Q tt<5eNTATION COFY &U4 a compliments bj? 5 And the exemption 2,500 A taxable value is left of $5,000 And on this the tax is $21 ii6 TAXES AS REFORMERS A large number of landowners pay no tax at all. Some- thing like eight thousand to ten thousand of the small far- mers out of sixteen thousand have been relieved of taxation by the change from the property tax to the land and income tax and pay nothing. Out of ninety thousand landowners only thirteen thousand pay land-tax. "The land-tax is expressly planned," the Commissioner of Taxes said, "to exempt the small owner and to free the struggling poor man." The land-tax begins to be progressive or graduated when the values reach $25,000 above improvements. There is no tax on improvements, large or small, but the privilege of exemption of mortgages is withdrawn when estates are large enough to be subject to the graduated tax, that is, at $25,000. The larger owner not only pays a larger rate of tax, but loses all the exemptions, except those for improvements. The extra tax increases by one-eighth of a penny up to a value of $1,150,000, when its maximum is reached of two- pence in the pound, or four cents in every $4.86. This added to the original tax of one penny in the pound makes a maximum possible tax of threepence, or six cents on $4.86 of value, or about .013. So that the land-tax even at its heaviest, is not heavy. The purpose was sweeping, but the execution has been most gentle. The taxes are not destruc- tive; great estates still exist. The worst that can be said is that notice has been served on the monopolists that they must surrender or disappear. Another graduated tax is that on estates which pass by death. Nothing is demanded of properties worth less than $500, nor on estates that descend to widows and widowers. The rate up to properties worth $5000 is two and one half per cent. It then rises to three and one half per cent., until a limit of $25,000 is reached, when it becomes seven per WINGLESS CAPITALISTS 117 cent, up to $100,000. On all estates above that, the rate is ten per cent. On the passage of the new taxation laws, some of the "sentimental" capitalists undertook to carry out their threat of "leaving the country," to the extent of refusing to lend. They said to borrowers who sought to renew mortgages, "You have elected these labour men, go to them for your money." The only result was that they lost their business, for there were others with money to lend who were glad to get the securities. The only persons who were punished were the wingless capitalists themselves. Owners of estates large enough for the graduated tax have a further penalty if absentees : then their graduated tax is increased twenty per cent. The collections under this head are very small. Some of the absentees escape this tax by periodically returning to the colony. The absentee tax was not an invention of New Zealand. In England two hundred years ago, it was enacted that "ab- sentees are to be assessed a double portion on their lands, stocks and chattels." And even in Ireland, in the reign of Queen Anne, an absentee tax of six shillings in the pound was put on all office holders who did not live half of the year in the country. Times have changed, and in Ireland now the absentees are not taxed they tax. The land-tax yields $1,075,000 a year and the graduated tax and the absentee tax add $450,000 more. The income tax is popular because it taxes only the profits of industry, and not the materials or adventures of industry, and because it taxes men on their improvements and experi- ments only as they are successful and only in proportion to their success. It is popular with business men for the reason well stated by the Honourable William Pember Reeves. "It is an in- ii8 TAXES AS REFORMERS surance premium which the business man pays for entire relief from taxation when he is not in a position to pay taxes." South Australia had preceded New Zealand in its adop- tion of an income tax, and its success there made it impos- sible to doubt its practicability. As planned in New Zealand, the tax is free from un- necessary publicity. The New Zealand income tax follows the same lines of policy as the land-tax. The small man is exempt. The rates increase as the income increases. The man who has an income of only $1500 a year pays nothing, and fifteen hundred is deducted, with one exception, from all incomes before the tax is levied. To encourage thrift life insurance premiums up to $250 are also exempt. The rate of the tax is sixpence on the pound, or twelve cents on $4.86, up to five thousand a year. On all above that the rate is double, one shilling on the pound. The exception just spoken of is in regard to companies. Corporations, joint-stock companies, are not allowed the $1500 exemption, nor are they given a low rate. They must all pay at the rate of a shilling on the pound on all their income. Absentees, too, are punished as in the case of the land- tax, and are not allowed the $1500 exemption. The steamship companies and other owners of vessels doing business in New Zealand ports, though not resident there, must pay income tax on the profits of their business in New Zealand. The introduction of a new system of taxation is always attended with embarrassments and disappointments; but though there has been embarrassment in this New Zealand experiment, as was inevitable, there has not been disappoint- ment, and the revenues of the country have been increased. CUTTING UP LARGE HOLDINGS 119 The income tax yields $575,000 a year. This looks small to the American accustomed to big figures, but everything in this world is comparative. The substitution for the property tax of the income tax and the land-tax, with the exemptions of improvements, mortgages, etc., has not re- sulted, as it was predicted would be the case, in a disastrous shrinkage of revenue. In explanation of the small amount received under the income tax, it is to be remembered that no income from land or mortgages or "from the use and produce of land enjoyed by the owner or occupier" is taxable under this head. The land-tax takes care of landed property and mortgages. When a farmer makes a good thing out of butter or stock of his own production, he is not called upon to pay income tax, and on the same principle, the man who sells cattle out of his own herds does not pay income tax on the profits. But if the same man cuts it up into meat in a town shop, he must pay income tax on that'business. If a man is a dealer in stock which he gets from others, he must pay an income tax on his profits, but if he sells only the cattle raised by himself, he is not liable. The receipts of the land-tax are steadily decreasing, year by year, though land values are increasing. Of course, since small estates are exempt, and both the government and private owners are cutting up large tracts into smaller pieces, there must be a continual withdrawal of land from taxation. The farther subdivision is carried, the greater will be the loss of revenue. The tax is evaded, too, I was told, to some extent by dividing property of taxable size among the mem- bers of a family into pieces small enough to be exempt. Some papers, like the "New Zealand Times," recommend that this decrease be met by taxing the small men ; but this backward, not to say, revolutionary measure has few friends. "To increase the graduation," both in the income and the 120 TAXES AS REFORMERS land-tax, is the remedy that seems most popular among the radicals. They point out that the colony has sold altogether, for less than $80,000,000, 15,000,000 acres of land which are now worth $420,000,000. And they insist that this difference in value could have been saved by a proper sys- tem of taxation and that it is now a proper subject for a heavier levy. What part had Henry George in the land-tax reforms of New Zealand ? Though obviously not a single tax country New Zealand has made so much progress in the direction of taxing land that the influence of that great American at once suggests itself. I found Henry George everywhere spoken of with the greatest admiration. Premier Ballance quoted him as an authority for one of the details of his land-tax scheme, and referred to him as the "greatest authority on the land question, who has revolutionised public opinion." Ballance described as his ideal tax a tax on the value of land, less improvements. "It ts our intention gradually to lead up to the pure land-tax." His government would have been glad to exempt mort- gages from taxation, as they understood perfectly well that this was a tax on improvements ; but for fiscal reasons they were unable to do so. "Our land-tax," the commissioner said, "is not a pure land-tax, because we feared that would not raise revenue enough. It was impossible to foretell the fiscal result. The mortgage tax was, therefore, made a part of the system and that saved the revenue." Parliament has passed a law authorising towns to levy their taxes or rates on the unimproved value of land, forcing idle property into use, if the people vote to do so. But the public opinion in favour of this "single tax" is so feeble that in the three years the law has been in force, only twenty local bodies, none important, had voted on the proposition. Twelve adopted and eight rejected it. HENRY GEORGE 121 From this it is evident there is very little "pure land-tax" enthusiasm among the local taxpayers. As for the national bias in favour of such taxation, it dates back of the aposto- late of Henry George to the ministry of Sir George Grey, who, in 1878, introduced the land-tax into New Zealand finance. Only one collection was made, and in the next year the tax was repealed and the favourite of the monopo- lists, the property tax, replaced it. "New Zealand," Sir George Grey said, thirteen years later, "was thus the first country to have a fair land-tax. It was the wonder of other countries at the time." South Australia adopted this land-tax and has retained it, but allows no exemption. "But it came too early here," Sir George Grey said. "The great landowners trembled. They believed it was putting in the thin edge of the wedge." They rallied all their forces and Sir George Grey was pun- ished by expulsion from office. "Years of suffering," Sir George Grey said, after this revolt, in 1890, "have taught the people how great a boon they then lost, and they are now determined once more to get and keep forever that tax for which almost all mankind from one end of the earth to the other, are now longing." "Henry George was not in it," the Commissioner of Taxes said emphatically in explaining that the New Zealand tax was born before Henry George's ideas were known, and that the land-tax now in force was not a "pure land-tax." "Henry George had little influence," another authority declared. "He frightened us by the confiscatory features of his plan." Mr. Ballance, in a pamphlet in 1887, sa ^ "Henry George would not pay from the public exchequer for the economic errors of the past, but would make the individuals who accepted the guarantee of the state a victim of the national wrong-doing. To state the doctrine is to condemn it." 122 TAXES AS REFORMERS The most important thing about the land and income tax- ation of New Zealand is its spirit its purpose to work to redress the social balance between the too rich and the too poor. But little more, however, has been achieved than to point the way and take the first step. In the simple statement that New Zealand still raises seventy-five per cent, of her revenue from the tariff, that much the largest part of this customs revenue is derived from the necessaries of life, is made manifest the unpleasant truth that even in New Zealand the people are taxed, not according to their ability to pay, but according to their ne- cessities. The basis of contribution through the tariff to the sup- port of the government of New Zealand is the amount of tea, kerosene, sugar, etc., which a family must consume, not the amount of wealth which is conserved and increased for it by the state. The class which gets the chief benefit of the government, and the class which makes the chief contribution to the cost are not the same. There have been some reductions of the duties on the necessaries of life, but they have not been large enough to affect the general character of the tariff as "the white man's burden." I found a rising demand among the Progressive Liberals for a change in this policy. With the election of 1899 the Conservative party, which has so fruitlessly attempted to stem the tide of liberalism, has practically disappeared for- ever. The Liberal party enters upon the task of adminis- tration for its fourth inning with a majority of thirty in a Parliament of seventy-four fifty-two to twenty-two. Influential papers like the "Times" of Lyttleton are call- ing upon the ministry to use its overwhelming power to readjust the burdens of taxation by increasing the land and THE WHITE MAN'S BURDEN 123 income tax and lightening the tariff. They point out that the land and income tax system was adopted for two pur- poses which have not yet been achieved. First, to break up monopolies, especially that in land; and second, to transfer the main burden of government to those who get its main benefits. These principles have been given all the dignity of statu- tory initiation, but they cannot be said to be carried out by a policy which collects three quarters of the taxes by a method which throws the heaviest part of the expense of the state on the poor. Special protest is made against the policy of spending on public works money raised by this tariff. An average of $2,000,000 a year of the general revenue is appropriated to railroads and the like. "These amounts," Mr. Henry George Ell, a young workingman of Christchurch, leader of the Progressive Liberals, and just elected to Parliament, says, "are taken from the masses of the people to be spent on rail- roads and other works to enhance the wealth of the land- owners." The consideration that is shown small men in the land-tax is undone, much more than undone, in the tariff. Mr. Ell is going about showing the farmers that they would be much better off if they could exchange the favours of the land-tax for justice in the tariff. If the preferences given the rich by the tariff were abolished, these small far- mers would save so much that they could lose all their ex- emptions, pay the taxes on the full value of the land and still have money left. But by taking out of the poor man's pocket the funds for the public works, railroads and the like, mainly for the benefit of the landowners, the state is con- stantly abstracting large sums of money from the pockets of the masses which it is spending against their interest to in- crease their rents and the cost of living. 124 TAXES AS REFORMERS The present Premier, the Honourable R. J. Seddon, is in sympathy with the demand for this democratisation of tax- ation. During the last campaign, in 1899, he told the Liber- als that if he had to choose between the introduction of penny postage and the lowering of the tariff, he would take the latter. Postage reform would cost the revenue three hundred thousand dollars, two thirds of which would go to the people in the cities, and among them, almost wholly, to the business class. He thought it more important that the taxation of the necessaries of life through the tariff should be reduced to the masses. And he declares himself willing to reduce the tariff taxes in exchange for a higher land-tax. The total revenue from the land and income tax is only $3,329,340 a year, while the tariff produces $10,201,155. The average rate of the tariff is twenty-five per cent, and the rates on the necessaries of life are much higher than the average. Tea is forty per cent. ; sugar, thirty ; rice, forty- two; salt, forty-eight; kerosene, ninety. The largest tax- payers are spirits, tea, sugar, tobacco, kerosene, currants. These are the poor man's necessaries; which means that a man pays taxes according to the size of his family ; and the poor man in all countries is the family man. Mr. Ell is a leader in the agitation for a lower taxation on life and a higher taxation on land. Through newspaper articles, the organisation of the Progressive Liberal Asso- ciation of Canterbury, and by public speeches and political campaigns, he is waking up the press and the politicians and the people to the fact that there is an issue here which will have to be met. His association has papered New Zealand with the facts and arguments about the discriminations against the masses inseparable from a tariff on the necessaries of life, and has made a household word of the famous quotation from Pitt : "To levy a direct tax of seven per cent, is a dangerous ex- THEY PAY WITHOUT KNOWING 125 periment in a free country, and may excite revolt ; but there is a method by which you can tax the last rag from the back and the last bite from the mouth without causing a murmur against high taxes, and that is to tax a great many articles of daily use and necessity so indirectly that the people will pay them and not know it. Their grumbling then will be of hard times, but they will not know that the hard times are caused by taxation." CHAPTER VII A MAN BETTER THAN A SHEEP NEW ZEALAND, though so young, has tasted of land monop- oly to the dregs, and has not liked it. "Earth hunger" became ravenous early in that beautiful and fertile country. It would be idle to tell the old story, told in all countries, of the various and devious ways in which the heritage of the people was legislated away and stolen away in New Zea- land. Enough to say that when the people came to them- selves in the civic revival of 1890 they found this the chief among the evils demanding remedy. Large areas were held by the few, and they would not sell and would not culti- vate. Population surged up against stretches of fertile plain and valley, only to find these kept out of the market to exact a suffocation price when the population became more crowded. They were used meanwhile only for sheep. New Zealanders are fond of sheep, and one of their great- est staples is frozen mutton, but they finally made up their minds to give men the preference. Sir George Grey, as proud to be a commoner as he had been to be governor, pointed out in his place in Parliament, in 1891, that 17,937,570 acres of land were held by only 1615 landowners, while 100,000 people occupied less than 300,000 acres. And seven years later, in his "Long White Cloud," the Honourable William Pember Reeves showed that "in spite of land laws, land-tax, and time, out of 34,- 000,000 acres of land 21,000,000 are held in areas of more than 5000 acres." 126 TRUSTEES FOR THEMSELVES 127 Sir George Grey asked, "Does it not seem almost incred- ible that so great a disparity should exist, and that that disparity should have been created by the rulers of this country, the trustees of the public lands which belong to the whole people ?" He raised a question which has not been answered yet a notable question to have been asked by an aristocrat of aristocrats. "I doubt," he said, "that all these vast properties have been 'legally' acquired as we are told. If trustees make laws, possibly for their own benefit, can it be said that when their wards are left in such a state of poverty and distress the distribution that has been made of the common property has been 'lawfully' made?" As early as 1870 this tendency to consolidation had been seen and deplored, and the compulsory resumption of the lands alienated so wastefully, and in many cases worse than wastefully, had been suggested. Sir George Grey was an advocate of resumption, and in 1887 Sir Robert Stout in- troduced a bill for compulsory repurchase, but nothing ef- fectual was done, and the aggregation of huge estates went on. Some of the ministries tried in various ways to create and keep an independent yeomanry, and other ministries did their best to thwart these efforts. As one way to prevent concentration lands were sold in small parcels and were leased instead of being sold, but the small men sold out or were sold out. When land was offered in small pieces to perpetuate "the yeomanry," the great companies and the large landowners in the vicinity had their shepherds and cooks and station managers and their workingmen and even their wives buy the land, and then transfer it to them. Owners were allowed a certain amount of land in proportion to the \vire fencing they erected, and they ran their fences along the public roads 128 A MAN BETTER THAN A SHEEP and the streams and up the fertile valleys, acquiring long and narrow strips for themselves, rendering all the land behind them useless to other settlers. The alienation of the land, it must not be forgotten how- ever, was not entirely the fault of the land speculator and the monopolist. In the early days the colony was very glad to sell its land. It was a gala day long remembered in Christchurch when the provincial government of early times was able to announce that it had made a sale of land by which it could reduce the railway bonds by 50,000. The provinces sold their land to pay off their debts, for land was the only convertible property they had. The abuses of the four years from 1887 to 1891 made that administration a carnival of land dissipation, and its Min- ister of Lands was known as "The High Priest of Dum- myism." "The land grabbers picked out the eyes on the plains," a New Zealander explained to me, "and left only the hills and mountains. When the farmers came along they had to ask, 'Shall sheep and cattle occupy the plains, and our wives and children go to the mountains and the hills ?' ' Gold diggers and hunters would come back telling of the beautiful land they had seen, which the people could not even look at, for the squatters and land grabbers would not let any one penetrate their fences, and would send their servants to dog any one venturing inside. The land was mostly in the hands of joint-stock companies and, even worse, absentee corporations. The managers of these companies, all British, of course, were driven by the demands of their stockholders in London for dividends to do things no other landlord in the country would do. They put through the courts a tenant who was behindhand when, if they had been individual owners instead of com- panies, he would have got time and escaped ruin. SIR GEORGE GREY 129 Minister of Lands McKenzie, in the debate on the land bills which followed the tax bill in the programme of re- form, quoted with great effect from a speech of the chair- man of one of these great companies to the shareholders in London. "He said they were going to declare a dividend and bonus of fifteen per cent., but the shareholders could not look for any higher dividends or bonuses until wages had been re- duced in New Zealand." The minister declared that these companies wanted the workingmen of the colony to be "actual slaves," and that their influence was being unitedly thrown against the land reforms he was proposing, because it would enable these poor men to get out of the rut of poverty. The pressure for land became a political pressure. The issue between "squatters" as the great land grabbers were called and settlers, between man and sheep, was one of the crucial issues of the campaign of 1890. "No matter what party a candidate belonged to," I was told, "he was sure to be asked at the polls again and again, 'What will you do about the land?" If the New Zealanders had strong democratic ideas about the social control of land, it is easy to see where they got them. Besides the tutoring of experience, they had been taught such views from the beginning by a series of remark- able men. Along with the selfish and often illegal absorp- tion of land there went from the first an active and noble movement in opposition to it. Foremost among the land democrats was Sir George Grey. By a happy opportunity he was made a builder of the foundations of society in places as far apart as South Australia, New Zealand and South Africa. He did his best to affect with some touches of justice and common sense the policy of the British Empire to its hundreds of 130 A MAN BETTER THAN A SHEEP millions of subject races, and his influence reached even to India. He was able to arrest the policy which first robbed the natives and then created monopoly and aristocracy through the division of the plunder. From first to last Grey was a faithful preacher of "land for the people," even in England and Ireland as well as in the colonies. Sir Robert Stout, several times Premier and now Chief Justice of New Zealand, the most intellectual and cultivated radical in the Southern hemisphere, and John Ballance, whose name is revered from end to end of New Zealand as the greatest Liberal Premier of the past, always put the democratisation of land first in their programme. To the financial genius of Sir Julius Vogel it is due that at least half a century was gained in the development of railroads, public works, immigration and land settlement through the investment of British capital in the bonds of New Zealand. The most important part of his public works scheme was that the community should secure the enor- mous increase in the value of lands which he foresaw must follow. This he was forced to throw overboard by the prejudice and selfishness of the Parliament of the day, but the idea could not be thrown over. When John Ballance became Premier and John McKen- zie Minister of Lands, in 1891 a position in which Mc- Kenzie has continued with Premier Seddon since the death of Ballance in 1893 the hour and the men to toll the knell of land monopoly in New Zealand arrived. McKenzie had been a boy in the Highlands. The land- lord was the head teacher in the hard school in which he learned the political economy of land. When he was push- ing his land bills through the New Zealand Parliament he was twitted by members of the Opposition, who sneeringly "wondered where he got his ideas !" "In the glens of Scotland," he replied. LANDLORD TEACHERS 131 "What made me a reformer?" he said in answer to a question from me. "When I was a little boy, one day going along the coun- try road with my father I saw a lot of people, about thirty families, who had been evicted from Glen Calvie. They were not allowed to stop even in the public highway. There had been but one place opened to them, and we found them in that. There they were, a hundred souls or more, mak- ing their fires and cooking their morning meal in the ceme- tery of Kilcairdin, among the graves. They had slept in the church, and they ate in the shadow of the tombstones, the living among the dead. "I have seen in the Highlands of Scotland the ground harrowed over during the night in order to hide the blood shed by the people who had been trying to defend their homes." The minister revisited his boyhood home in 1899, and when he came back he had had another lesson. In a public address upon his return he told how old neighbours had come to him and begged that he would not make any speeches there on the land question, lest the landlord take offence and they suffer. There are "Outlanders," it would seem, nearer home than the Transvaal! "It was sheer necessity that drove me into politics," he said in describing his early career. "When I came from Rosshire to the Otago district of the South Island we had no schoolhouses, no post-offices, no roads, no bridges the country was a wilderness. I was the first settler. When others came we united " "To demand these improvements of the government?" I interrupted, in Americanese. "No," he said, in New Zealandese, "to assist each other to get them by the use of our political powers." He was secretary of the first school board, and the school 132 A MAN BETTER THAN A SHEEP which started with twelve children now has five hundred. lie was the secretary of the road board. "I made the first road," he said, "in the district, and never put a level on it, for I had none. But," he added with pride, "it has never been altered. I was secretary also for nine years of the old Otago Land Board." Mr. McKenzie for twenty-nine years has been in public positions of one kind and another in New Zealand, from secretary of the Otago Land Board to member of Parlia- ment and Minister of Lands, and has never been defeated in an election. "The laws in those days were all made by monopolists. Land squatters and speculators and land grabbers got into the provincial councils and made laws to suit themselves. The people had no voice. A man had to hold a certain area of land before he could get a vote, and the people were represented entirely by one class, and they made the laws to suit themselves. I found the situation so obnoxious that I resigned from the Otago Land Board. It was of no use to go to the meetings, for I could do nothing. These people had picked out all the best pieces of land under laws which they made and administered entirely in their own interests. Our young men and young women were grow- ing up and could find no land to settle on. They were capa- ble enough and had capital, but they had no land. The cry among the farmers was 'What shall we do with our boys ?' Out of this situation sprang the land laws, and the land and income and inheritance taxes." The land situation was so bad when Bal lance and Mc- Kenzie set themselves to find a remedy as to justify the statement made by a member of Parliament that "We have had the most pernicious system of land legislation in this colony that has ever been known in any civilised country in the world. Our land laws were designed by squatters, LIKE THE TENANTRY AT HOME 133 in the interest of squatters, and they have been adminis- tered by squatters' nominees for the purposes of land jobbery and monopoly." "Now is the time to get rid of them," said another member in Parliament. Minister McKenzie had a map made which he hung up before Parliament, showing how the country was blackened with the great holdings. They saw the huge estates and how the land was "gridironed" and "spotted." In the set- tlement of the colony, the frontages along the roads and rivers, and around watering places, and at the heads of valleys, were all taken up under laws made by the great landowners for the great landowners. All the river flats and gullies and every stream and highway had been picked up. This rendered access to* the lands in the rear impos- sible, and made them useless even with access, since they were cut off from water. Behind these frontages were millions of acres of back country, which were held under lease from the state by the owners of the frontages, and were of no value to anybody but them. The leases were to expire in 1896, and the colony would have then on its hands these millions of acres which it could sell or let to no one but the owners of the frontages. Unless some way were found of breaking through their cordon, the men who had "spotted" the country would own the country. A tenantry was arising in New Zealand just like the ten- antry at home. As Minister McKenzie showed Parliament in presenting his land bills, there were already in New Zea- land more farmers who were tenants than farmers who owned their lands. The majority of the farmers of New Zealand were pass- ing under the yoke of the mortgage. Fifty-eight per cent, of those who occupied their own land were mortgaged so heavily that their interest was equivalent to a rack rent. The country was paying enormous sums of money every 134 A MAN BETTER THAN A SHEEP year for interest on the loans that had made the railways, roads, and other public works, and added unearned incre- ment to the lands that had been sold for a mess of pottage ; but these lands kept in sheep were sending all their profits to Great Britain. The proceeds of this beautiful country, the minister told Parliament, are being wasted in riotous living by absentee spendthrifts. Immigration began to move the wrong way. An exodus from the colony set in, or rather set out. "Many people," said John Ballance to Parliament, "are leaving New Zea- land for other shores because they cannot get land here. Unless the big estates are dealt with, this exodus must con- tinue. There never yet was a country with large estates that continued to prosper." Whole districts in the colony were being starved for want of land for expansion, and the sons of the country were being forced out. The minister's map showed how the land had been "mopped up" by companies, banks and speculators. "In fifteen years," he told Parliament, if things went on as they were going, "there will not be an acre of land left for settlement in this colony, and the lands will be in the hands of 250,000 people. By that time three out of every four individuals in the colony will be land- less. The children of five years and under, now, will have no land to settle upon when they come of age. We have parted with something like 13,000,000 acres of our best agricultural lands, and we have only about 2,000,000 acres suitable for disposal in small areas." With a country that could support easily ten millions of people Japan has 50,000,000 New Zealand, with less than 750,000, found itself with a scarcity of land. There was springing up in New Zealand a landlordism nothing better than what has gone before in the old country. Mr. CRUELTIES OF THE FREEHOLD 135 McKenzie pointed to places in his own electorate where ten- ants were paying rents at a rate of two hundred and fifty per cent, on the price given the government for the land in good seasons just pulling through; in bad seasons, "the usual clearing-out sale," and ruin for them and the trades- men and the business people dependent upon them. "The cruelty of the freehold" was a phrase often found on Mr. McKenzie's lips in his speeches in and out of Par- liament. He told how freehold gives the right to the owner to turn people out of their homes, to burn the roofs of their dwellings so that they may not return to them, and to leave them starving on the roadside, as he had seen them. It was the freehold which was responsible for the deer for- ests in Scotland. "The whole country-side in parts of Scot- land," he said, "has been depopulated of small settlers, de- - populated of the men who fought and won the battles of Great Britain in the past. Who scaled the heights of Alma ? Who made the charge of Balaklava? Who relieved Luck-f now? Who were in a hundred other fights? Who but/ the Highland regiments, which were drawn from these very ' men ? Who but themselves, their relations, and their fami- ,' lies were driven off the straths and glens to make room for deer forests for