HC5T 
 
 The Wealth and Income of 
 the Chief Powers 
 
 J.C 
 
 by 
 Stamp
 
 UNIVERSITY OF CALIFORNIA 
 
 AT LOS ANGELES
 
 THE 
 
 WEALTH AND INCOME 
 
 OF THE 
 
 CHIEF POWERS. 
 
 BY 
 
 J. C. STAMP. C.B.E., D.Si 
 
 jsued in Advance of the Journal of the Royal Statistical Society. 
 Vol. LXXXII, Part IV (July, 1!H9). 
 
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 ROYAL STATISTICAL SOCIETV, 
 
 9, ADELPH1 TERRACE, STRAND, VV.C. 2. 
 
 1919. 
 
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 I 
 
 ,v 
 
 The Wealth and Income of the Chief Powers. 
 By J. C. Stamp, C.B.E., D.Sc. 
 
 [Read before the Royal Statistical Society v May 20, 1919. 
 The Ex-President, Sir Bernard Mallet, K.C.B., in the chair.] 
 
 
 
 CONTENTS : 
 
 
 
 
 PAGE 
 
 
 PADS 
 
 1. 
 
 Introductory remarks 
 
 1 
 
 9. Italy 
 
 . 38 
 
 2. 
 
 The object of the present 
 
 
 10. Spain 
 
 . 39 
 
 
 paper 
 
 3 
 
 11. Austria-Hungary 
 
 41 
 
 3. 
 
 General observations on 
 
 
 12. Other European Countries 
 
 41 
 
 
 comparisons in wealth .... 
 
 5 
 
 13. Australia 
 
 43 
 
 4. 
 
 Various methods of esti- 
 
 
 14. Canada 
 
 47 
 
 
 mating income and capital 
 
 8 
 
 15. Japan 
 
 48 
 
 5. 
 
 United Kingdom 
 
 14 
 
 16. Argentine 
 
 49 
 
 »;. 
 
 United States of America.... 
 
 17 
 
 17. General Summary 
 
 . 50 
 
 7. 
 
 Germany 
 
 23 
 
 18. Seleoted Bibliography 
 
 . 52 
 
 8. 
 
 France 
 
 30 
 
 
 
 1. Introductory Remarks. 
 
 ' In representing the wealth of nations as consisting, not 
 
 in the unconsumable riches of money, but in the consumable 
 
 goods annually reproduced by the labour of the Society 
 
 . . . (their) doctrine seems to be in every respect as just as 
 
 it is generous and liberal. . . . They have for some years 
 
 past made a pretty considerable sect, distinguished in the 
 
 French Republic of letters by the name of ' Economic 
 
 Adam Smith. 
 
 No apology is needed for dealing with this subject at the present 
 
 time when the air is filled with discussions about national wealth, 
 
 433310
 
 2 Stamp — The Wealth and Income of the Chief Powers. 
 
 capital levies, indemnities and kindred questions. We are all 
 familiar with the class of persons who profess to despise and distrust 
 statistics and statistical methods. They are usually the first to 
 rush to statistics when they are in trouble, and to use them without 
 investigation or discrimination. While there is a very considerable 
 literature upon this particular subject — running into many scores of 
 works — it is extraordinary how the less responsible efforts, often 
 mere partisan guesses, gain a footing and keep currency with serious 
 and reasoned estimates. This arises partly from the fact that the 
 partisan who is out to prove his point is nearly always best pleased 
 by an extreme figure, and so we find that current estimates of the 
 wealth of the United Kingdom (in 1914) used in polemical literature, 
 range from 10,000 millions to 24,000 millions sterling. 
 
 At another moment the fickle user of figures seeks to prove that 
 statistics of wealth have no real meaning, that they assume an 
 impossible and sudden realisation of all commodities, that they omit 
 certain items of well-being, and so on ; and because estimates made 
 up on one particular principle are not really serviceable for every 
 possible use, they are condemned as being useful for none. The 
 very wide variations that exist in estimates purporting to represent 
 the same facts — for the popular use of statistics dislikes all qualifica- 
 tions, and drops out all footnotes or definitions — is perhaps one of 
 the chief reasons for the ultimate distrust. And yet, of course, pro- 
 posals for progress in modern civilisation and solutions of its problems 
 depend to an increasing extent not merely upon correct aggregations 
 and classifications of numbers, but also still more upon methods of 
 estimation, or statistical science as distinct from State-arithmetic, in 
 t hi «e fields where precise measurement or enumeration is not possible. 
 
 The uses to which estimates of national wealth and income may 
 be put are many and various. They include : — 
 
 1. Tests of " progress " by way of comparisons between different 
 years, to show the accumulation of capital ; tests of the distribution 
 of wealth, according to the form or embodiment which wealth takes ; 
 of the effects of changes in the rate of interest, or in the value of 
 money. 
 
 2. Tests of the relative " prosperity " or resources of different 
 nations or communities, either as a whole or per head of the popula- 
 tion, and in relation to their national debts. 
 
 3. Comparisons of income with capital and property. 
 
 4. Considi rations of the distribution of wealth according to 
 individual fortunes, and changes in that distribution. 
 
 5. Consideration of the applicability and yield of schemes of 
 taxation, e.g., the capital levy
 
 Stamp — The Wealth and Income of the Chief Powers. 3 
 
 6. Questions relating to War indemnities. 
 It is in connection rather with the second, fifth and sixth da 
 above that the public mind is must exercised at the present moment, 
 
 and a great deal of careful, as well as much careless, work has quit' 
 recently been done in this held of statistics. 
 
 It is perhaps hardly necessary to say that the capital wealth 
 or income at any given moment is not a sole test of Nihility to bear 
 indemnities — it is only a partial measure, and the potential wealth in 
 ungotten minerals and resources, as well as the character of com- 
 merce and distribution of income, are important factors in the 
 problem. It may, h iwever, be pointed out that present values are 
 on a very different scale from thos ■ which are being discussed in 
 this paper, and the true money measure of present wealth can onlv 
 be guessed at for some time yet. 
 
 2. The Object of this Paper. 
 
 The objects of the present treatment of the subject are : — 
 
 1. To review the great mass of recent work from different 
 countries, and to select the most authoritative and careful efforts, 
 presenting the main results for the British reader within the limits 
 of a single paper. 
 
 2. To present those results in a uniform notation in currency, 
 adjusted as at a unif irm date, 1914, and to relate them as nearly as 
 possible to like subject-matter for each country. The year 1914, as 
 at the outbreak of war, represents the latest date for which satis 
 factory statistics are generally available. No useful w r ork can be 
 done on any later year, so great is the disturbing effect of war. 
 As soon as stable conditions are again reached, and proper measure- 
 ments can be made, not only will 1914 serve as a point from which 
 to measure the effects of war, but it will also serve to show r the com- 
 parative changes for different nations. 
 
 3. To subject the data and methods involved to careful analysis 
 and criticism, so far as that may be possible. At present, est in i 
 
 of every kind, good, bad and indifferent, pass muster together as 
 equals. I shall endeavour to label them according to their probable 
 degree of approximation to the facts, or rather, according to the 
 extent I feel able to say that thej cannot be inaccurate. Here I 
 shall use the term "possible range of error" out of the ordinary 
 signification attaching to " probable error," and to bear the following 
 meaning : — 
 
 The estimate under each detailed head is considered, and the 
 extent to which it may possibly be deficient or excessive is juil 
 by reference to the character <>f the data and the methods employed. 
 
 p. 2
 
 4 Stamp — The Wealth and Income of the Chief Powers. 
 
 The " minus " range of error is not always equal to the " plus " 
 range ; as, for example, in the case of an aggregated valuation used 
 for taxation, which is not nearly so likely to be excessive as it is 
 to be deficient, in normal circumstances. All the " minuses " and 
 all the " pluses " are then separately totalled. It will be obvious 
 that as all the details are unlikely to err in the same direction, the 
 final aggregate valuation is probably much closer to the absolute 
 truth than this " possible range of error " would indicate, and the 
 latter usually expresses a generous estimate for the ]jrobable error. 1 
 The determination of these percentages rests on no absolute or 
 external criteria — they are purely subjective judgments of my own, 
 and, therefore, the personal equation must be very prominent. 
 There is, however, this one limit to that disadvantage — the same per- 
 sonal equation runs throughout all the estimates of error, and they 
 are not the products of different observers. In order that some kind 
 of relative value may be attached to the different estimates of 
 national wealth, I have introduced for the purposes of my final 
 table, in which they would otherwise appear as of equal reliability, 
 a system of grading. Those cases in which the " possible range of 
 " error " is not greater than 10 per cent, of the whole estimate, are 
 classed as Grade I. Those where it may be more than 10 
 but not more than 20 per cent, are called Grade II, and 
 those similarly between 20 per cent, and 30 per cent. Grade III, 
 while the mere " guesses " not based on recent broad data are put in 
 Grade IV. An estimate that at the time might have been put in 
 one grade may, so far as the final summary for 1914 is concerned, 
 be re-graded in a lower category if in bringing it up to the level of 
 1914 further possibility of error is introduced. As this is the first 
 effort of the kind, I offer every apology for its empirical and 
 elementary character, but I think it represents an attempted advance 
 in this realm of comparative statistics. 
 
 4. The final object — which, however, in point of arrangement comes 
 first — is to discuss briefly the various methods that are available for 
 the determination of national income and national capital, and their 
 chief characteristics or limitations, for I feel that many readers may 
 have but little information before them on this subject. I shall 
 al;K> add a brief and selected bibliography of recent work. An 
 extensive list, down to 1913, is contained in Corrado Gini's great work, 
 " L'Ammontare e la Composizione della Kicchezza delle Nazioni," 
 enumerating souk- three to four hundred references, mainly for capital 
 
 1 While I should not care to give a precise expression for the probable error 
 in these circumstances, I do not think it would ordinarily exceed 4 \/~p, 
 where // is the- " possible range of error," -f- or — .
 
 Stamp — The Wealth and Income of the Chief Powers. 5 
 
 only. A good statement of reoent contributions is given by Lan- 
 feanoo Maroi is " Come bi oalcola e a quanto ammonta la ricchezza 
 
 "d'ltalia e delle altre principal] nazioni," while the official report 
 of the Australian census has a list of about one hundred and tinny 
 references. 
 
 I have included very few references to the earlier estimates in 
 each country, however well known or valuable, for reasons of space. 
 In the first place, the further removed they are from 1914 the more 
 risky it is to " build " up on them to reach a figure for that date. 
 In the second place, all competent investigators can be relied upon 
 to make the most of the work of their predecessors, and to use it so 
 far as it is valuable. 
 
 For reasons of space also, I shall not touch upon the measure- 
 ment of progress in the different countries, or the comparative dis- 
 tribution of property and income, or to any extent on the propor- 
 tions of capital which are represented by different classes of pro- 
 perty. These topics may form in themselves suitable matter for 
 further papers at a later date. 
 
 3. General Observations on Comparisons in Wealth. 
 ' The nutrition of a Commonwealth consisteth in the Plenty 
 " and Distribution of materials conducing to life : In Concoction 
 or " Preparation . . . 
 
 ' By Concoction, I understand the reducing of all commodities 
 ' which are not presently consumed, but reserved for nourish- 
 " ment in time to come, to something of equal value . 
 " and this is nothing else but gold, and silver, and money. 
 ' For gold and silver being (as it happens) almost in all countries 
 " of the world highly valued, is a commodious measure of the 
 '* value of all things else between nations. . . . By the means 
 " of which measure, all commodities, moveable and immoveable, 
 " are made to accompany a man to all places of his resort, 
 " within and without the place of his ordinary residence ; and 
 " the same passeth from man to man within the Common- 
 ' wealth, and goes round about, nourishing (as it passeth) every 
 ' part thereof ; in so much as this concoction is, as it were, 
 '' the signification of the Commonwealth." — Hobbes. 
 In my experience, for the sake at any rate of those readers who are 
 new to the subject, it is never wise to set abroad comparisons of this 
 character without reference— even at the risk of repetition— to the 
 chief limitations and dangers involved. I have dealt with some 
 aspects of the subject in " British Incomes and Property." 
 
 (i) It is obvious that the aggregate wealth of a tribal community
 
 6 Stamp — The Wealth and Income of the Chief Powers 
 
 measured in cowrie shells (even if the valuation in shells were reduced 
 to sterling at the " par of exchange " for such shells with a gold 
 currency) would not be comparable with the wealth of a civilised 
 community. There would be many things by which the native sets 
 great store, and which, in short, are valuable to him, but have no 
 merit in the eyes of a European, while many treasures to a European 
 would be " worthless " to the native. The two countries might 
 theoretically contain each the same physical objects of possession, 
 and yet register quite different aggregates of " wealth." The illus- 
 tration is, of course, an extreme one, but it is intended to bring out 
 the fact that in the countries to be compared men must care for the 
 same objects in a similar way, and their scale of relative values must 
 be akin. To the extent to which countries diverge in this respect, 
 the comparisons will be invalid. 
 
 (ii) Consideration of the aggregate of gross personal wealth with- 
 out regard to a national debt, and the taxation consequent thereon 
 (even if the whole debt is held at home) may lead to ridiculous 
 results. The stock may be wealth in the hands of the investors, 
 but it is a concealed liability, by way of taxation, on the incomes and 
 capital generally. 1 
 
 The usual way, and I think the best way, of treating this matter 
 in the past, has been to count as wealth the individual holdings in 
 Government stock, but to deduct the debt as a mortgage on the property 
 owned by the State or collective community. The practice of valuing 
 national wealth varies in different countries, some being much more 
 inclusive in the matter of State property, and this difference would 
 be a source of trouble in making comparisons if the gross value were 
 in question. But the amount of the net capital, after deducting the 
 debt, is so much smaller that its bears a relatively insignificant pro- 
 portion to the whole national capital, and so this method of deduct- 
 ing the debt tends to diminish the difficulty and the importance of the 
 exact comparability of the estimates for different countries so far as 
 the year 1914 is concerned. In all comparisons and estimates for 
 later years the matter will assume great importance, for the deduction 
 of the debt from State property will often give a minus quantity, 
 which for many purposes, though not for all, should reduce the 
 aggregate of personal wealth.* 
 
 (iii) The wealth of a country may mean either the value of the 
 objects found within its boundaries, or the wealth of the inhabitants, 
 including their foreign possessions, and excluding wealth within the 
 
 1 British Intones, p. 390. 
 
 ' Vide "An estimate of the capital wealth of the United Kingdom in 
 private hands." ikono.nic Journal, September 191&
 
 Stamp — The Wealth and Income of the t 'hief Powers. 7 
 
 country held by people abroad. The confusion between these two 
 
 ideas has played havoc with discissions on such subjects as the 
 ' Taxable Capacity of Ireland." 1 It is the latter sense the wealth 
 of the inhabitants — that is mainly under consideration in this paper, 
 That aspect is foremost when questions of taxation are prominent, 
 but there are matters, such as the inalienable wealth of a country ill 
 a geographical sense (for warlike purposes) for which the former is 
 important. A colony capitalised from the home country may lie 
 poor by the wealth of its inhabitants, but rich in its resources and the 
 actual yield within its borders. 
 
 (iv) Wealth in private hands is not easy to define exactly, for there 
 are various shades of ownership : — 
 
 (a) Absolute personal disposition of the whole value. 
 
 (b) Trust interests. 
 
 (c) Collective ownership with only potential specific alloca- 
 tion to individuals, such as the reserves of companies which may 
 be of higher value in the hands of the company than the aggre- 
 gation of the market value of individual interests therein. 
 
 (d) Collective ownership, without the possibility of individual 
 allocation, social private wealth, such as churches, clubs, etc. 
 
 Similarly, communal wealth is not all of the same degree of 
 " dispersion " in value. 
 
 (a) City and local property like waterworks, buildings and 
 trams, having a " value " determinable by deliberate com- 
 parison with privately owned objects. 
 
 (o) National property, varying from a museum to a navy. 
 The closeness with which a " market value " can be assigned 
 varies with the class of wealth, for, if there is no possibility of a 
 market, one naturally tends towards the adoption of the cost of 
 production or reproduction. Moreover, some of the comparisons of 
 national wealth are slightly impaired by the extent to which the 
 methods employed give different recognition of each class. 
 
 (v) So far as " income " is concerned, there are other considera- 
 tions, which I have set out in " British Incomes," and will not 
 repeat here, except one — by way of illustration — -viz., the non- 
 inclusion of a valuation of domestic services by a wife to her husband 
 and home which would lead to a difficulty in comparisons between 
 countries of different social habits. For example, if we suppose 
 that in one country one million wives remain at home and one 
 million women work in industry, and there are no domestic servants, 
 the total " income " will differ from that of a country where half the 
 " wives " work in industry and half the other women are domestic 
 
 1 British Incomes, p. 369.
 
 8 Stamp — The Wealth and Income of the Chief Powers. 
 
 servants in the homes of the absent wives, despite the fact that the 
 total " work " being done is the same in both cases. 
 
 (vi) In countries where values vary widely at short intervals 
 for " stock " or produce which bulks largely in the total valuation, 
 there may be more difficulty in securing a valuation on normal condi- 
 tions. 
 
 4. Various Methods of Computing Wealth and Income. 
 
 Stated quite briefly, the available methods for computing 
 National capital in different countries are as follows : — 
 
 (7) Based on Data arising through the Taxation of Incomes. 
 
 (a) Collective Taxation or Taxation at the Source. — The statistics 
 of such taxation covering the whole profits of corporate bodies, 
 like public companies, before distribution or whether distributed or 
 not, obviously lead to comprehensive results. Where sources of 
 income are attacked for revenue purposes, and the destination of 
 income is ignored, it is not necessary for elaborate estimates to be 
 made for income remaining in collective or semi-collective ownership ; 
 moreover, such a system allows of profits being presented for different 
 classes of business or income, and so enables them to be capitalised 
 on an appropriate basis. There may, however, be a danger that this 
 method will give too high a result, if sufficient allowance is not made 
 for income going to foreigners or persons living entirely abroad 
 which thus forms no part of the national income. If the tax is on 
 the British model, which taxes in full both income originating abroad 
 and accruing to persons residing in the United Kingdom, and income 
 originating in the United Kingdom and accruing to persons abroad, 
 this difficulty is inherent in the method, and perhaps sufficient 
 recognition has never yet been given to it. Liability to error arises 
 in three ways : — 
 
 (i) Evasion in the tax. 
 
 (ii) Omissions from the scheme of tax (i.e., " garden pro- 
 duce " as taxable income ; " enjoyment " income from movable 
 property). 
 
 (iii) The basis of capitalisation, viz., the number of years 
 
 purchase adopted. 
 
 This method, generally known as the " Giffen " method, though 
 
 not invented by him, is the main basis for the valuation for the 
 
 United Kingdom. It will be to a limited extent available in the 
 
 United States, South Africa and other colonies. 
 
 (b) Taxation of Income on Individual Returns. — Where statistics 
 of this character are available, they may be utilised for capital
 
 Stamp — The Wealth and Income of the Chief Powers. 9 
 
 valuations, but only wit h Borne difficulty. If there is a rough division 
 of income into earned income and income from property, it is of 
 course of assistance in the capitalisation. The chief defects are : — 
 (i) The considerable extent to which evasion takes place, 
 (ii) Omission of all income held collectively, 
 (iii) Difficulty in determining the ratio of income to capital 
 on the average, which makes capitalisation a far greater difficulty 
 than under (a) (iii) above. 
 
 (//) Based on Data arising through Annual Taxation of Capital. 
 
 (a) Particular Classes of Property, such as Land or Buildings. — 
 Obviously these particulars supply a part only of the whole capital 
 valuation, and they more properly belong to the " inventory 
 " method " referred to below. Unless the values are revised regu- 
 larly on uniform lines, without local differences, they form but a 
 rude basis, and there are always difficulties in determining the 
 extent to which other forms of wealth (i.e., shares or business profits) 
 duplicate these values. Some of the Continental systems of taxation 
 supply material of this order, and the Australian States have regu- 
 larly revised valuations which are valuable because they constitute 
 so large a fraction of the total wealth. 
 