noblemen?" "The history of the Highland evictions the Sutherland clearings tells how many thousands of families were broken up by the landlords and the freeholders, and scat- tered all over the face of the earth the homes of the many made desolate, so that the few can reign in plenty and wealth." I once walked through the Glen Tilt, a summer's day, from Braemar to Blair-Athol. The river Tilt runs its cur- rent of liquid cairngorms between the velvety hills of a great deer forest, where, by the way, there was to be seen neither deer nor forest. All day long we passed from one 136 A MAN BETTER THAN A SHEEP little homestead to another, but the homesteads consisted only of demolished walls and foundations levelled to the ground, and the only inhabitants were memories. We stopped at a peasant's cottage near the entrance to Blair- Athol and the park of the great duke to get a glass of milk. "Glen Tilt," the farmer's wife told us, "used to send a thousand men to the wars to defend their country, but the ( people have all been driven away and their homes destroyed | to make the deer forests you have been walking through. And," she added, with a gleam in her eye, "they have gone to America, Australia and Canada, and from there they . are sending into our markets their cattle and wheat at 1 prices which are drying up the rents of the very lords who 1 banished them." Naturally Minister McKenzie criticises the new Irish land policy of the British government, by which the gov- ernment advances money to the peasant to buy the free- hold. This will end, he predicts, in mortgaging and con- solidation. / Behind the freehold Mr. McKenzie saw gathering in New ' Zealand all the things he had been taught by the lords of | the Highlands to hate the power to rack-rent, foreclose and evict, to add field to field, to put deer and sheep where men, women and children might be, to speculate and monopolise. "We have had the freehold for fifty years," the minister said to Parliament, "and the result is these big estates, the greatest curse of New Zealand." If you chance to overhear the expression "social pests" in New Zealand you will find nine times out of ten that it is the great estates that are the subject of conversation. "Social pests" is New Zealandese for land monopolists. Another of the current phrases in New Zealand is an expression which flew from the lips of the Minister of La- bour, the Honourable William Pember Reeves, author of NO WAR AGAINST CAPITAL 137 the Compulsory Arbitration law, in a hot debate in Parlia- ment that it was necessary to "burst up the great estates." In answer to the threat of the Conservatives that the great land companies would leave the country if the pro- posed legislation hostile to them were enacted, Premier Bal- lance said in Parliament : "We do not care what these huge companies do. We shall not sink even if they all pack up and go." He was not warring against capital, he explained, but he meant to restrict the flow of capital to large estates and to stimulate the flow of capital into small estates. Minister McKenzie told Parliament of a demand for more land made upon him by one of the men into whose maw had been going most of the land which the colony had sold in his vicinity in small parcels to meet the need for small farms. "He told me that he had already purchased a very large area for cash. He said, 'I want another three thousand acres, or I am going to leave the country.' I told him that I would be very glad to see him leave it." It was these abuses coming to a head after years of suffer- ing that made the New Zealand people move at last. As a step toward a remedy, and, as Minister McKenzie said, "only a step," two laws were passed and amended in the years 1892 and following. One of these laws under- took to prevent future monopoly in the public lands; the other to break up by purchase, compulsory, if need be, the monopoly already existing in private lands. Both made ample and particular provision for the resettlement of the people on the land, especially as tenants of the state, in- stead of private owners. The main idea of both these laws is the same that land shall be held only for use and for such use only as is for the public good, and that the public is the only judge of what is "good" for it. 1 38 A MAN BETTER THAN A SHEEP The ultimate ideal of the New Zealand system is that the state shall be the only landowner, the only freeholder; but, with the political sagacity characteristic of their blood, the New Zealanders have not attempted to realise this ideal at one stroke. They took but "one step," but at the same time they understood it to be "but" one step. In the new laws the hated freehold is continued, and yet it is not con- tinued. It is practically discontinued in the disposition of the private estates taken back to be made into farms for the people, but is still given in the sale of public lands. But new conditions as to use and improvement and area are imposed, which take away from the new freeholds the anarchistic right, beloved of the would-be New Zealand squire as of all squires, "to do what I will with my own," and besides these new restrictions progressing upon him from the rear come the never-resting "progressive" taxes. No one is now allowed to buy or lease more either of the resumed lands or the public lands than 640 acres of first-class, or 2000 of second-class land, nor more pas- toral land than enough for 2000 or 4000 sheep. If he already holds that amount of land he can get no more. Mineral and oil lands are reserved. The government offers its public lands by lease or sale. But it offers the lands it has had to buy, compulsorily or amicably, on lease only. But on those who buy and on those who lease restrictions are imposed to prevent monopoly and insure use restrictions of area, use, improvements. No one can attain the dignity of state tenant who cannot pass a satisfactory examination showing that he has the money, knowledge and character necessary for success. No one can retain his farm, whether bought or leased, unless he is found to be faithfully comply- ing with all the requirements. Leases can be sold by the tenant, but the new tenant must also satisfy the Land Board of his capability. ANOTHER OPEN DOOR 139 A new tenure is created by the new laws or rather an old New Zealand tenure, the perpetual lease, is perfected and special inducements are given to make it more attractive to buyers than absolute ownership. It is called the ''lease in perpetuity," and under it the occupier is still the owner, but the owner of a leasehold, not a freehold; owner of the right to occupy, to use, to transmit to his children, to sell, to lease, to mortgage, but not the owner of the right to keep idle, to speculate, or to sell to other speculators. He is the owner of all the value he puts into the ground, or into improvements above ground, and only under this tenure is he the secure owner of these values, for, even if he for- feits his lease through fault or misfortune, the government guarantees him the value of all his' improvements. Only under this tenure also is he free from foreclosure, which is the terror of the freehold landowner. "It is better so we cannot lose it," said a farmer, explaining why he preferred to lease rather than buy. This lease is especially designed for the poor man, for by it he can get his land without any payment in cash. As the distribution is made among the applicants by lot he has the same chance as the richest or the quickest man in the country to get his six hundred and forty acres of the best land, and he does not have to spend a cent for pur- chase money. The system is an "open door" to indepen- dence for the man who has not money enough both to buy and work a farm, but only enough to work it. He can keep all his money for his farm. The government makes the valuation of the land low, and it charges only four per cent, a year rent for the newly opened public lands, and five per cent, a year for farms cut out of the resumed estates, and this original valuation is never increased, but goes on without change for 999 years. Minister McKenzie fought hard to have the 999 year HO A MAN BETTER THAN A SHEEP leases made with thirty years' revaluations, but had to choose between sacrificing this or the whole measure. The increased value gained in the future by the land of the leasehold cannot be reached through the rent, for that is unchange- able for 999 years, but it can be reached through the land- tax. Leasehold and freehold alike are taxable on the "prairie value." If the land-tax is increased so as to soak up all the unearned increment of the freehold, it will also soak up all the unearned increment of the leasehold. The advantage sought by the thirty years' revaluation was that it provided for a periodical, automatic increase of the land- tax to soak up the increased value. The tenant has every right the freeholder has, except the right to sell without the consent of the state and the right to keep the land idle. The New Zealand system is not really the abolition of the freehold. But instead of giving every land occupier a little freehold of his own, which he will probably lose to the money-lenders, New Zealand makes every citizen a joint owner of all the freeholds. Every citizen as a citizen has a freehold in the great estate of the nation. The demand for the freehold is a demand that the free- hold be taken from all to be given to a few. But the policy of leasehold means an inalienable fatherland for all. There is still a cry for the freehold, especially among the Conservatives, but it is largely the selfish cry of successful men. "Complaints against the leasehold," said the Minis- ter of Lands, "are largely from men who have taken land under leasehold, been successful, and now want the free- hold." "As our farmers get rich," said a prominent member of the Liberal party "I have known some who have cleared the cost of their farms in two crops they want to have $he freehold in order that they may add field to field, for- SENTIMENTALISTS 141 getting that they themselves are the beneficiaries of the break up of just such large estates, as, in their selfishness, they would now like to found for themselves. It is inter- esting, too, to note that the Conservatives, the class that habitually decry sentiment as out of place in economic re- lations, are the loudest in pleading for the freehold on sen- timental grounds." Such pastoral land as there is and there has not been much as yet in the resumed estates, as they have been se- lected with a view particularly to farming is not let on 999 year leases, but for short terms. This permits it to be converted into agricultural use if needed. The right of resuming without compensation is reserved in certain cases, so that the land may be used for closer settlement. Every year reports are made to Parliament showing in detail every transaction in the purchase and sale of these lands. Provision is made in the law for garden plots and house and business lots the latter sometimes under freehold for the agricultural labourers, mechanics, and others who would naturally group themselves about the farms cut out of the resumed estates. When employment is scarce, these men can put in their days on their own little places. Lease- holds cannot be mortgaged nor taken for debt, though the improvements may be. The system of distributing land by ballot has been adopted instead of the former method of auction. This was dis- continued because people, in the excitement of bidding, would be tempted to pay more for the land than they could afford, and more than it was really worth. This democracy is a real estate dealer who sees to it that its lands do not sell for too much. In the same spirit the valuations on which the rents are calculated are made low. The state is a landlord who sees i 4 2 A MAN BETTER THAN A SHEEP its advantage in moderate rents. It says in its official pub- lication, "The state does not so much seek to raise a reve- nue directly as to encourage the occupation of the lands by the people. This secures indirectly an increased reve- nue, besides the other advantages which result from a nu- merous rural population." Advertisements of land for sale by the large holders are a constant feature of the New Zealand newspapers. One of the ministers told me of a prominent Australian wool merchant, banker and landowner who had just been inves- tigating the New Zealand system of purchasing the large estates for settlement. He was going back to Australia to urge the adoption of a similar system there. He had satis- fied himself that the small farmers can make more out of the land than the large holders. The best way, in other words, for the large holders to realise is to sell to small men, and the best way to do that is through the govern- ment, which is the most popular seller. Why the people prefer to deal with the government lies on the surface. "The land htmgerers," I heard the Minister of Lands explain, "started to buy land of the great companies, but when, as often happened, the instalments after the first were not paid, they lost their first payments, all their improve- ments and their time. They have no such experience when they buy from the state. If they default it resumes after a very indulgent delay, rents again, appraises the value of the improvements, deducts the rent due, and pays back the bal- ance to the outgoing tenant." The Minister of Lands gives this concise statement of the advantages of the 999 years leasehold, which is being as far as possible substituted for the freehold in the land system of New Zealand : First. It enables the government to select the occupier. PRECEDENTS FOR EVERYTHING 143 Second. It controls the cultivation and improvement. Third. No transfer can be made without the consent of the state. Fourth. Speculation and its result monopoly are pre- vented. Fifth. The area which can be held by any one is limited. There is absolutely nothing new in this land legislation of New Zealand, neither in principle nor practice, except that the New Zealanders have done whole-heartedly what has been done elsewhere but half-heartedly. Not even the compulsory resumption of the great estates is a novelty. There was a precedent in New Zealand or English history for every step. Progressive taxation really began when, long ago, small men were made exempt. Limitation of area, stipulations as to use and improvement, are parts of the homestead sys- tem of the United States. The perpetual lease had been tried before in New Zealand, but with defects which made it inoperative. Compulsory purchase had been suggested in 1870, and proposed in a bill to Parliament in 1887. The compulsory feature was a practical necessity in any reform of the New Zealand land system. Some owners would not sell, some asked extravagant prices, and some, who would have been glad to sell, could not because they were in the hands of the mortgage companies. Some of the owners of the "spotted frontages" that have been de- scribed were defiant in their refusal to sell. Behind them lay millions of acres useless to the government or the people unless their frontage could be taken. Minister McKenzie made good use of the English pre- cedent as to compulsory resumption of the land. "What are they doing in Great Britain? Does not the state interfere with the land there, although the land does not belong to the state? Have they not appointed royal 144 A MAN BETTER THAN A SHEEP commissioners and sent them down to the Highlands of Scotland to fix the price and regulate other things? Have they not also introduced legislation there to take back the land with a view of putting a class of small owners upon it ? Is not that the state interfering with the land ? . . . The people of any country have a right to interfere with it." All civilised countries exercise the power of condemning land when the public good requires. Premier Seddon said, in speaking of this principle in Parliament: "It is just as important to the colony to take land for settlement as for roads, or railways, or for mining pur- poses." Compulsory purchase was at first defeated in Parliament, but Minister McKenzie made the campaign of 1893 on that issue in his district, and was triumphantly returned. "On every platform during the recess I said that the time had arrived when it was necessary to take land com- pulsorily for settlement. On every occasion when I said that it was applauded by the people." Seventeen of the twenty-seven members who had opposed this measure in Parliament and had threatened that he should never be al- lowed to come back were themselves not allowed to return by their constituents. Three times compulsory purchase passed the House of Representatives, but was thrown out by the upper house, but the ministry persisted in demand- ing it. "The government is determined," Minister McKenzie told Parliament in 1893, "to stand or fall by compulsory pur- chase." It finally passed the House of Representatives by a vote of fifty to five, and the upper house then surrendered. As in the case of compulsory arbitration, here the possi- bility of compulsion made compulsion itself usually un- necessary. The government has had to resort to condem- NO SENTIMENTAL DAMAGES 145 nation in only two instances, and is offered more estates in all parts of the country than it needs. An attempt is now being made by one of the great land- owners, whose property the Hatuma estate is being taken under condemnation proceedings, to break down the law by demanding from the courts compensation not only for the market value of the land, but for the disturbance, sentimen- tal and other, to which he will be subjected. The former chief justice supported his contention, but his place is now filled by Sir Robert Stout, the philosophic radical. The government, on its side, stands for the American rule of damages in such cases, which gives the landowner only the market value. The owner in this case, who is an absentee, is likely to carry the case to the Privy Council of England, but even if he does so, and even if the decision of the Privy Council is in his favour, it will not, I was assured by prom- inent members of the ministry, have the slightest effect upon the policy of New Zealand in this matter. The establishment of the claim for sentimental damages would upset the new land system completely. The land which is condemned must, by the terms of the law, be leased to the small farmers at a price which will produce five per cent, revenue on its cost, including surveys, roads, etc. The addition of sentimental damages to the cost would increase the rental beyond the ability of the small farmers to pay. ,No decision of the courts, therefore, either at home or in England, will avail to arrest the policy of compulsory pur- chase, for upon that the entire fabric of land reform in New- Zealand rests. This matter was attended to in the session of 1899 by an amendment to the law which provides that when land is taken by compulsion the compensation given the owner shall be only the value of the land and the loss to his business which he incurs from the condemnation. i 4 6 A MAN BETTER THAN A SHEEP This is the rule of damages which has been established by the American railroads, through the courts, for the land they take from the private owner by compulsion. It is also, therefore, the rule of damages which will be applied to the American railroads by the people when they, like the Swiss, take back their highways. "We must experiment cautiously," Minister McKenzie said, in introducing his land bill of 1892. Only 50,000 a year was asked from Parliament for the first year's purchase of estates. As the experiment felt its way toward success this amount was increased to 250,000 a year, and later to 500,000 a year $2,500,000. Everything connected with this legislation was done in this spirit of "experimenting cautiously." No really new path was opened. All that was done was to move one step farther in the old path of the land reform to which New Zealand had been committed from the earliest years of its colonial life. The greatest care was taken so to constitute the boards which investigate and recommend the purchase of the re- sumed estates that they shall be composed of the very best men for the work, and shall be free from jobbery in con- nection with the landowners, and free from political jobbery. In resuming land small estates are not taken, and in the case of large estates the owner has the prior right to the lease of his homestead and six hundred and forty acres, of first-class land. He has also the right to require that the government shall take the whole of his estate if it takes any. Throughout, it will be seen, the rights of the private owners are strongly safeguarded. As a result there is no social bitterness. There is no cry on the one side for spoli- ation, no feeling on the other of having been despoiled. The colony is offered more estates than it can buy, and there are but few cases in which the owners will not accept its TO MAKE SURE OF THE HOME 147 terms. In one of the only two cases in which condemnation has been resorted to, the owners were willing to sell, but the agent, they being absentees, wished, for his own protection and the satisfaction of his clients, that the terms of the sale should be legally fixed by the Compensation Board. People who have been living on the estates as workmen, shepherds, station keepers, have special privileges in the se- lection of the land on which they have been living before the estate is thrown open to the general public. The lease in perpetuity is favoured by the government to make itself the only freeholder and convert all the landowners ulti- mately into state tenants, but it is not forced on the settlers. Recognising that the prejudices, habitudes and preferences of centuries o freehold experience were not to be overcome in a day, the settler in the case of public lands is allowed to choose freehold or leasehold as he wishes. He can buy for cash, or lease with the right of purchase, or lease in per- petuity. But no such choice is given in the case of the farms cut out of the resumed estates. It would be love's labour lost to break these up and then dispose of them under a tenure which, as all previous experience proves, would start them again travelling the road that leads to consolidation. Some of the very estates repurchased under the new law by the government were years ago sold by it in small sections to favour small farmers. It is willing to recognise in the dis- posal of the public lands the various preferences of the selectors as to tenure, but it is equally determined never to part again with its ownership of the lands which it is buy- ing back. Minister McKenzie told Parliament that he proposed the lease in perpetuity largely in answer to the entreaties of settlers who had been foreclosed by the money-lenders, under the freehold system, and had come to him and written H8 A MAN BETTER THAN A SHEEP to him asking for a perpetual lease under which they would be sure of their homes forever. "Speculation'' is a word that Minister McKenzie hates as much as "freehold." It is one of the "cruelties" he charges upon the freehold. He framed the new law for the disposal of the public lands so as "to keep every speculator out of them," he told Parliament. And of his bill for the purchase and subdivision of the estates, he said in the same way: "No big estates will grow out of the land purchased under this law. It has been rendered impossible. . . . No one has the right to purchase, and therefore there can be no speculation." Under the lease in perpetuity designed by Minister Mc- Kenzie the settlers become tenants of the Crown. There is no middleman, and there can be no transfer without the consent of the government. "They will soon find that there can be no speculation there," the minister said. I heard of an encounter between Mr. McKenzie and one of these speculators whom he so much detests. This speculator had four times got freeholds from the government, and, after holding each of them a short time, sold and pocketed a handsome profit. One day a deputa- tion appeared from the North Island, demanding to be given the freehold of a lot of land its members hold under lease. Though Minister McKenzie had never seen the man just spoken of, he had heard his name, and it was that of the leader of the delegation. Questioning him as to his vari- ous places of residence, he soon found that he had before him the speculating settler. "Now," he said, "you have had four chances at a free- hold. You have four times got land for your own home. You have speculated in it and made a good thing out of A SPECULATOR TURNED DOWN 149 it, but you come here and ask me to help you to do the same thing again. You will never get another freehold as long as I am minister." "One man one run," was another watchword with which Minister McKenzie called the people to his side. Against the system by which thirteen holders, nine of them com- panies, could get one hundred and sixty-five sheep runs, one company having twenty-five of them, monopolising all the runs in a district and keeping every one else out of the country, he instituted the system of "one man one run." Under this no one could get more than one run, and that only of a moderate size a great boon, he said, to our young men, who had been elbowed away hitherto by the dummies of the great monopolies. It might seem at the first glance that the fact that the state had millions of acres of public lands which it was opening to settlement was a good reason for not buying more land by resuming the great estates. But the public lands were in the North Island, in vast forest wastes, far from roads, markets, or society. It would take a long while to supply this territory with the accessories of trade and intercourse. Land already broken up was wanted for immediate use, and that was already monopolised. A very desirable class of immigrants, the farmers of England, were entirely unsuited for roughing it in the bush in the North Island, but if they could be supplied with land already cleared, like that of the great estates, they could begin in New Zealand where they left off in England and make a success at once of their new life. And, then, only by purchasing land could the common- wealth break up the great estates and get rid of the moral, political and economic evils that attend the existence of these "social pests." The subdivision of the land already monop- olised was a necessity of New Zealand statesmanship. ISO A MAN BETTER THAN A SHEEP "The more you subdivide the land," Minister McKenzie said, "the more you increase its producing power, and the revenue of the country will be correspondingly increased." Premier Ballance put the same consideration foremost in his advocacy of the policy of recovering the land and putting the people back on it. "There is nothing which will conduce more to the pros- perity of the country than cutting up those large estates and putting people on the land. Then they will be prosperous, your customs revenue will increase annually, and there will be no more unemployed hanging about the towns. Increase the number of your estates, make easier the position of the producers, and you will multiply the energies of the colony." A community as highly financed as New Zealand, owing hundreds of millions of dollars in Europe, has need to be sensitive about anything that affects the taxpaying power of the people. What have been the results ? Up to the end of the fiscal year terminating March 31, 1899, the government had expended in the resumption of private estates $6,253,235, and had added to this $269,310 for surveys, roads and other costs of opening them for set- tlement a total of $6,522,545. This is a sum as much for New Zealand as $600,000,000 would be for the United States. For this sum sixty-two estates have been acquired, with an area of 256,829 acres. Of these, 218,485 acres had been let March 31, 1899, in 1304 holdings. There are now living on this land, instead of the sheep and shepherds who were once their principal occupiers, 3077 persons, and they have built 813 houses. The value of the improvements which have been made is $645,655. The yearly cost of this investment of the colony in the in- terest it is paying on the bonds issued for the purchase is GLADSTONE'S MISTAKE 151 $212,438, while the actual rental is already $288,735, some of the lands are still unlet. The colony gets the money to buy by borrowing in Lon- don at three and one fourth per cent, and less, and it leases the land to the tenant at five. At the date of the report, March 31, 1899, the total income was at the rate of 4.8 per cent., and enough of the land then unlet has since been dis- posed of to bring the return up to over five per cent, on the capital "sunk." And besides this direct profit is to be counted the indirect vastly more important. The New Zealander uses his national credit to get money in London to lend again in advances to settlers and free the farmer from the high rates of interest he is paying the private bankers, and in precisely the same way the New Zealander gets money in London to buy, either with or without the owner's consent, the great sheep runs, to sell them at cost to men who will raise food and families for their own and the common good. The number of forfeitures has been very small, and most of the forfeited sections have been relet. The land report for 1899 shows that the total number of Crown tenants is now 15,899, holding 14,818,557 acres, and paying $1,331,765 a year rent, and of this only $84,965 is in arrears. Mr. Gladstone was quoted during the debate on the New Zealand land bills as an authority against the ability of the state to play the role of landlord. After giving his opinion that nationalisation without compensation would be robbery, he said, "Nationalisation of the land, with compensation, so far as I can understand it, would be folly, because the state is not qualified to exercise the functions of a landlord. The state could not become the landlord; it would over- burden and break down the state." The people of New Zealand were not deterred by this formidable quotation. 