 (b) General Property Valuation. — The particulars furnished by a 
 system of annual taxation upon all classes of property, should, in 
 theory, form an ideal basis for a valuation. But unfortunately, in 
 practice, such a tax as the General Property Tax in the United 
 States, is full of defects. The valuations of personal property tend 
 to disappear altogether (as was the case during the eighteenth 
 century with our own " Land Tax ") or to be negligible, and thus real 
 property alone remains to bear the burden. This real property is 
 assessed on very diverse lines in different areas, and is admittedly 
 much below the selling values in many States. These facts are 
 commonplaces to all students of American taxation. In effect, there- 
 fore, this class is not really distinguishable from II (a) above and the 
 information gained is never enough for a complete valuation, but 
 becomes only a factor in the inventory methods. 
 
 ///. — Based on Data arising through Taxation of Capital at 
 
 Irregular Periods. 
 
 (a) Statistics of " Estates " chargeable with duties on passing at 
 Death.— This method has the appearance of being the most satis- 
 factory and scientific of all. A special ad hoc valuation is made 
 periodically of all wealth held in individual Ownership, and it is only 
 required to ascertain what proportion of the whole comes thus
 
 iO Stamp — The Wealth and Income of the Chief Powers. 
 
 Under review in any given year, or, alternatively, at what intervals 
 of time the same item of wealth will be re-charged to duty on the 
 average, in order to compute the total wealth belonging to indi- 
 viduals. But this apparently simple task is, in practice, fraught with 
 many difficulties, and the method of ascertainment of the " multi- 
 plier," though greatly improved of late years, is still open to doubt or 
 enquiry upon important points. The question cannot possibly be 
 opened up at length here, and those interested are referred to the 
 considerable literature upon the subject, notably Sir Bernard Mallet's 
 Paper given to this Society in 1915 ; Mr. G. H. Knibbs' work, The 
 Private Wealth of Australia; Chapter XI of my British Incomes; 
 and the monumental work by Corrado Gini to which reference has 
 been made. Knibbs says there are two methods — (1) the determina- 
 tion of the average interval of time between the passing of estates 
 to the successors in title, and (2) the ascertainment of the average 
 rate of the passing of estates during any period under review. The 
 first may appropriately be called the devolution-interval method, 
 and the second the devolution-rate method. Obviously the two 
 methods are — in the last analysis — essentially the same, the number 
 of years in the devolution interval being the reciprocal of the annual 
 rate of devolution. At first sight it might therefore appear that it 
 is a matter of little moment which method we follow. This surmise 
 is not correct ; " the devolution interval method is the more com- 
 plicated and uncertain, and the corrections — which must be applied 
 to any estimate of its value — are not readily computed or easily 
 " ascertained." Gini, however, makes some subtle distinctions, and 
 elaborates several variations with different titles. 
 
 The chief difficulties of all devices for using Probate Returns 
 arise through : — 
 
 1. Defects in administration and evasion of the particular duty, 
 the statistics of which are being used. 
 
 2. The effect of gifts inter vivos, in keeping a certain proportion 
 of wealth from " passing " with the frequency of ordinary intervals 
 for estates as a whole. 
 
 3. Legal points in the Estate Duties, e.g., the practice of settle- 
 ments, and settlement Estate Duty. 
 
 4. The fact that vital statistics are continually changing. 
 
 5. The application and sufficiency of vital statistics, e.g., the 
 variations between the death rates for the different ages, classes of 
 people, and the two sexes, in relation to the wealth held in each 
 class. 
 
 6. The actual growth of wealth in the period under review. 
 Even when these difficulties are overcome, the result is an
 
 Stamp The Wealth and Income of the Chief Powers. 11 
 
 aggregate of individual wealth. only, and additions have to be made 
 
 for wealth which may not !>«' fully reflected in individual holdii 
 (reserves of public companies) and for social, corporal'' or national 
 wealth. The method would have the advantage over the method 
 of capitalisation of income, in that it measures the value of non- 
 income producing wraith, such as furniture, pictures and jewellery, 
 bu1 this advantage is considerably reduced in practice, for such 
 wealth is frequently " passed " during lifetime, and is often not fully 
 valued. 
 
 The method lias long been the favourite one in France, and it 
 has also been studied and used in the United Kingdom, Italy. 
 Australia, and to a less extent elsewhere. It has almost invariably 
 given lower results than the other methods. 
 
 (b) Statistics of Capital Valuations for Specific Purposes. — The 
 special valuation of land for the Land Values Duties furnishes an 
 example. From this point of view these statistics are partial and 
 auxiliary only, and nothing short of a complete and universal valua- 
 tion — as under proposals for a capital levy— could furnish statistics 
 adequate for an estimate of national wealth. Even in this case 
 there is a large sum that must be called " national wealth " that 
 would not be included in the aggregated individual fortunes. 
 
 IV. — The Inventory Method. 
 
 This method aims at a valuation, in the aggregate, of each " form " 
 in which wealth is embodied, without regard to the ownership by 
 individuals, companies, &c. It is often called the " objective " 
 method. It depends for its success almost entirely upon the exist- 
 ence of statistical material compiled for other purposes, e.g., import 
 and export statistics, local government taxation figures, expert 
 valuations of mineral resources, statistical enumerations of objects 
 to which an average value can be applied. Examples of the last 
 mentioned are the valuation of shipping by reference to the total 
 tonnage multiplied by an average value per ton, or of mi nin g capital 
 by the average capital invested per ton of output ; or of live b1 i ick 1 iy 
 the number of each kind multiplied by an average price ; or even ol 
 businesses, by a co-efficient. There are few classes of statistics that 
 have not been pressed or even "hammered" into Bervice for the 
 " inventory " method, and further illustration can best be left to the 
 paragraphs that follow. 
 
 The chief defects of the method are : — 
 
 1. The impossibility of testing how far the ownership of the 
 wealth is within the country or not. It is obvious, for example,
 
 12 Stamp — The Wealth and Income of the Chief Powers. 
 
 that if half the farms iu a country are mortgaged to or owned by 
 foreigners, their value will give a false impression of national wealth. 
 
 2. The difficulty of determining whether all forms have been 
 included. 
 
 3. The risk of overlapping, i.e., stocks and shares duplicated with 
 real property, owned by companies. 
 
 4. The divorce from all tests of profit earning capacity. For 
 example, the carriages, railway lines, stations, &c, of a railway 
 company are all " valued," and their aggregate comes to, say, 
 5,ooo,oooZ. The railway as a whole may have been losing money 
 for years, or, on the other hand, may be making several millions a 
 year. 
 
 Of course, as a general rule on capitalisation of plus and minus 
 " goodwill " (in the excess or deficiency of profits compared with the 
 normal return upon invested capital), the differences tend to cancel 
 out, and an aggregate of valuations as " going concerns " tends to 
 approximate to invested capital, except when there are striking 
 changes in the value of money and rate of interest. 
 
 5. The difficulty, where " averages " are employed as factors, 
 of accurately determining them. If they are the results of impres- 
 sions, they may be considerably in error, and even if they are the 
 product of actual observation they have often to be carefully weighted 
 in application to the different classes. 
 
 It is rarely that a " sample " can be taken which can be regarded 
 as identical in proportionate components with the whole. Average 
 " wage " statistics can be applied only after close study of the 
 data. 
 
 The Inventory method may be carried through by single observers, 
 as in France, Germany, Spain, Australia, Argentine, and other 
 countries, or it may be the collected results of many investigators, 
 as with the United States, where it is called a " Census." 
 
 An auxiliary or alternative method to the Inventory, but really 
 falling under that title, is the " Fire Insurance " method (as applied 
 in Germany) which of course is very rough, and covers only a part 
 of the field. 
 
 V.— The " Census " Method. 
 
 In the Census proper a statement is taken from each individual 
 resident declaring the whole of his wealth and income. This method 
 has been followed in Australia, and is described with some elaboration 
 and much important new analysis by Mr. G. H. Knibbs. It has the 
 disadvantage of course that individuals may have very different ideas 
 of capitalising their income, or of estimating market values ; that
 
 Stamp — The Wealth and Income of the Chief Powers. 13 
 
 some may bo afraid of the use of the Census for taxation purposes ; 
 and that there may be omissions to make the return. In any case, 
 additions have to be made for collective wealth. But it is the only 
 method which enables direct correlation between wealth and income 
 to be examined. From such an examination Mr. Knibbs has 
 obtained the " wealth-and-income " or " pluto-prosodic " surface. 
 
 The chief methods of determining National Income follow to 
 some extent similar lines. 
 
 1. Statistics of Income Taxation. — The value of this method 
 depends on the completeness and efficiency of the tax in question. 
 It is, for example, very different if England is compared with Italy. 
 " Taxation at the Source " obviously gives more complete figures, 
 requiring less supplementing fiorn other sources. 
 
 The extent to which this method covers the field depends upon 
 the exemption limit, or the point at which the tax starts. The 
 Prussian limit of 47Z. per annum enabled the method to be applied 
 to cover the bulk of the population, but the British limit of 160I. 
 did not account for as much as one-half of the total income, or more 
 than one-eighth of the people. The American exemption, still 
 higher, left an even greater proportion to be dealt with by other 
 means. But with all its defects, this method is the only really satis- 
 factory one for dealing with the income of the wealthier section of the 
 community. 
 
 2. The Occupational Census Method.— This method is used for 
 dealing with the wage earning classes and smaller incomes where 
 the income tax statistics do not apply. These classes have little 
 income beyond their earnings, and the average earnings of each class 
 are determined as closely as may be, and applied to the number 
 of earners in each class or occupation as given by the Census. The 
 whole value of this method depends, of course, on the accuracy of 
 the census, and still more upon the care with which wage statistics 
 are prepared and handled. The lower half of the British estimate 
 is determined in this way with very satisfactory material. The 
 same method is adopted for France, but, by the application of 
 averaged earnings, the result is obtained on rougher lines. In 
 France, moreover, the method is applied to businesses and profes- 
 sions in the absence of income tax statistics. 
 
 3. Interest on Capital. — In a few cases estimates are partly made 
 up, or are checked, by a computation of the average yield upon 
 different classes of capital to the amount of such capital detennim d 
 in other ways. 
 
 4. " Net Output" or Census of Production Method.— li the total 
 value of work done or goods produced in a year is determined and
 
 11 Stamp — The Wealth and Income of the Chief Powers. 
 
 the values of the raw materials used are deducted, the " added 
 " value " may be taken to be the fund which forms the people's 
 income. In the British Census of Production, 1907, the " Net 
 " Output " was the gross output (selling value) less the cost of 
 jnai .rials used. " It expresses completely and without duplication 
 " the total amount by which the value (at works) of the products 
 " of the industry taken as a whole, exceeded the cost (at works) 
 " of the materials purchased from outside, i.e., it represents the 
 " value added to the materials in the course of manufacture." It 
 corresponds, approximately, to the balance of a trading account. 
 It constitutes for any industry the fund from which wages, salaries, 
 rent, royalties and sundry expenses have to be defrayed, the balance 
 being profit (or loss). Mr. Flux showed that the results of the 1907 
 ( lensus were consistent with the estimates of British income obtained 
 in other ways. Giffen, in 1903, made an estimate by aggregating 
 the value of goods consumed. This method has hitherto been the 
 chief one for the determination of the incomes of the United States. 
 
 5. The Income " Census."- — This method has been adopted in 
 Australia for 1914-15 at the same time as the Wealth Census referred 
 to above. 
 
 5. The United Kingdom. 
 
 I do not propose to devote a great deal of my space to the esti- 
 mates of our own national wealth and income because the literature 
 on the subject is readily available, and the methods and data are 
 better known and understood than those for other countries. 
 
 The most recent detailed estimates of capital are those given by 
 .Mr. Cranimond before this Society in 1914, 16,472,000,000/., and 
 my own in British Incomes and Property (published in 1916), for 
 1914, of 14.319,000,000^. ± 1,867,000,000/. The latter was re-examined 
 in 1918 in the Economic Journal, in connection with the proposals for 
 a capital levy which had brought forth a crop of " estimates " widely 
 divergent. The former was repeated by Mr. Crammond recently 
 without re-examination. 
 
 The estimates by Sir Bernard Mallet and Mr. Strutt, given to 
 this Society in 1915, based on the " multiplier," led to a considerably 
 lowei figure than my estimate. For convenience I reproduce below, 
 from British Incomes, the main headings of the valuation (which has 
 not to my knowledge 1mm n adversely criticised in any detail) and 
 would refer tlu.se int. r< sted to Chapter XI of that book for further 
 particulars : —
 
 Stamp — The Wealth and Income of the Chief Powers. 
 
 15 
 
 Capital raluc 
 (million £). 
 
 1,168 
 
 .. 3,330 
 
 22 
 
 340 
 
 1,148 
 
 1,143 
 
 656 
 
 179 
 
 1. Lands 
 
 2. Houses, &c .... 
 
 3. Other profits (Sch. A.) 
 
 4. Farmers' capital 
 
 5. Sch. C, National Debt, &c 
 
 I). Railways in the United KinL'dom 
 
 7. Railways out of the United Kingdom .... 
 
 8. Coal and other mines 
 
 9. Ironworks .... .... .... .... 37 
 
 10. Gasworks 182 
 
 11. Waterworks, canals, and other concerns (Sch. A.) 278 
 
 12. Indian, colonial, and foreign securities .... .... G21 
 
 13. Coupons 383 
 
 14. Other profits and interest 276 
 
 15. Businesses not otherwise detailed .... .... 2,770 
 
 16. Income accruing abroad and not remitted .... 400 
 
 17. Income of non-income tax paying classes derived 
 
 from capital .... .... .... .... .... 200 
 
 18. Movable property, &c, not yielding income 
 
 (furniture, &c.) .... .... .... 800 
 
 19. Government and local property .... 400 
 
 Total valuation 14,319 
 
 or, in round figures 14,300 
 
 At the time when Mr. Cram mo nd gave his estimate of 16,472 
 millions, I criticised some of his details, and I find that he remarked 
 that my criticism was " very valuable " and that he was " glad to 
 " accept " the corrections. In setting out my own results subse- 
 quently, I continued the analysis of his details. But in view of his 
 recent use of the original figure as the estimate for 1914, and of the 
 fact that it has been widely published and quoted, and diverges so 
 widely from my own, it is perhaps only right that I should indicate 
 wherein the main divergence lies. For " Lands " my estimate is 
 150 millions less, for " Companies and Trades " generally it is nearly 
 900 millions less, though for a specially selected group it is 200 
 millions more. In the case of his capitalization of the income of 
 non-taxpaying classes derived from capital, Mr. Crammond has put 
 1,000 millions against my 200 millions, because he has quite confused 
 this old entry of Giffen's with the full capital of the lower classes, and 
 has ignored the extent to which the gross figures for income tax 
 already capitalized by him in his remaining figures cover bhe ground. 
 His figure for capital in investments abroad on which income is not 
 brought home, was 500 millions more, and his figure for movable 
 property 200 millions more. Except as to the last item, which Is 
 merely a matter of individual judgment, I remain of opinion that the
 
 1G Stamp— The Wealth and Income of the Chief Powers. 
 
 best evidence supports my figures rather than his ; that he has not 
 made himself sufficiently acquainted with the character of the 
 original data, and that his aggregate estimate is far too high. He 
 gave the wealth per head in Germany as 227/. against a British 
 average of 336/. His methods lead to appreciably higher figures 
 than those arrived at by Sir Leo Chiozza Money in " Riches and 
 Poverty " or in " The Nation's Wealth." 
 
 In the Economic Journal for September, 1918 (" An estimate 
 " of the capital wealth of the United Kingdom in private hands ") I 
 have shown that the national wealth, as estimated by the multiplier 
 upon the data supplied through individual returns of wealth, is recon- 
 cilable with the estimate that would be made on the Giffen (or 
 capitalization of income) basis with our existing income tax figures, 
 if we had similar taxation on individual statements of income and not 
 taxation at the source. That is to say, the gap between the old 
 estimate by the capitalization method and the estimate by the 
 " multiplier " estate duty method is not substantially greater than 
 the gap between the capitalization method for income tax assess- 
 ments at the source, and the capitalization of income admitted on 
 personal statements for super-tax, abatements, &c, in the same 
 scheme of taxation for the same year. I also checked the estimate 
 in British Incomes in sections by reference to the results of the new 
 Land Valuation, the Census of Production, and the capital invested 
 abroad, and I concluded that there was no evidence to justify any 
 substantial additions. I therefore remain of the opinion that 
 15,000,000,000^. was an outside figure for the year in question for 
 the total national wealth, of which upwards of 3,000, 000, 000Z. would 
 not have been returnable by individuals in statements of wealth for 
 the purposes of a capital levy. 
 
 The Estimate of Income is generally made up of three parts : — 
 (a) The income of income tax paying classes, from the tax 
 
 statistics. 
 (h) The income of wage-earning classes. 
 
 (c) The income of others below the income tax limit (made 
 the subject of a special enquiry by the British Association 
 a few years ago). 
 Dr. Bowley has so recently reconsidered these factors that I can- 
 not do better than repeat his conclusions. 1 
 
 The section under (a) was carefully considered by me in British 
 Incomes, and he has accepted all my conclusions. The summary is : — 
 
 1 " The Division of the Product of Tndustrv — an analysis of National Income 
 before the War."
 
 Stamp — The Wealth and Income of the Chief rowers. 17 
 
 Million £. 
 
 Wages, small salaries, &c .... 1,046 
 
 Incomes over 100/ 936 
 
 Miscellaneous .... .... .... 108 
 
 2,090 for 1911, 
 
 and on similar lines rather over 2,250,000,000/. for 1913-1 1. He 
 concludes, " I am unable to obtain the figure of 2,400,000,000/. 
 "frequently stated as the pre-war income without, making 
 " extravagant estimates of wages or of incomes from abroad." The 
 totals arrived at on these principles for 1907 were reconcile.! 
 with the results of the Census of Production by Mr. Flux on 
 the "Net Produce" method; and they have also, very roughly, 
 been shown to be consistent with the annual values of residences, 
 and the gradation of wealth indicated by the House Duty statistics. 
 At an earlier date (1903) Giffen obtained a figure from " total con- 
 " sumption " which tallied with the direct results. 
 
 I think that on the whole the estimate of income, having regard to 
 the nature of the data and the methods employed, is perhaps the most 
 accurate available for any country, and is certainly in Grade I. My 
 estimate for capital taken alone, would have been placed in Grade II, 
 but, in view of the consilience of other lines of evidence, it is fairly 
 safe to say that the range of error is not greater than 10 per cent., 
 though it certainly cannot be affirmed to be much less. 
 
 6. The United States of America (excluding Alaska and the 
 
 Island Possessions). 
 The fountain head of practically all information on the subject 
 of American wealth is the " Census " conducted by the Washington 
 Bureau. The first census was in 1850, and it was repeated at 
 decennial intervals down td 1900, and then taken in 1904 and 
 1912. The latest figures for the purposes of this Paper are taken 
 from the Bulletin of Estimated Valuation of National Wealth, dated 
 March 10, 1915, which gives the statistics for 1912. A comprehensive 
 work, The Wealth and Income of the People of the United States, by 
 Dr. King, of Wisconsin University, deals very lucidly with the results 
 of the censuses from 1850 to 1904, and can hardly be improved upon 
 as a fair and critical review of the material presented in a broad 
 and popular way. Other monographs exist in fair numbers, but 
 they are practically superseded by this work. In his judgment the 
 earlier census estimates were only broadly representative of the 
 facts, but in the recent ones we may accept the results with " a very 
 " considerable degree of confidence," for there has been progressive 
 improvement in the methods adopted by the Government Depart- 
 
 C
 
 18 Stamp — The Wealth and Income of the Chief Powers. 
 
 ments and in the quality of the statistical material. An interesting 
 summary of the results may also be read in The Private Wealth of 
 Australia, by G. II. Knibbs, published in 1918. 
 
 Capital— Although the American method is called a " Census," 
 it is more strictly an inventory, as far as possible on a tax basis, for 
 it does not require individual statements of personal wealth, but 
 delegates the construction of the inventory to a large number of 
 officials for different areas, under careful uniform instructions. 
 Thus it has advantages over an inventory ' compiled by a single 
 statistician working for the whole country at once, for it works in 
 detailed touch with all local conditions and variations, and thus 
 obviates the risks attaching to averages, or even to weighted aver- 
 ages. But, on the other hand, there is always difficulty in getting 
 a number of investigators to act upon a strictly uniform principle. 
 The American Census has always been very dependent upon the data 
 furnished by its system of taxation, and therefore belongs just as 
 much to the estimates under the taxation class as others which have 
 never been dignified by the name of " census," and it is clearly in a 
 different category from the Australian Census. The accuracy of the 
 valuation for the general property tax has always been a critical 
 point, practically dominating the whole estimate. In 1850 the 
 officials were asked to state the true valuation as well as the assessed 
 valuation, by adding a percentage to the latter. The proper per- 
 centage to add was certainly not acknowledged or known at that 
 early date. A similar instruction was given in 1860. In both these 
 years property belonging to foreign residents was included and State 
 property omitted. The 1870 Report claimed that the addition to 
 compensate for under-assessment had been made with great nicety 
 by competent investigators, but admitted that nothing more than 
 an " impression " could be given of the amounts of personal property 
 omitted from assessment. The valuation was then $24,055,000,000, 
 or 4,940,000,000?. on a gold basis. In 1880 the attempt at correction 
 was very elaborate, and from enquiries in many directions it was 
 determined that assessed values were, as a whole, 65 per cent, of 
 true values ; but the Acts of 1899 and 1902 (resulting in the censuses 
 of 1900 and 1904) wen; efforts to place the investigation on a still 
 firmer footing. Franchise properties like railways and tramways 
 were valued by a capitalization of net earnings ; ships were taken 
 on building costs written down for depreciation ; mines were valued 
 on the survey reports, while personal property was taken on four 
 years' national purchases, checked by a method of sampling indi- 
 vidual households, and their insurance policies. 
 
 In 1912 the following points are of interest: — Taxable real property
 
 Stamp — The Wraith and tncovfte of the Chief Powers. 
 
 19 
 
 was considered to be assessed at u* 7 per cent, of its value in Iowa and 
 15 per cent., in Nebraska, as against ioo per cent, in New Hampshire 
 and Wyoming. The exempt property wa takes ae a proportion 
 
 (one-eighth) on the sample of the three States for which it 
 separately given. Livestock and agricultural products were valued 
 according to the official returns from the Board of Agriculture, and 
 on the results of previous censuses ; gold and silver coin and bullion, 
 railroad and equipments, cars, &c, shipping and canals, mining 
 products, &c, were similarly estimated from appropriate official 
 reports. For manufacturing machinery, tools, &c. — the proportions 
 ascertained in 1904 were adopted. Tramways, telephones, electric 
 light and power, were taken at the cost of construction. The 
 valuations of manufactured products were based upon previous 
 censuses, and it was assumed that one-twelfth of the value of food- 
 stuffs, and one half of the value of other products were in merchant s' 
 stock, and that there was a two months' supply of factory materials 
 in stock. A six months' stock of imports was assumed, while 
 furniture and similar movables were taken as the products and 
 imports of the period from 1904 to 1912, added to 20 per cent, of the 
 1904 value, and light articles (such as kitchen utensils) were esti 
 mated at a year's product. The following table in sterling is taken 
 in an abridged form, from G. H. Knibbs' work : — 
 
 
 In million £. 
 
 Form of wealth. 
 
 
 
 
 
 1900. 
 
 1904. 
 
 1912. 
 
 (a) Ileal property taxed 
 
 9,519 
 
 11,405 
 
 20,212 
 
 (6) „ „ exempt 
 
 1,277 
 
 1,404 
 
 2,533 
 
 (c) Livestock, farm implements, &c. 
 
 833 
 
 1,011 
 
 1,503 
 
 (d) Gold and silver coin, &c. 
 
 345 
 
 411 
 
 538 
 
 (e) Railways, Pullman cars, &c 
 
 1,877 
 
 2,330 
 
 3,343 
 
 (/) Tramways 
 
 324 
 
 450 
 
 944 
 
 (g) Telegraphs and telephones 
 
 125 
 
 167 
 
 2Mi 
 
 (h) Shipping, canals, irrigation 
 
 111 
 
 174 
 
 380 
 
 (t) Privately owned waterworks, 
 
 
 
 
 electric light and power 
 
 138 
 
 173 
 
 491 
 
 (j) Agricultural products 
 
 299 
 
 390 
 
 1,076 
 
 (k) Manufactured products 
 
 1,250 
 
 1,522 
 
 3,019 
 
 (/) Mining products 
 
 67 
 
 84 
 
 it;: 
 
 (m) Imported merchandise .... 
 
 87 
 
 102 
 
 170 
 
 (n) Manufacturing machinery 
 
 522 
 
 678 
 
 1,252 
 
 (0) Clothing, ornaments, furniture, 
 
 
 
 
 &c 
 
 411 
 
 514 
 
 ss2 
 
 Total National wealth 
 
 18,1*S 
 
 22,008 
 
 38,577 
 
 Population 
 
 75,994,575 
 
 82,466,551 
 
 95,-i 10,503 
 
 National wealth per head of 
 
 
 
 
 population .... 
 
 239/. 
 
 267/. 
 
 404/. 
 
 I -
 
 20 Stamp— The Wealth and Income of the Chief Powers. 
 
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 Stamp — The Wealth and Income of the Chief Poivers. 21 
 
 After considering carefully the data and the method of valuation 
 for 1912, my own impression is that a range of possible error of 
 ±5 per cent, should be assigned to (d), a range of ±*]\ per oent. to 
 {a), (e) and (h), of 10 per cent, to (c), (/), (g), (/), of 20 pei oent. to 
 (&)» (j)< (0» ( m )> an( l °f 3° P er cent - to (k), ()i) and (0). 
 
 The net effect of these estimates is a range of possible error ovei 
 all of ±13 per cent. Although it is extremely improbable thai all 
 the errors could be in the same direction, and it is therefore likely 
 that the net error must on this showing be much less than 13 pei 
 cent., I do not feel thai the estimate can properly be pul into the 
 first grade. It is difficult to judge whether, if all profits were 
 capitalised, the plus and minus goodwill would so balance as to leave 
 the result practically equivalent to this inventory of hard assets, 
 and I am never completely reconciled to any valuation which ignores 
 the valuation as a " going concern," on the actual earning power of 
 the separate aggregations of assets. A few of the above items have 
 been valued on this basis, but only a small part of the whole has real 
 relation to current earning power. 
 
 The table on the previous page is made up from various sections 
 of Dr. King's book. 
 
 It may be mentioned that the French writer, Neymarck, adopted 
 an estimate of 25,900 millions for 1913. Rising land values con- 
 stitute a growing fraction of the nominal increase of wealth, for in 
 1850-60 they were one-third only, and in 1900-1910 three-fifths of 
 the increase is for higher land values. 
 
 Income. — Dr. King says that " with existing data " it is difficidt, 
 if not impossible, to estimate with great accuracy, the total value 
 of the national income. He considers that it can be attempted in 
 two ways :— (1) the consumption of the people, and (2) the produc- 
 tion of the nation. As regards (1) there is little information on 
 retail prices, and it is difficidt to avoid duplicating items, for there 
 is much "consumption" that takes place for further production, 
 so that (2) is the more workable. He tried the me1 hod of multiply- 
 ing the book income of families by the number of families in the 
 class, and also tracing the process of production from nature to the 
 final consumer, and found that for 1910 the totals were not greatly 
 different, but the second process necessitated less guessing than the 
 other. The following table shows the chief residts : —
 
 22 Stamp— The Wealth and Income of the Chief Powers. 
 
 Unitt d States National I>,come. ■ 
 
 
 
 
 
 
 
 Total 
 
 
 
 Total 
 
 Ptr 
 
 Corrected 
 
 r : 
 
 
 estimate 
 
 Net 
 
 Y : 
 
 m"' 
 
 capita. 
 
 for 
 
 family. 
 
 Trice. 
 
 capital 
 
 goods 
 
 
 income . 
 
 
 price. 
 
 
 
 savings. 
 
 consumed. 
 
 
 Mill. £. 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 M 11. £. 
 
 Mill. £. 
 
 1850.... 
 
 455 
 
 19 
 
 14 
 
 110 
 
 79 
 
 82 
 
 373 
 
 I860.... 
 
 747 
 
 24 
 
 16 
 
 126 
 
 89 
 
 173 
 
 574 
 
 1870.... 
 
 1,380 
 
 3(5 
 
 16 
 
 183 
 
 82 
 
 215 
 
 1,165 
 
 1880.... 
 
 1,519 
 
 30 
 
 22 
 
 151 
 
 114 
 
 260 
 
 1,259 
 
 1890... 
 
 2,482 
 
 39 
 
 35 
 
 193 
 
 170 
 
 330 
 
 2,152 
 
 1900... 
 
 3,693 
 
 49 
 
 48 
 
 228 
 
 224 
 
 322 
 
 3,371 
 
 1910... 
 
 C.,1'72 
 
 (38 
 
 54 
 
 307 
 
 243 
 
 411 
 
 5,861 
 
 Dr. King considers that the error in 1850 may be at least 25 
 per cent., but that the years 1900 and 1910 are correct within 10 per 
 cent. Spahr's work was the chief authority for prior years, and it 
 gives 2,220,000,000^. for 1890, or n per cent, less than King. As the 
 estimate stands, unchecked by any taxation data, it is in the second 
 grade, but after the lapse of a few years such statistics should be 
 available from the recently instituted income tax as to make a 
 much closer estimate possible. The early years of a new tax never 
 give complete and reliable statistics of wealth, but the details 
 published in 1918, for 1916, by the Treasury, so far as can be seen, 
 lend support to Dr. King's work. The exemption limit is high, and 
 much careful work by investigators with first hand knowledge of the 
 material is necessary to render real assistance upon the problem. 
 
 A recent writer 1 has made a computation for 1917 and 1918 on 
 
 the income of the United States as a whole, and as subject to excess 
 
 profits and income taxation. He adopts the same method as Dr. 
 
 g, who gave nearly 6,275 millions for 1910. The Hon. A. C. 
 
 Miller, of the Federal Reserve Board, put the income for 1917 at 
 
 rather more than 10,000 millions.* Professor B. M. Anderson, of 
 
 II rvard, put the figure as high as 14.000 million.* for 1917, by 
 
 adopting King's 1910 basis and adding 31 per cent, for increased 
 
 production and 71 per cent, for increase in prices. Mr. Friday's 
 
 own estimate is 13,400 millions, obtained by the " net product " 
 
 method, which may be said, despite the enormous inflation and the 
 
 difficulty of handling the figures consequent thereon, to confirm 
 
 Kind's work. The point to be considered here is the extent to which 
 
 1 David Friday, " The Taxable Increase of the United States," Journal of 
 Political Economy, December, 1918. 
 
 2 " War Finance and Inflation," Annals of the American Academy of 
 J'olilical Science, January, 1918. 
 
 3 New York Times Annalist, January, 1918.
 
 Stamp — The Wealth and Income of the Chief Powers. 23 
 
 the 1917 figure is confirmed by the income tax data for 1917, after 
 detailed consideration. He finds that the total income subject to 
 tax was nearly 3,700,000,000?., but he is not able to relate this to 
 the total income for the year. All that can be said is that the ratio 
 of increase in taxable income from 1913 to 1917 is roughly comparable 
 with the ratio given by the net product method. Probably when the 
 definite comparison between the results of the two methods cot 
 to be attempted it will be found that the American individual income 
 returns suffer in the same way, statistically, as our own. They will 
 quite fail to exhaust the share of the total income (as taxed at the 
 source) assignable to the classes concerned. Dr. R. P. Faulkner has 
 stated that out of $2,000,000,000 of dividend income, super-tax 
 methods account for only $491, 000,000. * 
 
 7. The German Empire. 
 
 The most frequently quoted source of information for Germany 
 is the work entitled Deutschlands Volkswohlstand, 1888-1913, by Dr. 
 Helfferich, Director of the Deutsche Bank, published in 1913. It 
 represents a clear and able attempt to get a close approximation to 
 the aggregate income and capital. The estimate for national 
 income is based upon the Prussian income tax returns for 1912, on 
 the following lines : — 
 
 Million £. 
 
 1. Net total incomes of taxpayers with incomes of 
 
 over 3,000 marks 326 
 
 2. Taxable incomes of taxpayers with incomes 
 
 between 900 and 3,000 marks, calculated 
 from the arithmetical average of the taxes paid 
 by various classes within this group .... .... 421 
 
 3. Income of certain exempted persons on an 
 
 average of 1,500 marks .... 46 
 
 4. Incomes of tax free individuals and heads of 
 
 households, assuming a minimum average 
 income of 750 marks .... .... .... .... 299 
 
 Total income of personal taxpayers and persons 
 
 exempt 1.092 
 
 The corresponding totals for earlier years were : — 
 
 Million £. 
 
 1896 629 
 
 1901 752 
 
 1906 855 
 
 1911 1.058 
 
 1 Journal of American Statistical Association, 1914, page 521, "Income 
 Tax Statistic^,"
 
 24 Stamp— The Wealth and Income of the Chief Powers. 
 
 An addition is then made for income tax evasion amounting to 
 10 per cent., which is the estimate given by " most authorities." As 
 only the dividends of companies appear in personal returns, the undis- 
 tributed profits or reserves are then estimated on the basis of one- 
 fourth of the income assessed for impersonal taxpayers, or nearly 
 11,000,000?., bringing the Prussian aggregate income up to about 
 175,000,000/., an " average income of 600 marks per caput." 
 
 Dr. Helfferich then declares that a " thorough examination of 
 " the assessment results " (Durchprufung der Ergebnisse der Veran- 
 lagung) " in the other States having an income tax system suitable 
 " for purposes of comparison, shows that this average may be taken 
 " as representing, approximately (ungefahr zutrefiendes Mitt el) 
 " the average income for the whole Empire. In Saxony the average 
 " is rather higher, in Wurttemburg and Baden somewhat lower, in 
 "the Hansa cities — with an average of nearly 1,000 marks— con- 
 " siderably higher, and in the relatively poor Thuringian States 
 " considerably lower." Applying the Prussian average to the whole 
 Empire (with its population of about 66 millions) he gives a grand 
 total of private incomes of 1,910,000,000/. to 1, 960,000,000/. , to which 
 he adds 50,000,000/. for the net incomes of public corpora- 
 tions, Federated States, Eevenues, making in all 1,960,000,000/. to 
 2,010,000,000/. His calculation for 1896 on similar lines comes out at 
 1,050,000,000/., or 410 marks per caput, so that there was 
 an increase of 80 per cent, in aggregate, and 45 per cent, in indi- 
 vidual income. Helfferich says : " the modest character (Wie 
 " massig) of the estimate is seen by comparison with Schmoller's 
 " estimate for 1895 of 1,225,000,000/., which, on the same 
 " basis of increase, would amount for 1911 to 2,200,000,000/." 
 Helfferich omits to note that if he had allowed a wider margin for 
 income tax evasion in 1896 than in 1912 — which by all the literature 
 upon the subject is clearly proper— then his own estimate for 1896 
 is too low, and approximates more closely to Schmoller's figure, 
 while the operation of raising the latter to the 1911 basis is not 
 justified. He considers that Steinmann-Bucher's estimate of 
 1,710,000,000/. for 1908 agrees substantially (in ungefahrer Ueberein- 
 stimmung) with his results. 
 
 In a fifth edition (1915) of his book, translated into French, 
 Helfferich says that no fresh statistics are available, and for 1913 
 he makes a " trifling " increase of 120 millions, bringing the total to 
 43 milliards of marks, or 2,105 millions sterling. 
 
 On a critical review of Helfferich's data and methods, I 
 conclude : — 
 
 (a) That there may be 5 per cent, error in the estimate of tax 
 free incomes either way.
 
 Stamp — The Wealth and Income of the Chief Powers. 25 
 
 (!>) That the 10 per cent, addition for evasion is a minimum 
 figure, and that the figure may possibly be even 30 per oent. The 
 comparison between the supertax and abatement statistics, and the 
 income tax at the source in the United Kingdom, which I made in 
 fche Economic Journal in September, 1918, is an instructive analogy 
 on the possible extent of this margin. But in applying it to these 
 figures, I have allowed for the corporate income under " c." 
 
 The introduction of the <; amnesty " provision in the L913 law, 
 as well as the remarks of candid critics of the German administra- 
 tion, indicate that the loss due to evasion may well exceed 10 per 
 cent. The Prussian system is admittedly strict in its scrutiny of 
 the accuracy of items revealed, and also of the presumptive agreement 
 of the aggregate income with the style of living, but there was no 
 exhaustive method of referring all objective sources of income in 
 detail to individual dossiers. 
 
 (c) The addition for company reserves cannot well be more than 
 25 per cent, below the figure given, but may easily be 50 per cent, 
 above it. 
 
 (d) The use of the Prussian income per head as the basis for com- 
 puting the incomes of the rest of the Empire is not invalidated by 
 any prima facie improbability as to its correctness, though at that 
 date the absence of any reliable comparison for such a large State as 
 Bavaria is an important source of difficulty. It seems, at any rate, 
 possible that the average for the whole Empire might differ from 
 that for Prussia by 5 per cent., or, at any rate, that the non-Prussian 
 States might differ from Prussia by 10 per cent. 
 
 (e) In the estimate of public property an error of 30 per cent, is 
 possible. 
 
 The net result of these considerations is that Helfferich's mean 
 estimate of 1,985,000,000^. may possibly be excessive by 1 1 i,ooo,oooZ. 
 or deficient by 184,000,000/., or say 6 and 9 per cent, respectively, 
 so that it may be classed as a Grade I estimate. 
 
 Capital. — Helfferich takes the statistics of the Property tax in 
 
 Prussia for 1911 as his starting point at an aggregate valuation of 
 
 5,100,000,000. 
 
 He adds : — 
 
 Million £. 
 
 1. For taxable property omitted, 20 per cent. .... 1,020 
 
 2. Private property legally exempt. (Properties 
 
 under 300/. are tax free and those between 
 300/. and 1,000/. are free if the owner has less 
 than 45/. per annum) 
 5,400,000 owners at an average of 122/. and 
 240,000 at an average of 392/ 758 
 
 3. Furniture, utensils, clothing, &c, 10 per cent, of 
 
 (1) and (2) above (17/. per hoad) 735 
 
 4. Property in impersonal ownership.... .... .... 245
 
 26 Stamp— The Wealth and Income of the Chief Powers. 
 
 The aggregate thus becomes 7,850,000,000/. , or about 196J. per 
 head iu Prussia, and, on the assumption of a like basis for the other 
 states, 12,750,000,000/. for the Empire. 
 
 He then adds the State railways, which represent 835 millions 
 of invested capital, but which were worth, in his judgment, 
 1,000,000,000/. to 1,250,000,000/. ; the profit making concerns 
 belonging to State and municipalities, and further corporations, 
 about 125 millions ; schools, churches, parks and similar unproduc- 
 tive property, with military and naval works, from 125,000,000/. to 
 150,000,000/. From the last two classes falls to be deducted the 
 public debts about 125,000,000/. The grand net total is 
 13,950,000,000/. for 1911. 
 
 Helfferich proceeds to check this by reference to fire insurance 
 statistics for 1911 : — 
 
 Million £. 
 