152 A MAN BETTER THAN A SHEEP They went on and made the state a landlord, with results so far quite the opposite of these predictions. Land in New Zealand is being distributed, not concen- trated. The number of small holdings shows a steady increase, though not yet a rapid increase. In 1895 the num- ber of holdings had been 46,676. In 1899 there were 62,- 639 holdings of one acre and upward, an increase of 1880 for the year. Out of 62,639 holdings, 36,932 fifty-nine per cent. were less than 100 acres. Only 10,959, or 17*^ per cent., hold over 320 acres, and this, it must be remem- bered, includes a large number of extensive tracts held under pastoral leases. In 1868 the land was held by only five per cent, of the people. In 1888 the percentage of land holders to popula- tion was only one half per cent, better than it had been twenty years before. To-day, notwithstanding the growth of population and of industrial pursuits, two per cent, more of the population owns land than in 1888. A picturesque translation of these statistics I found in a letter in the "Lyttleton Times," contributed by "J onn in the Bush." "The dear -old feudal system of New Zealand is gone broken up by a ruthless democracy. "I have stood on the top of the Blue Mountains of Otago and scanned ten mighty baronies, from ten to one hundred thousand acres each, the lord of which had power of 'pot and gallows' in those days. If any man was ever sus- pected of a longing for an acre of that land he had to go and get his teeth pulled out, as he had no more use for them in that little town by the mountain-side a town of re- tired sheep inspectors and others who braved the ire of these potentates and were reduced to sucking wild pigs. "The scene is changed! Climb that mountain now and LAST OF tHE BARONS 153 look around. In place of the wide, rolling waste of brown tussock you see cultivated fields, homesteads, schools, churches and villages, and roads and railways winding everywhere. Ay, and even buggies on the roads, with the gay ribbons of the settlers' pretty daughters fluttering in the breeze. That plain is now a scene of life and bustle, with its pleasures and its pains, and all that goes to make up a healthy, a happy and a free humanity. It was worth a fight for, and King Demos has won and the barons, the barons, where are they? One is left only one and he still hangs grimly on to his one hundred thousand acres of it, and still marshals his squires and his villeins and his serfs, and feeds them on black tea and damper and scraggy mutton, as of yore." j{ One of the issues put to the fore by the opposition in the recent election of 1899 was tne substitution of the freehold for the leasehold. The Opposition promised the people that, if elected, it would allow them to convert their state lease- holds into freeholds, but evidently the people did not want the privilege, for they returned the Seddon party to power with a larger majority in Parliament than before. "The end of the freehold system," Premier Seddon told the voters, "is that the mortgagee gets the farm, and the farmers get the road. If we repeal the leasehold law we will pre- vent the poor man from getting any land." Considering that the lease in perpetuity is a new proposi- tion, and that it has to compete with prepossessions centu- ries old in favour of absolute ownership, the leasehold is gaining public favour with surprising rapidity. It has hap- pened that lands offered with the right of purchase have re- mained unsold, but when offered again under leasehold have been applied for several times over. Private estates offered in freehold have gone begging for purchasers, while at the 154 A MAN BETTER THAN A SHEEP same time public land near by was eagerly taken under leasehold. "The state as a landlord," Premier Seddon has said, "will be more liberal than the money-lenders who foreclose." The state is the unique sort of landlord that reduces rent when it finds itself making a profit. In his budget speech in 1899 the Premier announced that out of its gains the state was able to lower its rents, as well as its interest on advances to settlers, one half per cent, a year, or one tenth. In a speech on the eve of the election of 1899, the P re ~ mier said that there had not been a single penny of loss on the lands bought, and the rents paid gave five per cent. He promised that the ministry "would borrow more money, buy more land, and put their sons and daughters on it." Still more radical ideas and plans are fermenting in the New Zealand mind. The Minister of Lands has declared in a public speech that he "would like to see the time when all the lands of New Zealand were nationalised." And Mr. William Rolleston, the most authoritative figure of the Conservatives, certainly as regards land questions, said during the last campaign, "We shall never have national prosperity in New Zealand until we nationalise every foot of its land." Minister McKenzie and those working with him in these reforms saw that the sale of land simply meant, as the New Zealand statistics proved, the concentration of it sooner or later, and probably sooner, in the hands of a few men. When the Crown sold the freehold, it surrendered control and could neither prevent consolidation, nor insist on use. The consolidation of the land then was inevitable; the only choice was, under whom? Should the people become a tenantry under the money-lenders, or a tenantry under the state? What was needed was an owner who would not do A SIGNIFICANT EPISODE 155 the cruel and uneconomic things which the private owner did, and this owner Ballance, Stout, McKenzie, Seddon, and their party see in the state. Both in the land and fiscal policy of New Zealand, since 1891, this has been the ruling purpose to put an end to "private ownership" of land in the old sense and with the old immunity from social control, and to replace it by a "private ownership" of the tenant under the state with social control for social advantage. The New Zealanders are well on the way to the realisation of what no people have yet had an inalienable fatherland. The example of New Zealand has been followed by sev- eral other colonies. Queensland, South Australia, and West Australia have each an act for the resumption of pri- vate arable lands, and the Victorian Parliament has re- cently passed a similar measure, but no results of much interest have been achieved in these colonies. A bill for the resumption of private lands was introduced into the New South Wales Parliament in 1896, but was defeated through the opposition largely of the labour mem- bers. It was said by them that the banks and mortgage companies and impecunious or designing landowners "would unload" upon the state, and that the state might again sell the land which it had just bought, and so in a few years have the same curse of land penury and be asked again to practise the same remedy, and thus buying to resell and sell- ing to rebuy commit the endless folly of legislating in a circle. Perhaps no episode in Australasian history more vividly presents the fundamental difference between Australian character and politics and New Zealand character and poli- tics than this success in New Zealand and failure in New South Wales. I met a man from Savannah, Georgia, on the train be- 156 A MAN BETTER THAN A SHEEP tween Napierville and Woodville, New Zealand, who had been thirty-four years in the country. He was warm in his praises of his adopted home, but the legislation, especially the land legislation, "was rotten." He talked on, and in a few minutes revealed the reason for his "conservatism." He had done his best business, he said, until late years, "in little spec's in land, but the new laws had killed it dead." One of the leading officials in the Land Department, whose special work is in the purchase of the resumed estates, said to me: "We have the choice of all the large estates of New Zea- land. All are at the call of the government. No man now dreams of buying a large estate or seeking to build one up to leave to his family. All that is a thing of the past. For several years no large estate has been sold in its en- tirety in Canterbury, and as for speculation, that, too, is a thing of the past" that is, speculation in farming land. In the cities dealings in "corner lots" are still popular. Freeholds are still granted in New Zealand, if the pur- chaser of public land so elects; large amounts of land are still held in freehold, but the determination of the people as expressed in their present policy is to end it as soon as possible. It is for this that they are buying back the large estates, increasing the rate of taxation the landlord pays as the number of his acres increase, taking a larger share of the larger inheritances. It will require long years for this policy to reach its consummation, but it is moving surely, if slowly, toward this goal. In consequence of the laws we have referred to and public opinion, speculation in land in New Zealand is dead, and this is the beginning of the end. CHAPTER VIII "LANDLESS MEN HAVE THE PREFERENCE" THERE is a place in New Zealand which is the constant resort of a steady stream of visitors, who are sometimes land ministers from other colonies, or economists from the Musee Social of Paris, or other varieties of the "Democratic Traveller." It is the Cheviot estate the first that was "resumed" and cut up into small farms by Minister McKen- zie. I spent two days there in the height of the New Zea- land summer, just after the wheat had been harvested. There could be nowhere a fairer sight of level fields, yellow with stacks of grain like huge, golden beehives, and rolling hills ribboned with vivid green stretches of turnip fields in which the sheep were soon to be fattening. Along the west ran the Lowry Peaks, to the east is the Pacific Ocean where the estate had a harbour of its own Port Robinson. Rivers bound it on the south and north, and streams run through it everywhere. In the centre is the village named McKenzie after the Minister of Lands. It is only five years old, and has hotels, blacksmith shops, stores, churches, schools and houses, large and small, arranged along the wide streets or scattered over the farms and garden plots. On a commanding position, in the middle of a noble park, is the manor-house of the late owner, still the property of his family, as, in accordance with the considerate procedure of the government, they were allowed to acquire it with five thousand acres of land when the estate was resumed. Sur- 157 158 LANDLESS MEN HAVE PREFERENCE rounding the village in every direction the eye saw farms with comfortable buildings, well-stocked and cultivated. These twelve square miles, now teeming with people and prosperity were, until 1892, the home of but one family with its flocks and shepherds. One man owned as far as he could look, from the mountains to the sea, and from river to river, and there was but one house, for the cottages of the work- men hardly deserved that name. One could travel miles and miles without seeing human beings or a habitation. It was a lucky accident that gave Minister McKenzie the opportunity to make this demonstration of what "closer set- tlement" meant. While he was fighting his land bills through Parliament, a dispute arose between the Tax Com- missioner and the trustees of this beautiful estate whose owner had recently died as to the valuation on which it was to be taxed. Its 84,000 acres were assessed at $1,524,630, a pretty good price for land for which the owner had paid five shillings an acre in 1853 and sub- sequently. The trustees insisted that it should be taxed for no more than $1,301,100. There were very few estates in the colony that were the equal of this. The founder of the estate, "Ready Money" Robinson, as he was significantly called, had made very extensive and thorough improvements good buildings, gardens and orchards, magnificent planta- tions of pine and a great deal of fencing, a very important item in New Zealand. Under the land and income tax law as it then stood in New Zealand, in the case of such a disagreement as to the assessment, the government had the power to take the property at the owner's valuation plus ten per cent. The land law which Minister McKenzie got through Parliament the same year appropriated only $250,000 for the purchase of estates, but here was a chance to try his experiment on land costing six times as much, and he eagerly took advantage of it. The property was taken u LOOKING FORWARD 159 at the owners' valuation to their entire satisfaction, as they, daughters of the original owner, wanted the inherit- ance divided. The Minister of Lands went to work to make his disposal of Cheviot an object lesson. The purchase was made profit- able at once. As soon as the department received the title, it leased the land, agricultural and all, for grazing for the summer while it was preparing the estate for subdivision. By this means a revenue of three and two-fifths per cent, on the purchase money was obtained immediately, to the confusion of those who had declared that no government could do business successfully in land. The estate was then resurveyed into agricultural farms of from 50 to 100 acres, grazing farms of from 500 to 3000 acres, one chief town- ship and three villages. Thirty thousand acres were de- voted to these farms. Two thousand acres in the vicinity of the town site at the centre were cut up into suburban lots and garden plots. The plan of the new community pro- vided for large men and small men, men with capital and men without. There were farms for agriculturists with money, lots for labourers, and the farmers and the labourers were settled side by side for mutual advantage. The future was looked out for by leaving areas at all junc- tions and key points where village sites were likely to be needed in the future. A railway line was also surveyed through the estate. It was laid off thus early in order that the colony might not have to buy the land back when the time came in the future for the construction of the road. One of the benefits of the opening of lands to settle- ment is that it gives the country roads. The great owners refused to make roads; they preferred to close up their estates all around. At Cheviot roads were now made wherever needed, using the gravel which was found in many 160 LANDLESS MEN HAVE PREFERENCE places on the property. A passable road was made to each section offered for sale. Cheviot has a port of its own, and to this port a new road was made at great expense through a bluff of rock, the drive along which vies in beauty with the celebrated road between Sorrento and Amalfi. All this work on the resurvey and improvement of the estate, including the port, cost $320,000 in addition to the purchase money. The Cheviot settlement was an immediate success. It was not until November, 1893, that the actual transfer of land began, and in six months, as the Minister told Par- liament, one hundred and seventy-one settlers had come in and were living on their property, and more were coming in every day. These settlers had one hundred and ninety- one children with them. They employed twenty other peo- ple ; there were ten persons in business who employed forty others; there were one hundred and sixty-three labourers working co-operatively, as is the New Zealand way in making roads and doing the other work of getting the land ready for settlement. The hammer sounded all day long on the new houses that were being built. In six months five hundred and sixty-nine people had been provided there with land or work. Many of these people for whom a place had been found at Cheviot, the minister said, would "otherwise be among the unemployed in Christchurch, for whom the government would have to find something to do, or they would have to leave the country." Just the class of men for whom the "one man one run" policy had been adopted came in here to take advantage of it young men with some capital, $2500 to $3000 or more, who had been unable to get land as long as it was monopo- lised by the great companies. As the unpretentious char- acter of the houses shows, they did not spend their money on expensive building, but kept it to put into the best of NO SURRENDERS 161 fencing and live stock, which would bring them in an im- mediate income. The money spent for the improvement of the estate helped to market it and to provide the very best kind of popula- tion to live on it. In the first year, out of the money they saved more than half the labourers brought in to make roads, build bridges, etc., acquired small holdings out of those specially pro- vided for their class, put up houses and brought in their families. Where the bullock bell used to be the only sound in the old days, there was now to be heard the school bell, and instead of the sheep of old hanging on to tussocks of grass, were now to be seen the children trooping along the road on their way to school. The experience of New Zealand does not sustain the idea so widely prevalent that city people and artisans cannot make a living on the land. Some of the most successful settlers have been men brought up as tailors or shoemakers, and workers in other trades in the city of London. Sailors and day labourers have been successful, too. The population of Cheviot which, in 1892, consisted of only one family with their attendants, had increased, in 1898, to over one thousand, and is still larger at the present time. The farms have been eagerly taken up and the rents were, on March 31, 1898, paying five and one half per cent, on the net cost. This then stood at $1,312,145. The inter- est was $44,330 a year, and the annual rents were $72,500. The amount of improvements required of the tenants by law was $84,160, but the actual value at the time of the last in- spection was $247,690. Out of a total rent roll of $17,575 a year from 236 leases, there were only 19 settlers in arrears, with rents to the amount of $859. There were 4019 acres in grain; 7374 in green and root crops, and 11,430 in Eng- lish grasses. There have been no forfeitures or surrenders. 162 LANDLESS MEN HAVE PREFERENCE .In going about this place, I took special pains to find out what causes of dissatisfaction, if any, there might be, and what the shortcomings were, for the temptation to become enthusiastic was almost overpowering. There were some complaints from the labourers who had settled on the small plots. There was not as much work as they had hoped for from neighbouring farmers, and some of them had to go away from home to get it, sometimes for six months at a time. I found the labourers more fortunate at Momona, near Dunedin, where are fourteen settlers on three hun- dred acres, almost all of them farm labourers. They are surrounded by farmers and have plenty of work. Their wives take care of the cows and the milk for the creamery, while the men are away harvesting. We met a Scotch family on the Cheviot road, a wagon full of children and furniture, bound for "home," returning to Scotland because the farmer thought he could do better there where his father was. But, as he had sold' his lease- hold for a handsome advance, before he had even ploughed it, or made any improvements of much value, he could hardly be said to have not done well here. I found that there had been some little speculation in the properties at Cheviot notwithstanding the great pains taken by the Minister to prevent it. Of course this was but a bagatelle in comparison with the speculation that would have taken place in a settlement under private auspices. To check this speculation as much as possible the Minister has so far refused to allow settlers to acquire adjoining sections. He has established this rule in order to make impossible any such consolidation of properties as it is his whole mis- sion to prevent. He cannot, of course, prevent settlers from selling their leaseholds to incoming tenants nor would he wish to reject the incoming tenants if they were eligible. The administration is criticised because the work on the A MISTAKE CORRECTED 163 roads was done by hand and had required the presence of hundreds of labourers, whereas it could have been done at a much less cost and with a small number of men, if done by machinery. It was this, I was told, which had swelled the cost of making the roads to the high figure of $320,000. The government, however; could easily see a long profit to itself in the employment of this large number of men. It converted many of them into permanent settlers, producing wealth and paying taxes. A thrifty young farmer, who occupied one of the most flourishing places in the settlement, stretching along a val- ley, and just out from under the shadow of the moun- tains, told me that many men at Cheviot were eking out a bare existence. This was because the land was cut up into pieces too small to enable the farmer to make a living. There are men who get along only by violating the rules as to cropping the land. The complaint was almost universal, I found, not only at Cheviot, but in other similar settlements, that the sections were too small. The ten-acre sections were of little use unless near a large settle- ment, and not then unless outside employment was certain. Two-hundred-acre sections were of no use to men who wanted to raise sheep, and were no more than a living to the ordinary farmer in New Zealand where there are so few cities, and where so much of the produce has to be sold for export at rates fixed by international competition. This mistake of too small sections was due to a natural eager- ness to find homes for the largest possible number of peo- ple. In later sub-divisions the farms are made larger. However I found no lack of opinion among the wiser farmers that what was wanted was not so much more land as better culture. More farmers lose money by having too much land than by giving the land they have too much at- tention. 164 LANDLESS MEN HAVE PREFERENCE A now prosperous farmer, who was for years employed on the estate before its resumption as one of the labourers, told me of an interview which took place one day between him and the late owner, who was going over his estate with a party of friends. Meeting his man, he said to him, "Bruce, would you not like to have a piece of this land?" "Yes, sir, indeed I would, sir," the man replied. "Well, that is all you will ever get of it, Bruce," his master replied, and they all laughed and went on their way. Bruce now holds from the government, under leasehold, as fine a farm as there is in New Zealand, on the very spot where he held this con- versation with his employer. Last year he threshed out an average of 70 bushels of wheat an acre, and the year before 68 bushels, and 30 acres averaged 80 bushels to the acre. His farm is 190 acres. With land like that, it is no won- der that Bruce told me, almost plaintively, that he wanted "more land." The average yield of wheat last year on the Cheviot estate was 45 bushels ; of oats 35 bushels, an average of less than the year before on account of the damage done by the cater- pillars, and n l /2 acres produced 1012 bushels of barley. The Cheviot settlers have an association, and at their dinner in June, 1899, it was stated that one settler was feeding 1400 sheep on 200 acres, and he had also threshed 5000 bushels of grain. A member of the Land Board told of land in the Can- terbury District for which $200 an acre had been paid thirty years ago, which is still producing 60 bushels of wheat to the acre in rotation with barley, potatoes, oats, and other crops, with little fertilising except for the turnip crop. The soil is a lime wash three or four feet deep brought down from the mountains. This fertility of the land in New Zealand is one reason for the high price which it brings. Democracy is another REDEEMS ITSELF IN TWENTY YEARS 165 reason. There is no cheap land in New Zealand. Land is more productive and is in more demand where the number of landowners is increasing and where the opportunity to get land belongs to the people than under the regime of large estates. The people can always pay more for land than the plutocracy, if they have the opportunity. But even the critics of the minor mistakes made by the administration in the disposal of this estate had to admit the success of it on a broad view. "Any one at Cheviot," said one of the grumblers, "wish- ing to sell and advertising, would get a dozen answers im- mediately. Cheviot has a great name." And another pointed out that Cheviot, at the present rate, will have paid for itself in twenty years. "Since it is so profitable an operation, why should the government let the great number of people who want land go hungry for it? Let it buy more and give everybody enough." Those who are living in the town are doing well. The blacksmith's hearty wife came to the door to answer our questions, and we looked with admiration upon her red- cheeked daughter who was driving in the cow at the gate. They had a five-acre piece and a ten-acre piece and a thirty- five-acre piece. They had got five acres at auction which, had they not secured it, the lady said, would have been used "only for the church," which had also been a bidder. Along the drive to Port Robinson the workmen of the port have places of thirty to forty acres with cottages bor- dering on the cliffs hundreds of feet high, looking out over the Pacific and its rugged and picturesque coast. Gardens under the lee of the bank look out to the ocean with sloping sides covered with fruit trees and with flats luxuriant with vegetables and flowers. The greater productiveness of the close settlement over the great estate is easily seen at Cheviot. The last shipment 1 66 LANDLESS MEN HAVE PREFERENCE of wool for the late owner, "Ready Money" Robinson, was 2500 bales worth ten pounds a bale, or $125,000. In the year 1898, the shipment was over 3000 bales, in addition to which nearly 4000 sacks of wheat were shipped, and a large amount of other products. Over 25,0x30 fat lambs had been sent away to freezing works, and 20,000 fat sheep ex- ported. This says nothing of the fact that the estate has, in addition to this, been maintaining its population of over looo. More important than the lambs that go to the freez- ing works are the "kiddies," who will live and if need be die for New Zealand. One of the officials of the Land Department, an expert valuer, told me that he had made a careful calculation of the old Cheviot and the new, and had compared the new Cheviot with some of the large private estates that still exist in the vicinity, and found that this land under small ownership and agricultural use, instead of large ownership and pastoral use, had gained in productive power fourteen times. The money orders issued at Cheviot have increased from $1630 in 1891 to $34,820 in 1899. A man who acts as guide to the wonders of the geysers and hot pools of Wairakei, raises strawberries and lettuce every month of the year in the earth kept hot by a system of steam-pipes supplied by nature herself. He has three hundred acres of government land. "It gives me a chance," was his laconic summary of the land system of his country. Not far from Cheviot is an estate which has a different story to tell. Its owner some years ago undertook to sell off his land. He advertised widely. The soil is fine, and the attendance at the auction was large. The result shows one reason why people in New Zealand prefer to deal with the democracy instead of the private speculator. The es- tate was divided into town lots and farms surrounding AN OUTSIDE VIEW 167 them. The lots were put up first. After the town lots were sold off, the owner stopped the sale of the agricultural lands because he thought it was not bringing in enough. The buyers of the town lots had bid good prices because they calculated that there would be a large population settled on the farms round about. The discontinuance of the sale of the farms left these purchasers high and dry. Many of them were ruined and unable to make the second and third payments, and the land went back into the hands of the owner. When Cheviot was first offered to the public, some of the farms were put up to be sold for cash in fee simple. No one wanted them. They remained unsold at a considerable loss. Finally the Land Department changed the conditions and offered them under leasehold in perpetuity, and they were immediately "rushed" by a very much larger number of applicants than there were farms. The leaseholder can keep his capital to use in his farming. He cannot be fore- closed if he borrows money, and if he leaves or is unable to pay his loan he is certain to secure the full value of his improvements. The leaseholder cannot borrow on the security of his lease, either from a private banker or from the government. Neither can he borrow ordinarily from a private lender on the security of his improvements, but the Treasury, through the Advances to Settlers office, will make loans on such security. It considers a man's good-will and his improvements good loanable security, and stands ready to lend him money that he needs and knows how to use. The colony of Victoria last year sent the Honourable R. W. Best, Minister of Lands, and W. A. Trenwith, Mem- ber of the Legislative Assembly, to New Zealand to study its land and labour institutions and this is what they say of Cheviot in their official report : 1 68 LANDLESS MEN HAVE PREFERENCE "While proceeding through the estate we saw a number of neat homesteads on agricultural and grazing farms, and everywhere there were signs of comfort and prosperity. . . . We were much struck with the comfortable and neat appearance of the homesteads. . . . Most of the settlers seemed to be doing well. They paid their thresh- ing-machine bills generally cash down. A request to hold over until the sale of the crop was an exception. . . . Whereas the crops under the contract system, when the land was cultivated in its unimproved state, yielded only some sixteen to nineteen bushels per acre, this year the yields have been from forty to sixty bushels. "We thus completed our inspection of an estate which six years ago was nothing short of a great sheep walk owned by one man, who at most employed but the ordinary station hands, but which now, studded with comfortable home- steads, townships, schools, well-fenced and well-cultivated farms, supports a population of upward of 1200 persons. What has been here effected by the government of New Zea- land, receiving interest at the rate of five and one half per cent, on its outlay in the resumption and settlement of an estate, is very reassuring to those who favour any well-con- trived system of closer settlement." Wliile Minister McKenzie was proving at Cheviot what could be done with "closer" settlement, Parliament passed the law he had asked for, to authorise the purchase of land. He has ever since 1892 been buying estates and cutting them up into smaller places along the lines which have been so successful at Cheviot. Sometimes he acts upon petition, oftener, on his own motion. If the people of any neighbourhood find themselves crowded for land, they may petition the ministry "to re- sume" some estate near by. The people of Ashburton, for PUBLICANS AND PETITIONS 169 instance, needing land and unable to buy any in small plots from the men around them, sent in the following: "ASHBURTON, March i, 1895. "THE HONOURABLE JOHN MCKENZIE, Minister of Lands, Wellington. "We, the undersigned electors in the Ashburton District, do hereby urgently request you in terms of the powers con- ferred upon you by the Land Act, to set apart a portion of land near Ashburton for settlement. "And your petitioners will ever pray, etc." At about the same time this petition was presented the coincidence may not have been accidental the "High Bank" estate, about 10,000 acres in the neighbourhood of Ash- burton, was offered by the owner. It was inspected by the Board of Land Purchase Commissioners. They found it to be all level land, of fine quality, and only three miles by good roads from several railway stations, and recommended the purchase. Their recommendation was adopted, and the price offered was accepted by the owner. The es- tate was subdivided into forty-three farms of 50 to 639 acres each, and thirty-nine smaller pieces for village set- tlements of from one to ten acres each. The farms were all applied for the first day they were offered, and also some of the smaller sections. There is now a thriving settlement of farmers growing grain, green crops and fattening sheep and cattle where for- merly only one man was in occupation, who used the land chiefly for sheep. The officials of the Land Department do not take these petitions too seriously. Any one will sign a petition. The publicans often promote petitions. They want the land 1 70 LANDLESS MEN HAVE PREFERENCE settled to increase the number of their customers. It is noticed that the men who sign the petitions are not usually the men who get the lands. The petitions are frequent, and as one of the Land Department men remarked, "They are usually presented in connection with estates that are offered. The owner sees to it that the petition is circulated. But, as in this Ashburton case, the petitions may represent a genuine demand and a real need, and then, as here, they receive the attention they deserve." Owners of large estates generally have come to be glad to sell to the government. It is better for them to sell to it than to subdivide themselves, because the people would rather buy of the government. From it they can get deben- tures which yield 4^/2 per cent, on the value of the farm, and this is more than they can make by running the estate themselves. The large trust companies hold many estates and they want to realise. Then owners sell because they are afraid of the graduated tax. Some of them are getting old and can manage money more easily than property, and the heirs often have the same preference. One of the finest places I visited in New Zealand was the estate of Elderslie, a few miles from Oamaru. A large part of it has recently been purchased for "closer settle- ment." On our way thither we went through the Teanaraki settlement of small farmers and workingmen. In a canvas hut a former roustabout was living on ten acres of land and doing well. "I used to have to get work where I could and to live as best I might. Now I can keep a hack in the paddock, come and go when I like, and get the highest wages. The rent is high, but there is enough in that field to pay it." We passed from the canvas hut and the hardly more pre- tentious cottages of the other settlers to a beautiful mansion THE SMALL MAN SURVIVES 171 in a park adorned with trees brought from all parts of the world cedars from Lebanon, firs from Colorado, even pines from India. The estate stretches fifteen miles back of the house. The proprietor of this private barony retired from busi- ness with a fortune at the age of forty, bought a part of this property from the Bank of New Zealand, added to it, piece by piece, until finally he had many thousands of acres. He was in debt $350,000, which he had borrowed for improve- ments. By selling 11,000 acres to the government at $32.50 an acre, he has extinguished his debt. He keeps his homestead surrounded by gardens as beautiful as any you will see in the heart of France. His sons also have hand- some farms, and he himself retains something like 15,000 acres. He sold, he told me, because it was very difficult to farm on so large a scale. There was a great risk in having so much land under one or two crops. The small farmer could easily keep his place under constant cultivation, under his own supervision, and would have a greater variety of crops. If he lost on one, he could make on another. In other words, this gentleman practically admitted that the political economy of the small cultivator is superior to that of the large ones, and his self-interest works more accurately and successfully than that of his great neighbours. This gentleman did not conceal the fact that the pro- gressive land-tax was one of his reasons for selling not so much for what it was, as for what it might be. He said this with the air of conviction of the large landowner who has felt the tax. He was evidently in a very cheer- ful state of mind over his sale. There was not the least suggestion of any feeling of resentment against the policy that was making the large landowners willing to allow the community to become their best customer. i;2 LANDLESS MEN HAVE PREFERENCE Mr. Charles B. Spahr, in his investigation of bonanza farming in the Northwest given in the "Outlook" of Novem- ber 4, 1899, points out that the tendency to concentration has been reversed, and that the farms are being split up, and in the "Outlook" of January 13, 1900, the same tendency is shown to exist in the large estates of Argentina. The small owner is competing out the large owner in New Zealand agriculture as he tends to in other parts of the world, but in some points the small man is still inferior. For instance, in the "closer settlements" the small men pro- duce wool of inferior quality, as they cannot afford to go in for animals of high breeding. This they will have to remedy by co-operation, or else New Zealand will have to do as Victoria has done set up a government stud. Not far from Elderslie is the Ardgowan estate of 4234 acres, which the government took by condemnation for $173,000 (34,600) and has cut up into 65 farms and plots ranging from 5 to 364 acres, and rented at 5 per cent, of the cost to the government; or from $1.37 (5.?. 