 Insured values in public institutions .... 3,890 
 
 „ ,, joint stock companies .... .... 6,060 
 
 ,, „ mutual associations .... .... 880 
 
 Total 10,830 
 
 Insurance of German property in foreign companies is not 
 included, and no allowance is made for insufficient insurance or self- 
 insurance, and Helfferich concludes that the aggregate value of 
 real and personal property cannot be less than 10,000,000,000/. The 
 value of land, as distinct from buildings, has been variously esti- 
 mated from 1,000,000,000/. to Steinmann-Bucher's figure (approx.) 
 2,500,000,000/. Helfferich assumes an average of 80/. to 100/. per 
 square rod for city areas, and arrives at 1,470,000,000/. An average 
 value of 40/. per hectare for agriculture and forests, gives nearly 
 2,000,000,000/. more. The last item in his estimate, which he con- 
 siders to be the most uncertain of all, is that for foreign investments. 
 The Imperial Marine office in 1905 gave 400,000,000/. to 450,000,000/. 
 as the capital investments abroad. The German holdings of foreign 
 securities were put at 500,000,000/. in 1892 by Schmoller, and at 
 600,000,000/. in 1893 by the President of the Reichsbank ; at 
 800,000,000/. in 1905 by the Marine Office. These two classes of 
 capital overlap, and cannot be added together. Helfferich adopts 
 1,000,000,000/. after allowing for this, and for the securities sold back 
 to foreign countries, and considers it, if anything, too high. His 
 whole table is as follows :—
 
 Stamp — The Wealth and Income of the Chief Powers. 27 
 
 Million £. 
 Real and personal property insured against 
 
 fire nearly 10,000 
 
 Land in Country and City .... .... .... „ .'{..Mm 
 
 Mining property „ :;ih, 
 
 Shipping.... ^ „ 50 
 
 Goods in transit... .... .... .... .... 50 
 
 Metallic money .... .... .... .... .... o,,|, 
 
 Public property, including railways, not in- 
 sured against fire .... .... .... .... „ 1 600 
 
 Capital investments abroad .... .... .... ,, 1,000 
 
 Total net 16,420 
 
 The tax method, therefore, gives a result of 13,950,000,000/., 
 and the fire insurance method 16,420,000,000?., from which Helfferich 
 derives his final figure of 14,750,000,000/., with these as the limits of 
 possibility. Examining the first method in detail and assigning a 
 margin of error to each item, it seems to me that the preliminary 
 aggregate of 7,850,000,000/. may be too much by 200 million and 
 too little by 1,270,000,000/., and the whole Empire (12,750,000,000/.), 
 therefore 300 millions and 1,900 millions respectively, if the pro- 
 portion is identical, as assumed. But there may be an error of at 
 least 10 per cent, in the application of this proportion, and of 
 20 per cent, in the further items, bringing the range of possible 
 error up to — 1,030,000,000/. and 4-2,630,000,000/. respectively. 
 
 Judged by this method alone, therefore, the estimate would 
 range between 12,920,000,000/. and 16,580,000,000/. And all that 
 can be said about the fire insurance method, which contains no 
 elements with a less range of possible error than 20 per cent., is that 
 it tends to the adoption of a figure nearer the upper limit. At any 
 rate, it would justify one in taking, at least, the mid-point between 
 the two limits, and putting the valuation at 15,550,000,000/. 
 Altogether, I am of opinion that Helfferich's estimate is too low by 
 at least 800,000,000/., and that, despite the use of two independent 
 methods, it cannot be classed as Grade I. 
 
 Helfferich then also looks at Schmoller's estimate of (approx.) 
 10,000,000,000/. for 1895, and brings it up to 1911 by taking the 
 mean of the percentage increases in. property tax figures and lire 
 insurance figures respectively (after deducting one-fourth for more 
 complete insurance and more rigid assessment). This gives rather 
 over 15,000 millions, but is, of course, of little value. The wealth 
 per head is given as 226/. to 240/. Helfferich deals in detail with the 
 yearly increase of national wealth, and measures it by various tests, 
 from which we may assume an annual figure at 1912 of 500,000,000/.,
 
 2* Stamp -The Wealth and Income of the Chief Powers, 
 
 to be closely approximate to the truth. His 1914 figure would 
 therefore be 15,750,000,000/. and my own modification, as suggested, 
 16,550,000,000?. 
 
 It must be borne in mind in connection with statements — 
 generally unaccompanied by any data which can form the object 
 of criticism and examination — placing the capital vaguely in the 
 neighbourhood of 20,000 millions, that ulterior motives were par- 
 ticularly likely to exist in German propaganda, and that too much 
 credence can easily be given to vague estimates. Even Helfferich 
 had it in his mind to make out as strong a case as he could, and 
 the tone of his first edition is further exaggerated in the more recent 
 editions (1915). He said, " We are no longer at the mercy of 
 " borrowed capital, nor is a financial blockade possible, since the 
 " days of the Morocco and Tripoli and the Balkan crisis. We built 
 " our fleet and increased our army without having recourse to a loan 
 " for the purpose, and moreover devoted an equal sum to workmen's 
 " insurance, a feat unparalleled elsewhere, and we have repaid foreign 
 " loans. The results of the war have so far justified all we expected 
 "from Germany's economic and financial preparations." (N.B. — The 
 word U3ed is " Riistung," a term rarely employed in the German 
 language otherwise than for military preparations.) " A few weeks 
 " before the outbreak of the war we regarded it as a matter of 
 " world-wide importance to dispel the illusion that financial tactics 
 " could secure what hitherto neither military power, nor alliances, 
 " nor ententes, could bring about, namely, the destruction of 
 " Germany, and we may consequently hope that the future course 
 " of the war will eradicate the illusion once for all and show the world 
 " that Germany is equal to any rival. Whosoever fails to destroy us 
 " by steel and iron need not hope for salvation from the British 
 " Chancellor's ' silver bullets.' In order to maintain the conquered 
 " lands and secure further territory, we must learn from the mistakes 
 " of others." 1 
 
 The editor of the journal from which the above is cited, goes on 
 to remark that previously it could only be conjectured what motives 
 gave rise to the publication and gratuitous distribution of the book, 
 but that now the reasons are abundantly clear. With such an 
 object it can hardly be supposed that Helfferich would knowingly 
 have neglected any opportunity for stating the national wealth as 
 fully as could plausibly be supported by evidence. As a French 
 writer has recently said concerning German estimates, " their 
 " authors have not usually been either modest or moderate." 
 Professor Ballod has made a recent attempt on the following lines : 
 
 1 Slock Exchange Gazette, January 9, 1919.
 
 S i \ \i p -The Wealth and Income of the Chief Powers. 29 
 
 M II on £ (approx.). 
 
 Rural property, built and unbuilt 3,900 
 
 Urban 3,000 
 
 Shares 1,750 
 
 Publiodebt 1,760 
 
 Foreign property 1,230 
 
 Private industry 720 
 
 Trai ling stocks 500 
 
 Various public debts 4,460 
 
 State debts 1,000 
 
 18,900 
 
 Deductions : foreign holdings, &c 2,000 
 
 16,900 
 "Increase" in rural property since 1914 1,000 
 
 17,000 
 
 or in round figures, 18,000 millions. 
 
 He admitted that this total bore traces of inflation, and that 
 after the war the values would shrink, but he was 'considering the 
 immediate fiscal position and the basis of taxation. In my judgment 
 his estimate does nothing to disturb the approximations already 
 reached on Helfferich's basis. 
 
 The most notable recent contribution is that by Steinmann- 
 Bucher 1 , who had reached 17,130 millions for 1908, which Helffericli 
 definitely regarded as too high. The Dresdner Bank, which had 
 already fathered the boastful computations in 1913, took to n - 
 assuring the German people when the war was well advanced, and 
 Steinmann-Bucher " responsible Editor of information for the War 
 " Commission of German industry," did not hesitate to declare at 
 Easter, 1916 (in Deutuchlands Volksvermogen im Krieg) that Germany 
 " was rich before the war, is still more so during the war, and will 
 " be even richer after the war ! " and under the sponsorship of two 
 Professors — Schantz and Julius Wolf- — his doctrine was promul- 
 gated with profusion of publication throughout the Empire. He 
 insists that when an objective total of market value has been reached, 
 one has only begun the tale of national wealth— there are other 
 elements not to be so measured. " I mean also the ability to acquire 
 " wealth, to conserve and increase it, for this very faculty is in itself 
 " riches." We must consider quality as well as quantity. 
 
 For 1914 he reaches 18,800,000,000/. to 19,850, ooo,oooZ. In 
 several items he agrees with Ilellferich's inventory, and the main 
 differences arise through taking " real and personal property 
 
 1 Vide also Das reiche Deutschland - ein Wehrbeitrag, March, 1914, and 350 
 Milliarden deutsches Volksvermogen, 1909.
 
 30 S tamp The Wealth and Income of the Chief Powers. 
 
 "assessed against fire" at 10,000,000,000/. to 11,000,000,000/., or 
 1,000 millions more, and " land in country and city ' at 5,000 
 millions instead of the 3,500 millions adopted by Helfferich. Public 
 property is put at 2,000 instead of 1,500 millions. His estimate of 
 insured values does not seem to be free from the possibilities of 
 double entries while, in dealing with the value of property he has 
 preferred, as a basis, Prussian statistics of sale prices to the taxation 
 rolls. The whole mentality of his work (and an apparent rivalry 
 and jealousy between the two great banks) leads to the view that he 
 would stretch every point to the utmost to prove his thesis. If we 
 accept his figures we are faced with the fact that the boasted Prussian 
 tax system, with all its bureaucratic and police accessories, must 
 have been, in fact, ineffective to a degree, and I do not think the 
 balance of evidence supports a higher figure than 17,000,000,000?. 
 as the capital wealth of Germany in 1914, and I prefer the more con- 
 servative modification of Helfferich's methods, already given, viz., 
 io j55° millions. 
 
 The French writer, Peret, prefers an even lower estimate than 
 Helfferich's own figure, for he considers the fire insurance statistics 
 exaggerate the facts. 
 
 8. France. 
 
 The best work on the subject in recent years is a comprehensive 
 treatment by Eene Pupin (La Richesse de la France (Levant la Guerre), 
 published in 1916, while a briefer but useful summary of the data 
 was made by Kaoul Peret, Deputy, and former Minister of Com- 
 merce, the general reporter of the budget, in 1917. 
 
 In recent articles in Economiste Europeen (February, 1918) E. 
 Thery, author of " La fortune publique de la France " (1912), has 
 made new computations of the capital wealth for 1912, following 
 upon his estimates for 1892 and 1908. 
 
 Pupin expected to be criticized for arriving at figures in excess 
 of previous investigators, but he is convinced that for many years the 
 wealth of France has been underestimated. About 1906 to 1908 the 
 ' private wealth " had generally been put at 8,720,000,000/., whereas 
 Pupin, though regarding the total annual additions as 720,000,000/. 
 only, reaches 11,300,000,000/. for 1911. In the same way the 
 income had been put at 1,110,000,000/. to 1,190,000,000/., and 
 Pupin reached 1,430 millions. He claims to establish that the 
 share of national dividend going to " capital " is clearly less than 
 that going to " effort," that, taken together, they make 13 per 
 cent, on capital, and that 10 per cent, of the annual income repre- 
 sents the net annual addition to capital.
 
 Stamp — The Wealth and Income of the Chief Powers. 31 
 
 Income. Pupin recognizes four possible methods of estimation : 
 
 (1) That used by the Administration des Finances, viz., a co- 
 efficient giving a constant relation between rental values of pfinis.-s 
 and the incomes of their inhabitants. 
 
 (2) The computation of income from the amount of taxes paid. 
 
 (3) Classification of trades, iV.c, according to local areas, with a 
 " oo effioient of productivity." 
 
 (1) " Successive approximations," as adopted by de Foviile. 
 Be employs the last, and seeks to find the " net income " or 
 annual produce from capital and work which the French are able 
 to dispose of after paying all general expenses of their enterprises. 
 Basing upon the 1906 occupational census, he uses the average 
 wages or earnings for each class or category. The Ministry of 
 Agriculture furnished adequate data in 1913 (farm labourers, 45Z. ; 
 women, 27Z. ; male domestics, 40Z. ; female domestics, 30/., or an 
 average over all of about 39J.). 
 
 His summary table of personal incomes is as follows : — 
 
 Million £. 
 From capital — 
 
 Landed property .... .... 80 
 
 Buildings 108 
 
 Stocks and shares .... .... .... .... .... 176 
 
 Savings bank, pensions, bank deposits, &c. .... 36 
 
 400 
 
 From effort — 
 
 Agriculture (4,047,000 persons) 148 
 
 Industry (6,215,000 persons) 277 
 
 Commerce (1,437,000 persons) .... .... .... 58 
 
 Professions (100,000 persons) 4-8 
 
 Public officials (655,000 persons) 35 
 
 Domestic service (946,000 persons) 38 
 
 560 
 
 Army and Navy (593,000 persons) 25 
 
 From capital and labour — 
 
 Farming .... .... .... .... .... .... 132 
 
 Commerce and private industry .... 148 
 
 Liberal professions .... .... ■••• 33 
 
 313 
 
 Total income of all kinds 1,298 
 
 Deduct 10 per cent, from the income from shares 
 for income from other sources already 
 counted in this summary .... 18 
 
 Total of individual incomes £1,280 
 
 Some important additions have to be made to this figure to 
 bring it up to the " national " income in the ordinary sense :—
 
 32 Stamp — The Wealth and Income of the Chief Powers. 
 
 (1) 20 millions for undistributed company profits. 
 
 (2) 96 millions for subsistence of 4,800,000 persons living on the 
 holdings of their farms at 493 francs per head, which can be increased 
 to 140 millions when the whole families are included. 
 
 (3) 3-6 millions for land belonging to the State, the Departements 
 and the Communes. 
 
 The income from landed propert) r is based upon the estimates 
 of capital values, together with the percentage ratios obtained by 
 administrative investigations, and is unlikely to be in error by more 
 than 5 per cent. An inquiry in 1909-10 gave a gross value for 
 133 millions for dwellings and 14 millions for factories, and Pupin 
 deducts 25 per cent, from the former and 75 per cent, from the 
 latter to get net values, with an addition of 4 per cent, from 1909 
 to 1911. The gross figure is probably correct within 5 per cent., 
 but the deductions are extravagant, and I incline to the addition of 
 10 millions to his net result. Accepting the aggregate capital value 
 average of stocks and shares adopted for the capital valuation, the 
 return thereon was taken from various investigations at 4 per cent. 
 This average is not a carefully weighted one, and may be in error 
 by one quarter per cent., or one-sixteenth of the estimated return. 
 The return from Savings Bank and other bank deposits is built 
 up from various ' statistical sources under nine heads, and would 
 err only by omissions ; in fact, Pupin himself says " au total lea 
 " revenus de cette categorie auraient largement depasse 900 millions 
 " en 1911 ; dans notre desir de demeurer plutot en dedans de la 
 " realite, nous porterons ce dernier chiffre." The estimates of 
 earnings and wages are based upon the occupational census of 1906, 
 with an addition, small it is true, but adequate for French conditions, 
 to bring the figures up to 1911. In agriculture the report of an 
 official inquiry for 1910 (published 1913) by the Ministry of Agri- 
 culture, furnishes the required data, and the general average wage 
 is 43Z. for men and 28I. for women. Pupin's net figure, after a reduc- 
 tion for the slack season, makes no provision for value of board and 
 lodging to farm hands living in, which would have been charged 
 as an expense in arriving at the farmers' profits. It cannot be put 
 at loss than 6 millions. The possibility of error under the main 
 heading is at least 10 per cent. 
 
 For wages in industry generally, Pupin has no scientific ad hoc 
 data, but relies upon (a) the statistics for mines and quarries in 
 1905 (which show that 195,000 workers shared just over io,ooo,oooZ. 
 or about 52Z. per head) putting his figures at 54L per head for 1911 ; 
 (b) investigations by Lavergne and Henry (1906) indicating for male 
 workers 86l. in Paris and 49Z. elsewhere, and for female workers 48Z.
 
 Stamp — The Wealth and Income of the Chief Powers. 33 
 
 in Paris and 24J. elsewhere. These are weighted for the general 
 average, increased by 3 per cent, for the further five years, and 
 give 55/. per man (applied to 4,005,000 workers) and 29J. pet woman 
 
 (applied to 2,210,000 workers). A small reduction in made for 
 800,000 transport workers. It will be seen that the samples upon 
 which the estimate is based are small and out of date, and it may 
 well be that the result is 10 per cent, too high or 20 per cent, too low. 
 
 For commerce, examples are drawn from a branch bank, an 
 '' Etablissement de credit," and the result of " observations " in 
 1905 showing, for men, 74Z. in Paris, and 40Z. elsewhere, and for 
 women, 40J. in Paris, and 24Z. elsewhere. With an addition to 
 bring the figures to 1911, it is 49?. throughout for men and 28i. 
 for women, applied to 916,000 men and 521,000 women. The 
 figures are so low that it does not appear possible the estimate can 
 err in excess. Public officials are taken, after sample inquiry, at 
 60I. for State servants and 48Z. for local officials, while the Army and 
 Navy figures are closely known. Domestic servants are averaged 
 at 40Z. per head per annum. 
 
 The income from industry, &c, is taken under farming, commerce 
 and professions respectively. The farming " net produce " is 36 
 millions, adopted from official statistics, and subjected to a com- 
 parison between 1892 and 1912 in the prices of produce and the 
 level of expenses, and Pupin adds 96 millions for the remuneration 
 of 5 million " farmers." Renoiilt in 1905 gave 12I. per head, but 
 Lavergne and Henry, working upon Coste's details (for 1892) put 
 it at 17?. 15s. There is a possible underestimate in this case of at 
 least 10 per cent. In commerce and private industry the details are 
 very meagre ; 897,700 businesses from 1 to 50 workers each, or an 
 average of 3, are assumed to make 160I. each ; 180,000 establish- 
 ments of a more modest character, without wage earners, are put 
 at 80I. each. The professions are taken in detail, with estimated 
 profits for each sub-class. As examples I may mention : doctors, 
 180I. ; dentists, 120Z. ; veterinary surgeons, 120I. ; teachers, pro- 
 fessors, &c, 60Z. ; barristers (including the briefless), 60I. ; artists 
 and writers from 48Z. for half the number up to 480/., for the " aris- 
 tocratic " 5 per cent, of the total number : engineers and architects, 
 120I. for heads of firms, and 60I. for assistants, &c. These averages 
 all seem to be astonishingly low to English ideas, but it may be 
 assumed that Pupin has not written without considerable know! 
 of actual French conditions. 
 
 His actual gross total of 1,430,000,000*. may, in my judgment, 
 be too much by 80 millions, or too little by 170 millions, and the 
 estimate standing alone must be put in Grade II. 
 
 D
 
 34 Stamp -The Wealth and Income of the Chief Powers. 
 
 Peret's estimates for land and buildings, based on the adminis- 
 tration of direct taxes, are the same within 2 millions ; learned pro- 
 fessions within 1 million. 
 
 For " commerce, industry, public functions and offices " (cal- 
 culated by the method of " average relation " between the principal 
 of the licence tax and the revenue of the professions in 1907) he 
 gives 220 millions against Pupin's 173 millions, a difference which 
 is largely counterbalanced by his 108 millions for " profit of agri- 
 " culture " (based on the report of the Commission of Fiscal Legis- 
 lation of the Chamber of Deputies, on the Income Tax proposal 
 1907), which is 24 millions less than Pupin's figure. Salaries, wages 
 and pensions are put at 480 millions, and the income from personal 
 property at 160 millions, making a gross total of 1,200,000,000?., 
 which, Peret himself says, is a " very low estimate." 
 
 Capital. — Pupin's valuation upon the direct method, as at the 
 end of 1911, is given in the table on the next page, side by side 
 with those by Peret and Thery (1912), in order that they may be 
 compared in detail as far as possible. 
 
 Land. — Pupin and Peret take the results of the inquiry by the 
 Ministry of France in 1908, but Pupin, after endeavouring to show 
 its consistency with the statistics of 1879 (by means of index numbers 
 of prices, &c), adds 320 millions for the enhancement in value 
 between 1904 (which he treats as the true point in time for the 
 official value) and 1911. He then deducts 112 millions as the value 
 of lands belonging to the State, Departements and Communes. 
 M. R. Salefranque, writing in 1914 on " Les transmissions immobiliers 
 " devant l'impot," adopts the original values of 1878, as proper 
 to 1914, by a comparison of the prices of produce. This figure, 
 3,640 millions, is probably considerably too high, but there is little 
 doubt that the valuation by reference to the direct tax roll gives too 
 low a result, possibly by 10 per cent. 
 
 Buildings.— Pupin and Peret adopt the findings of " L'adminis- 
 tration des Contributions Directes " for 1909. Pupin adds for the 
 increase in value for two years 64 millions. The underestimate, 
 after dealing with the various considerations put forward by him, 
 may well be 10 per cent. Indeed, other French writers have put 
 the value of land and buildings in 1908 at 5,695 millions instead of 
 Pupin's 5.368 millions for 1912, and Peret treats the figures as under- 
 estimated. 
 
 On the other hand, the mortgage debt of 600 millions (Michel's 
 estimate) is not deducted (except by Pupin to the extent of 100 
 millions). Thery 's total for these two classes, which he divides a 
 little differently, is rather greater, 5,536,000,000!!.
 
 Stamp — The Wealth and Income of the Ohief Powers 
 
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 36 Stamp — The Wealth and Income of the Chief Powers. 
 
 Fonds de Commerce, Industrie privte et stocJcs y attache's — Farm 
 Capital. — Pupin takes the 1906 general census results and classes 
 the commercial establishments as small, average (employing two to 
 five persons) and large (employing more than five persons). He 
 assigns an average profit of 120I. to the first, 320/. to the second, and 
 8x61. to the remainder, giving 148,000,000/. for the whole number. 
 The 630,000 industrial businesses are similarly treated, excluding 
 20,000 which are assumed to be accounted for in the values of shares, 
 bringing these classes together up to 440 millions. Lavergne and 
 Henry in 1908 had taken the official statistics of la contribution des 
 patentes, and arrived at annual profits of 106 millions, which they 
 capitalised at 260 millions only. Pupin suggests that at least three 
 years' purchase should have been taken. These figures do not 
 include stock in trade. In an ingenious work " Les Reglements par 
 Effets de Commerce," Roulleau computed from the total Bills of 
 Exchange stamped in 1911, and their average term, that they repre- 
 sented an average value of 200 millions. Offices are valued, follow- 
 ing Lavergne and Henry, at 75,ooo,oooZ. Farm capital is computed 
 mainly from the known numbers of different classes of live-stock, 
 amounting to 260,000,000/., with an estimate for material. Peret's 
 valuations under these heads are not strictly parallel, and are deduced 
 from declarations of inheritance, with the multiplier of 35. 
 
 Yaleurs mobilieres. — The authority of Neymarck is relied upon 
 by Pupin. Neymarck has certainly made very careful computations 
 as to the total values quoted on the Paris Bourse (165 milliards of 
 ' francs), but the elimination of one-third (55 milliards) as belonging 
 to foreigners, societies, or held by companies whose shares are a mere 
 duplication, is open to considerable doubt. " Ces no milliards 
 rcpresentent la fortune mobiliere des capitalistes franfais, abstrac- 
 " tion faite des titres conserves dans la portefeuille des Societes 
 " par actions." 
 
 Peret quotes the statistics of the Administration of Registration 
 as to the nominal amount of capital liable to stamp duty. The 
 official estimate of Government annuities and Treasury Bills is 
 1,020,000,000/., which Peret reduces to 800 to allow for foreign 
 holdings. He considers that the common estimates ranging from 
 4,300 to 4,600 millions are over-stated. 
 
 Other moveable wealth. — Pupin includes furniture, clothing, jewel- 
 lery and plate, domestic animals, vehicles, ships, &c. For furniture 
 he proceeds upon the assumption that when the letting value of a 
 house is below 200/., the furniture has the greater value, but for 
 premises lower than 40/. it has less, and on this basis he gets 
 80,000,000/. This is supported by taking a figure, per head, of
 
 Stamp — The Wealth and Income of the Chief Powers. 37 
 
 120 francs. Furniture is assumed to be worths quarter of its cost 
 and clothing one-eighth (40,000,000*.). Vehicles are put at 
 40,000,000/. and ships at 20,000,000/. Poet's figure is obtained 
 by the multiplier 35. 
 
 Savings Banks, &c— These items lend themselves better than the 
 majority to direct valuation. 
 
 Upon the whole valuation Pupin 's total is clearly liable to a 
 possible error of well over 10 per cent., and P6ret admits that many 
 of his items are rather below the real figure and that the total must 
 amount to at least 12,000 millions. Thery's computation is the 
 maximum to which any French writer, giving detail, has committed 
 himself. 
 
 As a matter of fact, in France, " the classic home of the method 
 " of the devolution interval," as Gini has said, statisticians have been 
 hypnotised by the multiplier, and in the absence of the strong counter- 
 vailing evidence that we in England possess, have put such con- 
 fidence in its results, that they have distrusted the numerous assump- 
 tions of the inventory method when it leads to substantially higher 
 figures. Pupin devotes a chapter to the multiplier, and declines to 
 accept the traditional 35, " pieusement recueilli et transmis par lea 
 '' plumes les plus autorisees." But his modification is confined to 
 " l'annuite mobiliere." He finds that in 1891-5, taking 1893, the 
 valeurs mobilieres appearing in " l'annuite successorale " amount 
 to 1,574,000,000 francs, and at this time the amount of the " fortune 
 " mobiliere " was 78,000 millions, or 55 times as much. Similarly in 
 1896, the total was 52-4 times as great. He therefore takes as a 
 basis the net values of " Successions " and " donations," divides the 
 total into two, viz., " annuite* mobiliere " et " annuite comprenant 
 " tous les autres biens,"and multiplies the former by 50 and the latter 
 by 35. In this way 7,155,000,000 francs has to be considered. 
 " L'annuite mobiliere " is taken as 110,000,000,000 francs divided by 
 50, or 2,200 millions, and the balance, 4,955 millions, is multiplied 
 by 35 to give the equivalent capital, thus obtaining 283 milliards 
 or about 11,300,000,000/. This method is, of course, no check at 
 all upon the inventory method, and is reasoning in a circle, for it usee 
 the inventory to get the multiplier in an empirical way, instead of 
 obtaining a multiplier by independent means as a check upon the 
 inventory. This multiplier is in no sense a true statistical co- 
 efficient from vital statistics. Pupin shows that the multiplier of 35 
 applied in detail gives results which show surprising discrepancies 
 when compared with inventory values. Savings banks deposits, for 
 example, only come to 50 per cent, of the acknowledged figures. H« 
 ooncludes his examination by saying that its lesson is easily gleaned. 
 
 433310
 
 38 Stamp — The Wealth and Income of the Chief Powers. 
 
 " Do not condemn the method of the successorale annuite, but correct 
 " it, rejuvenate it, and then it will do you good service ; all insti- 
 " (rations are subject to similar exigencies, and the best buildings 
 " can be made to resist the effects of time only if they are properly 
 " restored " — which is a euphemistic way of saying that you must 
 hammer the figures till they fit. 
 
 (Since the foregoing was written, and within the past week, the 
 latest edition of Colson's Coins d'economie politique, just published, 
 has come into my hands. In the third volume, devoted to this 
 subject, he reaches the conclusion that the capital wealth at the 
 end of 1913 was almost exactly i2,ooo,ooo,oooJ., or 300Z. per head.) 
 
 9. Italy. 
 
 Corrado Gini and Lanfranco Maroi in their works upon the wealth 
 and income of Italy, refer in detail to the investigations and estimates 
 of the following writers in recent years : Nitti (1905), Coletti (1907), 
 Gini (1909), Princivalle (1909), Colajanni (1910), Santoro (1911), 
 Gabrielli Wiseman (1915), Benedetti (1916), Coppini (1916), Contento 
 (1917), Savorgnan (1916), Corniani (1918), Gini (1918), and various 
 others. Literary activity on the subject in Italy has evidently been 
 remarkable, and space quite forbids that I should here examine all 
 these efforts. I propose to give brief particulars of two or three of 
 the more detailed investigations. 
 
 
 M'llionfi 
 
 sterling. 
 
 
 
 
 
 
 Gini 
 
 Corniani 
 
 Santoro 
 
 Gini 
 
 Princivalle 
 
 
 for 1914. 
 
 1914. 
 
 1910. 
 
 for 1908. 
 
 for 1908. 
 
 1. Lands, including build- 
 
 1,760 
 
 1,200 
 
 1,000 
 
 1,480 
 
 
 960 
 
 ings in rural areas, 
 
 
 
 
 
 
 
 mint's, quarries. 
 
 
 
 
 
 
 
 2. Buildings (urban).... 
 
 M II 1 
 
 800 
 
 480 
 
 640 
 
 
 480 
 
 3. Livestock .... 
 
 200 
 
 280 
 
 240 
 
 140 
 
 
 140 
 
 4. Money 
 
 56 
 
 120 
 
 68 
 
 68 
 
 
 67 
 
 5. Deposits; savings banks, 
 
 
 
 
 
 
 
 deposit and current 
 
 
 
 
 
 
 
 accounts.... 
 
 304 
 
 240 
 
 140 
 
 176 
 
 
 177 
 
 6. " Rendita consolidata " 
 
 
 
 
 
 
 
 and other public debts 
 
 240 
 
 480 
 
 412 
 
 220 
 
 
 220 
 
 7. Bills, shares and bonds .... 
 
 264 
 
 760 
 
 520 
 
 252 
 
 
 250 
 
 8. Furniture, &c 
 
 460 
 
 — 
 
 — 
 
 120 
 
 } 
 
 
 9. Other moveable property 
 
 400 
 
 120 
 
 120 
 
 200 
 
 220 
 
 
 
 
 
 
 r 
 
 2,440 
 
 
 4,484 
 
 4,000 
 
 2,980 
 
 3,296 
 
 I 
 
 to 
 
 2,600
 
 si \\ir The Wealth and Income of the Chief Pom S9 
 
 Gini builda his 1914 estimates upon his figures of 1908, by 
 
 applying the ratio of increase shown by the death duty st.it i 
 
 which lead from 3,296 millions to 4,000 millions, but he gives good 
 
 reasons for supposing that actual wealth has increased at a greater 
 
 nitr. Maroi and Gini make a careful comparison with tin- estimate of 
 
 Princivalle for 1908, and Gini, in the course of his long chapters, 
 
 presses into service the inventory, the multiplier and the capitalisal ion 
 
 methods in turn, as they happen bo 1"' available or appropriate. 
 
 Gini's estimate for 1908 was 3,296 millions against Princivalle's 
 
 2,600 millions. His predecessors had used the method of the 
 
 " intervallo devolutivo," and Gini shows why this method, especially 
 
 in Italy, leads to deficient results. " Gli autori sopra citati non attri- 
 
 " buivono poi, a mio modo di videre, un' importanza adequata all' 
 
 " evasione, che essi ritenevano di solo J del valore accertato e tassato, 
 
 " ossia di 1/5 del valore effetivo." Princivalle's valuation was 
 
 based mainly on the inventory method, and it differs from Gini's 
 
 in attributing values of 960 and 480 millions respectively to lands 
 
 and buildings against 1,480 and 640 millions, which Gini claims, 
 
 with justice, I think, to have established. Maroi confirmed the 
 
 view that no better starting point can be found for estimating Italy's 
 
 wealth before the war than Gini's 1908 estimate (che e la piu rigorosa e 
 
 scientificamente esatta). Corniani's estimate seems to be a journalistic 
 
 effort, lacking a scientific basis, and manifestly erroneous in details, 
 
 as, for example, in the value of lands, although the total valuation is 
 
 not far wrong. 
 
 Gini certainly went to very great trouble in his enquiries in each 
 local area to ascertain the extent of the deficient valuation of land 
 and buildings which, of course, dominate the whole estimate. 
 
 The estimate for Italian wealth falls, in my judgment, in 
 Grade II. 
 
 The national income of Italy has not been so frequently deter- 
 mined, and no recent details are available. The income tax data 
 are weak, and the occupational census method does not greatly 
 assist. Bogart (Direct Costs of the Present War) adopts the current 
 estimate of 800,000,000?. 
 
 10. Spain. 
 
 A French writer, M. Andre Barthe, has recently made a detai 
 
 estimate of Spanish wealth : —
 
 40 Stamp— The Wealth and Income of the Chief Powers. 
 
 Million £ (appox.). 
 
 Buildings 500 
 
 Land 1.100 
 
 Livestock 100 
 
 Stocks and shares 240 
 
 Equipment .... .... .... •••• ••■• ?2 
 
 Furniture and moveables 360 
 
 State debt 360 
 
 Precious metals .... .... ■••. •■•• 80 
 
 Banking current accounts .... .... .... 8 
 
 Stocks of goods in hand .... .... .... 60 
 
 Total 2,940 
 
 He rejects the multiplier method owing to the fact that the 
 statistics of the succession duties go back to 1891 only. But the 
 figures of even the highest year, with a multiplier of 27, give ridi- 
 culously low results. The Register of Property gives an average 
 letting value for buildings of 20,000,000?., corresponding to a capital 
 value at 4 per cent, of 500 million as against the value by the multi- 
 plier method of only 324,000,000/. 
 
 In the case of land, the products alone are worth 240,000,000?. 
 annually, against a capital value on the multiplier method of 
 373,000,000?. The share capital and the profits of large companies 
 form the basis of valuation for business, and smaller trades are taken 
 at an average capital of 160Z. for 95,000 establishments. Three 
 million families are credited with household possessions on an average 
 of 120Z. each. The other items of the inventory are calculated in 
 the ordinary way. The value of State lands is cancelled by the entry 
 for the State debt, and collective wealth generally has been included. 
 
 Barthe computes the national income on the eve of war, as 
 follows : — 
 
 Million £. 
 Property and livestock — 1,760 millions at 3 J per 
 
 cent 61-6 
 
 Wages of 2,000,000 workpeople 800 
 
 Stock, share and State debt 28-6 
 
 Official salaries, taxed and not taxed .... .... .... 20-5 
 
 Profits of five classes taxed to l'impot des patentes ; 
 389,000 taxpayers at an average of £100 each (cor- 
 responding approximately to the tax capitalised 
 at 5 per cent.) .... .... .... .... 37-6 
 
 228-2 
 
 A Spanish writer, F. Bernis, puts the income at less than 240 
 millions (Economic Journal, March, 1919, page 83). These results 
 give the capital per head prima facie too high, and the income 
 apparently too low compared with other countries.
 
 Stamp — The Wealth and Income of the Chief Powers. 
 
 41 
 
 11. Austria Hungary. 
 
 The most authoritative and recent estimates of wealth are by 
 F. Fellner, who wrote a book in 1913, and also made a report to 
 the International Congress at Vienna. His estimate on the in- 
 ventory method has been revised from time to time since 1902. 
 
 Million 
 
 £. 
 
 
 
 
 
 
 
 Austria. 
 
 I 
 
 Hungary. 
 
 Landed property .... 
 Mines tind foundries 
 Buildings .... 
 
 Means of communication.... 
 Moveable wealth .... 
 Investments abroad 
 
 
 1,206 
 235 
 624 
 438 
 
 1,100 
 216 
 
 
 • 
 
 830 
 
 93 
 
 367 
 
 242 
 
 554 
 
 8 
 
 Deduct for debts due to foreigners 
 
 
 3,819 
 288 
 
 3,531 
 v 
 
 
 
 2,084 
 350 
 
 1,734 
 
 
 
 5,265,000,000/. 
 1910-12 
 
 as for 
 
 Neymarck estimates from 5,250 millions to 6,666 millions and 
 Peret, working upon Fellner's figures, 6,175 millions for 1913. A 
 regards income, there appears to be no recent estimate. Bogart 
 {Direct Costs of the Present War) relies upon a figure of 1,100,000,000/. 
 
 12. Capital Wealth in Other European Countries. 
 
 I now propose to give brief references to estimates which, 
 generally for reasons of language, I have not been able to consider 
 first hand, but for which I am dependent upon intermediate sources, 
 Gini, Peret, Maroi and others. 
 
 Holland. — Gini quotes Boissevain's estimate (on various bases) 
 of 880,000,000/. or 192/. per head in 1892, and by reference to the 
 ratio of probate returns in the two years, increases jt to 1,200,000,000/. 
 or 205!!. per head in 1909. 
 
 In a comprehensive work on the statistics of National Wealth, 
 National Income and Public Bodies, published in 1917, Dr. VerriJD 
 Stuart brings his figures for 1888 up to date, and covers the period 
 up to 1910. He reaches 1,050,000,000 mainly upon the " multiplier. " 
 basis. 
 
 Swe den. — Flodstrom for 1908, working on the inventory method, 
 computed 767,000,000/. as the inclusive national wraith (01 
 millions for individuals) being 141/. per head. Fahlbeok, on a
 
 42 Stamp — The Wealth and Income of the Chief Powers. 
 
 similar method, 1913, reached for the year 1908 777,000,000/., or 
 1 43 J. per head : — 
 
 Million £. 
 
 Agricultural property and State forests .... .... 208 
 
 Other properties .... .... .... .... .... .... 263 
 
 Mines, &c. 29 
 
 Fisheries .... .... .... .... .... .... .... 5 
 
 Means of communication .... .... .... .... 50 
 
 Merchant marine .... .... .... .... .... .... 9 
 
 Livestock and agricultural produce .... .... .... 55 
 
 Machinery, &c, personal moveables .... 210 
 
 Money and foreign credits .... .... .... .... 23 
 
 852 
 Debts due to foreigners .... .... .... .... .... 75 
 
 Total 777 
 
 The average rate of increase in the decade was 27,000,000?. per 
 annum. 
 
 Belgium. — A survey of Belgian wealth published in 1913 by 
 the Finance Ministry of Belgium gave the following estimates : — 
 
 Million £. 
 Land 264 
 
 Buildings .... 
 Personal wealth 
 Cash 
 Furniture, &c. 
 
 235 
 
 545 
 
 17 
 
 120 
 
 1,181 
 
 or 156/. per inhabitant. 
 
 As long ago as 1892 it was estimated by Graux and Beernaert 
 at 1,400,000,000?. (or 224?. per head). Gini raised this to 
 1,860,000,000?. (or 254?. per head) for 1908 on the basis of the increase 
 in death duty statistics. But Julin's composite index number " The 
 " economic progress of Belgium " (Journal, February, 1911) showed a 
 rise from 116 in 1892 to 187 in 1908, and it would appear that the 
 earlier estimate must have been excessive. On the other hand, the 
 recent estimate seems, prima facie, too low, and in the absence of 
 comprehensive revenue or tax statistics, no close estimate is possible. 
 Maroi refers, without quoting authorities, to recent estimates of 
 2,400,000,000?. (or 300?. per head) on the eve of war, but it appears 
 to me that it has proceeded on the same basis as Gini and been 
 carried to 1913. 
 
 Norway. — Working upon old estimates for 1884 and 1891, Gini 
 arrives at an estimate for 1911 of 184 to 214 millions, or 79?. to 90?. 
 per head.
 
 Stamp — The Wealth and Income of the Chief Powers. 43 
 
 Denmark. — Gini quotes 404,000,000!., or 166I. per head for 1900. 
 
 Switzerland. — Steiger has computed the- private wealth of each 
 canton separately for 1900 and 1910. His total was 580,000,000/. 
 But Gering and Holz (Economic politique de la Suisse) reach 
 800,000,000/., taking greater account of tax evasion. Gini accepts 
 600,000,000/. to 800,000,000/. or 160/. to 216/. per head. 
 
 Russia. — Maroi quotes an estimate of 12,000.000,000/., and 
 Peret says it would amount to " at least " 8,000 millions ; while 
 Neymarck puts it from 10,000 to 13,000 millions. They are all 
 wide guesses. The Commission of the Duma in 1910, in reporting 
 on the Income Tax law, estimated the income at 980,000,000/., 
 which seems to be an obvious underestimate. 
 
 Turkey is credited by Maroi with 1,400 millions, or 64/. per 
 head, and Bulgaria with 400 millions, or 90/. per head, but Neymarck 
 estimates 600 millions in the latter case. For Roumania, Neymarck 
 estimates from 800 to 1,120 millions, and P6ret says that it has 
 been " quite recently " put at 860 millions, in which figure were 
 included " the State fortune, railways and forests — but the data 
 " are open to discussion." Serbia is given 480 millions, or 105/. 
 per head, by Maroi. 
 
 For Greece, Gini quotes an old estimate (1890) by Skiadau of 
 2,200 millions, or 88/. per head. 
 
 13. Australia. 
 
 The " well informed guesses " put forward by Sir Robert Giffin 
 in 1903 for the various parts of the British Empire, have been relied 
 upon by most writers, but so far as Australia is concerned, they 
 have now been definitely superseded by perhaps the most thorough 
 and complete attempt that has yet been made to ascertain national 
 wealth. 
 
 Sir T. Coghlan made reasoned estimates for 1903, in ten clas- 
 amounting to 982,000,000/., or actually less than his estimate for 
 1890, viz., 1,019,000,000/. 
 