6d.) to $4 an acre a year for 999 years. There have been no failures among the tenants on the Ardgowan estate except one, and he was the most capable of them all, the failure being due solely to financial reasons. One of the settlers here was a woman who had been a domestic in Oamaru. She and her husband now had fifteen acres and were doing well. Her father, she told me, had been a farmer. "Land," she added, "runs in our blood," but some of it I saw had worked through to the outside. At Tokorahi among the settlers were men who had been clerks, farm labourers, etc. Two of the most successful had been employed in a bank. At Maerawhenua a tall, shrewd, characteristic specimen of the transplanted Scotchman told me how, when it was in the hands of the private owner, he had been a "cropper" on HIGH RENT HIGH DEATH-RATE 173 the land he now holds. The government gave him and the other croppers, as is its custom, the privilege of continuing on the land they occupied. The rent under the private landlord had been fifteen shillings an acre. Now it was only ten and one half. A neighbour had had to pay fifteen shillings, which had been reduced to seven. "Why does the government," I asked, "let its tenants have the land for so much less than the private landlord?" "Be- cause the government wants no profit," was the reply. My Scotchman and all his neighbours were doing well. This settlement had been made after Cheviot had been es- tablished, and the mistake made there of sections too small had been remedied here. At Roimata, Pawaho, Paparangi, and some other points near Christchurch, Lyttleton and Wellington, may be seen settlements which the government has started in order to give the workmen of the cities homes in the country. The village settlements established from the time of John Bal- lance down to the present day, of which the latest examples are to be seen at Cheviot and Waikakahi, are for workmen, but not for city workmen. But the land policy of New Zealand has not forgotten the need of suburban homes for urban workers. This is a project dear to Premier Sed- don's heart. He often refers to the huddled quarters of the workingmen in Wellington and other cities, bunched up under the hills, with a death-rate far exceeding that among the well-to-do. "Their high rents and high death- rate," he says, "make them slaves." He dwells with enthu- siasm upon his plans for taking them out of town a few miles, giving them an acre or two of ground, with frequent workmen's trains, and rent at half the price they pay in town. But the Land Department has not been able to execute these plans with the success that has attended its efforts for 174 LANDLESS MEN HAVE PREFERENCE the farmers' sons. This has been partly due to a defect in the law, which gave compulsory powers of purchase of estates near the cities only when they were of five hundred acres or more. This was remedied in the last session of Parliament. For the purposes of providing workmen's homes the government may now compulsorily take land in small parcels up to one hundred acres in towns of 15,000 inhabitants, or within fifteen miles of their boundaries. It is only by compulsory purchase that anything can be done for suburban homes for workingmen. Obviously owners oi. land in the vicinity of the cities are not under the same economic forces making them willing to sell, that operate on the owners of large estates away from the cities. The only way to get their land at a fair price is to take it by condemnation. Another difficulty in the way of suburban settlements has been the inadequate train service, but this has now been changed for the better. The workingmen complain that the requirements as to improvements in the suburban settlements put the acqui- sition of this land beyond the reach of most of them. The workingman, taking one of these plots, must, within a year, build a dwelling-house worth at least $150, within two years must build such a fence as the law demands around his lot, and, within three years, must have at least one quarter of his land fenced off and under proper cultiva- tion as a garden or orchard. These requirements imply possession of quite a little capital. On the other hand the government will advance the work- man, if married, $100 toward the cost of these improve- ments, and, if a bachelor, $50. The very broad definition given to "workman" by the New Zealand law is another reason why the intention that these settlements should inure especially to the benefit of NOT WHAT WE CALL WORKMEN 175 the artisan class has not been realised. A "workman" in New Zealand, according to the law, is any man or woman, twenty-one years old, who is doing manual, clerical, or other work for pay, and is worth only $750 or less. At the settlements which I visited I found persons of almost all classes except what we Americans would call "workmen." Very little is being done with this form of settlement now. For one reason, the areas have been too small, and there has been much disappointment that the workingmen in the artisan sense have not taken more advantage of the opportunities offered them. Instead of being taken up by them, the public allotments have gone into the posses- sions of little shopkeepers, widows with a little money and with sons who were working at a distance, people who had no manual occupation not by the real workingmen for whom it was intended. Pawaho was opened in April, 1899, five miles out from Christchurch, and was taken up immediately. Twenty fam- ilies are now living there on pieces of land varying in size from half an acre to two acres and a half. This land rents for from $4.50 to $11.50 an acre. At Wharenui, a new settlement four miles from Christ- church, the land has also been taken up, though there is no tram and no railroad connection, and the only means of com- munication is by coach. The sections here are of one to three acres and rent at $17.50 an acre. In the suburbs of the uniquely beautiful city of Adelaide I visited the "Homestead Blocks" which are to be found near all the large towns of South Australia. Here workingmen, shopkeepers and other persons of small means are given a chance to get land enough for a homestead and a good garden. The "Blocker System," as it is popularly called, is not for farmers. They can get land under the land act. It is for those for whom the possession and cultivation of 176 LANDLESS MEN HAVE PREFERENCE a piece of good land are not the main business, but to whom land may be a help, and when other occupation fails possibly their salvation. It aims to decentralise the people out of the cities into the country, and its motto is, "One family, one homestead." So South Australia under powers of compulsory purchase, like those of New Zealand, has been buying back land from private owners around the cities and cutting it up into blocks of one to five acres near the towns, and of as much as thirty acres in the country. The prices the colony must pay are high of course; so high that for the last year or two it has bought very little for these settlements. The blocks are leased, not sold, and the tenants must pay five per cent, on the cost. This makes the rent average about $6.30 an acre as far as ten miles out of Adelaide. To be .eligible the "blocker" must be one who makes his living by his own labour ; not necessarily, however, what we call a workingman. After the tenant has made improve- ments on his land the government will make him advances on the value to the amount of $250. As one of the officers expressed it, "If a man has the walls of a house up, the government will lend him money to finish it." Less liberal than New Zealand, South Aus- tralia, in case of forfeiture, forfeits the improvement as well as the land. The blocks are intentionally made too small to furnish the whole living of the occupant, though in some cases, with in- tensive culture, the holders of twenty-acre blocks have been able to live on the land alone. Owing to the prohibitive prices asked for land by owners and to other causes the system has not flourished. During the last year there were 3692 acres let for homesteads, but the larger total of 4207 acres was cancelled. This has been due largely to terrible ONE FAMILY ONE HOMESTEAD 177 droughts which ruined the crops of the "blockers," and at the same time made the outside employment which might have saved them very scarce. The blocks I saw in the vicinity of Adelaide were many of them most attractively cultivated, and were occupied by a very desirable class of people. The advantages of this system, taking people out of the cities, adding the healthiest of all industries to the reper- toire of livelihoods, giving an unfailing resource in times when other resources fail, keeping near the cities a supply of the best kind of labour, offering a new chance to men who might otherwise be lost, do not need to be dwelt upon. The experiments of South Australia and New Zealand in this direction of suburban allotment not quite accurately called workingmen's settlements though in the right di- rection, are still only in the experimental stage. In none of the colonies could this form of settlement be considered the success which in New Zealand the Improved Farm Settle- ments and the "closer settlements" as at Cheviot certainly are. The enlarged powers to acquire land in and near the New Zealand cities, given by the last Parliament, will soon produce results, and these should be important. That there is a growing need for these allotments and that the workingmen and others who would occupy them can make profitable use of the land, is proved by the rents which private landowners are able to exact from small men in the neighbourhood of the towns. Seventeen dollars and a half to twenty dollars an acre (3.10 to 4) are easily got, for instance, in the neighbourhood of Christchurch, New Zealand. The same land when leased in farms can com- mand only seven and a half to ten dollars an acre (30^. to 4cw.). By virtue of being, though in so small a way, cap- italists, the farmer pays less than half what the workingman who has no capital must pay. 1 78 LANDLESS MEN HAVE PREFERENCE The New Zealand democracy, which gives the ballot and old-age pensions and seats in Parliament to the Maoris and even this year a place in the Cabinet, where the Hon- ourable James Carroll, a Maori, sits as Colonial Secretary does not leave them out of its provision of lands for the landless. A special investigation by Parliament, beginning in 1893, ascertained that there were 4233 Maoris, who either had no land at all, or not enough to live on. To meet their wants an area of 169,289 acres was withdrawn from other settlement, and set aside for the landless natives. So far 2415 have been taken care of, and the needs of 1828 are being attended to. Co-operative villages have especial recognition in the New Zealand land system. Ordinarily land is distributed among the applicants by ballot, but this would operate as a bar to the acquisition of land by co-operative associations whose members must, of course, live together. To meet this need the government has devised the "Small Farm Association" settlement. People who want to establish a co-operative village do not have to go into competition with other persons for their land. They need not go to the ballot box for their allotments, with the certainty of being scattered. If twelve or more people, associating themselves together for mutual help, make application to the Minister of Lands, he will allow them to select, subject to his approval, a block of land of not more than 11,000 acres, provided there is a settler for each' 200 acres in the block. No one can hold more than 320 acres. This land is held under the 999 years' lease. These settlements have been, perhaps, the least successful ventures New Zealand has made in the disposal of its land, but the failure has not been the government's but the set- tlers'. These co-operative associations are very apt to have more enthusiasm than experience. "The difficult art of liv- ing together" is difficult, as we know from George Eliot, A DIFFICULT ART 179 when only two attempt to practise it. The results of co- operative experiments in living and working together in New Zealand, on the state farm to be spoken of, and in South Australia, and in New South Wales, show that very few people are as yet ready for co-operative life. The path to the larger family this life promises, like the path to de- mocracy, is a long and weary one, though it is one from which the feet of the people will never turn back. These co-operative associations, in their eagerness, have taken up too much land and have not chosen it wisely as to situation, quality of soil, etc. In the year 1897-98 there were 172 forfeitures and surrenders out of 1204 holdings, and in the next year there were 116 more. There are now 812 selec- tors in these co-operative associations, holding 142,666 acres, which, with all the failures acknowledged, is still an inter- esting and respectable showing. The state sometimes puts its rents too high. The pro- cedure for reduction is cumbersome, and there is an agita- tion for "A Fair Rent" bill. Revaluation is possible under the present system only upon the tenant's abandoning his land. After twelve months it is offered again. If no one bids higher than the value charged the old tenant he can go in again at a reduced rate. A tenant in such a case could only trust the magnanimity of his neighbours not to bid to get his section, but few men care to risk taking a lease at a price at which a former tenant could not make ends meet. Among other concessions, the law provides that in case of natural disaster a year's rent may be remitted, but not to tenants who are in arrears. This system of "closer settlements" is not the creation of an individualistic peasant proprietorship like that which exists in France, and such as is aimed at in Ireland by the new policy of the English government, but a collective proprie- torship and partnership of people and state. In New Zea- 1 8o LANDLESS MEN HAVE PREFERENCE land the state is interested pecuniarily in the rent, and there- fore has a pecuniary interest in the prosperity of the tenant. It must weep with him and laugh with him. It is compelled to watch out for his welfare. It is therefore a very real public self-interest which sets the state to furnishing lime and poultry experts, London agents, low railroad rates, free cold storage, cheap money and all the rest that we tell of in "Government & Co., Unlimited." As we have shown, New Zealand is making a profit of five per cent, on its investments in "land for the people." There are different plans for disposing of these profits. At the end of the year 1899 the department expected to have accumulated profits of about $100,000. A sinking fund is proposed by some; another plan is to buy a farm with this money. Then the government could say to the people, "Here is a farm that has cost you nothing." Its profits could in turn be added to the fund for purchasing more farms, and thus the system could go on snow-balling itself into larger and larger proportions. Part of the profits of the settlements are now being used on public works in their vicinity for the benefit of the set- tlers whose labour has created the profits. Thus at Cheviot, the Land Department appropriated last year $15,000 of its profits for roads and other improvements, and is likely to appropriate a similar sum this year. Following the prece- dent of using the profits of the advances to settlers to reduce the rates of interest, the profits of the land opera- tions might also be used to reduce rents and the Premier has promised this shall be done. I had the opportunity of being present at the balloting to distribute among the people applying for them the farms cut out of a valuable property which has been "resumed" the Waikakahi estate. This consists of 47,320 acres in South Canterbury, between the Waitaki and Waihao WHY HE SOLD 181 rivers, bordering, like Cheviot, on the Pacific, with blue mountains on the sky line on the other side, a beautiful stretch of country between the ocean and the mountains, fer- tile, rich and wholesome. It had been for many years the property of a great sheep raiser. It was a fine tract of farm- ing country, well coated with dark loam, sometimes three feet deep, and traversed by numbers of streams draining the wide, open valleys. There are rich alluvial flats and rolling downs. The land was "in good heart," as it had not been exhausted by cropping, but where it had been cultivated the yield had been something extraordinary. As much as fifty to seventy bushels of wheat and 120 bushels of oats an acre had been threshed from some of it. There are three railway stations on the land or near it. Its owner, who had been a poor boy in the western High- lands of Scotland, came to New Zealand thirty-five years ago, and bought a few acres at ten dollars an acre. From the profits of his sheep-raising he bought some more and kept on buying, until he finally found himself the owner of this magnificent estate and a millionaire in thirty-five years. He sold because, as he said to one of the officials, "If I don't sell, you will take it by-and-by." In addition to this estate he had another of 16,000 acres which he gave to his nephew, without waiting for the pro- gressive land-tax and the progressive duties which would have been levied upon his death. The price paid him was $1,600,000 for 47,000 acres, about $34 an acre. The owner took $1,250,000 of this sum in debentures running for ten years, paying three and three fourths per cent, interest. The balance of the money is got from the Post-Office Savings Bank, or the investment funds of the Life Insurance Department, or from the Public Trustee. The owner kept the homestead, which, according to the act, he has a prior right to. In this way the govern- 182 LANDLESS MEN HAVE PREFERENCE ment dispose easily and profitably of a part of the property which otherwise might become a burden. The New Zealand newspapers were full of the official advertisements of the sale, and of news articles; for the distribution of such an estate is an event. The ballot was to take place at the little town of Waimate, and when I arrived I found the hotels, boarding-houses and private residences filled to the eaves with people who had come to submit their applications to the scrutiny of the land board, and to witness for themselves what fate would do for them in the casting of the lots. Even the railway carriages were turned into sleeping rooms. The estate had been divided into 140 farms, ranging from 45 to 1473 acres. Of these 126 were offered to the public on lease in perpetuity and fourteen were offered as small grazing grounds, and for these there were 3242 applications from 813 different applicants. There have been cases where there have been over one hundred applicants for one piece. For thirty-nine sections in another settlement there were 2500 applications. Every applicant, besides filing the for- mal paper required by law, has to appear personally before the land board to answer any further questions they need to ask to satisfy themselves that he has the money, knowledge and other qualifications which so dignified a person as a state tenant must possess. The land boards had been sit- ting in different places in the colony for several weeks to examine intending settlers, but a number were still to come before the board at Waimate on the eve of the distribution. These examinations are for obvious reasons usually private, but the board, anxious to let me see as much as possible of the inner workings of the system, and knowing that one so far from home as I could not offend the suscepti- bilities of the applicants under the fire of the official exami- nation, did me the courtesy to allow me to sit with them. NOT MUCH LIKE OKLAHOMA 183 The land board met in one of the ante-rooms in a little white court house of Grecian design, on the main street, and the court room itself was given over to the thronging crowd. The examination took place at night. The dingy court room, lighted by a dull, flaring lamp, was filled to the doors with eager, patient faces. It was a plain lot of working farmers and their wives, and of young men and young women, for women can apply for land on their own behalf. There were also villagers, farm labourers, work- ers on the railroad, constables, shepherds and domestic ser- vants. Brothers and sisters, husbands and wives, came to- gether. Most of them had brought their lunch to carry them through the long hours of waiting. One applicant had come from Queensland; there were some from the North Island; one from Canada had been in the Mashonaland war. There was a man who had been in land rushes in America, and, guessing my nation- ality, he said to me as I went past him, "This is not much like Oklahoma." Every applicant had already submitted his answers to the formal questions put by the government, and which I copy here to show what it asks those whom it may admit as tenants of its lands. 1. How old were you last birthday? 2. What means (including stock and agricultural imple- ments or machinery) do you possess for stocking and cul- tivating the land and erecting suitable buildings thereon, and what is the total value thereof? 3. Have you means sufficient, in your estimation, to en- able you to profitably work the land and fulfil the condi- tions of the lease? If not, state how you propose to do so. 4. What experience have you had in cultivating agricul- tural land or in dairying? 5. What is your present occupation? 1 84 LANDLESS MEN HAVE PREFERENCE 6. Are you married? If so, has your wife (or husband) had any experience in cultivating land, in farm work, or in dairying? Give particulars. 7. Have you any family? If so, state the number and sex of your children now living with you, and their ages. 8. What land do you hold or have any interest in? 9. What land does your wife (or husband) hold, or have an interest in? 10. Is the rural land (if any) mentioned in answers 8 and 9 insufficient for the maintenance of yourself and your family? If so, give your reasons. 11. Is the town or suburban land (if any) mentioned in answers 8 and 9 insufficient for a home for yourself and your family? If so, give your reasons. The conditions as to residence and improvement are very strict. The successful applicant, to hold his property, must begin residence within a year, and within a year must put on improvements equal to two and one half per cent, of the value of the land, and within another year two and one half per cent, more, and within the next four years another two and a half per cent. He must have his fields fenced, in accordance with the stipulations of the law, within two years, He must once a year cut and trim all the hedges on his land, and must also keep it clear of all broom, sweet-briar and other noxious plants. He must not take more than three crops from the same land in succession, and one of these crops must be a root crop. After the third crop he must put the land down in grass, and let it remain in pasture for at least three years before beginning to crop it again. If his farm is more than twenty acres he must keep not less than one half of it in permanent pasture. He is not al- lowed at any time to remove from the land nor burn any straw which is grown upon it. If the tenant neglects these THREE DAIRYMAIDS 185 and some other less important conditions the land com- missioner will have the work done for him, and the cost of it is made recoverable in the same way as the rent. Some of the old-fashioned people, used to the immunities of the freehold, resent the inspections of their premises necessary to ensure their compliance with the terms of the leases. "It is a good deal like being at school again," one of them complained. "The Ranger" is the title of the in- spector of leasehold properties. "If you find the Ranger in your garden," a leaseholder said sarcastically, "counting the gooseberries you mustn't mind it. It's part of the system." The women were called in first, one by one, from the court room before the land board.' "We should deal first with the women who are waiting," the chairman said. The first woman who appeared before the board, after answer- ing their questions, said, "I am taking this up entirely for the benefit of my family of seven children." The next was a domestic who had eight children. She had saved and made $3000. Her father came in on his crutches to vouch for her. Her mother and two sisters were with her. The three girls were all dairymaids, and all were balloting for the same section in order to increase the chances that some one of the family might get it. "Have you any other land?" the father was asked. "No, except a cemetery lot not yet occupied," he replied. Two sisters, domestics, applied for a piece for which there were one hundred and sixty applicants. They had en- tered, they said, to give their father, who was one of the applicants, another chance. A husband and wife were applicants for the same section. "If I get it, it's his," the wife said. "If he gets it, it's mine." One of the points as to which the board had to be most 1 86 LANDLESS MEN HAVE PREFERENCE careful in its search was that the applicant was not already the possessor of land, for here, by the law, "landless men have the preference." One of the first men to appear had a piece of land, but he explained to the board that it was the "worst piece on the Waikakahi River. I have to go out to find work to keep it, instead of its keeping me." But the board was inexorable. "You are not landless," they said. "We are obliged to give the preference to the land- less." "It is a serious thing for me," he said, and heaved a big sigh and went his way. Tlie next applicant held one hundred and sixty-eight acres of freehold. "That bars you," the board said. "You are not landless. You should have sold your land. You could then have had a chance." The next man had made over a lease of some land he held after he made application. He was barred. "You should have been free." The next had sold his lease to take effect if he got the section he applied for. If he did not, he would still hold his section. "Ineligible." "I have been working on the land all my life," said the next man, "but I have no land." There was an extra touch of heartiness in the "Ay" with which the land board approved his application. "If I had fifty acres of good land I would be all right," said the next man. He had all the requirements but the land knowledge, experience and money, or its equivalent. Each applicant must have five dollars in cash, or its equiva- lent, for each acre for which he applies. As to his resources, this man said he had horses, drays, cows, reapers, binders. "Me wife has thirty pounds in the post-office, and I have forty pounds meself, besides me furniture and an acre of potatoes." "I put in my application for the largest sized piece of A THRIFTY LABOURER 187 land I thought I could work myself," said one of the men. The board thought that he had asked for more than he could manage and cut his name out of the applicants for large sections, but allowed him to remain with those who were balloting for a smaller section. The applicants were allowed to apply in this manner for more than one section. One man withdrew because he had become convinced that he had not money enough to carry on the section he had applied for. "There is a great deal more fencing to be done than I thought." The applicants were carefully questioned about the amount of money they had in the bank or some other safe place, or in the shape of some equivalent. Their means may be part in cash, part in animals; unsold crops and wages due all count as part of the needed funds. There were suspicions that some men had qualified themselves to pass the examination as to their financial resources by bor- rowing money for a day or two. There was plenty of talk about men who got the use of a hundred pounds for two days for a pound, but no evidence was forthcoming. "Any number of people are putting money in the bank to make up the amount. If I had known it I could have done it, too," said a man who was rejected because he had not the amount of cash the board required. "They have all sworn," the chairman replied, "that it was their own. They will probably be prosecuted for perjury. You wouldn't like that?" The village constable was an applicant. If successful in the ballot he proposed to resign his position. He had $4200 of his own and his wife's, the savings of forty years. Needless to say, he was approved. One of the farm labourers who applied and was approved had $4500 to his credit. "A careful, thrifty man," the board said as he retired. i88 LANDLESS MEN HAVE PREFERENCE "Where did you get your money?" the board asked one. "Out of my hard earnings at work I saved it just to get such a piece of land as this at Waimate." "Where have you kept that money?" he was asked. "In my pocket and my wife's," he said. No banks for that man. He was a member of the stocking brigade. One of the applicants calculated ten acres he had in pota- toes as worth $1,250. The board did not think them worth so much and rejected him for insufficiency of capital. "I am done," he said. In several cases husbands and wives applied independently for sections. As the distribution is made by ballot wher- ever there is more than one applicant for the same piece they are not likely to have adjoining sections, and no ar- rangement is possible under existing regulations by which they can be assured sections together. And each has to live on his or her own section. This sort of divorce is felt to be against public policy, and the Premier promises to sub- mit to Parliament an amendment giving families a prefer- ence in the distribution, so that husband and wife may get sections together. A plate layer on the railroad and a brakeman were among those examined. "I intend," the latter said, "to make my home on it." Some of the men indulged in little touches of humour. One, asked if he had any encumbrances, said, "Three children." A labourer, who had been on the estate for twenty-four years, had as his substitute for cash one hundred and fifty sheep, seven horses, some cows and some furniture. "Any amount of money I want I can get," he said. He was ap- proved. He and the shepherd who came next and who had been on the estate for thirty years, got the land for which they applied that on which they had been living without A SCRUTINEER FROM AMERICA 189 having to run the chances of the ballot. The law gives this preference to the men employed on the estate, to enable them to save their homes. Surveyors are instructed to cut up the estates so as to put land enough with these homes to give a living to the occupant. A brother and sister came in, twenty-two and twenty-one years old, and said their father had given them $1,500 to start with. The father was called in. "Will you have any interest in the land?" he was asked. "No, sir, they are old enough to look out for themselves," he said. Their appli- cation was approved. A teacher of agriculture applied. "I have had very little experience in farming," he confessed. "What experience have you had ?" was asked of another. "I have spent all my life on the ground," was the answer. "Have you any land?" "No, sir." It was an orderly crowd, and the streets of the town became quiet the moment the board adjourned. The next morning at the appointed hour the people surged eagerly into the court room, filling the doors and the cor- ridors to witness the balloting. The question arose who should be "scrutineer" the representative of the applicants who draws the ballots bearing the fateful numbers and an- nounces to the crowd the successful number in the case of each section. Several voices said, "Let the people nomi- nate," and by acclamation the Democratic Traveller from America was chosen as scrutineer, and given the honour of helping the fates in the distribution among the people of one of the finest estates that has been resumed by the democracy. Just as the ballot was about to proceed one of the land board arose and made a public protest against a decision of the board the night before in the case of a man who had seven children, and though he had land found it insufficient for their support and had to go out LANDLESS MEN HAVE . PREFERENCE to work every day in the week. The board had decided that it could not consider him landless. "It is not justice," said this member of the board. "The board have admitted men," he declared, "who had thousands of dollars' worth of land, and rejected men who could not make a living on the pieces they had. The meaning of landless under the law," he said, "is the not possessing land enough to maintain a home. I deem it my duty to protest against the proceedings." The protest was unheeded; the action of the board was entirely within its discretion, and the people seemed con- fident that it had good reasons for the exclusion. For each farm to be balloted for there was a sheet on which were entered the names of all the applicants for it, ar- ranged alphabetically and numbered in due order from one onward. The clerk of the board read aloud the name and description of the first farm to be contested for. The great crowd grew still with excitement. There was the sharp clicking of the ballots, one for each applicant, and bearing his number, as they were thrown into the ballot box "The little hurdy-gurdy that tells the tale," as one of the bystand- ers said. The scrutineer, as the representative of the people and especially of the applicants, carefully and even ostentatiously supervised every detail of the placing of the ballots in the box, seeing that there was a ballot for every applicant and that the box was properly closed. The crank was turned, and the box, with the ballots rattling inside of it, revolved rapidly to. mix up the lots, so that there could be no pos- sibility of "fixing the returns." The scrutineer, not blind- folded, but standing with his back to the box, put his hand behind him, and, praying that luck might favour one of the red-cheeked dairymaids sitting breathless in front, drew forth the fateful ballot, and held it up in front in full view 7 * SHE GOT HER FARM 191 of every one and read aloud the number upon it. There- upon the name corresponding to the number was given out by the secretary of the board in sonorous tones. If the happy recipient had friends and neighbours present, or if he was a man generally known, the announcement of his name was received with cheers. The man for whom the scrutineer drew the first section was most enthusiastic. He came to the scrutineer after- ward and insisted upon knowing "the name and American address of his mascot." "You have brought me great luck," he said, "and something from the first fruits of that farm shall be yours." There is still time for the arrival of those fruits. Part way down the list the scrutineer, calling out the number on the ballot he had just drawn, saw a delighted flash leap over the face of one of the eager group of young women in front of him. The dairymaid had got her farm. "It was not much like Oklahoma." This little paragraph, which I cut out of a New Zealand paper in November, 1899, makes perhaps a fitting conclu- sion for the history of this resumption of land. "During the last year more houses have been built in Wai- mate than in the preceding ten years. Local carpenters can hardly cope with the demand. Many houses are in course of erection at Waikakahi also." CHAPTER IX TRAMPS MADE TAXPAYERS ALL these people we saw balloting at Waikakahi had money and experience. What is there in New Zealand for the man who has no land, nor money, nor work the unem- ployed, the tramp? New Zealand found itself face to face with this question at a very early stage of its history 1874 when its national life was hardly a generation old. Though too new a country then to have any right to such a disease of national old age, it had it, as a result of both its land policy and the public works policy of 1870. Part of the large sums