 In July, 1915, an Act was passed by the Federal Parliament 
 making provision for a war census. In one of the schedules issued 
 by the Commonwealth Statistician in connection with this matter, 
 all persons over 18 years of age, irrespective of sex, possessed of 
 property, holding sums on trust, or in receipt of income, were 
 required to give particulars of the same in such a manner as to 
 show the new value of the property, less debts and liabilities out- 
 standing at December 31, 1914, as well as income from all 
 sources, with deductions of various kinds. The results are 
 forth in considerable detail in a publication prepared by the
 
 44 Stamp— The Wealth and Income of the Chief Powers. 
 
 Commonwealth Statistician, entitled " The Private Wealth of 
 " Australia and its Growth as ascertained by various methods, 
 " together with a Report of the War Census of 1915." For Australia 
 as a whole, the final figures were : — 
 
 Aggregate of net incomes for year ended June 30, 1915 
 
 Number of returns for individuals 
 
 Aggregate of net incomes of individuals .... 
 Aggregate of net assets at June 30, 1915.... 
 Aggregate of net assets of individuals 
 
 257,650,251 
 
 2,195,065 
 
 ... 241,236,552 
 
 ... 1,643,463,376 
 
 ... 1,224,225,994 
 
 The difference between the two separate statements of income 
 and assets is explained by the fact that the higher figures in each 
 statement include returns from non-resident partnerships, trust 
 funds, companies, and institutions. Income from trust funds is, 
 in the main, included in the " individual " returns of beneficiaries. 
 Similarly, the aggregate of net assets of individuals includes the 
 value of interests in trust estates, assurance and annuity policies, &c. 
 In the tables relative to income and assets, the allocation to 
 States and territories is based on the locality of residence of the 
 owners or representatives, not on the locality in which the income 
 was earned or the assets are situated. The aggregate of net incomes 
 and assets of individuals, non-resident partnerships, trust funds, 
 companies and institutions for the year ended June 30, 1915, is 
 apportioned among the States and Territories as follows : — 
 
 States and territories. 
 
 Income. 
 
 Assets. 
 
 
 £ 
 
 Per cent. 
 
 £ 
 
 Per cent. 
 
 New South Wales 
 
 101,382,366 
 
 39-34 
 
 645,699,068 
 
 39-30 
 
 Victoria 
 
 78,987,957 
 
 30-66 
 
 565,337,460 
 
 34-40 
 
 Queensland .... 
 
 34,244,339 
 
 13-30 
 
 163,803,435 
 
 9-97 
 
 South Australia 
 
 20,129,634 
 
 7-81 
 
 154,623,129 
 
 9-40 
 
 Western Australia .... 
 
 15,310,227 
 
 5-94 
 
 67,869,080 
 
 412 
 
 Tasmania 
 
 7,281,846 
 
 2-83 
 
 44,945,491 
 
 2-74 
 
 Northern Territories 
 
 210,654 
 
 0-08 
 
 842,734 
 
 0-05 
 
 Federal Territories .... 
 
 103,228 
 
 0-04 
 
 342,797 
 
 002 
 
 
 257,650,251 
 
 100-00 
 
 1,643,463,376 
 
 100- 00 
 
 It will be observed that " individual " income is 93 per cent, 
 of " total " income, and " individual " capital is 74 per cent, of 
 " total " capital. 
 
 Gifien's figures of 1,100 millions for Australasia in 1903 was, if 
 anything, below the actual mark. Mr. Knibbs' volume is interesting, 
 not merely from its full account of a genuine census of wealth, but 
 also for its general theoretical examination of the multiplier and
 
 Stamp— The Wealth and Income of the ( 'hie/ Pou; 45 
 
 its parallel results in practice, the relations between income and 
 capital, and muoh information on the question of the distribution 
 
 of wealth. 
 
 The method of avoiding duplication between the dividends 
 
 received by companies and the profits made by companies is 
 described as follows : — 
 
 A special tabulation was made of the total assets shown on the 
 cards as comprising shares and debentures of companies and a 
 special return was obtained from all Australian companies showing 
 the undistributed profit during the year under review, including 
 sums transferred to reserves. In the final tabulation of the results, 
 the net assets of all companies were reduced by the amount of 
 shares and debentures in companies shown as being held in Australia, 
 the balance representing, approximately, the amount of outside 
 capital invested in companies operating in Australia. In the case 
 of income, the wealth and income card did not furnish a means of 
 determining the total income derived from dividends of companies. 
 The special returns of undistributed profit mentioned above was 
 consequently taken as furnishing for Australian companies the net 
 income not included in shareholders' returns. 
 
 ' The net assets of the Australian companies were taken from 
 " special returns obtained from these companies, such net as 
 "being computed without deducting the liabilities to share and 
 "debenture holders. From the total net assets so computed, the 
 " aggregate amount of shares and debentures in companies shown 
 " on the various individual and other cards was deducted, the 
 ' balance representing, approximately, the interest in Australian 
 " companies held by persons not resident, together with the margin, 
 " if any, between the share valuations of the several sharehold< 
 " and the valuation of net assets made by the company officials." 
 
 The income relating to non-residents was only just over one 
 million, and the balance (for individuals) represented 48 1, gs. jd. 
 per head (50I. 10s. 4^. in New South Wales, 50I. us. 2d. in Victoria), 
 but, per return, it was nol. 
 
 The capital wealth is of course distributed between the States 
 according to the States of domicile of the owners. The total of 
 1,643,000,000?. includes the Australian property of non-reside] 
 estimated as between 150,000, oool. to 200,000,000/., but does aot 
 include the property of Federal States or Local Governments, so 
 that " the aggregate private wealth of Australian residents as at 
 " June 30, 1915, was approximately 1,470,000,000/., or nearly 300/. 
 " per head." 
 
 The question of the number of persons owning wealth who ma
 
 46 Stamp— The Wealth and Income of the Chief Poioers. 
 
 no return for the census, received careful consideration, and it was 
 decided that the whole measure of uncertainty was " negligible as 
 " compared with that due to unavoidable limitations in the estimate 
 " of values, and perhaps also as to the amount of income." Several 
 classes of wealth were separately aggregated. " Cash in hand " 
 came to nearly 6 millions, and worked out per head of the population 
 at a considerably lower figure than independent estimates made in 
 other ways. It was found that the " net assets " of the companies, 
 making no allowance for liabilities to shareholders and debenture 
 holders, was 286 millions, whereas the individual returns came to 
 61 J per cent, only, " the balance being presumably held by absentees." 
 There is, of course, the margin of reserve value to which reference 
 has been made, and the general question of plus or minus goodwill 
 valued in the shares, but not included in the assets, is not cleared up. 
 The aggregate value of land (as improved) was 984 millions, and, 
 as unimproved, 456,000,000^., which, so far as comparison could be 
 made, was not out of accord with the information furnished by the 
 Land Tax assessments. Knibbs' work provides a very exhaustive 
 and acute discussion of the probate method in principle and in 
 application, and he concludes that " in Australia it cannot lead to 
 " satisfactory results owing to the absence of the necessary data 
 " regarding settlements. The defect introduces great uncertainty 
 " into determinations from probates, a fact forcibly illustrated 
 " by the necessity of applying a ' correction ' factor of about 1 *6 to 
 " the results obtained from probates, in order to bring them into 
 " agreement with the estimates obtained by the War Census." 
 
 He then makes a complete estimate of Australian wealth on the 
 " inventory method," for 1915 (omitting public property, whether 
 national or communal), and given in detail for each colony. The 
 results aggregated for the Commonwealth are as follows : — 
 
 
 Mllion £ 
 
 (1) Land and improvements 
 
 1,105-6 
 
 (2) Live stock and agricultural machinery 
 
 1231 
 
 (3) Manufacturing plant .... 
 
 40-0 
 
 (4) Mining properties and products 
 
 43-6 
 
 (5) Coin, &c 
 
 44-4 
 
 (6) Railways and tramways and shipping 
 
 251 
 
 (7) Agricultural products 
 
 59-5 
 
 (8) Locally-manufactured products 
 
 54-3 
 
 (9) Imported merchandise 
 
 31-8 
 
 (10) Clothing, &c 
 
 14-9 
 
 (11) Furniture, &c. 
 
 77-1 
 
 
 1,619-5 
 
 Private wealth per head .... 327J.
 
 Stamp— The Wealth and Income of the Chief Power*. 47 
 
 The estimate for lands, &c, is based upon municipal valuations, 
 
 and represents about two-thirds of the total; in several States 
 which show unimproved or annual values only, the figures have been 
 converted into " improved capital values " by the application of 
 factors. It is probable that this valuation is correct within 5 per 
 cent., certainly within 10 per cent. Annual statistics of the cumbers 
 of live stock, of the values of agricultural machinery, of manufactur- 
 ing plant, &c, are then utilized. Mining properties are taken from 
 statistics of paid up capital and dividends, and may have a larger 
 margin of error. For all the other items there is some substantial 
 basis of estimation, and taken by itself the inventory resull mighl 
 well claim to be correct within very little over 10 per cent. 
 
 After adding collective wealth Mr. Knibbs concludes that the 
 inventory method gives 1,760 millions, the Census 1,643, and the 
 probate basis 1,000 millions, and that the Census probably gives an 
 understatement owing to (1) its emergency character, (2) the incom- 
 pleteness of some returns, and (3) the tendency for persons to 
 suspect taxation motives. The inventory method, of course, covers 
 wealth in Australia owned by persons not living there, but does not 
 include Australian holdings of wealth abroad. 
 
 14. Canada. 
 
 The estimates that have been currently used for Canada are 
 Giffen's " guess " for 1903 of 1,350,000,000/. and Crammond's figure 
 for 1910 based thereon of 2,072,000,000/. with an income of 
 259,000,000/. 
 
 We have now available a reasoned inventory published in the 
 Journal of the Canadian Bankers' Association, 1915, and made up 
 with information from various sources : — 
 
 M lllon£. 
 
 Farm values .... .... .... .... 687 
 
 Mines and forests .... .... .... 164 
 
 Railways .... .... .... 231 
 
 Urban real property 618 
 
 Manufacturing machinery .... .... 62 
 
 Livestock and implements .... .... 182 
 
 Stocks of raw material .... .... .... 164 
 
 Carriages and motors .... .... 124 
 
 Specie 33 
 
 Investments abroad .... .... .... 20 
 
 2,285 
 
 I think it is quite probable that this estimate is correct within 
 zo per cent., and I have accordingly classed it in Grade II.
 
 48 Stamp— The Wealth and Income of the Chief Powers. 
 
 15. Japan. 
 
 I have been unable to trace any recent estimate of wealth, or 
 income, or any reference thereto, in European literature, anr* 
 Neymarck and Peret say definitely that there is none. 
 
 The income tax has now been in force for a good many years, 
 
 and should furnish the basis of a provisional estimate, if carefully 
 
 handled. Ordinary incomes under 40J. are exempt, and there are 
 
 numerous other minor provisions for allowances and exemptions 
 
 which may be studied in the Financial and Economic Annual issued 
 
 by the Japanese Finance Department. Mr. C. V. Sale in 1911 
 
 gave the following estimates for 1907 : — 
 
 1,125,000 families paying income tax 70/. average income. 
 
 8,025,000 families not paying income tax .... 24/. 10a. „ ,, 
 
 9,150,000 30/. 
 
 or a total income of 275,000,000/. 
 
 I have obtained the weighted average wages for 1913 for nearly 
 one million operatives, employed in 50 trades, with an average wage 
 for each trade given by the official statistics, and find that it does not 
 exceed 12Z. per head (including about 8 per cent, children), so that 
 it would not appear that the above average could be increased, in 
 view, especially, of the poor return from agriculture. Mr. Sale 
 obtained an average of 27 -81. gross produce per family in getting at the 
 above figure. My estimate for 1914 would be on the following lines : — 
 
 £ 
 
 Income taxed 78,826,000 
 
 Allowances and exemptions 80,000 
 
 Evasion, 50 per cent, of the income in the lowest 
 
 grade 18,000,000 
 
 And 20 per cent, in the incomes above .... 12,000,000 
 
 108,916,000 
 Increase, 8 per cent, from 1908 to 1914 .... 7,132,000 
 
 Total for income-tax payers 116,048,000 
 
 Lower classes— 8,500,000 families at 24-10 
 
 average 208,000,000 
 
 Total (say) 325,000,000 
 
 The Japan Year Book, 1910, to which Mr. C. V. Sale has drawn my 
 attention, reports an estimate by K. Yamashita, as at 1904, of the 
 total value consumed, or money spent, by the Japanese given in 
 some detail and aggregating to a figure between 270,000,000?. and 
 295,000,000?. This " consumption " estimate rather confirms the 
 above direct result. 
 
 There was an estimate of capital quoted in the same work, 
 as at 1902-04, of 1,328,000,000?., or 20Z. per head, a3 arrived at by 
 " financial authorities." Another estimate, tor 1904, is referred
 
 Stamp — The Wealth and Income of the Chief J'uners. 
 
 49 
 
 to by Mr. Sale, 1 as appearing in a work by Igarashi and Takahashi 
 (National Wealth of Japan, 190G), which amounted, apparently, to 
 2,280,000,000^., but I have been unable to examine it in detail. 
 For 1914, on details obtained from the financial annuals and other 
 sources, I put forward the following tentative efiorl : — 
 
 Land .... 
 
 Buildings 
 
 Furniture, &c. 
 
 Specie, &c 
 
 Stale debl rti led at home. 
 Local debt .... 
 
 Mines 
 
 Commercial companies 
 Other businesses 
 Savings bank 
 Private railways 
 
 M ll on £. 
 
 1,100 
 
 400 
 
 150 
 
 38 
 
 100 
 
 30 
 
 30 
 
 370 
 
 inn 
 
 62 
 
 6 
 
 2,386 
 
 say, 2,-100,000,000/. 
 
 In this I have excluded the value of State bu 3 (tobacco, salt, 
 
 camphor, railways) on the ground that they are practically equalled 
 by the State debt held by the Japanese. 
 
 16. Argentine Republic. 
 According to L'Anuario de la Direction General de Estadistica, 
 published in 1910 for 1908, the private wealth was put at 
 1,260,000,000?., or 212Z. per head. A valuation has recently been 
 made by Alessandro Bunge, Director-General of the Official 
 Statistical Office of the Republic, who, working entirely upon the 
 inventory method, reached the following results : — 
 
 Million £. 
 
 
 1908. 
 
 1910. 
 
 Lands 
 
 562 
 
 918 
 
 Fixed plant 
 
 54 
 
 03 
 
 Buildings .... 
 
 519 
 
 .Ys.S 
 
 Household goods and objects of art 
 
 130 
 
 147 
 
 Businesses .... 
 
 128 
 
 277 
 
 Agricultural profits and produce 
 
 108 
 
 108 
 
 Partly manufactured goods and goods in 
 
 
 
 transit 
 
 130 
 
 143 
 
 Agricultural machinery .... 
 
 16 
 
 35 
 
 Industrial machinery 
 
 35 
 
 38 
 
 Metals 
 
 :;t 
 
 68 
 
 Railways .... 
 
 181 
 
 292 
 
 Tramways, telephones, gas, &c 
 
 52 
 
 59 
 
 Ports, canals, docks .... 
 
 52 
 
 57 
 
 Total 
 
 2,000 
 
 2,824 
 
 1 Journal of the Royal Statistical Society, 1911, p. 182
 
 50 Stamp— The Wealth and Income of the Chief Powers. 
 
 The amounts per head on this valuation are high, viz., 336Z. 
 and 356Z. respectively. It may be taken that this official's estimate 
 for 1914 would be in the neighbourhood of 2,400,000,000^., or about 
 340Z. per head. 
 
 17. Summary and Conclusion. 
 I shall now proceed to summarise the foregoing in a single 
 table (see next page), bringing the results as nearly as possible to 
 the same pre-war point of time in 1914, and showing the approxi- 
 mate per capita amounts for comparative purposes. In the grading 
 I have sometimes taken a lower class than the original estimate 
 itself would require, if the adjustment to bring it to the level of 
 1914 has been considerable. 
 
 Comment is perhaps superfluous, but I may remark that the 
 generally higher level of pre-war prices in America (which is reflected 
 in the per capita average) cannot discount the immense absolute 
 lead of the States in real wealth, or the rapidity of its increase. 
 The difference between the United Kingdom and Germany is not 
 so considerable as other writers have suggested, and the effects 
 of the well-known thrift of the French nation are apparent. The 
 Japanese are making immense strides, but over 60 per cent, of 
 their population are engaged in agriculture, and live on an amount 
 per head which would be impossible in Europe — indeed, a comparison 
 with this leading Eastern nation's figures brings out the considera- 
 tions which I have urged in my opening paragraphs. 
 
 I should like to state that I do not pretend to have exhausted 
 the subject, for it is obvious that a complete critical compendium 
 of all that has been done in recent years would take up much space 
 and be an exceedingly laborious task. But if I have succeeded in 
 bringing some kind of order out of existing confusion, even over 
 only a part of the field, I shall have achieved all that I set out to do 
 Apart from any interest there may be in present comparisons, I feel 
 that in years to come, the year 1914 will be taken as the starting 
 point for measuring many kinds of change and development, and 
 tnat this contribution may have some small measure of utility to 
 future workers. Adam Smith's words in the " Wealth of Nations " 
 may form a fitting conclusion : — 
 
 " Parsimony, and not industry, is the immediate cause of 
 [ ' the increase of capital. Industry, indeed, provides the 
 " subject which parsimony accumulates, but whatever industry 
 " might acquire if parsimony did not save and store up, the 
 " capital would never be the greater." ..." Whatever, 
 " therefore, we may imagine the real wealth and revenue of a
 
 Stamp — The Wealth and Income of the Chief Powers. 51 
 
 
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 52 Stamp — The Wealth and Income of the Chief Powers. 
 
 country to consist in, whether in the annual produce of its 
 land and labour, as plain reason seems to dictate, or in the 
 quantity of the precious metals which circulate within it, as 
 vulgar prejudices suppose ; in either view of the matter, 
 every prodigal appears to be a public enemy and every frugal 
 man a public benefactor." 
 
 18. Selected Bibliography. 
 
 General. 
 Gini, " L'Ammontare e la composizione della richezza delle nazioni." 1914. 
 Maroi, " Come si calcola e a quanto ammonta la richezza d' Italia e delle altre 
 
 principali nazioni." 1919. 
 Knibbs, " Private Wealth of Australia and its Growth." 1918. 
 
 United Kingdom. 
 Bowley, " The Division of the product of industry : an analysis of National 
 
 Income before the War." 1919. 
 Bowley, " Elementary Manual of Statistics." 
 British Association. Report. 1910. 
 Money, " Riches and Poverty." 1911. 
 Crammond, in Statistical Journal. 1914. 
 Stamp, " British Incomes and Property." 1916. 
 Stamp, Economic Journal. Sept., 1918. 
 Mallet, in Statistical Journal. 1915. 
 
 United States. 
 Kino, " Wealth and Income of the People of the United States." 1915. 
 Streiqhtoff, " Distribution of Income in U.S." 1912. 
 Statistical Abstract of the United States. 1913. 
 Friday, in Journal of Political Economy. Dec, 1918. 
 Statistics of Income, 1916. Treasury Department. 1918. 
 Bureau of the Census. " Estimated Valuation of National Wealth." 1915. 
 
 Germany. 
 Helfferich, " Deutschlands Volkswohlstand, 1888-1913. 1913 and 1915. 
 Steinmann Bucher, " Deutschlands Volksvermogen im Krieg." 1916. 
 Steinmann Bucher, " Das reiche Deutschland — ein Wehrbeitrag." 1914. 
 Steinmann Bucher, " 350 Milliarden deutsches Volksvermogen." 1909. 
 Ballod, vide Journal des Economistes. 1917. 
 
 Italy. 
 Benin?, " Quote Successorie di alcune specii di richezza." 1909. 
 Benini, Ancora sul coefficiente per calcolo della richezza privata." Bollettino di 
 
 Statistica. 1910. 
 Bresciani-Turroni, " La richezza delle citta." Universita di Palermo. 1912. 
 Colajanni, " Manuale di demografia, 1910." 
 Colajanni, " Nuova Antologia, 1917." 
 Colajanni, Journal des Economistes, August, 1917. 

 
 Stamp — The Wealth and Income of the Chief Powers. 53 
 
 Coletti, liiforma Sociale. 1907. 
 
 Corniani, Economista, August, 1918. 
 
 Dettori, Lezioni de Slatistica economica, 1918. 
 
 Ki\\i in (Spectator), " Corriore della Sera." April, 1911, and February, 1916 
 
 Gini, " L'Ammontare e la composizione della riohezza dalle na/ioni." I'.il I 
 
 M utoi, " Come si calcola e a quanto ammonta la riohezza <1 Italia." 1919. 
 
 Mortaka, GHornale degli Economieti. 1909. 
 
 Mortara, Rapport No. 32 XIV. Session (Sept., 1913) tie 1' Institute) Int. de Stat 
 
 Pantaleoni, " Scritti varii di Econoraia III." 1910. 
 
 Prinoivalle, " Riforma Sociale." 1909. 
 
 Princivalle, " La richezza privata in Italia." 1909. 
 
 Princivalle, " Rivista di legislazione tributaria." 1911. 
 
 Santoro, " L'ltalia nei suoi progressi Economici al 18G0 al 1910." 1911. 
 
 Savoronan, Rivista Ital. di Sociologia. 1910. 
 
 Yikoilii, " Studi sonesi." 1915. 
 
 Wiseman, " Nuova Antologia," 1915. 
 
 Imposta sui roddita di ricbezza mobile, ecc. (Ministero delle finanzt.) 
 
 France. 
 Colson, " Coure d'Economie politique" (Vol. III.). 1918. 
 Coste, " L' Evaluation de la fortune privee en France." J. Soc. de Stat. 
 
 Paris, 1901. 
 Doumer, " La Fortune de la France " in " Je sais tout." June 15, 1909. 
 Fellner, " L'Evaluation de la richesse nationale." Bull, de Vlnst. Int. de 
 
 Stalistique. Tome XIII. 2e. 1902. 
 De Foville, "La richesse en France." (Revue (TEconomique Internationale.) 
 
 1906. 
 De Foville, " La richesse de la France." UOpinion. 1909. 
 Guyot, " Evaluation de la fortune privee en France d'apres les elements fiscaux." 
 
 Bull, de TInst. Int. de Statiatique. Tome IV. 3e. 
 P. Henry et A. de Laverone, " La richesse de la France." 1908. 
 Leroy Beaulieu, " Les fortunes en France." ficonomiate Francuis, July 25, 
 
 1903 ; Dec. 5 and 12, 1908. 
 Guyot, " V Evaluation des propriiUs non bdtiea." (Jnl. de la Soc. de Statistiqve 
 
 de Paris, Avril , 1914.) 
 Tiiery, " La Situation Economique et financiere de la Franco avant, pendant 
 
 et apres la guerre." Economiste Europeen, Jan. 18-Feb. 22, 1918. 
 Thkry, " La fortune publique de la France." 1912. 
 I'.i-utillon, Journal de la Societe de Statistique. Sept., 1910. 
 
 Other Countries. 
 Vide references in the text.
 
 54 
 
 Discussion on Dr. Stamp's Paper. 
 
 Sir Felix Schuster said he had the greatest pleasure in moving a 
 most cordial vote of thanks to the reader of so valuable and interesting 
 a Paper, a Paper which he hoped would be widely circulated amongst 
 the public, as it contained just the sort of information that was 
 really wanted. It was only as an ordinary member of the public 
 that he ventured to address that distinguished gathering, and he 
 did so with great diffidence, not only because he was one of the 
 youngest recruits to the Society, but also because he could not 
 possibly claim to be a scientific economist. His occupations, 
 especially during the last five years, had made it impossible for him 
 to keep up with the literature which had been produced during that 
 time and had made him forget to a great degree what he had read 
 before. But that perhaps made a vote of thanks more than the 
 usual formality. He said in all sincerity that he was deeply grateful 
 to the reader of the Paper for the information contained in it, which 
 presented in a very intelligible and simple form valuable results 
 and the methods by which they had been arrived at. Perhaps he 
 was one of the persons alluded to at the beginning of the Paper 
 who, he would not say had despised statistics, because he had never 
 done such a thing, but who had very often looked upon statistics 
 such as were sometimes produced in the papers and elsewhere with 
 profound suspicion. The reason was because one saw the object 
 for which they were produced, and that the methods which were 
 adopted were not scientific. They had listened to a Paper that 
 evening for which he was sure it could be claimed the results which 
 were shown were the best that could possibly be arrived at from the 
 information available. The part which appealed to him most was 
 the test of the relative prosperity and resources of the different 
 nations, and also the test of our own wealth and prosperity with 
 regard to the future. As to the methods adopted in presenting a 
 statement of our own wealth and income he certainly agreed with 
 what had been said, that the total amount of the national debt 
 must be deducted from the aggregate statement of wealth. He 
 ventured to think in the national debt they ought also to include 
 the indebtedness of local authorities, because they were equally a 
 mortgage on the income of the nation. For instance, in the ordinary 
 statement of the national debts such items as Irish land stock or 
 local-owned stock were not included at all, because they were only 
 contingent liability, but still they formed a mortgage on the whole. 
 It was not clear whether in the summary table these amounts had 
 been deducted, but in his opinion they should be if they wished to 
 get a correct result. A proper allowance should be made for State 
 property, which was an item it was difficult to get at. He did not 
 perhaps quite follow one sentence in which the reader alluded to it
 
 Discussion 0)1 Dr. Stamp* a Paper. 55 
 
 where he said that if the national debt were deducted from 
 State property they would get a minus quantity in many cases. He 
 thought they would almost invariably gel a 'minus quantity. As 
 far as he knew, before the war, India was the only one of the threat 
 countries where there was practically no taxation for payment 
 of interest on debt. He was sorry that Dr. Stamp could qoI 
 include India in his statement. The difficulties were obvii 
 and very great, but it would have been interesting. Perhaps 
 one of the German States also, viz., Bavaria, before the war 
 had great national property. Bui all that would disappear after 
 the war, and they would have a minu quantity. Coming to the 
 test of income tax returns and the test of income generally, 
 he was afraid that their present methods led to confusion and 
 also to loss of revenue. They had now adopted a double system 
 instead of invariable taxation at the source, and he regretted to say 
 during the last loan operation, the latter was abandoned, and in 
 certain loans now on the market the deduction did not take place at 
 the source. That must lead to confusion in the end, and he thought 
 they would be driven gradually into the census method and to adopt 
 that method alone. He personally thought that eventually taxation 
 at the source would have to be abandoned altogether. A persoi a) 
 statement by everyone was, he thought, inevitable in the future. 
 At present a good many people quite innocently did not pay what 
 they ought because they thought everything was taken off at the 
 source and forgot to send in their returns. He did not think there 
 was very much intentional evasion. He spoke from a certain amount 
 of experience, because for a number of years he had been one of the 
 additional Income Tax Commissioners in the City of London. He 
 spoke strongly for the straightforwardness and honesty of the 
 returns. He really thought that if there were any error in the 
 accounts the error was rather against the taxpayer and in favour of 
 the State. There were a few flagrant cases where one saw evasion, 
 but very few, and on the whole he thought they could trust the 
 returns to be straightforward and honest as long as the taxpayer 
 knew what he had to do and the lines were very clearly laid down 
 for him. He thought the time would come before very long when 
 they would have to have a census of property generally on simple 
 lines clearly specified. They would then have an effective test and 
 be able to arrive at a proper solution of what the wealth of the 
 country really was. He did not think the Death Duties test was at 
 all reliable. Dr. Stamp had pointed out some of the disadvantages 
 of that method, and there were others one could add. This was not 
 the place to speak of the ethics of taxation, but he considered the 
 Death Duties one of the most insidious forms of levy on capital 
 which, if it took place at all, ought to be used in the reduction of 
 debt and not as revenue, and that reliance on Death Duties would 
 prove a great pitfall for a future Chancellor of the Exchequer. 
 Coming to the summary table he had tried to work out the propor- 
 tions between the income that was shown and the capital. He had
 
 56 Discussion 
 
 hoped to arrive at some general conclusion as to their relationship. 
 He thought one might come to some conclusion whether highly- 
 developed countries showed similar or different results to countries 
 in which there was not such a high grade of development ; but he 
 did not think he could find much help in these returns. The pro- 
 portions came out very similarly. The United Kingdom 15 \ per 
 cent., the United States 17 per cent,, Germany 13 per cent,, France 
 12 \ per cent., Italy and Austria 18 per cent., Canada 13 per cent., 
 Australia 16 per cent., and Spain only 8 per cent. But, as Dr. Stamp 
 had pointed out, the figures for Spain could not be a true test of the 
 situation. It did not appear whether the national debts had been 
 deducted. But it was the future one had to consider, and they all 
 looked forward to the next table for the post-war period which Dr. 
 Stamp was going to produce, and which would be highly interesting. 
 With regard to the national debts of various countries it would be very 
 important to state where the debt was held, whether it was an 
 external debt or an internal debt, as that would have a very im- 
 portant bearing on the economic position of the country concerned. 
 Inflated and depreciated currencies would have to be taken into 
 account. He supposed they would all be translated not at the par 
 of exchange but at the real exchange of theday, and they would 
 get some very different results from those which were shown in the 
 table. If they wanted to arrive at a true test of the national wealth, 
 they would also need to have a statement of the comparative cost 
 of living in the various countries, and the table with the Index 
 Numbers of the cost of the necessaries of life would be a very useful 
 thing to have in such a statement, If it were possible to obtain it, 
 he would also like to know what he would call the effort to attain 
 the results : how much time was spent and what were the working 
 hours. If they had those they would then have a true measure 
 of the wealth. He supposed it was impossible to classify brain 
 power. What they had to get at, as Dr. Stamp had pointed 
 out, was not the actual wealth in being, but the potential wealth — 
 the development and future efforts that were possible in the various 
 countries, and especially in their own, in order to meet, as they had 
 to meet, the difficulties which were in front of them during the coming 
 years. Dr. Stamp had given them most valuable help in considering 
 all those grave matters, and he wished to express the warmest 
 thanks of the meeting which he was sure were due to him. 
 
 Sir George Paish said he had very great pleasure in seconding 
 the resolution. They were all greatly indebted to Dr. Stamp for 
 the paper, which at the present time was of special value. They 
 were all wondering how they were coming out of the war and how it 
 was to be paid for. The credit of the world had been extended as 
 it probably had never been extended before, and they wanted to 
 know exactly where they stood. The paper would certainly help 
 them in that direction. It was quite obvious that debt was not 
 wealth. At the same time, it was not destruction of wealth. The
 
 on Dr. Stamp's Paper. 57 
 
 internal debt of a nation was held within tin- nation, and the 
 holder of the debt placed il amongst his assets, while the 
 the community had to place it among its debits, and the two 
 squared. The foreign debt was, of course, a debit, and they had to 
 allow for it. Unfortunately, at the presenl timethej badincun 
 very substantial debt abroad, and they must allow for that fact. On 
 the other hand, they had loaned a good deal of money to their Allies 
 and Colonies, and, if that were good, it would go against the money 
 they owed. He thought it would be nearly, if not quite, sufficient 
 to pay off their foreign debts. Unfortunately the whole of their 
 loans to Allies were not good; and, therefore, they had to allow 
 as a debit against their wealth the net sum that they owed abri 
 on war account after placing a reasonable value upon their losses. 
 Of course the nation had immense foreign investments in the 
 aggregate to place against the money borrowed abroad during the 
 war. It was computed that before the war their assets abroad 
 were about 4,000 millions. If they deducted from that sum the 
 loss they had incurred from bad foreign investments during the 
 war, he thought they would still find they had over 3,000 millions 
 sterling abroad on balance after paying their debts abroad. So t hat 
 they were in a very strong position. With regard to the debt 
 which had been incurred, it was quite true that the nation as a 
 whole could not regard that asset as a credit; on the contrary, 
 it was a debit ; but the people who had subscribed to the debt 
 and held it as an investment, necessarily included it in their 
 accounts as an asset. When they came to consider how much 
 wealth there would be available in the event of a levy, they 
 must not only include the assets of the nation, but the debt of the 
 nation, which was owned by private persons. If they did that, they 
 would find that Dr. Stamp's basis of something like 14,500 millions 
 as the wealth to be levied upon would come to something like 20.000 
 millions, which was including only 5,500 millions of debt, instead of 
 the 7,400 millions they had incurred, the balance having been 
 provided in part by borrowing abroad and in part by calling in 
 money which they had previously loaned abroad. Rut the sum, 
 at any rate, on which they would have to levy would be something 
 like 20,000 millions on that basis. The amount would, indeed, 1" 
 still greater than that if they took into account present valuations. 
 Dr. Stamp had rightly not tried to bring the calculation up to date. 
 It was quite impossible for anyone to do so, as no one knew what 
 the value of property would be. They did know that in so far as 
 property was changing hands at the presort time, the value had 
 very greatly increased. And the cost of replacing the property of 
 the nation — buildings, works, machinery, &<$., would be infinitely 
 greater than the value stated in Dr. Stamp's work. So that. 
 when they came to think of a levy on anything like existing 
 values, they had to consider that the wealth was not some 
 T4,5oo millions, as estimated by Dr. Stamp, but a verv much 
 larger sum, and they would also have to include their war
 
 58 Discussion 
 
 debt. A3 to Dr. Stamp's statement with regard to the wealth of 
 Germany, he was inclined to think there was an exaggeration. As 
 he rightly pointed out, the various estimators wished to make it 
 look as large as possible. Before the war Germany engaged in a 
 campaign of flag-waving, as it were, exaggerating everything 
 that it did, and making it appear that Germany could do quite 
 extraordinary things. That campaign of exaggeration must be 
 taken into account in reckoning what the wealth and income of 
 Germany were prior to the war. He himself was very doubtful if 
 even Dr. Helfferich's figure was correct. He thought that if they 
 could have got an impartial investigator, they would have 
 found it was still smaller. Keferring to Sir Felix Schuster's 
 statement with regard to income in, relation to capital, that was a 
 matter of very great importance. It was, of course, of importance 
 that the capital they created and invested should yield a 
 profit, but it was not nearly so important as that it should 
 yield an income. For example, roads were a source of outgo. 
 If they merely had to capitalise the profits of the nation, they would 
 have to leave the roads out of account. They were of very great value 
 and were an expense ; but as a source of income they were 
 of greater value than almost any kind of wealth other than the land, 
 because without them they could not move the produce from place 
 to place. So it might be with regard to other things. What he 
 thought a nation should do was to try and keep its capital account 
 down to the lowest possible figure. One of the things they were 
 up against in their competition with Germany was the fact that 
 some of the German companies — as, for instance, the Allgemeine 
 Elektricitats Gesellschaft — had written down some of their most 
 important works to a mark, so that they had to pay no interest 
 whatever on capital. In a time of competition such companies could 
 disregard their capital account altogether, which seemed to him the 
 desirable thing to do. As they knew, the American railways did 
 the same thing. Year after year they devoted very large sums to 
 betterments, and the result was that the capitalisation of American 
 railways was extremely low in proportion to their value. From 
 the companies' point of view, that was an advantage that could not 
 very well be exaggerated, because the world from time to time got 
 into periods of depression, and if they had debentures or preference 
 dividends to meet, and there were no profits, companies were apt to 
 go into bankruptcy. If, on the other hand, they had written 
 down their capital to almost nothing, they could weather through 
 the most severe storms. So that, while they must attach a certain 
 amount of importance to the question of profits in relation to capital, 
 he attached still greater importance to the table which Dr. Stamp 
 had given them, showing the relation of the income of the 
 nations to the capital of the nations. In calculating the 
 capital in those circumstances, they would have to take what he 
 might term an asset value. They would take item by item and 
 value it at what it would cost to reproduce, and then discover what
 
 on Dr. Stamp's Paper. 59 
 
 proportion their income bore to their capital account. That was 
 the great thing. They as a nation had now to endeavour 
 to increase their income in relation to their capital, and he 
 was convinced they could do it. The amount of inefficiency they 
 had had in the past m all directions was simply extraordinary. 
 They were now up.against a wry difficult situation, and he thought 
 they could make their capital go very much further than it- had i 
 gone before. If, for example, they could double their traffic on tin- 
 railways without any appreciable increase of capital, the real value 
 of that capital would be immensely greater than it was at pret 
 It seemed to him that all the data Dr. Stamp had given them would 
 enable them to think out more clearly the extent, value and use of 
 their capital, and so help to make the nation more efficient. 
 
 Mr. Pethick Lawrence said he thought no one would refuse to 
 Dr. Stamp the tribute of the extraordinary care and great value of 
 the paper he had read. He had taken the whole of the world as his 
 province, and they had as a result a monumental standard which, 
 in after years, would be looked back upon with the very greatest 
 interest. They could not help regretting that he had not been able 
 to bring the figures up-to-date as they would then have been still 
 more interesting, but those who had attempted to consider the 
 figures of recent years realised the extreme difficulty of doing that, 
 and in any case they already had so much in the i'aper that they 
 could hardly ask for more. He wished to utter one warning with 
 regard to figures taken for any particular year in that there was a 
 time lag which he thought should be borne in mind. When they 
 were dealing with purely pre-war figures the time lag might be com- 
 paratively unimportant, but when they were dealing with rapidly 
 changing figures the time lag was exceedingly important. All the 
 figures were put down for 1914. He hoped Dr. Stamp would tell 
 them afterwards whether he thought they really represented the 
 income for the year 1914 or whether they represented the income 
 worked out in 1914. but really corresponding to the actual income 
 of perhaps somewhere between 1912 and 1913. The same remarks 
 applied somewhat to the matter of capital, but he was not quite 
 clear whether the figures given in the Death Duties were really the 
 figures for the deaths at those periods or whether they were amounts 
 received corresponding to probates in those periods. That would 
 make some difference and would affect the result. He asked Dr. 
 Stamp also whether he had considered the reverse side to evasion. 
 They had heard a good deal of evasion of income tax, but he had 
 been brought into contact a good deal lately with cases where people 
 did not claim all the deductions they were entitled to. He had nol 
 looked into it sufficiently to see whether it would affect totals, but 
 it might do so in some cases. With regard to the inventory method 
 of coming to a total he was not sure that sufficient importance was 
 attached to the danger of overlapping. As a serious instance <.f 
 overlapping with regard to post-war wealth he quoted the case of
 
 60 Discussion 
 
 the banks. People would sometimes work out the total wealth of 
 these on the basis of the value of the bank shares, and would say 
 that the wealth of the banks was a little more or a little less than it 
 was before the war. They would then take the whole of the war 
 debt not owned abroad and would add that to the wealth and say 
 that the wealth had increased by so much. Banks held a very 
 considerable amount of war debt amongst their assets, and he 
 thought there was a danger if they were not careful that they would 
 count the same thing twice over. That danger was mentioned, he 
 thought, by Dr. Stamp with regard to the inventory method, but 
 it might be very much more important than many people realised. 
 One or two people had spoken rather disparagingly of the multiplier 
 method. He ventured to think that it was more valuable than 
 they had said, and he did not believe that the difference between 
 the two methods was as great as was sometimes supposed. He had 
 had reason recently to work with that method, and had found for the 
 purposes for which he required it that there were a great many 
 additions to be made, and those additions brought it very much 
 nearer to the figures Dr. Stamp had arrived at on his own method 
 than many people supposed. There was in particular the question 
 of what Dr. Stamp had called communal wealth, and what he (the 
 speaker) had called institutional wealth, including such things as 
 the wealth of churches and chapels (which had lands and other 
 property), the wealth of clubs, friendly societies and trade unions, 
 &c, which probably came in all to no less than 2,000 millions or 
 something near that figure. It made a very great deal of difference 
 whether these were or were not included in what was called private 
 wealth. He thought Dr. Stamp would probably agree with him 
 when he said that it seemed to him that all the methods of computing 
 wealth were important provided the purpose for which the result 
 was to be used compared with the means by which the results had 
 been obtained. For the purpose of finding the effect of a new 
 income tax the best figure of wealth was one based upon the Income 
 Tax Returns ; but if they were to attempt a levy on capital, then he 
 thought the multiplier method was probably the best, because it was 
 basing like upon like, namely, the computation of capital. Some 
 people would say that they did not want the amount of wealth for 
 any particular purpose but wanted the absolute amount of wealth. 
 He would point out to those who took that view that it was very 
 difficult indeed to say what they meant by absolute wealth. To be 
 absolute they ought to include the wealth of roads, bridges, and 
 even rivers, but this would be very difficult. Therefore, much as 
 they would like to have it, he ventured to suggest that the idea of 
 absolute wealth was one which it was impossible to realise, and that 
 the source of obtaining results should, if possible, be the same as 
 the purpose for which the figures were to be obtained. An estimate 
 of the post-war wealth of the country was of the very greatest 
 importance for the purposes of taxation in the future. Whether 
 they attempted to obtain an annual revenue to meet the liabilities
 
 on Dr. Stamps Papi r. 61 
 
 of the country, or whether they attempted bo adopl the proposal 
 which he favoured very strongly, namely, the levy upon capital, he 
 thought it wus quite clear that bhe wealth in private bands had very 
 largely increased during the war, provided they included the | < r i •. 
 holdings of war debt but did not include among private liabilil 
 the obligation for paymenl of the debt which was at present a 
 corporate liability. Ultimately, it was on the assets of individuals 
 that the debt would have to fall, whether on capital or on income, 
 but at present it was not divided up. 
 