borrowed then in England were used to assist immigration. Sir Julius Vogel sent word to the agent general in London to find and forward fifty thousand immigrants in six months. They began coming in a flood. Public buildings and every available place were filled with them. It was the policy of making haste to be rich. One of its fruits ripened twenty years later in the collapse of the Bank of New Zealand. To take care of the immigrants they were put at work under experienced direction on blocks of Crown land from one quarter to five acres in area, on or near the rail- roads. They were set to building whares the Maori word for hut of sod. No one knew which building he was to occupy, so all were done with equal care, and when com- pleted they were balloted for. The people were allowed to occupy these huts and the land rent free for the first 192 ASSISTED IMMIGRANTS 193 year; then a charge was made of fifty cents a week for three or four years, and after that they were expected to look out for themselves. Among other reproductive works, the men in these early days were set to making plantations of trees which are now flourishing groves along the lines of -the railways. The main idea of the scheme was to give temporary re- lief, not to establish permanent settlements, though some of them still survive, as at Arowhenua. The Minister of Lands was then the Honourable William Rolleston, who has been a notable figure in New Zealand development. At this early day, in answer to a delegation of the unemployed, Mr. Rolleston laid out a complete programme of village settlements of a permanent character, with help from the Treasury in building homes, but he belonged to the wrong party the Conservatives and was never given rein to re- alise his ideas. At Arowhenua the visitor sees snug little cottages, bor- dering on noiseless turfy streets and surrounded by a won- derful profusion of flowers, foliage and garden products. Instead of fences there are luxuriant gorse hedges. Every foot of the small allotments is in thrifty use, but there is always along the walks and around the houses room for flowers. These places have all become freeholds, as the holders were allowed to purchase them. In the houses we visited the husband would usually be found away from home, busy labouring for some near-by farmer in the har- vest field. A good question to open up conversation with the house- wives as we encountered them was, "What was your ship?" referring to the vessel in which they had arrived from Eng- land a generation before as assisted immigrants. The Lancashire Witch, The Pyrrhus, were among the vessels that these women remembered gratefully. The sod whares still I 9 4 TRAMPS MADE TAXPAYERS stand on some of the lots, but most of them have been re- placed by wooden cottages of attractive appearance. One of the settlers, a sturdy Englishman, of Kent, who has been on his present place for eighteen years, had been a leader of a union of agricultural labourers in the old country. They had been reduced in their pay by the Farmers' Union from twenty shillings a week to fifteen, from fourteen shillings to twelve. They formed a Labour- ers' Union, and were promptly "locked out." The invita- tion of New Zealand coming at this time, this man and some of the others had emigrated. He and his sturdy wife had no children, and, he said, "no need to want them." He would have preferred to stay in England, he told me, but he had to leave home because he had made himself a marked man. A couple who lived in a house near by had been twenty- five years in possession of their home on its half acre of land. They had seven children, all doing well. This man had also been a farm labourer in England. His pay had been nine or ten shillings a week. He could not make enough there, he said, to get food to eat. "Being a labourer in England was pretty near being in prison." In New Zea- land he has a beautiful home, all his children have lived and are prosperous. A sailor was another inhabitant of this village. Sailors are frequently among the successful settlers on the land in New Zealand. The life of a sailor makes a practical man, one who is able to turn his hand to anything. At a settle- ment near Christchurch a sailor, who was adding to his already commodious home, in explaining to me the lack of success of his neighbours, said, with emphatic panto- mime, "They lack this," pointing to his hand, "and they lack that," pointing to his head. The sailor at Arowhenua had an acre of land, and had brought up two children. When WHAT MILK CAN DO 195 Cheviot was started he had gone there to work at one of his trades that of horse-rug making but, not succeeding, had returned. The driver who was taking us around and who was very much interested in our inquiries remarked to me, as we left this place, that if the same people should come now they would not do so well. There were more men now, he said, than work. When these men came there was a sad need of them in the country, and they were in sad need of the work it had to give. One of the lots was handsomely improved with a brick house which had recently been sold to a small capitalist who would rent it out. A settler, pointing to his very attractive home, said, "Milk did that." He had been a miner in Cornwall, and brought over five children whom he "did not want to go underground." He was a free, not an assisted immigrant, and had paid $62.50 for his first quarter acre. His house cost $2,000, and stands in effec- tive contrast with the original home near by. In 1886 the towns of New Zealand were again filled with workless men. This led the Honourable John Ballance, then Minister of Lands, to revive the idea of settling the idle labour on the idle land, but this time permanently, not temporarily. This he made his specialty. It was a scheme which caught the eye of the country and has never since been allowed to die out. Dromore was one of the settlements then inaugurated. A population of eighty-four people was gathered here. Nine hundred and twenty-five acres of Crown lands were selected for them not given, but rented. Three hundred dollars was advanced them to build houses. In four years 1891 they had put on the land in buildings and other permanent improvements $5785, and the Treasury had re- ceived in rents and interest from them $1683. The arrears 196 TRAMPS MADE TAXPAYERS were nil. The state had given these men and their families a chance to better themselves, and they had bettered the country as well as themselves, for they had opened up the land, improved the roads, increased the public revenue. Other settlements were started, and money was advanced to the people as loans to help them to fell the bush, put the land into grass, and establish themselves in homes. These subjects of economic resuscitation lose none of their political rights and none of their consciousness of them. The settlers at Eketahuna took timely advantage of the presence of the Minister for Public Works and members of Parliament on their electioneering tour last year to call their attention to the fact that they had to go twenty-eight miles to market and the post-office, although there was a town within five miles of them, but inaccessible for want of proper roads. Ministers have their "ears to the ground" at election time, and the settlers received a promise that "during the next session they would be attended to." "A delegation of workingmen is always sure of a hear- ing with the minister," said one of his officers. "Very likely some of them knew him when he was a workingman himself." Premier Ballance began the crusade against the freehold which Minister McKenzie afterward carried out, and he withheld from these settlers the right to part with their lands. The men and women with their children thus planted on the land can be seen healthy and contented and in happy homes. The experiment has stood even the finan- cial test, for the Treasury has made money by the venture. Times improved, and between 1887 an d I&9 1 no new vil- lage settlements were formed, but in the '90*5 hard times came again, and New Zealand heard the bitterest cry of the modern world, that of men and women who want work, asking in vain to serve and be served. NOT THE SOUP KITCHEN IDEA 197 In his report for 1895 the Secretary of the Labour De- partment of New Zealand wrote in as anxious a strain as if he had been at the head of the same department of any of the effete nations of the world. "There is," he said, "an unusual depression in the labour market and a corresponding difficulty in finding employ- ment. This year the difficulty of providing for the floating bodies of workmen has been augmented by the addition to their numbers, and many settlers and others hitherto belong- ing to permanent labourers here, under the pressure of the scarcity of money, have recruited the ranks of the wanderers by helping to swell the number of the unemployed. The skilled trades have also contributed their quota, boiler mak- ers, printers, painters, etc., stepping down into the ranks of untrained labour for the sake of employment on road works or railway construction." In May, 1899, while I was in New Zealand, there were many complaints made against the government from more* than one place, and public meetings were held to protest against its action in sending the unemployed from other parts of the colony to the public works in localities where the residents were themselves out of work. In one such place where twenty of the unemployed from Wellington had been sent to work on the railroads the representative of the district in Parliament wrote to the Premier that the names of fifty of his constituents out of work were on the register of the labour bureau awajting the promise that they would be given something to do. He said : "The labourers here have waited patiently for work. They are now disappointed. These men are very near to starvation." The New Zealand idea is not to relieve the tramp or the unemployed temporarily with soup kitchens, street cleaning or potato patches, but to make a citizen and taxpayer of 198 TRAMPS MADE TAXPAYERS him permanently. He needs money, land, work, instruc- tion, and the touch of a helping hand, and the democracy of New Zealand has been for many years attempting to perfect a system which it is hoped will give him a chance to get all of these. This policy we have seen developing, step by step, from the settlements of Rolleston to the vil- lage homes of Ballance, and it has been taken up and car- ried a good step farther by their successor, Minister McKen- zie. The public gives nothing but the chance. It will help the man, if he will help himself. He must pay ultimately for everything. There is not a touch of charity. Not even in the helping hand. For the man who is saved from sink- ing by this hand of the democracy is himself a member of the democracy. With his very first stroke of work he begins to strengthen the democracy to help some one else. With that first stroke he begins to be a taxpayer; what he receives he gives, and this is the golden rule of democracy ithe reciprocity which our clumsy language calls equality. In this policy New Zealand sought to avoid some funda- mental mistakes in the management of the Australian labour bureaus for the unemployed. These gave the men food and shelter. The instantaneous result of this was to clear all the bush country and the sheep runs and the roads in Aus- tralia of the "swaggers" and "sun-downers" who were tramping for a living there. These men asked for nothing in the world better than food and shelter, with the climate of Australia thrown in. Three thousand were being fed in Sydney alone at one time. An official of the Land Department, Mr. J. E. March, who was sent to investigate by the New Zealand govern- ment, on landing in Sydney saw nearly one thousand men at work levelling sand in one of the parks for their food. A pair of horses and a scraper would do more work in one day than these hundreds of men could do in two days, and NEVER GAVE SIXPENCE 199 the men knew it. He saw as many men outside the labour bureau seeking employment, which they could not get. There was plenty of land in New South Wales suitable for settle- ment. Just outside the city was some very good coun- try admirably adapted for small settlements. Sheep were its only tenants. A large army of able-bodied men were doing fictitious work for their food, with a larger army at the labour bureau seeking work, while on the land that would have supported them and their families and thou- sands more, roamed a few flocks. Another mistake made by the Australian bureaus had been to send men to employers who had labour enough in their vicinity, but wanted to put down its price. If the home labourers refused to accept reduced wages the Australian landowner would telegraph the labour bureau to send him men, and in this way the state was actually being used as an instrument to undercut the standard of life of its own citizens. The abuses which resulted from these errors of management absolutely stank in the nostrils of the whole community. "In New Zealand we never gave sixpence," said Mr. Ed- ward Tregear, the secretary of the labour bureau, "nor shelter, nor even railroad fare. We often advanced the railroad fares for workmen, and even for their families, but it must be repaid, and is retained from the man's wages." Three departments are co-operating in New Zealand in this work of turning tramps into taxpayers the Depart- ment of Public Works, the Labour Department and the Land Department. The last, in New Zealand, can give these men all three, of the things they want land, work and money. Items like this from the "Wellington Times" are common in the New Zealand newspapers : "The Auckland agent of the labour bureau has received 200 TRAMPS MADE TAXPAYERS instructions to forward an additional party of twelve suit- able workmen to the Poro-o-tarao-Ohinemoa section of the North Island Trunk Railway. Applications from men al- ready on the books will be received at the office of the bureau until noon to-morrow." The Labour Department, through the register it keeps of the needs of employers and employes, and through its connection with the various departments the largest em- ployers can find work if any one can. The Land Depart- ment has charge of the new country roads, and the Public Works Department has railroads and bridges and other public works always under construction. A man is sent to a private or public employer, as the case may be. The work may be at the other end of the colony, and he may not have a cent to pay his fare nor to live upon while going there, but that is no obstacle. The Labour Department advances him transportation and even subsistence ad- vances, does not give. If the work promises to be perma- nent it advances him transportation for his family. It will give him and them orders for meals and beds during their journey. The cost of this is to be repaid by the man out of his earnings, and the records of the experiment show but a trifling percentage of loss. It is the policy of New Zealand to keep the families of workingmen together wher- ever possible. With the same purpose the men put on a piece of work are not displaced to give work to others, so that "all may have a chance." The chances for the other men must be found elsewhere. The men on a job stay there until it is done. Near almost all the public works one sees the cot- tages, comfortable, primitive, to which unemployed men who are working for the public have been assisted to bring their wives and children. Given this inch, they want an ell- whole acres, in fact and a definite proportion of them look Families are Kept Together. t Waste Labour applied to Waste Forest. (Page 204.) KEEP THE FAMILY TOGETHER 201 up land near by and become permanent settlers on Crown lands if possible. They and their families acquire a love of the country, and are glad to leave the city forever. A steady transfer of people from the poorer town districts to the country is being thus accomplished. 'Many who do not wish to devote themselves wholly to farming take small sections of land in the vicinity of their work. When their employment on the railroads or other public works has come to an end these men find something to do in the towns that spring up, and this, with their own little piece of land, keeps them going. A great deal of pains is taken to put these unemployed men at work where there is land to be had, and they are allowed taught, in fact to work alter- nately for themselves and the government. Roads are made to open lands, and lands are opened to create a demand for roads. Estates like Cheviot are cut up not simply to pro- vide farms for the sons and daughters of the older settlers, but to place by their side partly to give them a supply of labour at harvest time unemployed labour, agricultural and artisan, in village settlements. We see in our picture of Cheviot the cottages of these labourers, who, but for this chance, might still be standing eleven or twelve hours in the market-place of the cities, saying, "No man hath hired us." If a man's family for any reason does not go with him the department makes it part of the contract that it shall retain one half of his wages, which is transmitted by means of postal notes by the paymaster of the works to "the folks at home." In the first six months of its existence three hundred of the unemployed, assisted by the labour bureau, remitted through it to their wives and families no less a sum than $40,000. If no private employer wants his services, the unem- ployed man in New Zealand can be sent to the state farm 202 TRAMPS MADE TAXPAYERS at Levin to be taught the use of the axe and the spade, and to work co-operatively while waiting for some other em- ployment. There, too, the family is taken with the man, and hundreds of people have found a temporary home, many of them for the first time learning to farm and graduat- ing into excellent workers who have at last secured good places, or who have since taken up land for themselves. The idea of the state farm is that it shall be a "transit sta- tion" through which a steady stream of labour, changed from non-effective to effective, should pass. It was at first attempted to have the elderly men with their families, who have been the principal beneficiaries of the scheme, learn to work together co-operatively, but, I was told by one who knew, "the women spoiled all that." The experiment of the state farm was handicapped by the very unsuitable character of the land assigned to the Labour Department by the Land Department almost as if the lat- ter were not in sympathy with the project. Eight hundred acres of heavy forest and scrub is not precisely the kind of paradise one would choose for a fresh start in life for elderly and unskilled men, many of them townsmen. That the Labour Department has been able to achieve such results as are to be credited to the state farm speaks volumes for the faithfulness and intelligence of its officials, and says no less for the wealth-producing powers of even poor labour on poor land. The unemployed there were thirty-seven at the start, with fifty-seven dependents were put to clearing off tim- ber, working on the co-operative plan and paid full wages. This kept them in good heart, but manifestly made the clearing much more expensive than that done by the private settler, who does not make six or seven shillings a day out of clearing his land. The sales of timber made an impor- tant contribution to the expenses of the farm. THE STATE FARM 203 As they felled the timber the men constantly changing, of course, with new arrivals and departures went on mak- ing fences and roads, and building cottages. The value of the improvements created in this way by fugitive and inexperienced labour has come within three thousand pounds of the total cost of the farm to the government, and as land that was worth $20 an acre has been made worth $60, the experiment has been financially successful, to say nothing of the human salvage. A considerable part of the men taken in at Levin have been elderly and helpless workmen, for whom private em- ployers and public works offered no opportunity, and its function has been specially benign on that account. To make these men self-supporting is a more skilful and more useful task than any other a fraternal government could un- dertake. This state farm holds a necessary place in the political economy of such a country as New Zealand or any other country. The important scheme of dealing with the unemployed formulated by the Unemployed Advisory Board of New South Wales, noticed on another page, recommends such a farm as an indispensable part of its plan to educate the out- of-works to the point at which they can be made useful in public works and in the settlement of the land. Such an adjunct any thorough governmental plan for dealing with the human detritus of our industrial system must have. If the Labour Department and the Public Works De- partment and the private employer have no call for our out-of-work, he has still the Land Department. Minister McKenzie, though a farmer and the representative of a farmers' district, has not limited his sympathies nor his efforts to satisfying the land hunger of the farmers' sons and daughters who, though they had money, could not, under the old squatter regime, get land. Under him the 204 TRAMPS MADE TAXPAYERS village settlements of Rolleston and Ballance have been de- veloped into the "Improved Farm Settlements," which are a more practical and successful contribution to the settlement of the unemployed question than anything to be seen in Australia, Europe or America. The Improved Farm Settlements are communities built on a foundation of land, labour and co-operation, to give homes and a place in the world to the man who has lost them all in the fierce struggle of modern life, and whose destiny, if unassisted, is to be degraded into a consumer who produces nothing. The Improved Farm Settlement is New Zealand's attempt in the field where most other nations have nothing to show but poorhouses, jails, and potters fields for the "surplus" population. Out of the idle land and idle men the democracy of New Zealand are now at work cre- ating a new type of social and economic organisation. Con- sidering the vital character of the problem of the unem- ployed and the practically complete failure of every attempt to deal with it elsewhere, this experiment is certainly of fascinating and momentous interest. There are forty-five of these Improved Farm Settlements in the Wellington, Taranaki, Auckland, Hawkes Bay, Otago, and Southland districts. Most of them are in the North Island, where the unreclaimed public lands are. They cover an area of 73,320 acres. There were on them at the last report 513 land holders and 1854 residents. There have been 917 men enlisted in this work, and 364 have left. The settlers had cleared 15,141 acres of the bush and had grassed 20,814. They had been advanced $286,645, while the total value of the improvements which had been made by them was $420,840, and they have paid in rent and interest $13,210. This result has been achieved by the combination of the waste forests and waste labourers of the community. Using ROADS TO INDEPENDENCE 205 the unemployed to make roads is not a new idea, but New Zealand is the only country that has had the wit to see that the tramps could build roads on which the tramp himself could travel to independence. While New Zealand was doing this with its unemployed one of its neighbouring colonies was setting them to scrape paint off park fences. When an Improved Farm Settlement is to be opened a tract of Crown land is selected which, when cleared, will be suitable for farming, especially for dairying. It is sur- veyed, roads are laid out, and it is cut up into farms vary- ing from ten to two hundred acres, according to the quality and use. Crown lands only are used for this, not lands which the state has had to buy back. These latter are al- ready improved, and the public could not afford to let them go to settlers who would not know how to make them imme- diately productive, whereas on forest land their unskilled labour immediately begins to create value. Maori tribal lands cannot be taken for settlement, but must be bought. However, the Maoris are constantly ap- plying to have their titles registered under the Crown. They thereby get individual ownership, and the government can then take the lands as it is constantly doing. It buys the interest of eight or ten of a tribe and then applies to have this cut out by the land courts, after which it can use it as it chooses. The Maoris are allowed to become settlers in the Improved Farm Settlements, as even a newly landed immigrant could do. "We do not exclude aliens," the offi- cials told me. The party of unemployed which, has been forwarded by the Labour Department is received at the scene of the pro- posed settlement by an officer of the Land Department. They find there everything needed for shelter and work, and they find the public land in the vicinity surveyed into sections and waiting for occupancy by them. The sec- 206 TRAMPS MADE TAXPAYERS tions are distributed among the applicants by lot. Mar- ried men have the preference in the distribution both of work and land. All are immediately set to work to clear away "the bush" and grass their land, so that it may be fit for cropping or pasture. At the same time they are given work on the roads which are to connect their new homes with civilisation, or on some railroad or other public work in the vicinity, and it is arranged that they shall divide their time between their own and the public work. As they clear their lands and get them into grass, money is lent them on the value they thus create, and fifty dollars at least will be advanced to each married man to help him build his home. "Men absolutely destitute," the Minister of Lands said to me, "in that way become thrifty settlers." "By this plan," said Premier Seddon, "we at the same time build our highways, and deposit in permanent settle- ment by their side the labour that builds them." When I was in New Zealand the Land Department was employing about two thousand men in making roads upon the Crown lands. Many of the men, of course, abandon their holdings, and these are then usually offered to those of their neighbours who stay. The policy of the department is to allow the successful men to absorb the land of the unsuccessful ones up to a reasonable limit. While the settlers are struggling they are not asked to pay rent, but when an outlet for their products is secured and they are making a living, the representative of the Land Department in the neighbourhood notifies his superior "that the time has now come when the settlers should be required to pay rent." Temporary work is also furnished for the unemployed in felling the forests on the public lands; but the practical TALK WITH THE PREMIER 207 genius of the New Zealander does not believe in temporary remedies, and his main energies have been given to the method by which the unemployed are given work not dur- ing the slack season, but for the rest of their lives, if they choose to take advantage of it. Most of the men who find refuge in the Improved Farm Settlements are of the class of ordinary labourers "nav- vies" but there is among them a sprinkling of skilled la- bourers and the artisan class. Among the other things done for them is to teach them how to work. The in- struction given them is not simply how to work their land, as was shown by a conversation I heard between one of the settlers and the agent of the Land Department. This settler had been a carpenter, and, being rather slow, had found himself always at a disadvantage in the labour market, and had consequently betaken himself to work on the roads and settlement on government land. He had eight children and one hundred acres of land to look after and was doing well with both. When I came to his place he was building a bridge, at his own expense, over the creek in front of his house. He told the official that he and the other settlers in the neighbourhood would get on much better if they could have a creamery. He had written to the Agricultural Department about it, but had received an unfavourable answer. "Do not rest satisfied with this answer," the official said. "There are different ways of doing these things. If you cannot do anything by correspondence, apply direct to the Premier. Two or three of you go and talk with him at Inglewood, where he is to make a speech in a fortnight. You can do more in twenty minutes' talk than by reams of correspondence." A creamery would cost about $8000. The Department of Agriculture, under the law, is authorised to advance 208 TRAMPS MADE TAXPAYERS funds for the erection of creameries if the settlers can pro-- vide their proportion, which, in this case, would have been about $2500, but the people here could raise only $1250. There was a discretionary power, however, to make a larger advance, and hence the recommendation to apply to the Premier. This scene between the official and the settler reminded me of a remark by the Minister of Lands telling why one of his men had been chosen to administer the land laws in his district. "Because," the Minister said, "he has a human heart and will look out for the settlers, and also has a good head and can protect the interests of the government." The largest of these Improved Farm Settlements is Whangamomona, in the Taranaki district. The settlements are usually of ten to fifteen sections, or even less, but here about one hundred and eight were offered. Ninety-eight were taken immediately. About fifty of the settlers remain, but some of these are likely to be dropped. Seven years ago this region was an unbroken wilderness. The survey- ing party had to work its own way through, and had to carry its tents, food, "billies," as the Australasians call the pail they make tea in, and all. Now the traveller goes twenty-five miles by coach, twenty miles more on good roads, and half a dozen miles farther on a bridle path, which is the forerunner of the coach road to follow. He finds flourishing farms all the way. If one was asked to give the age of the settlement from appearances, he would think it to be at least twenty-five years old, instead of seven. "It is usually the small settlements that succeed. A few men well placed, with land enough near by a population which can give the men work, or near public works this is the secret of success for this kind of experiment." The erection of a creamery in the neighbourhood almost always EVERYTHING BUT TUCKER 209 makes success certain, and it is for this reason that money is advanced for them. The department gives the men whom it thus brings out to put on the land nothing, but it advances them everything except "tucker" food. They and their families, if these are with them, even find ready for them on the ground of their new start, tents for shelter. These were at first lent, but this it was found made the men careless. Now they must pay a rent which is deducted from their wages. All the tools that they need slasher, spade, shovel, pick- are furnished them, and for these, too, they must pay in the same way. These are all bought by wholesale, and sold to them at only enough of an advance to cover the cost. Hand carts and barrows they are allowed to use free ; timber jacks they must pay a shilling a day for; these cost the government $37 each. "Tucker" the men can get on credit if they have a job. The storekeepers are on hand at the monthly payments, and they can always ascertain from the official inspector how much each man is getting. Payments are made at the works, and are in cash. The Land Department at one time proposed to start a store of its own in the vicinity of Whan- gamomona. It found that the storekeepers were charging extortionate prices for provisions, in consequence of which the men demanded higher pay. Instructions were given to the local officers that unless prices were reduced they should open stores. This was abandoned because it was seen that if this was done it would never be possible, on humanitarian grounds, to refuse food to the wives and children of the men in the settlement, even if they would not work. Such a scheme, moreover, would have been a violation by the government itself of its own truck act, forbidding payment in kind. One of the most important things which is taught the 210 TRAMPS MADE TAXPAYERS men is to work co-operatively, as has been described in the chapter, "The Workmen are the Contractors." Instead of a contractor there is the public engineer, who lays out the work and makes contracts with each group of men to do such work as they bid for. "With the exception of a few special items," the land report for 1899 says, "all the work done by the department has been on the co-operative system." When a "co-operative gang" has been formed by the men it must consist of four, but there may be as many more as the men wish they then choose their head man. He represents them in the contract made with the depart- ment. The money due each month, called "progress money," is paid to him, but in the presence of the others. The statement issued to the head man gives all the items, deductions and the like, and any member of the gang can see it. The men can change their head man at any time they desire to do so. It is very seldom, I learned, that any four men come together again after having once worked with each other. When the men first come from the cities to this rural life they show their inexperience and irresponsibility in curious ways. It was found from the storekeepers in one of the settlements I visited that the settlers when they first came spent from five dollars and upward a week for "tucker," buying all kinds of fancy goods, like sardines, where the ordinary workman spends only half that amount. This exuberance soon wears off. Getting their gardens makes a great difference. "Our potatoes, carrots, parsnips, and other truck make a difference of one half in our flour bill," one of the settlers told me. The Whangamomona settlement, through which I rode for two days, is a very picturesque illustration of the land settlements of this type. Two thousand acres are reserved BABIES AND ROSES 211 here to preserve the beauty of the road. This has been built entirely by the labour of the men who have been brought from Wellington, Christchurch, Napier and other towns, and is a fine specimen of mountain engineering, and a link in the main highway on the west side of the North Island. The settlement is three years old. The gardens, the galvanised iron "tin" houses, the wooden chimneys built outside, the cows feeding in pastures black- ened with the stumps of the timber felled and burned, the doorways filled with groups of children growing within as luxuriantly as the flowers and vines without, make a land- scape which may have too many sharp edges and colours too incongruous to delight the eye of the landscape painter, but it is a picture any statesman might be proud to sign his name to. Every home here is an adventure the goal of a Pilgrim's Progress, very prosaic no doubt, but thrilling enough to the men and women and children who have been enabled to shut these doors against the city wolves of want. One of the cottages here is the castle of a man who had been a day labourer in Christchurch. He began by working on the road, then opened a boarding-house. He had one hundred acres. Among other products is a house full of children. Not far away lives another "successful man," who was a day labourer out of work. Given this chance, he saved money, bought cows and made butter to sell to the other workingmen. Yonder is the house of an Irish baronet. He has come in here, taken up land, and gone to work like any day labourer, and is doing better than the average. Occasionally some abandoned house tells of a man who has given up the struggle. Here is a gas stoker from Napier, who, when he lost his job, went to the Land Department for a life position 212 TRAMPS MADE TAXPAYERS as one of its tenants. He has sixty acres, and his house is a bower of roses and babies. In the garden is a new Russian forage plant that grows as a tree, with which he is experimenting. The mother points with joy to the little four-year-old, who, when eighteen months old in town, could not walk, but is now running everywhere. "We cannot expect to get much out of it for ourselves," she says, "but we will make the children, we hope, inde- pendent." Not far away is the place of one who was an ordinary wood cutter, who is now living on twenty acres of his own, in a house which the Land Department helped him to build by advancing him $75. The men take great pride in their new homes, and many of them travel every day miles on horseback to get work to keep them going, if no work is to be had near by. In a house which I asked permission to photograph there was a window not glazed. "Take it so as not to show the window with the canvas cover," the owner pleaded. This man was discussing with the government officer, Mr. G. F. Robinson, with a record of nearly thirty years' service, the disposition of the section adjoining his. "I hope Lockwood will get it," he said. "He has a lot of children. We have nine children of school age in the settlement now, but no school. This little settlement was at the extreme end of the bridle path into which the coach road and the waggon road had dwindled, as we penetrated far- ther and farther into the wilderness. As soon as possible a school will be established here, for the democracy follows the settlers close with the schoolhouse, although the pay of the schoolmaster is not very large in one settlement $7.50 a week. In New Zealand primary education is free, universal, secular and compulsory, and thirteen four- teenths of the children are educated by the state. In the TEN CHILDREN ON FOUR HORSES 213 Whangamomona settlement I saw ten children going to school on four horses, and sometimes there are four to be seen on one horse. We saw three little ones who had to walk six miles every day. Each family has its separate home. The co-operation is in the work, not the living. The preference always shown for married settlers in giving out road and other work is really a preference for children. One of the reasons urged for the resumption of the large estates when that measure was in Parliament was that it would help young people to marry. The political economy of New Zealand takes large account of the baby crop. Single men are forced out of the settlements rigorously if they do not comply to the letter with all the regulations. For instance, settlers must make improvements in proportion to the money paid them for public works. Single men are required to improve to the extent of one half of the wages they receive, but married men to the extent of only one third. The enforcement of this rule is strict and drives out the undesirable single men. This settlement, like most of the Improved Farm Settle- ments, shows a decrease in the number of persons living on it, but an increase in the work done and the value of the improvements. In other words, the natural and official weeding-out process is making itself felt. The men who are unfit or unwilling are leaving, but those who remain are working so faithfully that the wealth of the little com- munity is increasing faster than the number of inhabitants declines. In 1898 there were 187 persons on the land in Whanga- momona; in 1899, 1 68, but the number of cattle, horses and sheep has increased from 887 to 1178 and the value of the houses, gardens, etc., has grown from $11,095 to $ 2 r 245. The number of acres under grass is 3052 against 2202 the year before. The official report says: 214 TRAMPS MADE TAXPAYERS "The settlement may now be said to be permanently estab- lished. A large school has been erected and opened. A dairy factory" the one as to which we overheard the Land Department officer giving advice to one of the settlers "is in contemplation, and most of those settlers who now hold land will, in all probability, remain and become good settlers." There are six Improved Farm Settlements near Auck- land, three to the north and three to the south, sheltering about sixty families. In this district work and land have been given only to married men. So far at least eighty per cent, of the men have proved permanent. The settle- ments were fortunate in their proximity to saw-mills, kauri forests and other sources of employment. The advance of money to men here to build with has been discontinued because it was found that some borrowed and built only to get work, and then cleared out. When there was no road work to be had the Land De- partment helped these men out by allowing them to fell kauri trees on their own sections and on Crown lands by payment of a royalty. The timber was felled by co-opera- tive gangs working together, and only resident settlers were employed at this work, so that the money earned might be kept amongst them. For the settlers physically inca- pable of the severe labour required in felling kauri road work was provided, if possible. At Mangatu, Auckland North, the ten original settlers are still resident, and with their families number seventy- three souls. They have been advanced $7165, and this has enabled them to make the improvements worth $13,115. At Uruti, in the Taranaki district, out of seven settlers four remain. There are twenty-two persons on the land, and with them are one hundred and forty-three cattle, twen- ty-six sheep and four horses. These four men obtain work ADVANCES OF MONEY 215 enough from the local authorities and farmers with large holdings near by to be able to dispense with any necessity for further assistance. They have cleared and grassed five hundred and two acres. They have a post-office, a school is soon to be erected, and a dairy factory will be established. Nihoniho, in the same district, is an instance of a set- tlement pushed too far ahead of the opportunities for em- ployment by its members. The soil is very good, but the lands around it are not yet open. As soon as the road work in their immediate vicinity was completed the selectors, with the exception of three, abandoned the district. Akitio, in the Wellington district, contains 3300 acres, held by 32 settlers, with 66 persons to be supported by them. Twenty-three of the settlers are employed on the roads near by, two work at saw-mills, three find work to do on their own holdings. By energy, industry and economy many who started without means, depending on road-making and Treasury assistance in clearing and other improvements, are now comfortably housed, have part of their sections cleared, grassed and stocked, and in a few years' time, when the road work is completed, will have their holdings in such a forward state as will enable them to get a comfortable living without having to depend on outside work. The three settlements of Ngaire, Poti and Maata, in the Taranaki district, are well established, the settlers have paid up most of their rent and are now practically beyond the need of assistance. At Mangaere, which we passed through on our way to Whangamomona, an ordinary bushman was living on twenty acres', in a house on which the government had ad- vanced him seventy-five dollars as soon as it was finished. All the men in this settlement have been advanced money on their houses and work in sums ranging from $50 to $100. Ten persons here have made improvements of $5200. 216 TRAMPS MADE TAXPAYERS The only rent in arrears is $4 due from one man. The future of this settlement is assured by a creamery which was erected in 1899. One of the twelve settlers at Kawatau died during the year 1899, leaving his widow in possession of his section. The only public expenditure during the year was incurred for grass seed and sowing eight acres of land for this widow. There are kickers and grumblers of course. One very intense specimen of this type whom I met indulged himself out of pique with his own government in an enthusiastic advocacy of the superior virtues of everything in America. He read me, with much gusto, in the presence of an official of the Land Department, an article which he had published in the local paper. "In this district," his article ran, "the farmer makes the road to his farm with an American pick and shovel, he puts in his wheat with an American drill, he reaps it with an American reaper and binder, he pumps the water for his harvest hands through an American pump, he takes his wheat to a mill where the most intricate machinery is Amer- ican, he drives around town in a buggy that is mostly American, his timber is cut with an American axe, the ham- mer that drove the nails in his house was an American ham- mer, his saw was American, and, finally, his wheat rolls into Wellington behind an American locomotive." This man's denunciation of the land policy was most vin- dictive, but it had its origin in the enforcement of a neces- sary regulation. He wanted to graze other men's cattle on his land. The land board told him that he could do so, but that he must pay the receipts over to it. In the same way, if he sold timber from the section he would have to turn the money into the treasury of the land board, for the obvious reason that the treasury was lending him money on the security of this timber and grass. THE MOST NEEDY CLASS 217 This grumbler had been one of those with no money, no land, no work. His fellow-citizens gave him a chance to get all these and he had got them, but apparently he recip- rocated none of the kind interest in the welfare of the others which lay at the bottom of the scheme of settlement, which was making a man of him. Had he been a member of a co-operative society which did these things for him that is, if he had done them for himself in a nearer and more realis- able way than doing it for himself through the state, he might perhaps have appreciated it. There is a more needy class even than the navvies and out-of-works who get the most of the benefit of the Im- proved Farm Settlements. This more necessitous class is the unemployed tradesmen, mechanics, clerks, and the like. For them some form of co-operative settlement is being urged, and, in connection with that, some organised system of instruction such as is proposed by the Unemployed Ad- visory Board of New South Wales, as noted on a following page. What this class can do, however, even under the present system, is shown by the experience of two printers of which I learned in Auckland. When the linotype was rising on the horizon of the compositors, the member of the upper house of Parliament for that district, the Honourable W. T. Jennings, at a meeting of the Typographical Union, pointed out how great a mistake it would be for the men who were certain to be thrown out to hang about the cities. They had on the average about $500 of savings. The trade-union would allow each man displaced about $75 more. The "Herald" of Auckland agreed to add some- thing to this. Their savings and this assistance, if they stayed in town, it was pointed out to them, would melt away, and at the end of the year they would be penniless and with no prospect of any future help. Their represen- tative in Parliament advised them to go into one of the 218 village settlements. He promised that he would use his influence to have good land assigned them by the Land De- partment. He offered to go himself into this new settle- ment life with them. But he could not raise the least in- terest in his suggestion. One or two said it would be a good thing, but made no move. The event has been just as he anticipated. The men who have been displaced by the typesetting machine are drifting up one street and down another. There is no pos- sibility of their getting work at their own trade, and they have exhausted all the help they received. Meanwhile two of the brightest young men among them, who saw what was coming, went into the country, and have had a very different experience. Getting some public land, they put what money they had into stock, tools and their maintenance. They had a very rough time, but at last are getting their feet firmly planted on the ground, and the ground is their own. While the other men go on rotting, these men will be growing more independent, and will be raising children and strengthening the state along with themselves. This success is something like that which has been achieved by purely voluntary effort on "Printers' Farm," which has been established by the "Big Six" Typographical Union of New York. This union, foreseeing what was coming in the introduction of the typesetting machine, bought one hundred and sixty acres a mile south of Bound Brook, New Jersey, and there, on some of the richest soil in New Jersey, under the Watchung Mountains, in a scene rich with revolutionary associations, is a colony of forty- seven men printers who have made themselves farmers. These Improved Farm Settlements are, as we have shown, not all successful. Some mistakes have been made, but the fact that the population is holding its own and that MORE THAN IMPERIAL 219 improvements are increasing shows that the system is tak- ing root. 1 The numbers may seem small to those whose imaginations have become imperial. Two thousand and ninety-three men settled on the land, they and their depen- dents, numbering 6509, may not seem very much, but the significance of the plan does not lie in the numbers already relieved, though these speak eloquently, but in the fact that a working plan has at length been devised and put into suc- cessful operation which can be expanded to meet any of the demands of the problem. No other country has done 1 Adding to the results of the Improved Farm Settlements those of the Village Settlement system, also mainly for the benefit of the unemployed, we have the following particulars of what has been accomplished by New Zealand in its attempt to convert idle land and idle men into sources of social and financial strength for the country. COMPARATIVE STATEMENT SHOWING POSITION IN 1899 OF IMPROVED FARM SETTLEMENTS AND VILLAGE HOMESTEAD SETTLEMENTS. Particulars. Improved Farm Village Homestead Settlements. Settlements. Totals. Number of Settlements, 45 165 310 Area, 73,655 acres 35.454 acres 109,109 New Selectors during 1899, 78 101 179 Forfeitures and Surrenders, 164 62 226 Total number of Selectors, 526 i,567 2,093 Total number of persons > on the land, $ 1,615 4,894 6,509 Total amount advanced, s j> u houses 4,5 1 1 Houses 13,769 Bush felling t2,i65 18,280 53,906 Rent and Interest paid > during year, J 7" 4,877 5,588 Rent and Interest paid from ) commencement of system, } 1,064 3L873 32,937 Improvements, 64,988 "5,834 180,822 The Treasury has advanced $360,930, $169,685 have been received in rent and interest, and the improvements amount to more than twice as much as the loans, $904,110 a pretty good investment financially, to say nothing of the far more important interests involved. 220 this with the unemployed. There are many plans for the relief of this unfortunate class. Here is what is wanted however a plan not to relieve but to rehabilitate, to restore them to their economic and other citizenship. Co-operative labour colonies for the unemployed have never been favoured in New Zealand. Though the New Zealanders speak of themselves as "experimenters," I ob- served that they keep well within the practical in their ven- tures. This is probably the reason for the success they have had. Plans for. such settlements are urged in New Zea- land, as everywhere, by those who seek a short road to the co-operative commonwealth. In several of the Aus- tralian colonies some very ambitious attempts have been made to realise the hopes entertained that the unemployed could thus be organised in a new fashion into prosperous economic and civil life. But the New Zealand Minister of Lands believes these colonies to be impracticable at present, and "I believe in the practical," he says. Michael Davitt, in his charming and valuable book, "Life and Progress in Australasia," describes graphically the co- operative communities and socialistic settlements which were established by the South Australian government after the panic of 1893. A great deal of time and energy, public and private, have been spent on these settlements. When Davitt was there the prospects were of the brightest, and it was with keen interest that I inquired about them when I ar- rived in South Australia. Social alarm, "the terror," had a place among the reasons which led to their establishment. The reaction of 1893 was extremely severe throughout Aus- tralia. There had been several bad years of drouth to add their losses to those of the panic. A building boom had collapsed, and the unemployed were parading the streets of Adelaide with black flags, holding revolutionary meetings, sleeping by thousands in the parks, and demanding bread A COMMUNISTIC WAVE 221 and work. All the materials for a great riot were ready. It was under this pressure that the people and the officials acted, the latter none too willingly. When Norway sent to see if land could be had in South Australia for settlement for Norwegians out of work the government had replied there was none. It said now to the citizens who proposed the co-operative experiments that there was no land available. But, it added, if you can find land we will let you have it. Thereupon three men, repre- senting the workingmen one of them a clerk, another a blacksmith, and the third a roustabout went on an explor- ing expedition to see if land could be found. The River Murray which flows through an alluvial valley, had hitherto been used only for sheep. The "squatters" living there declared that it was good for sheep only, but the working- men believed that they could make something of it agricul- turally, although they recognised the difficulties that were involved in the fact that cultivation was possible only with the help of irrigation, which was laborious, slow and costly. The first Murray River settlement was located at a place called Lyrup. The state, besides alloting land, advanced tools, shelter, subsistence. The law under which the settle- ments were made had been so framed that the people could organise their communities as they chose individualisti- cally, co-operatively, communistically. "There was a wave of communistic feeling at that time all through Australia," one of the men prominent in this work said to me, "and this made itself felt in the organisa- tion of these colonies, which at the start were all co-operative and some of them communistic." Murtho was one of these communistic settlements, but the communistic features were dropped in three weeks, and by this time the co-operative and communistic features have been practically abandoned in all the settlements. 222 TRAMPS MADE TAXPAYERS By the original act the Treasury advanced only fifty per cent, of the cost of the experiments, and the men were en- tirely free to manage their own affairs; but the colony was induced to go in deeper, and has now an indebtedness charged against the settlements of about $500,000. This mistake, which, it will be observed, is quite different from the New Zealand method, has led to another. The gov- ernment, to secure itself for the debt, has taken in charge the selling of the produce of the colonies, and the buying of their supplies. The colonists are now obliged to turn over everything to it. It has "degraded them," as one of its own officers phrased it. It is admitted on all hands that the men work hard, but, work as hard as they will, they see little prospect of getting ahead of their in- debtedness. They are allowed to handle no money, ex- cept a few pounds which they are allowed out of their earn- ings, almost as if it were a gratuity. They are paid wages for their work, but not in money. They are given fifteen shillings a week for subsistence, to be taken out of the stores. Whatever they earn in excess of fifteen shillings and many earn thirty shillings a week is credited them as a fund out of which they can draw for extras, like implements, houses, extensions, etc. The experience of the settlers of Moorook may be taken as a fair illustration of the results of this method of state installation of co-operative village life. The settlers at Moorook, like all in these River Murray settlements, were labourers taken out of the streets and given but little more direction than they could find within themselves. Still, with all these disadvantages they made a success, so far as proving that the land they had chosen was fit for agriculture indeed, with proper irrigation, admirably adapted both for grain and fruit. There were, of course, many internal difficulties associated with this attempt of A FATAL INTERFERENCE 223 strangers and men without practical knowledge of previous co-operative experience to organise co-operative life, but all the best observers of the movement believe that they would have succeeded had it not been for the disastrous features of state interference. "We all knew the government could establish successful beggar colonies," said one of the members of the South Australian Parliament, "outdoor poorhouses, but here was an attempt to place the unemployed on the land and make permanent settlers of them on co-operative lines. It was the most advanced experiment in the world. In many cases these settlers proved themselves more skilful even than the experts who were sent to direct them." The settlement at Moorook had just broken up when I reached Adelaide. The Minister of Lands had a short time before interfered and said the settlers must leave their earn- ings with the department. The men pointed out that they could not buy to as good advantage through it as by them- selves, for the dealers who sold to them through the Min- ister would charge them prices so high that they could not live. In the case of some of the adjoining settlements the members had not proved themselves to be particularly steady men, and to hold their money might perhaps have been helpful, as it made it impossible for them to throw it away. But in the case of Moorook it was fatal. The men there were trusty, and were too independent to submit to such interference. Nine out of thirteen left. They and their friends urged that a different ruling be made in their case from that applied to the other settlements, but fruit- lessly. The Minister, acting on the merely financial aspects of the matter, and seeing that the men were spending more than they were receiving, insisted that they could not con- tinue "on their own," as the Australian phrase is. There- upon they gave up their land, and thousands of bushels of 224 TRAMPS MADE TAXPAYERS onions, potatoes, and other produce which they had raised were left rotting on the ground. This result is what any co-operative adviser familiar with the causes of success and failure in co-operation elsewhere would have predicted as inevitable the moment the officials began to take charge of trie sales and purchases of the men. It is an illustration, however, of the cheapness of co-opera- tive living, of the productiveness of co-operative methods, and the wealth that lies awaiting the union of labour and land, that, with all these vicissitudes and mistakes, these set- tlements have already resulted in an unquestionable eco- nomic gain to the colony. The report of the surveyor-general for 1898 reports sat- isfactory progress. The total area under cultivation in all the settlements had been increased from 4829 to 6585 acres, and the total value of the improvements is $323,840, and he sees "no reason why the settlements should not be a de- cided success." But they are no longer illustrations of the co-operative idea they were founded to vindicate. The strong men are shouldering out the weak ones, with the idea of absorbing all that has been done. At Pyap I learned the members are charging a premium to any new member, unless he is an artisan, like a carpenter or blacksmith, for whom they have a great need. "The settlements will die one after another," an official of the Land Department said to me. "The land will be of- fered for lease to whoever best shows his ability to pay a fair interest on the cost of the improvements." One service which it is recognised that all these efforts of the workingmen and their friends have done the community is that they have practically added a new territory to the colony. "UpWard of eighty thousand acres of Murray River land," says Premier Kingston, "that were never put A GREAT MONEY MAKER 225 to use before have been taken up by farmers since the estab- lishment of the settlements, owing to what the settlers have done in the way of proving the possibilities of the district." The Premier repelled the criticisms that too much had been done to help the unemployed establish themselves, their wives and children in homes on the banks of the Murray. "We did not extend to them one half the concessions," he said, "which have been extended at different times, and justly extended, to more powerful and influential classes who did not stand so much in need of it." "The village settlements are doing well enough," the Pre- mier said to me, but in saying this, of course, he referred simply to the material results. These settlements can no longer serve as illustrations of what men can do in co- operative or communal life. But even the broken bits of this co-operative experiment arrange themselves in the kaleidoscope so as to re-enforce all previous experience of the extraordinary wealth-produ- cing power of co-operative effort. In fact, the greatest diffi- culty with co-operation is not that it does not produce wealth fast enough, but that it produces it too fast. Co-operative and communistic societies do not stay poor long enough to give their members a chance to grow together. This bit of verse which is floating about South Australia shows that some one has been able to get a laugh out of the serious side of these efforts : THE SETTLER'S ELYSIUM "A village settler's is the life for me, If it is all that it's cracked up to be. I want a place where corn, and wine, and hoil Is bustin' up promiscuous from the soil ; Where hens and turkeys run about in freedom, And no one ain't a-troubled for to feed 'em; 226 TRAMPS MADE TAXPAYERS Where cows produces butter, milk, and cheese, Just all according to the teat you squeeze ; Where calves are never born, but only oxes, And fruit grows dried and packed in little boxes ; Where 'all- wool goods' straight from the sheep is taken, And rashers planted springs up 'ams and bacon; A place of calm delight and innocence, Where everything but labour is intense; Where Gov'ment spends all that must be spent, And at the proper time remits the rent, And follerin' out the principles as we hold, Finally gives a man his little freehold. A spot where all is pleasant, nothin' rilin', Just like a poetry village, allus 'smilin' ' ; A sort of half-way station to the skies, A workman's genooine, earthly paradise. If this will stop the country goin' to pot, Send me, I am a hardent patriot!'' New South Wales also tried co-operative colonies after the panic of 1893. The unemployed, enlisted from the streets indiscriminately, were sent out to live together and work together on new land, in the belief that their poverty would be bond enough to hold them together. Any one who knows the infinite patience and almost infinite failures by which alone the co-operators of England, France and Germany, though men of the same trades and nationality, have been able to build co-operation to the magnificent thing it is now, would know what must be the end of such a venture. Just before I reached Sydney the Minister of Lands, under whose charge these co-operative settlements were,, had issued an order discontinuing the co-operative feature. Of course this put an end at once to that side of the settlement life which was alone of any unique interest. As in South HOW TO KILL CO-OPERATION 227 Australia, these settlements, though failing co-operatively, have not failed financially. The whole story was told me in Sydney of the causes of failure on the co-operative side: the jealousies of the men, the incompetence of many of them, the poor soil mistakenly chosen on "expert advice," the grudgingness of the disburse- ment of the money by the Treasury to the settlers, the ac- tive and passive opposition of the officials, the illegal and certainly impolitic and unjust expulsion by the department of the single men who were doing the most unselfish work of all, as they, with no families, shared with the married men ; the resignation in a body of the citizens' committee in charge of the settlements, as they could get neither hearing nor help from the Minister of Lands; and finally the order discontinuing the co-operative regime altogether, and drop- ping the settlements to the level of the ordinary individual- istic life of the outside world. Government endowment of co-operative settlements proved as disastrous as private endowment of co-operation has always done.