 He would hesitate to place the increase of private wealth as high 
 as Sir George Puish had done. There was an amount to wipe oil for 
 internal loss in the shape of deterioration in property which (apart 
 from price changes) he would put certainly at not less than i,ooo 
 millions. He also thought that the amount of the War Loan held 
 by the banks should be taken into account. There was also the 
 vexed question of the appreciation of capital. The fact was that 
 although the price of commodities had increased to an enormous 
 extent this was not reflected at any rate to the same extent in the 
 increase of price of capital. Whether it would be so in years to come 
 when all capital tended to come to a supply value, as well as a demand 
 value, remained to be seen. It was, therefore, very difficult to judge. 
 It seemed to him that some kinds of capital had increased and some 
 diminished, and it was rather guesswork on which side the balance 
 lay. Personally, as an advocate of a levy on capital, he would be 
 glad if the figure proved as high as Sir George Paish had put it, but 
 he did not think it could, and he preferred to take a more conserva- 
 tive estimate. He should not like to recommend the proposal on the 
 ground that it was going to produce a larger sum than he honestly 
 believed in. 
 
 Mr. J. E. Allen said he supposed when discussion wandered 
 from the subject of the Paper, it was really the most sincere compli- 
 ment to the reader, as the speakers found that they could not pick 
 holes in what the reader had said. That was his attitude, and he felt 
 sure when Mr. Pethick Lawrence rose from his seat that they would 
 have something in the way of controversy. Mr. Lawrence maintained 
 that the amount of privately held wealth had largely increased as a 
 result of or during the war. That seemed to him an extremely 
 controversial statement, and was one with which he entirely dis- 
 agreed. He was not certain what had happened to the aggregate 
 amount of private wealth during the war, nor was he at all certain 
 as to what was the meaning of the war debt. He thoughl it would 
 be an excellent subject for the Society if someone would try and 
 explain to them what was meant by the war debt, and what really 
 happened, for instance, when the Chancellor of the Exchequer 
 floated a big loan for, say, 1,000 millions. It seemed to him that 
 after the loan was floated the country was not 1,000 millions poorer, 
 nor, on the other hand, was it 1,000 millions richer ; putting on one 
 side subscriptions by or sales of securities to foreigners the amount
 
 62 Discussion 
 
 of wealth was exactly the same before the emission of the loan as it 
 was after its emission. He would like to have had the opinion of 
 Professor Edgeworth on that point. His own idea was that when 
 a loan of that magnitude was issued, what really happened was that 
 all the wealth owned by private persons or institutions in securities 
 was watered to that extent — that if they had before the loan securities 
 worth 10,000 millions, after the loan had been issued those securities 
 were only worth something a little over 9,000 millions ; that was to 
 sav, the effect of borrowing by the Government for non-productive 
 purposes was to make a levy upon the owners of certain kinds of 
 existing wealth. He could not say whether that was so or not, but 
 he was inclined to that opinion. 
 
 Mr. J. Sorley said that the present fluctuation in values was 
 strongly brought out in the estimate of the total war damage in 
 Northern France. The claim amounted to 12,000,000,000^., or 
 approximately the value calculated for the total pre-war wealth of 
 France. The calculation showed the difficulty of valuing a country's 
 wealth, and the great alteration in values since 1914. 
 
 The Chairman said, before putting the vote of thanks, he wished 
 to say how very important he thought Dr. Stamp's contribution to the 
 subject had been. The Society might congratulate itself on having 
 had, within a single session, two addresses on topics connected with 
 public finance — the President's, and the one they had heard that 
 evening — which he thought no Chancellor of the Exchequer could 
 afford to neglect. A survey of that kind was one of the utmost 
 value at the present time, when so many wild estimates were flying 
 about, and he thought they would agree that Dr. Stamp had enabled 
 them to feel confidence in the pre-war estimates which had been put 
 forward ; and that they made a most valuable starting point for 
 investigations as to estimates of the present wealth and income 
 which were so essential for taxation and other purposes. He hoped 
 that the Paper would have the effect of stimulating further investiga- 
 tion on the subject. Dr. Stamp's discussion of the methods of 
 valuation would be of great interest and importance if any such 
 further investigation took place, and that was the part of the Paper 
 which interested him most. He thought that Dr. Stamp would be 
 the last to say they had reached finality in these questions ; the 
 discussion had shown that there was still some confusion, for instance, 
 as to the way in which national debt should be treated. Dr. Stamp 
 had alluded to this in his Paper and also in the articles in the Economic 
 Journal of last September. But he would be glad of a little more 
 light on the question of how this debt really affected the aggregate 
 of privately owned wealth, which was the crux of the matter when 
 it came to considering proposals for a capital levy. It was a 
 very important matter in the pre-war estimates, but it had now 
 become vital, and if one looked at the various estimates which had 
 been made 'during the last year by, for instance, Mr. Pethick Law-
 
 on Dr. St(i)ni>'s Paper. 63 
 
 rence, Mr. J. B. Allen, Mr. Sydney Arnold, and Dr. Btamp, he thought 
 one found there was always sonic difference in the method in which 
 the estimate had been made, which largely accounted for the eery 
 great divergences in the total figure reached. He only alluded to 
 this in order to emphasize the point that he thought further expert 
 enquiry into the matter was essential. It seemed to him that it would 
 be quite useless to begin discussing the expediency or otherwise of a 
 capital levy until they got some agreement both as to the principle 
 upon which an estimate of privately owned wealth should be made, 
 and as to the existing amount of the wealth which would be subject 
 to such a levy. His (Sir Bernard's) own estimate from estate duty 
 statistics had generally been assailed on account of the disappoint- 
 ingly low total brought out. This did not greatly disturb him, as he 
 thought there was much greater inconvenience in the inflated and 
 exaggerated estimates which were so prevalent; but he had Keen 
 consoled by Dr. Stamp's comments upon this estimate, and by the 
 fact that Dr. Stamp's estimate of pre-war wealth in private owner- 
 ship in the Economic Journal article referred to, which, if he was not 
 mistaken, was in the neighbourhood of 11,000 millions, was almost 
 exactly the amount he himself had arrived by his multiplier calcula- 
 tion. 
 
 A vote of thanks was passed unanimously to the author. 
 
 Dr. Stamp, in reply, thanked them for their vote and said he 
 would reply briefly on the chief points made in the discussion. Sir 
 Felix Schuster had referred to the question of national and local 
 loans and as to whether they had been deducted in arriving at the 
 figures in the table. He (Dr. Stamp) had purposely not elaborated 
 the methods of arriving at the British figures under discussion. 
 because his views had been stated at length in " British Incomes and 
 Property " and in the Economic Journal. If anyone turned to that 
 volume they would find that many of the questions raised that night 
 had been dealt with there. The national and local loans had been 
 deducted from the value of the Municipal and State property. 
 Having first been put in as individual wealth in the hands of the 
 people they had then been treated as a mortgage on the communal 
 property, and this he thought was the most satisfactory way of 
 dealing with it. There was a plus balance of value in State property 
 in pre-war days, but dealing with it now there would be a minus 
 quantity. With regard to Mr. Allen's question as to whether thi 
 was any increase of wealth on the flotation of a loan, the an-v. 
 that there had been merely a redistribution of wealth. That meant 
 that one class of wealth apparently went up by 5,000 millions or 
 10,000 millions, which was added under one head, but it had to be 
 taken off at another place before they got their total valuation. 
 When they came to a valuation for a capital levy it was otherwise. 
 There the individuals who held the War Loan had to be taxed "t 
 that, the same as everybody else, and therefore we might get a larger
 
 64 Discussion 
 
 gross figure liable to a capital levy than the net capital valuation of 
 the country as a whole. It was quite certain that at the present 
 moment there would be a minus quantity for State property on this 
 method. Sir Felix had regretted that he (Dr. Stamp) had not put in 
 any material with regard to India. He had looked at it carefully, and 
 had found the figures so very diverse and nearly all from polemical 
 literature, which it was so difficult to assess, that he had left it out 
 of the paper. He hoped that it would be found by the present 
 Commission which was sitting on the subject of income tax that 
 taxation at the source, which Sir Felix thought was near its death- 
 bed, would have a new lease of life and would be found to be com- 
 patible with universal individual statements of income. He thought 
 that would be the only satisfactory result for any Chancellor, and 
 he was sure some way would be found of dealing with it. Sir Felix 
 had also dealt with the efficiency of the income tax, the question of 
 evasion, &c. There were a number of people present who could 
 speak effectively on this, but he had dealt with it in " British In- 
 comes and Property," and had shown what he regarded as the net 
 figure to be added to income tax totals for evasion. Even in 
 the inventory method it was, as far as possible, only the net 
 State property which had been added. The external debt did 
 not come in amongst the assets of individuals, but it did come off 
 the assets of State property, and therefore it served to lessen the 
 total valuation. Sir Felix had made an interesting suggestion that 
 they ought to be able to add to those figures some estimate of the 
 effort put forward to realize them : that was the human horse 
 power per pound of income, so to speak. One might find an equal 
 number of hours perhaps, but one would have to think whether 
 they were " brain-hours " or " hand-hours," and be up against the 
 extraordinarily controversial and difficult problem of how to compare 
 the hours put in by a miner with those put in by a civil servant, a 
 statesman, or an ordinary professional man. They would have to 
 take some unit like 30 as representing the proper effort of a miner 
 and compare it with, say, 10 for a Cabinet Minister ! Sir George 
 Paish had said that his estimate of capital invested abroad was 
 rather different from his (Dr. Stamp's). It was not actually men- 
 tioned in the Paper and could not be ascertained from the mere 
 inspection of capital items, because a large sum was included under 
 " companies " for those in the City, for example, which had mines 
 abroad. But when he had worked it out with care for the Economic 
 Journal he came to a figure which was near enough to that 
 obtained by Sir George. There had been a great deal of confusion 
 between the national wealth he had been dealing with and the wealth 
 which would appear upon returns for a capital levy. Although he 
 had 14,50° millions as the national wealth, he had shown in the 
 Economic Journal that the figure which would have come out before 
 the war on the returns for a capital levy would have been in the 
 neighbourhood of 11,000 millions. There was a vast difference 
 between what came out on personal returns for a levy and what
 
 o/i Dr. Stamp's Paper. 65 
 
 came out on a total valuation. Tt was obvioul that all the vast 
 wealth held in the reserves of oompaniea was only partiall) I'-ih-eted 
 in the value of the shares, and there were many oth<r forms in wliich 
 it would not come out to individuals. IT", had m 
 of the present amount oi wealth, <>r rathex timate before the 
 
 war was over, of t6,ooomillio] irnable 
 
 by individuals, so that it bad gone up bj 5 millions. The amount of 
 the War Loan muld not be taken at its full value bi there ^ 
 
 enormous collective holdings which v. lected to the aligbl 
 
 extent in the individual shares. Tin on who had oriti< 1 ed 
 
 his post-war figure was a friend v into it carefully, 
 
 judging all the facts, and had said that he had put it too high ral 
 than too low. He thought Mr. Allen had shown in In A book 
 
 that there was a very large drop in the value of many forms 
 of capital. All the debentures and preference shares were 
 diminished by the very fact that the market rate of interest 
 had risen. They had a very large amount of capital which 
 had to be put at a lower figure now than before the war. He t hought 
 that Sir George Paish should make more allowance for this factor. 
 The question had been raised as to whether he had included the 
 value of roads. He would read a passage from " British Incomes 
 and Property" on the point. 'It can be argued with great 
 " force that the greater part of the value of roads is already 
 " included in the value of adjacent property. In so far 
 " the property is directly served it is enhanced in worth by the 
 " present value of the services rendered by roads which have been 
 " made and paid for in the past. One need not belong to the school 
 " of thought which expects a cheaper ' hair cut ' to work out into an 
 " increased ground rent before one admits that, so far as minor 
 " roads are concerned, their value must be mainly in the rents paid 
 " for the houses, &c, served. There i~; very probably a Burplua or 
 " national value over and above the individual values in main roads, 
 " taken as a system, and an estimate is permissible on that account. 
 " Of course, it is open to argument, that all individual values are 
 : ' improved by common wealth such as parks, but it is improbable 
 " that the connection is so direct and full as in the case of sew 
 " for example. In the case of recent expenditure (for the Bake of 
 " argument assumed to be outright) where rate of interest on outlay 
 " is a controlling feature, the tenant's rent must cover streets and 
 " sewers as much as it does the brickwork of the houses itself. In 
 the case of expenditure long past, where actual outlay has ceased 
 to command a rate of interest, we may consider a 
 " sewerless house with poor situation, as upon 1 margin, 
 
 "for which no site rent is payahh and contrast it with a similar 
 " structure fully equipped, commanding a superior rent and a 
 "distinct site rent. It is difficult to escape I elusion that a 
 
 "large part of public expenditure serving specific properties must 
 " be valued in the valuation of those properti So it would be 
 
 seen that a valuation had been included foraBiirplus value in the main 
 
 r 
 
 t<
 
 66 Discussion 
 
 roads system apart from the ordinary town roads. In the Economic 
 Journal, in reckoning the national capital at the end of the war, he 
 was not reckoning what the real worth of the country was in terms 
 of any other period. He was asking what was the face value of 
 the wealth which would appear on individual statements of total 
 wealth. When they came to ask what the real wealth of the country 
 was, he was completely with Mr. Allen that it had not been increased, 
 though as a statement in pounds, shillings, and pence, it might have 
 done. What actually happened when a loan was floated, it seemed 
 to him, if he might digress, was that if the loan was really provided 
 to the Government out of the savings of the nation, they then got 
 what he might call a charge for interest on every taxpayer. If it 
 had been allocated as an interest payment to someone else., it would 
 have reduced their income from 400 millions to 350 millions or 50 
 millions per annum. But under taxation instead of interest they 
 would still call their income 400 millions, but the net effect was 
 that it reduced their income by 50 millions and increased somebody 
 else's income by 50 millions. In so far as that was not provided by 
 a genuine saving but was an inflation of currency, it was obtained 
 by the Government depreciating everybody's purchasing power. 
 The inventory method tended to be lower in its results than a 
 valuation as a going-concern — the capitalization of profits — if a 
 country were prosperous because there was a large element of good- 
 will constantly, on the rise. On the other hand, the capital valuation, 
 quite in the American form, was not merely a valuation of so many 
 years' purchase of an existing profit, but it had also got a future site 
 value in it. The inventory methods therefore tended to have 
 larger values than a going-concern if the site values were increasing. 
 The two together perhaps might tend to cancel out. With reference 
 to what Mr. Pethick Lawrence had said as to the time " lag," in 
 " British Incomes and Property " he had shown the point of time 
 to which an income tax assessment might be said to relate. They 
 would notice in his table he had raised the figure from 14,300 to 
 14,500 millions, for that very reason, that he was trying to get the 
 figure to what it stood in July, 1914, whereas his original estimate 
 was some time in the financial year 1913-14 ; a date precisely fixed 
 would rotate about January as a fixed point. He had added half a 
 year's savings at the rate of 400 millions per annum. On the question 
 of overlapping there was, of course, a tendency which could be seen 
 in the process of investigating the inventory methods of other 
 countries. The very first thing to get was the investigators' method 
 of dealing with this. Supposing they took an investigator who 
 was about to make up an inventory for this country, and found him 
 taking the total capital of the companies quoted on the Stock 
 Exchange, they knew at once they need not go any further with 
 that man because they would see that he was not qualified for his 
 task. They all knew that there was an immense duplication of 
 capital, one company holding the capital of another, and so on. 
 It was merely duplication and did not get down to real capital at all.
 
 on Dr. Stamp's Paper. 67 
 
 Some enquirers had put an enormous amount of work into this 
 question of dealing with Bhare values as contrasted with the real 
 value which had been put into the business. As to statements with 
 regard to damages and so on, it was on- tliin<_' to talk about the 
 war wealth of the country and quite another to discuss the cost of 
 
 making good anything at present prices. The latter might I asily 
 
 three or four times as much, and if there wen- elements <>f exaggera- 
 tion, to give a margin for beating down, it would not invalidate 
 the work of the French investigators in arriving at 12,000,000,000/. 
 as the pre-war capital of France. In conclusion, he thanked them 
 for the kind attention they had given to his Paper, and hoped that 
 he had dealt with most of the points which had been raised.
 
 LONDON : 
 HARRISON AND SONS, PBINTEBS IN OEDINAKY TO HIS MAJESTY 
 
 ST martin's lane, w.c. 2. 
 
 waVB ^-c AUroRNM 
 
 AT
 
 CONTENTS OF RECENT ISSUES OF THE 
 
 Journal of the Royal Statistical Society, 
 
 Vol. LXXXI, Part III —May, L918. i-aok 
 
 The Bases .>f Looal Taxation in England. Bj Edgab .1. Sabpbb. 
 
 With I lisoussion ................. :i '7 i is 
 
 The Industrial Position of [taly. Bj Professor B. \u mi.<> O.B., 
 
 and l>r. F. Giannini. With Discussion Mfl 
 
 On the Future of Statistics. By HABALD WbstbbOAABD 
 
 Vol. LXXXI, Part IV— July, ltfl8. 
 
 The Effect of Trade Fluctuations upon Profits. M\ •/. C. STAMP, 
 
 C.B.E., D.Sc. With Discussion -608 
 
 Recent Economic Developments in Japan in their Relation go Uer 
 
 Trade with the United Kingdom. Bj K. Yamw\ki, Consul- 
 
 General lor Japan. With Discussion 
 On the Value of a Vfean as Calculated from a Simple. By Profess 
 
 F. Y. Edgbwortii, K.15. A 
 
 Annual Report of the Council, &c. With Proceedings al the 1 
 
 fourth Annual General Meeting (133 — o'45 
 
 Vol. LXXXII, Part I— January, 1919. 
 
 Eugenics in Relation to Economics and Statistics. By Major 
 
 Leonard Darwin, Sc. I). With Discussion 1 — 33 
 
 Notes on the Biology of a Life-Table. By John Bbownlbb, M.D., 
 
 D.Sc. Wit i Discussion 34— 77 
 
 A Note on German and English War-Time Diets. By Major 
 
 Greenwood (Capt. R.A.M.O, T.F.) and Cecily M. Thompson 78- 
 
 Vol. LXXXII, Part II— March, 1919. 
 
 The Taxation of the Various Classes of the People. The Presidential 
 Address of the Right Hon. IIekbbrt Samuel, for the Session 
 1918-19. Delivered to the Royal Statistical Society, January 21, 
 1919. With Proceedings 143 
 
 Problems of Industrial Organisation. By Major Greenwood, Capt. 
 R.A.M.O, T.F. (Lister Institute and Ministry of Muuitions). 
 With Discussion " 186—221 
 
 Psychical Research and Statistical Method. By Professor F. Y. 
 Edgeworth, M.A., F.B.A ! 
 
 Vol. LXXXII, Part III— M,ry, L919. 
 
 A Survey of the Development of the Serbian (Southern Slav) Nation. 
 
 An Economic and Statistical Study. Bj Gh DlOl 
 
 Assistant Professor of Politic d Economy, B rity. 
 
 With Discussion 29 B 
 
 The Measurement of Chai ges in the Cost of Living. By \ I 
 
 Bowi.ky, Sc.I). With Disoussion 
 Crop-Cycles in the United Kingdom and in the : By 
 
 IIi.-vry L. Moobb, Columbia University, New Zork 
 
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