- Every one of the co-operative societies so generously endowed by the Christian Socialists of Eng- land, in the time of E. Van Sittart Neale, failed. The re- sult of this method of establishing co-operation is pithily summed up in the phrase current among English co-opera- tors that "to subsidise co-operation is to kill it." The most that the political or private friends of co-operative effort can do is to teach it. The Schultze-Delitsch and Raffeisen banks, which have spread all over continental Europe during this generation, would not have outlived the nursing bottle if Schultze- Delitsch and Raffeisen had loaned the people the capital to, start with. It is by keeping close within the lines of this policy to teach co-operation, never to endow it that the Honourable Horace Plunkett has been able to achieve his 228 TRAMPS MADE TAXPAYERS remarkable work in the creation of a new industrial life in Ireland. Co-operation was made a living thing in the eco- nomic system of the colonies of New Zealand and Victoria and Canada, because the government taught the farmers how to co-operate, but left them to do the co-operating themselves at their own expense. The most thorough plan having any official character which has yet been promulgated for the radical treatment of the unemployed question in Australia comes from the colony of New South Wales. As the result of the failure of the co- operative villages we have mentioned and to provide for a social evil which it is recognised is chronic in our modern civilisation, New South Wales appointed last year a board called the Unemployed Advisory Board. This is to advise what permanent policy to adopt, and to carry out such of its recommendations as may be accepted by Parliament and the public. It consists of three ministers of the Crown and nine other members, including representatives of the unem- ployed, members of Parliament and labour organisations, and some of the best known clergymen and other citizens. It is given "power to carry out the work, subject in all re- spects to the approval of the Governor-in-Council." This board made its report in September, 1899. Its rec- ommendations, based, as they are, on the recent experience of New South Wales itself and the other colonies, and made in full view of what has been done everywhere else, espe- cially in New Zealand, certainly have the importance of news of a high sociological value to statesmen and reform- ers the world over. It proposes, first, an extensive scheme of "reproductive public works" reproductive, it will be observed, not of the kind seen in 1895, m Sydney, when thousands of men were scraping the paint off the fences or hauling sand from one place to another in the public parks and back again, just to THE NEW SOUTH WALES PLAN 229 "make work." Those public works are to be managed on the co-operative system adopted in New Zealand, which the board says has "had highly satisfactory results, both to the men employed and to the government." The programme of the board includes such enterprises as planting the public lands with trees, clearing and draining them for settlement, the storage and supply of water for mining, building bridges, making railroads, highways, and tram lines, which, in New South Wales, are owned by the national government, all of which, if properly managed, would add more than their cost to the value of the property of the people. The board further recommends : First. A National Intelligence Department for men and women. Second. Labour depots where the unemployed can be temporarily shelterd and employed. Third. Industrial Farm Settlements an. expansion of the labour depot where the men are given work and tech- nical instruction, and are sifted out into incapable and capable. Fourth. Assisted Settlement Blocks, where the men who graduate from the Industrial Farm Settlements are given farms of their own. Fifth. Compulsory Labour Farms for the vagrants. In addition to this, the board proposes subsidies to the prospectors "fossickers" in mineral fields ; systematic em- ployment for the men in the public institutions who may be found fit for such effort, calculated to be half the total number of inmates; advances to settlers to prevent their ruin at the hands of the usurer, who is a constant source of supply of unemployed; allotment of land to societies formed to settle co-operatively; treasury advances for the establishment of co-operative industries in the Assisted Set- 230 TRAMPS MADE TAXPAYERS tlement Blocks; and, finally, and not the least important, instruction in agriculture for all the primary schools in the colony. The board ascertained by their inquiries among the in- mates of the various charitable institutions of the colony that a very large majority eighty-seven per cent. of the workingmen who had had to seek help were unskilled la- bourers, who had never had any sort of technical education, skilled training or instruction in any trade or calling. Of the skilled workmen a very small proportion were pau- pers. It was this striking illustration of the value of tech- nical training that led the board to urge the "desirability of extending a system of agricultural instruction to our pri- mary schools. In view of our belief that to a large extent the land offers the best means of permanently solving the unemployed question, we consider the sooner that attention is given to the instruction offered youth in using the land to the best advantage, the more success will attend the efforts in the direction of agricultural pursuits." The board recommends the compulsory resumption by the state of drainable areas, suitable for agriculture, which have been neglected by the private owners. The labour depot proposed by the Unemployed Advisory Board of New South Wales resembles the state farm which the New Zealand government has established at Levin. The colony of Victoria has also something like the labour depot in a state farm at Leongatha. This is founded on the plan of the well-known German labour colonies. It contains 800 acres, admirably, equipped with buildings and agri- cultural machinery of the best type. The smallest num- ber of men who have been there at one time is forty-seven, the largest 346. When I was in Victoria the number being entertained was 150, an increase due to the return of miners from the gold fields of West Australia. The average stay A KEY-NOTE OF STATESMANSHIP 231 of the men is three months. Sixty per cent, of them, I was told by Colonel Goldstein, who is in charge of the farm, were drunkards. No one over fifty-five years old is re- ceived. Victoria at one time established a few settlements for the unemployed, and made some advances of money, but this has now been discontinued. The most important function of the Industrial Farm Set- tlements thus proposed in New South Wales is to do all the preliminary work of clearing, road making, building, etc., to prepare for use the land which is to be made into the Assisted Settlement Blocks. The pay of the Industrial Farm settlers is not given them in money, but in the form of board, residence, clothing, etc., in proportion to the work they do. These Assisted Settlement Blocks are not to be sold, but rented. The rent is to be two and one half per cent, on the unimproved value of the land. No rent is to be paid for the first two years. All the improvements which have been put upon the land by the state in the way of clearing, etc., are made a charge on the land and are paid for by the tenant in annual instalments extending over a period of twenty years, with interest at the rate of four per cent, on the unpaid balance. The report does not emphasise it, but it is to be taken for granted that, as is done in New Zealand wherever pos- sible, the public works and the settlement of the land shall be made to go hand in hand the labour that builds the highways, railroads, bridges, settling down on the land alongside; the wages the government pays the workingmen enabling them to become permanent contributors to the reve- nue of the railroads and public buildings they have erected. In this policy and not in the subsidisation of industry will be found the key-note of successful statesmanship in deal- ing with the problem of the unemployed. Since these plans of the Unemployed Advisory Board 232 TRAMPS MADE TAXPAYERS were made and submitted there has been a change of min- istry in New South Wales. The new government has ap- pointed a commission to carry out the proposals, but, sin- gularly enough, has put upon it only one member of the board which prepared them. "It is a great pity," one of the board writes, "that those who conceived these plans should not have been allowed to take part in executing them." CHAPTER X A COUNTRY WITHOUT STRIKES ALL the Australasian colonies have labour parties more or less strong, generally less, and labour legislation more or le$s advanced, generally less. Only two colonies have any- thing to show that could be called novelties in this field Victoria and New Zealand. Australasia is commonly spoken of as if it were run by the workingmen, and run hard. But the least observing traveller finds at once that nothing could be further from the truth than that the work- ingman is the master anywhere in Australia or New Zealand. These are not labour countries, and their advanced institu- tions are not due to labour parties. While I was in Mel- bourne the trades-unions were refused permission by the mayor to parade the streets in the celebration of their eight- hours holiday. The best they could get was the left- handed intimation that if they "strolled" through the streets they would not be molested. The year before the mayor had declined to allow a room in the town-hall to be used for a meeting of citizens investigating the unemployed question. In Melbourne the workingman has an almost magnificent trades hall, as a monument of former grandeur, covering a large area, with a fine and expensive building, but everywhere now about it are evidences of discourage- ment and decay. The fact is that nowhere in Australasia have the workingmen recovered from the effects of their crushing defeat in the strike of 1890. In New Zealand the 233 234 A COUNTRY WITHOUT STRIKES people, including the workingmen, turned this defeat into a victory by making it the occasion of a renaissance of reform which it has been the province of this book to chronicle, but no equally fortunate issue followed in the other colo- nies. The impulse was felt in New South Wales and else- where in Australia, but it reached only a scanty realisation. The workingmen have not yet been able to establish the eight-hours day by law in any colony, and have to content themselves with the general observance maintained by the best trades-unions by the simple strength of organisation. Within these limits the institution is firmly established. I was informed by the officials of the Public Works Depart- ment in New South Wales that it was not necessary in mak- ing out specifications for contractors to stipulate for the eight-hours day, as its observance was a matter of course in the building trades. The interest of the workingmen demand universal observance of the eight-hours day, but the law by which alone this could be had the labour parties have nowhere been strong enough to get enacted. Nowhere, either in Australia or New Zealand, is there a labour party which has ever had a majority in Parliament, and no labour party has ever been able, by the most skilful tactics, either of fusion or independence or the "squeezing policy" support- ing either party in return for concessions to hold the bal- ance of power for more than a moment, or, during that mo- ment, to secure any really radical legislation. Even in New Zealand the initiative in its industrial legislation, which is minute and advanced, is not to be credited to a labour party. It is in New South Wales that the most promising polit- ical organisation of the workingmen has been developed. In. 1 89 1 the workingmen of that colony elected thirty-five out-and-out labour representatives to the new Parliament containing one hundred and forty-one members. The ap- THE FIGHTING PLATFORM 235 pearance of a distinct labour party so strong in numbers and strong, too, in character and intelligence, was an event at- tracting attention all over the world. There were great expectations in Australia and abroad of the reforms which would follow, but the new party was split at the very open- ing of its career. Its opponents cunningly introduced a question involving the venerable issue of free trade and pro- tection, and a quarter of the labour members deserted their party and supported the ministry, as it supported the tariff. The other labour members were of shrewder stuff and voted with one party for protection, to get the electoral reform of "one man, one vote," and voted with another party for free trade to get the land-tax. The labour party of New South Wales still survives. Its manifesto of 1898 shows a membership in Parliament of nineteen. It has done good work and has been instrumen- tal in overturning several ministries, as that of Sir Henry Parkes of 1892 and the Reid ministry of 1899. Its influ- ence was important in such, legislation as the reform of the suffrage, the abolition of the contractor in many gov- ernment works, and numerous improvements in land and labour legislation, but it cannot be said to have added any such notable things to the list of realised radicalism as New Zealand has done. That the labour members have used their Parliamentary power with great conservatism is sufficiently plain. "The ministry of 1899," I was assured by one of the labour mem- bers of New South Wales, "is absolutely dependent on the labour vote." But with this supremacy the labour men have made no demands that could be called radical. The labour party of New South Wales is known as the Political Labour League, and puts forth two platforms. One is called the "fighting platform," and the other is the "platform." The "platform" contains the whole list of the social de- 236 A COUNTRY WITHOUT STRIKES mands which the workingmen would like to see established by political means, and includes such things as free medical services for every one and the nationalisation of mines, land, banks and railroads. In fact, it adopts the phrase of the German Socialist Labour Party and calls for nationali- sation of "the means of production, distribution and ex- change." The "fighting platform" puts forward only those things which it is proposed to make immediate issues. The "fighting platform" of 1898, for instance, mentions only one of the radical issues just quoted from the "platform." It puts forward as the first matters to be pushed through Parliament the abolition of the upper house, the adoption of the initiative and referendum, a national bank, old-age pensions and local government How little foothold the labour men really have in Australia is shown by the fact that in the face of this strong political organisation of labour in New South Wales the government does not rec- ognise the trades-unions even of its own employes. I have told elsewhere the story of the treatment of the tram-car men of Sydney. The Minister for Public Works does not treat with his employes through their organisations. "But we ascertain their standard of wages and conditions and approximate them as closely as we can." The two landmarks in labour legislation in Australasia are the minimum wage law of Victoria and the compulsory arbitration court of New Zealand. The minimum wage law of Victoria, so far as it goes, has a purpose similar to that of the compulsory arbitration law of New Zealand to protect the livelihood of the people. But it does not go very far, nor, so far as it goes, does it go very well. This legislation was the response of Parliament to shocking reve- lations of the misery being spread through Melbourne and other towns in Victoria by the sweating system. Its pur- pose is to take away the power of the sweater to depress A LIVING WAGE LAW 237 wages below the living point. It might be called a ''living wage law limited." It is designated in the report of the chief inspector of factories as an attempt to deal with the sweating evil and intended to put an end to the "uncon- trolled competition" by which "inconceivable misery" is brought to those who are "earning only a precarious daily wage." The initiative is not given to the people, as it is in the New Zealand arbitration law, but to the governor and council. In a similar way the machinery of the South Australian arbitration law was to be set in motion by the state, not by the parties to an industrial dispute, and the law remains inoperative. The Governor of Victoria, when con- vinced that the depression of wages and conditions of labour in any trade have become a matter of public concern, has the power to order the election of a "special board" to fix a figure below which wages shall not be pushed. These boards contain an equal number of representatives of em- ployers and employes, as the New Zealand arbitration boards and court do, and each side, as in New Zealand, elects its own representative, and these representatives then choose a chairman. The boards are called "special boards" because each takes cognisance only of the special trade for which it was appointed. Up to the present time five of these boards have been constituted, one each in the baking, men's and boys' clothing, boots and shoes, shirts, cuffs and collars, and furniture trades, and they are given by law authority to investigate the conditions of the trade for which they are appointed and to determine the lowest prices or rates which shall be paid to any person engaged therein. These rates or wages become legally enforceable on a date fixed by the board. These boards are in fact compulsory arbitration boards for the trades concerned. They differ radically, however, from the compulsory arbitration tribunals of New Zealand, for 238 these have the power to fix all wages, as well as the mini- mum, and act upon the initiative of the people, and have much greater authority than the Victorian boards. The New Zealand compulsion is not merely compulsion to obey the award. There are other compulsions equally valuable, and in fact indispensable. Not the least of these are compulsory publicity, with the powers of compelling the attendance of witnesses with the production of books, and the compulsion which compels disputants to refer their cases to arbitration. Under the Victorian law, up to the time of the last report of the chief inspector of factories, June I, 1899, f r tne vear J 898, the five special boards had made awards affecting 10,635 employes, and had increased their wages by an amount estimated at $500,000 if they worked full time. In the baking trade the minimum was fixed at one shilling, twenty-five cents, an hour for men and five shillings a week for apprentices. This was an increase on the average of $3.75 a week for the men. There was no in- crease in the price of bread to the consumer. In the cloth- ing trade the minimum was made js. 6d., $1.87, a day of eight hours for the men and eighty-three cents for the women. The average wages of 4484 employes were in- creased sixty-eight cents a week, with no increase in the price of clothing a result which the chief inspector con- siders "little short of astounding." But the fact that the minimum rates for piece-work out- side the factories were fixed too high led the manufacturers to insist that outside workers should become factory work- ers. Many women who had been working at home had to go into the factories. They have found, the inspector says, that the factories, with their light, sanitation, warmth and regulated hours were better places than their own homes. Those who could not go into the factories have had to do without work. The old and slow workers had to suffer like THE CHINESE SMILE 239 these women. The minimum proved to be more than the manufacturers were willing to pay these incompetents, with the result that many of them were converted into tramps. Under the New Zealand compulsory arbitration law the ar- bitration court has the power to fix the rates at which the "incompetent" men can be employed, and the Victorian boards have been compelled to follow this precedent and al- low such persons to work for less than the official minimum. The export trade in clothing fell off during the year of mini- mum wages. The decent manufacturers gained by the elim- ination the law achieved of the unscrupulous sweating com- petitor, but apparently are not able to hold the foreign markets in competition with manufacturers abroad who have no minimum wage to pay. In the boot and shoe trade the special board at first re- duced the wages of the men to six shillings a day from 7.?. 6d., but afterward, in consequence of the bitter com- plaints of the workers, increased this to seven shillings a day, $1.75, despite the strenuous opposition of the employ- ers. This determination of the minimum wage has in- creased the average pay of every man, woman and child in the trade by $1.08 a week. But here again the "poor" workmen presented a stumbling block. The rate for piece- work was made so high that the manufacturers would em- ploy only young and strong men, and the "old and slow" men had to go on the street. For the shirt, collar and cuff makers the minimum was fixed at 4^. an hour, 16^. per week of forty-eight hours. A snag was struck in the furniture trade. There are a number of Chinese manufacturers of furniture in Vic- toria, and the department has found it impossible either to enforce the minimum or to ascertain what wages these Chinese capitalists really pay their Chinese labour. The reports they make to the government claim that their 240 A COUNTRY WITHOUT STRIKES wages average $10.56 per week, against $9 paid by the white manufacturers. These Chinese meet the inspector with "the smile childlike and bland" immortalised by Bret Harte, and insist that they are obeying the law. "What can be done," the inspector asks, "with men who meet you with a bland smile and maintain without hesitation or doubt that the law is complied with when you are morally equally certain that the law is broken every day and hour in the factory? They are seldom rude. An unfailing politeness and courtesy marks all their utterances, but with the view of obtaining information an officer might just as well ques- tion the furniture they make." An inspector who spoke Chinese was obtained, but he was as helpless to penetrate the Oriental suavity of these undoubted law-breakers as the English inspectors. Here is a specimen "determination" made by one of these special boards. (Extract from "Government Gazette," April 2cl, 1897.) FACTORIES AND SHOPS ACTS Determination of Special Board Appointed to Determine the Lowest Price or Rate of Payment for Bread-Making or Baking. In accordance with the provisions of the Factories and Shops Acts the Special Board appointed to determine the lowest price or rate of payment for bread- making or baking has made the following determination, namely: 1. That the lowest price or rate of payment payable to any person for bread- making or baking shall be twelvepence per hour. 2. That the number of apprentices under the age of eighteen years who may be employed in a factory or work-room in the bread-making or baking trade shall be one apprentice to every three men or fraction of three men. 3. That no improvers under the age of eighteen years shall be employed in a factory or work-room in the bread-making or baking trade. 4. That the lowest price or rate of pay payable to such apprentices shall be not less than five shillings per week. 5. That the price or rate determined by the Board shall come into force on the 3d of April, 1897. Dated at Melbourne, the 15th day of March, 1897. HARTLEY WILLIAMS, Chairman. PERJURY IF YOU LIKE 241 The exports of furniture have declined under this mini- mum wage about one third, but this can be explained, the officials think, by other causes than the law. "We can do nothing with the Chinese, nor with some of the white men," the head of the department said to me; and I learned not only from the officials but from the workingmen that evasion of the minimum by mutual arrangement be- tween the men and the masters was not an uncommon thing. When the chief inspector asked an old man to sign a decla- ration that he was receiving the minimum wages as declared by the special board in his trade, the inspector says, "He looked me fair in the face and said, 'I will sign anything you like.' What he meant was, 'I must work, and to get and keep the work I will commit perjury if you like.' Can anything be sadder? After that day I determined that, so far as I could help it, I would never again put a man in such a position. There is some excuse for an old man. but when the same is done by young and strong men one begins to ask, how can Parliament protect the men against themselves ?" Representatives of the workingmen whom I met in the fine trades-union hall of Melbourne confirmed this statement of the chief inspector. "The men," one of these trades- union leaders said, "lie to the inspectors about their wages." The reasons why the men do this are sufficiently indicated by the story just quoted. The chief inspector, almost in the accents of discouragement, asking what can be done to remedy the straits in which Victorian industry finds itself under this law, exclaims, "The only answer appears to me to be to provide work at remunerative wages for men able to work and old-age pensions for the old-age workers. It is no doubt very easy to say provide remunerative work, but how to do so has puzzled the wise men of the past, and is probably the greatest of the difficulties which confront the statesmen of the present day." In other words, the only 242 A COUNTRY WITHOUT STRIKES remedy lies along the line which New Zealand has already travelled so far and with such success in its settlement of the unemployed in work and on the land and with its old- age pensions and other reforms. There have been a few "labour members" in the New Zea- land Parliament for many years, but there has not been a well-organised labour party as in Australia. The work- ingmen of New Zealand have seldom attempted to con- centrate their vote on men of their own class, but have voted for the representatives who seemed to them to promise best for the people at large. This policy has given them great influence. A Liberal who wants to run for Parliament must send his name in to the trades- union conference of his district. If they do not approve him it is of no use for him to stand. In the tidal wave of 1890, when the Liberal party was swept into the ruling position it has ever since maintained, and of which it is assured until 1903 by the election of last year, there were twenty members who owed their election to the labour vote, but there were only six mechanics among them. The labour members in New Zealand, unlike those of New South Wales, Queens- land and other colonies, have uniformly allied themselves with the Liberals. Any one who thinks, from an outside view, that the New Zealand government is a labour government would be dis- illusioned instantly by getting an inside view of the atti- tude toward the labour elements held by some of the prin- cipal members of the New Zealand Liberal Party. A distinguished Liberal leader told me he had found the labour programme more popular and better understood among the farmers than among the workingmen. He insists that the country people are the real mainstay of the Liberal policy. His colleagues predicted to him that he would go down be- fore his country constituency with the Liberal labour pro- A MINISTRY OF WORKINGMEN 243 gramme he had espoused; but he found, on the contrary, that it added to his strength. His explanation of this para- dox is that "the country voters are better statesmen than the city workingmen." A very eminent New Zealand politician rang the changes on the workingmen's weakness, ignorance and jealousy. "With my early associations among the men I know how, in a crowd of workingmen, the moment a com- rade begins to get up, to have some new ideas, to take the lead, his fellows begin to suspect, to ridicule and to pull down." One of the most undoubted friends of the labouring man, speaking with the reverse of enthusiasm of the labour leader, said, "The first year the labour leader is a pretty good sort of fellow; he has high aspirations, is unselfish and patriotic. The second year he appears in a bell-topper hat and a gold chain. The third year he is invited to dinner by the members of the upper house, and on the fourth year he is neither fish, flesh, fowl nor good red herring." Members of the Ministry make no secret of their dis- appointment over the fact that, with all their labour legis- lation, they are not strongest in the districts where the work- ingmen are strongest, and that labour leaders put into the upper house to give strength to the labour programme oppose the government instead of supporting it. These officials and leaders who criticise the workingmen know the class well, for some of them were workingmen. One of the Cabinet said, "All the members of the present Min- istry have begun at the bottom. I know myself what it is to stay out all night in the bush up to my neck in mud and slush. This is a ministry of workingmen who have resolved that the government should do something to bet- ter the condition of the common people from whom they sprang, and they have worked faithfully to that end." To understand the relations of the labourers and the Lib- erals the capital fact to be remembered is that New Zealand 244 A COUNTRY WITHOUT STRIKES alone, of all the Australasian colonies, is not city ruled. It is not, like New South Wales or Victoria,, a citified country, but it remains and its conformation guarantees that it will always remain country. There are no large cities and can be none. An observer from abroad notices at once that the leading men of New Zealand are not the sophisti- cated kind he finds elsewhere in public places. There is a certain rusticity like that of the English country gentle- man characteristic of the best New Zealander even in the cities, and in this unmetropolitanised quality is to be found one of the great secrets of the sincerity and success of New Zealand reform. The labour legislation of New Zealand began before the labour party came in, as far back as 1872, though in a very mild form, and the Conservatives in 1890, just before they lost control of the government, had introduced some new labour measures. The movement was at no time theoret- ical, but, like all the New Zealand reforms, was a response to the pressure of real evils. But though New Zealand did not act prophetically, nor in advance of the appearance of the evil why should it be counted a fault in a nation any more than in a person to be forewarned? it acted almost as soon as the evil gave its first intimation. Even Earl Onslow, conservative of conservatives, almost harsh critic of the New Zealand novelties, points out how the absence of vested interests permitted the country to carry out needed changes. Prescience, however, had some part in the passage of the labour laws, and it had more there than in the land laws. In land the situation of the people of New Zealand had be- come desperate. But its industrial development was so slight that the wrongs to be remedied were felt by only a few, though all could see them. In the first debate on the factory bills their passage was urged even more on the A SPECTRE WITH SPURS 245 plea of avoiding the ills which had undeniably overtaken England than to remedy visible ills in New Zealand. That some evils existed and that they had created some heat may be inferred from the remark made by one of the influ- ential supporters of the administration in debate, that if the needed measures were not passed the iron hand of force would be used to deprive property owners of their property. The really acute phase of the labour problem, and the one which stirred the nation, was in the unemployed diffi- culty. That, even before 1890, strangely enough for so young a country, was real, terrible, a public menace. It was due primarily to the monopoly of land, but it made itself felt in every industrial centre of the country. A royal commission they have royal commissions even in the colonies had reported in 1890 that there was no sweating in New Zealand. In the debate on the labour measures very few serious evils of a strictly industrial sort were dis- closed. The condition of the men and women and children in the shops was denounced as "perfect slavery." The shelter and food given the nomadic shearers, who go about from sheep ranch to sheep ranch during the season, were shown to be almost inhuman. There were complaints that the workmen were paid in goods at truck stores instead of in cash. The deductions of insurance money from the wages of workmen were a grievance. But no student of New Zealand affairs can doubt that these complaints all to- gether would never have sufficed to generate political energy enough to move the people a step had not the unemployed spectre ridden them with spurs deep and sharp. New Zea- land was moving at her ease toward the adoption of the English factory legislation before the popular uprising of 1890, but after that event the country moved with revolu- tionary rapidity, and, though it was monopoly of land and money and government that stimulated the uprising, the 246 A COUNTRY WITHOUT STRIKES remedial measures dealing with the labour question were quite as sweeping as any of the others. When one recalls that the labour measures included compulsory arbitration, compulsory half-holidays for shops and factories, a com- pulsory educational requirement for factory children, the extensive abolition of the contractor in public works, an instalment of the minimum wage, the institution of a thor- ough and successful scheme for putting the unemployed on public works and at the same time making them settlers on the land, it will be admitted that the labour question received an extraordinary amount of attention from those who could not be called an industrial people in the usual sense. In the years just before 1890 swarms of stalwart men, many of them skilled workmen, flooded the streets of the towns. Soup kitchens, relief works at degrading wages, two-and-sixpence a day, charity, all the agencies of demor- alisation were doing their bitter work. One of the first things done by the new party of liberalism in 1891, elected by the help largely of the votes of the workingmen, was to establish a Labour Department. This was an acknowl- edgment that the interests of the workingmen were as much a political matter as those of the farmers or miners. This democracy believed that the application of all the available energy of the community to the supply of all the needs of the community was a concern of the whole people if any- thing was. They saw that the government of the people was the only agency that had the power or the machinery or the motive to serve the whole people in the common interest, and the only one that had the means to use in any comprehensive way the information that could be gained by a labour department. The new democratic fervour which was born in New Zea- land of the oppression of the people by the land and money FOR LABOUR NOT LITERATURE 247 and other monopolies gave these principles immediate effect. Though the population was largely agricultural the new Department of Labour was made equal in rank to that of the Department of Agriculture, and the first minister was one of the most brilliant members of the party, the Hon- ourable William Pember Reeves. The permanent head of the department is Mr. Edward Tregear, of whom the Honourable R. W. Best, Minister of Lands for Victoria, says, in his recent report of a tour in New Zealand, "Mr. Tregear has made a life-long study of labour problems and to some extent, no doubt, was chosen because of his well- known sympathy with schemes for the amelioration of the condition of workingmen." One of Mr. Tregear's strong- est characteristics is this sympathy with workingmen, but stronger than this is the common sense which dictates to him that under no circumstances is the workingman in dis- tress to be "killed with kindness" by being pauperised. His motto is, "With work, everything; without work, nothing." That unflinching courage, which is possible only to the man whose culture is so broad that he instinctively despises everything but the truth, is characteristic of Mr. Tregear. His utterances in his reports concerning the evils of the present industrial system in general and the special evils of New Zealand in particular are of a frankness usually con- spicuous by its absence in official labour literature. Thus he says in his report for 1894: "Hold what theory we may, hide the facts in what casuistry we may, it remains that the wage-payer is the master of the wage-earner, the land holder is the master of the landless, and the owner of ma- chinery is the master of the machinist." It appears to be a popular idea with the officials of labour departments in some parts of the world that the purpose of such establishments is simply to provide a sort of university extension fellowship for academic students of sociological 248 A COUNTRY WITHOUT STRIKES questions for the production of "scientific" reports to be em- bodied in formidable public documents distributed through the libraries of the world and never read. But the New Zea- land Labour Department is for labour men, not for labour literature. This Labour Department is one which makes labour its care. Its first duty is to get work for workless citizens, and it puts far behind these in importance the pub- lication of statistics and more, or less, learned conclusions from them. If a family wants a cook or a farmer a harvest hand the nation in New Zealand does not think it too small a matter to stand at hundreds of places in towns and at cross-roads with pen and paper to catch the names of those who might meet the need, and for this it makes no charge. If a country girl wants housework or a place in a factory, or a workingman getting no call where he is standing in the market-place would try his luck in another town, they find that the nation has anticipated them and is waiting for them in the Registry offices with a list of every one in the country who has made known that he is looking for such help as theirs. This democracy, in selecting the men who are to have the chance to work, gives the preference to the married and the elderly men. It can take into account the greatest public interest not the interest of the employer, who looks only to get the most stalwart men for his money, but the interest of the whole community, in which the family is the greatest value-producer. Short-sighted profit-seek- ing secures a momentary advantage in the strength of the young and single men, by pauperising married men and destroying the future source of supply of young single men. It gets nuts for one year by cutting down the tree which might go on bearing nuts for generations. From first to last the department, under Mr. Tregear, has regarded as its first and chief duty "its vital duty," he calls it the practical task of finding where labour was WITHOUT WORK, NOTHING 249 wanted and depositing there the labour running elsewhere to waste. In the last year 2115 men obtained work or received temporary advances of passages, etc., to enable them to reach employment. Of these 937 were single and 1117 were married men, the latter having 4759 persons dependent upon them. The woman's branch of the depart- ment at Wellington has also found employment for 426 women and girls during the year. From June i, 1891, to March, 1899, the Labour Department has found work for 21,607 men > upon whom 52,246 persons were dependent. This is an average yearly of nearly one per cent, of the population. Of the effect of this upon the workers Mr. Tregear says, in his report for 1898, "The help of the government has been of immense advantage. It has often meant rescue, if not from starvation, from the reception of charitable aid, the acceptance of which is generally unspeakably bitter to hon- est working people. It has sometimes prevented a feeling of utter despair taking possession of a defeated labourer and has enabled him not only to get a few weeks or a few months work at a critical time, but in many cases has al- lowed him the means to leave an over-crowded town and proceed to a district where one job would succeed another until he has found a place in rural society that he can fill with advantage both to himself and to his neighbour." The means employed by Mr. Tregear are the maintenance of a widely extended system of agencies for bringing work- ers and work together, a strict decentralisation of the unem- ployed by scattering them through the colony, and a refusal to give anything. Aid is furnished only by sending the worker to private employment or, if to public works, only to such as were necessary and reproductive. This is in clear contrast with methods used in neighbouring colonies, as in New South Wales. There, as shown by official investiga- 250 A COUNTRY WITHOUT STRIKES tions both' by New South Wales itself and by government agents from New Zealand, the unemployed were invited to the cities by gratuitous food and shelter. They were put to work at things obviously useless and at make-believe wages, and thereby degraded. The unemployed in many cases were shipped into districts where disputes were pend- ing between employers and employes, with the result that this state agency, established and supported by the taxpayers to improve the condition of the working people, was used to depress the level of wages and living of all the people. In New Zealand, to carry on its work of shift- ing labour from the congested districts to those where la- bour was in demand, the Labour Department created two hundred agencies, covering the whole country. In the towns various officials, like factory inspectors, undertook the duty, and in the country districts the constables acted. In only a few large towns were special agents appointed. If the transfer of workers to work had been left wholly to the efforts of the Labour Department no great results could have been expected; but, as has already been shown, New Zealand, through other departments, has entered upon a wide and intelligent and successful system of making work for the unemployed. When the Labour Department has gathered its unemployed it finds both the Land Depart- ment waiting with its roads and the Public Works Depart- ment waiting with its court houses, post-offices, railroads, bridges, etc., ready to take the men off its hands if private employment cannot be found for them. Two features have characterised this policy from the be- ginning : the men were given nothing but a chance, and no work was made for the sake of making work. Nothing was undertaken that was not necessary and that would not be profitable to the community. There was no setting of men to shovel sand from one point only to shovel it back A GOLDEN STREAM RUNNING AWAY 251 again, as was done in the parks of Sydney, and from the beginning there was never the least touch of charity. The man had to pay ultimately for everything for the railroad ticket taking him and his family to their new home, for the food and shelter they had on the way, for the tools he found ready for him, for the tents, for everything. Another feature of Mr. Tregear's administration of the Labour Department has been that he has conceived it to be his function not to provide work for manual workers alone, but, in his own phrase, for "all classes of labour, mental as well as physical." It is true, notwithstanding all that has been done by the Labour Bureau, the Land Department, the Department of Public Works and the railroads in finding work for the workless, that there are still unemployed in New Zealand, and still the distress that comes from forced idleness. Even in good times like these we find such items in the New Zea- land papers as this, in June last: "Since the beginning of the cold weather nearly two hundred persons have been supplied with coal and blankets in Christchurch, and a large number of others are on the books" ; and in May, "We learn that fifty unemployed waited on the mayor to ascertain whether the city council intended to put any works in hand to absorb the surplus labour." Evidently the New Zealand methods do not fully meet the great modern problem of how to save the golden stream of human energy that is running away between our fingers every day, as the seconds tick off the unused days of millions of men made idle a prob- lem not of poverty but of wealth, of wealth which has set labour free by new machinery, new methods, new combina- tions, and has not yet found the new "place where" for la- bour's disengaged lever, a problem of wealth producing poverty that waits to be made wealth again. All that New Zealand can claim and does claim is that it has done more 252 A COUNTRY WITHOUT STRIKES than others, and that its efforts are in the right direction. But manifestly they are only a beginning. There is no eight-hours day for men in New Zealand by law, but the hours of women and children are restricted, and this operates as a hardship in many cases. The Chinese in their laundries are subject to no limitation as to hours, being men, while the white laundry women who work in competition with them are compelled to stop at certain hours. This makes heavier the burden of the women, al- ready too poorly paid and too hard worked. It is being urged that this discrimination between men and women be ended. When women had no political rights and powers it was natural enough that they should be given especial pro- tection by law, but now that they have the ballot they stand on equal terms with men before the law-makers, and their special immunities should cease. In the factories again, as well as in the laundries, the requirement that the women stop work at a given moment, while the men can continue, puts the women at a disadvantage. It is characteristic of the New Zealander that the plan most favoured for equal- ising the men and women is not to take away from the women the protection of a legal prohibition of too long hours, but to give it to men, who, for the sake of health and the public good, require a fair share of leisure quite as much as the women. There is a venerable and fruitless agitation in England for a weekly half-holiday. Men like Lubbock and the Duke of Argyle have prevented the application of the only method by which such a measure can be made effective. The fetish of self-help has blocked every attempt to make this move- ment successful. It could be made successful only by being made universal all shops, all factories must observe it, or none would. This universality can be had only by polit- ical action, and this means a law, and law means compul- NEITHER HEAD NOR HEART 253 sion. This boon for the clerks of the retail stores was one of the first labour measures proposed and carried in New Zealand, and it was made effective there by compulsion. "Compulsion," an eminent New Zealander said in defend- ing this policy, "means only that the duty is binding on all, and that the interests of all require it. If, under, such cir- cumstances, it is wrong to compel, our whole civilisation is wrong, for its fundamental method is that when the inter- ests of all have been clearly defined the minority must sub- mit. There is always an intractable or criminal minority in every company. To withhold compulsion in matters affect- ing the interests of all is to submit the interests of all to the rule of a few. The ideal is that all shall unite and do the right; the actual is that there are always degenerates, criminals, cranks, or belated ones who cannot yet do the right. We have to choose between compulsion of the many by the few or the reverse. Compulsion is a choice of evils, but it is here the right choice." Just as the people of New Zealand made binding upon all the duty of arbitration and thus secured industrial peace, they have made binding upon all engaged in retail trade the half-holiday. They do not require merely that the em- ployes must be given the holiday, the employers must take it, too. The shop must be closed. The law has neglected to safeguard this concession to the shop clerks by stipulating that they shall not be worked longer hours on the other days to make up for the time they get by the holiday, and the re- sult is that in many cases, though the people have the half- holiday, they work as long as before and sometimes longer. It is proposed to remedy this by limiting the hours during which shops can be kept open, and this, like the half-holiday, will be got compulsorily. "It seems idle," Secretary Tre- gear says, "to ask the public to refrain from purchasing after a certain hour. In such matters the public has neither 254 A COUNTRY WITHOUT STRIKES head nor heart. It is when that right is established by statute that it obtains recognition from people too much ab- sorbed in their own business to recognise that they are causing injury to others." Merchants and banks must close their offices at five o'clock in the afternoon during two thirds of each month. The extension of this protective legislation to the "upper class" of the labour world is a New Zealand novelty, and there is a strong demand that the benefits of the compulsory arbitration act be also given the same classes. When the half-holiday was first established the opposition was very angry. The measure' was denounced by the merchants as an outrageous "interference with the liberty of the subject," but now the employers like the holiday as much as the clerks, and any proposal to return to the old order would be re- sisted by the one as much as by the other. Shops in New Zealand are under inspection like factories. Women and children are not allowed to work more than fifty-two hours a week in shops, and not more than forty- eight in factories. There must be seats for the girls, and their right to use them is zealously protected. The Mar- quis of Salisbury, Premier of England, took pains to rise in his seat in the House of Lords and speak to prevent such a boon being given to the girls in the English shops. The Pre- mier of New Zealand helped this reform through his Parlia- ment. There is a half-holiday for factories as well as shops. Factories must be closed after i P.M. on Saturday without deduction of pay for time-workers. Mothers are not al- lowed to work for a month after the birth of a child. Over- time is prohibited, except on permission of the inspectors, and with that it is allowed for only twenty-eight days in the year. No child under sixteen is allowed to work unless found physically fit by an inspector, and no child under fourteen is allowed in a factory at all. There are no half- LAWS THAT ARE NOT NULLITIES 255 timers. The regulation of the amount of air, space and sanitary conditions is under the absolute power of the in- spectors, who can insist upon their being made such as they consider necessary for the life and health of the working people. All the factories are under these regulations, and the word "factory" is so closely defined that no one can escape. A factory in New Zealand is any place where two or more people are occupied in industry. A man and one helper are a factory, although the helper be a member of his own family. Even hawkers are regulated by being de- fined by law as "a shop." These laws are not nullities. In Auckland one employer was fined sixty-six shillings, $16.50, on five charges of employing an assistant after one o'clock on Saturday. An- other employer was fined $8.50 for failing to provide proper seats for his girls, and another, for causing an assistant under eighteen years of age to work more than nine and one half hours in one day, had to pay $9. A baker who had worked his girls all night was fined one pound, $5, for each case, and warned that he had made himself liable to a fine of $50 on each charge. The judge seemed to show a dyspeptic desire to increase the fine when the poor man pleaded that he had been engaged in baking hot-cross buns for Good Friday, and his further plea that some of the girls were members of his owm family did not save him. A restaurant keeper, having kept two of his girls at work for more than eleven and one half hours, was fined $36.50, although one of the girls had had three afternoons off the same week. Another baker, for neglecting to allow one of his girls a full hour for dinner, was fined two pounds there- for, and had to pay $7.50 costs in addition. This strictness of the enforcement of the factory laws is proof enough of the honesty of the officials, but there is the same kind of human nature in New Zealand as seeks 256 A COUNTRY WITHOUT STRIKES elsewhere for its own selfish ends to make breaches in such safeguards of the welfare of others. A man prominent in the Labour Department told me that at the beginning of his career as inspector he had the greatest difficulty in mak- ing the manufacturers believe that they could not blind the administration of the law by putting guinea scales on the eyes of the inspectors. He was constantly "approached" in this way. If he visited a factory one day a bale of its shawls or whatever its stuffs were would come to his house the next morning. The principle of the minimum wage is accepted in New Zealand as well as in Victoria. In New Zealand minimum wages are being constantly determined by the decisions of the arbitration court, but there is also a minimum wage established by law. The factory act stipulates that the pay for overtime must not be less than sixpence an hour extra. Another minimum wage enactment was made by the last ses- sion of the New Zealand Parliament. One of the industrial evils there has been the employment of a large number of young men and women without pay under the pretence that they were sufficiently remunerated by being taught a trade. To put an end to this abuse the "Employment of Boys and Girls without Payment Prevention Act" was passed. This enacts that in all cases of the employment of young people under eighteen years of age there must be paid not less than four shillings, one dollar, a week for girls and five shillings for boys, irrespective of overtime. This legisla- tion was not, so far as I could learn, especially promoted by the working people, as, indeed, very little of the labour legislation has been. I must confess I was much interested to be told by one of the men most active in securing its passage that it was hoped that one effect of it would be that the girls, who would certainly be thrown out of factory life by the requirement that they be paid, would betake CONSERVATIVE PROPHECIES 257 themselves to domestic service, to the relief of the New Zea- land housekeeper, who has the same domestic help problem that her sister the world over has, and to the moral and physical elevation of the girls themselves. New Zealand supplements its system of free and universal primary education by refusing to allow uneducated children to be employed in its factories. Any child under fifteen years of age must be able to show a certificate of the fourth grade before it can be taken into employment in a factory. Workingmen in New Zealand have been bitterly complain- ing for years of the exactions to which they were subjected under the pretence of accident insurance. Constant deduc- tions were made from their wages by employers for such insurance. The employer might pay the money to the in- surance company or he might put it into his own pocket. The workingman would suffer this deduction one week, and the very next week, losing his place, would find him- self uninsured, and if he took another place be subjected to another deduction. It was claimed that the consent of the workingmen was obtained, but, as Secretary Tregear said in answer, "Under the pressure of modern competition in industrial life 'consent' is a word of pregnant signifi- cance." In the last session of Parliament this extortion was stopped by adding accident insurance to the business of the Life Insurance Department and by the "Wages Pro- tection Act," forbidding all employers from making any deductions whatever from the wages of their employes for accident insurance and forbidding the insurance companies to receive from any workingman money for insurance of which the employer was to get the benefit. When the factory acts and other labour measures were first introduced they were received by the Conservatives with the greatest indignation and alarm. Eminent mem- bers of that party predicted in Parliament that they would 258 A COUNTRY WITHOUT STRIKES prove "a delusion, a shame and a snare," and that they would create revolutionary dissatisfaction among the people whose liberty they so much curtailed. Of all the blue ruin thus predicted in 1891 the only realisation has been the ruin which finally, in the election of 1899, overtook the authors of these prophecies, the Conservative Party, which then, a shattered and hopeless wreck, disappeared forever beneath the waters of New Zealand politics. Nothing can be more striking than the contrast theoretical and practical between the Victorian minimum wage system and the New Zealand compulsory arbitration law. The latter is a thorough-going scheme, built up solidly on a statesman-like basis, to deal not only with a few cases but with the whole problem of the civil war between capital and labour. Though the cure of the sweating system was not one of its avowed purposes, the New Zealand compulsory arbitration law alleviates it with a far greater thoroughness than the "special boards" of Victoria. New Zealand, the only country which has a compulsory arbitration law, is the only country in which for five years, with one or two in- significant exceptions, there has been no strike or lockout in the world of organised labour. The New Zealand ex- periment answers every test which can be applied to prove the claim of a new institution to be a permanent and verit- able addition to the world's social inventions. Practically it does what it undertook to do it ushers in industrial peace. Philosophically it is an extension to a new field that of industrial anarchy of an old institution that of the law by which social peace has been created in the other territories of disorder. Every day since its introduction the law has struck its roots deeper into the life of the New Zea- land people, and it further approves itself by producing not only what was expected of it but many new and almost equally important fruits, such as checking cut-throat com- The Hon. William Pember Reeves, Author of the Compulsory Arbitration Law. (Page 259.) A POLITICAL GENIUS 259 petition between business men and putting an end to trade dishonesty. Another feature of the New Zealand law which commends itself to the philosophical student of institutions is that its appearance came in the direct line of evolutionary development. Other communities, notably Massachusetts, had carried arbitration up to the Rubicon of compulsion. New Zealand took the next step. The law is entirely without precedent nowhere in the world except in New Zealand is there any compulsory ar- bitration and it has been so successful that it may fairly be questioned whether it has not established a precedent that no other modern people largely committed to industrial life can afford to disregard. The compulsory arbitration law did not spring out of theory, and has not ended in the- ory. It was the remedy sought as a way of escape from practical embarrassments of the most serious sort. The strike of 1890 brought New Zealand as well as Australia within a day's journey of anarchy. This was followed by apprehensions of a big railroad strike. To save New Zea- land from being ravaged by these industrial conflicts, more terrible in their sum-total of losses than a foreign war, the then Minister of Labour, the Honourable William Pember Reeves, who lately came to America as the official repre- sentative of his government at the Commercial Congress in Philadelphia, began to study what had been accomplished by other nations in arbitration. Mr. Reeves was a young man; his career had been that of a lawyer, journalist, poet, politician. His compulsory arbitration law is the first piece of legislative work which came from him to attract attention outside New Zealand, but I am distinctly of the opinion that that will, in the judg- ment of coming years, entitle him to a place in the first rank of political inventors. Mr. Reeves studied all that had been done by other coun- 260 A COUNTRY WITHOUT STRIKES tries, and was forced to the conclusion that "voluntary arbi- tration is a sham." He traced the development of arbi- tration in all the leading countries up to the Massachusetts Board of Conciliation and Arbitration. This he found the best of all and lacking only one thing to make it completely successful compulsion. New Zealand began where Mass- achusetts left off, and has succeeded where Massachusetts failed. Mr. Reeves saw that to be effective arbitration, like taxation, must be compulsory, not that the minority might rule the majority, but that it might not. Time and time again in New Zealand the majority of masters and men in a trade had agreed to terms of settlement or methods of arbitration, sometimes after years of negotiation, only to have the whole structure of their civilised effort over- thrown by an irreconcilable minority of commercial cut- throats determined not to abate one jot or tittle of their privilege of murderous competition. The theory of the compulsory arbitration law is that the majority must rule. There are three parties vitally inter- ested in every industrial dispute: labour, capital and the state. Whichever side the state finds right is therefore in a majority. The New Zealanders are not at all sensitive about the use of compulsion. They are the most democratic people in the world, and they believe in whatever compulsion is neces- sary to prevent the minority from ruling. They see that compulsion is only another name for law. Taxation is com- pulsory, sanitation is compulsory, education is compulsory, and good order is compulsory. The compulsion which any citizen can avoid by behaving himself and doing the right is not a compulsion which need worry respectable people. The New Zealanders do not think the compulsion of the Court of Arbitration as odious as the compulsion of riotous labourers on one side or of Catling guns and Idaho bull THEY PREFER COMPULSION 261 pens on the other. The existence of the power of compul- sion makes compulsion often unnecessary. Some of the pleasantest incidents of the operation of the new system have been those in which employers and employes in trouble with each other have appeared before the judge of the arbitration court for his intervention privately and by means of it have reached a harmonious settlement without even the slight loss of time and money in a proceeding before his court. As to violations of the law there have been some, but the court has found no difficulty in imposing penalties on the guilty men, and they have found no difficulty in sub- mitting to them. How shrewd and correct was Mr. Reeves' conclusion that compulsion was the missing link in arbitration is shown by the fact, seen over and over again in the proceedings in New Zealand, that the disputants themselves prefer com- pulsion to conciliation. A majority of the cases, instead of resting in the decisions of the conciliation boards, go on up to the arbitration courts, though these in almost all cases sustain the boards. Both sides want compulsion, because they know that is final. Considering that there was no law to guide Mr. Reeves and no experience to serve as precedent, the fact that he was able in so untrodden a field to contrive a measure which should go into successful operation must be considered a legislative feat of the highest order. His bill for compul- sory arbitration was debated through three sessions of Par- liament, twice thrown out by the upper house, and finally, so cogent had been Mr. Reeves' treatment of the matter, was passed almost without opposition. It was enacted in 1894, to go into effect in 1895. The first case arose in 1896. The principal points of the law are, first, procedure for voluntary arbitration, with no publicity and no investiga- tion if the parties can thus settle their difficulties among 262 A COUNTRY WITHOUT STRIKES themselves ; but if they cannot, the law shows its other face. If their differences are irreconcilable by themselves the parties must arbitrate if either of them so elects; fight they shall not, if either wants arbitration. The compulsion of the law is threefold : compulsory publicity, compulsory ref- erence to a disinterested party, and compulsory obedience to the law's awards. The state has no powers to intervene in any dispute, even for inquiry, of its own motion. Those concerned sue and are sued as in other courts. The law was originally entitled "An Act to Encourage the Formation of Industrial Unions and Associations and to Facilitate the Settlement of Industrial Disputes by Con- ciliation and Arbitration," and the plan of arbitration as conceived by Mr. Reeves, and so successfully operated in New Zealand, contemplates the organisation voluntarily, of course of both employers and employes, separately, into associations and unions as the foundation of the whole structure. It is believed to be better for each side and for the public that the parties to an industrial dispute should be committees rather than mobs. To induce capital and labour thus to organise, special privileges are granted them, the greatest of these being the right to call the other to arbitra- tion. Only workingmen who organise and register under the arbitration law are subject to it. Compulsory arbitra- tion is therefore after all voluntary arbitration, so far as the workingmen at least are concerned, for the act cannot be invoked by or against any workingmen who are not organised into a trades-union. Employers may be sued singly, otherwise the act could be defeated by the refusal of employers to form themselves into associations. There is a Board of Conciliation in each of six districts into which New Zealand has been divided, and before these boards in- dustrial disputes are first tried. If a settlement is not achieved before the Conciliation Board the case goes on THE INDUSTRY GOES ON 263 up to the Court of Arbitration, which sits for the whole colony. On both the Board of Conciliation and the Court of Arbitration employers and employes are represented equally by men of their own choice. The presiding officer of the Court of Arbitration is a judge of the Supreme Court of the colony. This procedure guarantees that throughout the entire investigation both sides shall be represented by men of their own class, familiar with all the circumstances of their calling. Experts can be called in to represent both sides and to act as members of the boards or the court. Lawyers are not allowed to appear for either disputant ex- cept by the consent of both sides. The chairmen of the boards must be "impartial persons" who are "willing to act." By making a judge of the Supreme Court President of the Court of Arbitration the colony gives a guarantee to the disputants that the casting vote and the conduct of the investigation shall be in the hands of the best that the colony can give of experience, ability, dignity and disin- terestedness. Every precaution is taken that the proceed- ings shall be cheap, expeditious and untechnical. The trib- unals are expressly charged to make their decisions in accordance with the common sense and equity of the case, and not to frame their awards in a technical manner. Mean- while the industry goes on. Neither employer nor employe is allowed to stop work to escape the conciliation or arbitra- tion proceedings, nor to do so in order to evade an award. The law even reaches back of the time at which its inter- vention is invoked. At any time within six weeks after workingmen have struck or employers have locked out, the aggrieved party on one side or the other can go to the Ar- bitration Court, begin proceedings, and obtain an award. In this way even if a strike or lock-out has begun the court is able to stop it. The employer cannot get out of a dis- 264 A COUNTRY WITHOUT STRIKES pute with his men by discharging them and putting on new men. The- men laid off can go before the Arbitration Court at any time within six weeks and get redress. In South Australia employers can be brought in only if they have registered, but in New Zealand the employer can- not, as in South Australia, keep himself out of the reach of arbitration by thus omitting to register. The workmen can call him before the court on their own motion. The law has now been in active use since May, 1896. In that time there have been about fifty cases before it. It was believed by the author of the law that the Court of Arbitration would seldom be resorted to, and that the boards of conciliation would settle most of the disputes, but it has worked out quite otherwise. Two thirds of the cases have gone from the boards of conciliation up to the Court of Arbitration, but most of the decisions of the con- ciliation boards have been sustained by the court. The Arbitration Court has shown moderation and good sense in using its delicate powers, and the judges have done as little "legislating" as possible, either as regards the logic or the arithmetic of business. But in their decisions there can clearly be seen emerging some new principles of eco- nomic relation. The court, for instance, insists, wherever possible, that trades-unionists be given employment before non-unionists are put to work. This for the reason of pub- lic policy that all interests are promoted by the organisa- tion of labour, and because the trades-unions by their efforts and sacrifices improve conditions and rates of wages, and are fairly entitled to the first consideration. The court has also directed that when work grows slack it shall not be given to a few, but shall be divided among all the men, thus keeping all employed. It has also ordered that a pref- erence should be given to residents, and that they should be given work before outsiders are employed. PREFERENCE BOTH WAYS 265 The ordinary employers of New Zealand, like employers everywhere, are bitterly opposed to trades-unions. These help the workers to get better prices for the labour which the employers prosper by buying cheap, and this preference shown to trades-unionists has been a sore point with them ever since the principle was adopted by the Court of Arbi- tration. In 1900 the Employers' Association of Canterbury obtained an injunction from the Supreme Court forbidding the Arbitration Court to give trades-unionists preference of employment. This was at once met by the Canterbury Trades Council by a counter application to the court for an order to set aside the injunction. This application was suc- cessful, and the Arbitration Court is now fully and finally established in its right to give this preference whenever it seems called for by the circumstances of the case. Another reason for giving preference to trades-union- ists is that it was a proper compensation to them for the deprivation by the arbitration law of their power to strike. Under the old system they could enforce their demands by striking, and since the public, on account of the great dam- age to public interests, forbade these trades-unions to use this weapon they are given in lieu of it the first chance of employment. "Preference" must work both ways. The Arbitration Court, in giving organised labour preference of employment, calls on them in return to give a preference in the supply of labour to employers who are organised under the law. An- other requirement made of the trades-unions, in consideration of the preference of employment, is that they must not be monopolies, but must admit all competent men to the union. The court has also taken pains to prescribe, even in cases where it gave preference of employment to the members of unions, that non-unionists who were at work should not be discharged. It has also, where members of unions have 266 A COUNTRY WITHOUT STRIKES been discharged obviously to intimidate or destroy the union, ordered that they should be reinstated and has awarded heavy damages to their union. The court in its awards fixes an average or "minimum wage" as the rate necessary to be paid the ordinary worker, but it provides very carefully for the men who are not able to earn as much as this. They can still be employed at lower wages than the average, but, for the protection of the union rate, it is stipulated that if any dispute arises the rate of wages given such men must be submitted to the local Conciliation Board for approval. Both the boards of conciliation and the Court of Arbi- tration have summary powers of visiting any premises and questioning any persons concerned in an industrial dispute. They can compel the attendance of witnesses, the produc- tion of any books and papers needed, and can imprison any one refusing to obey their summons. Every precaution is taken by the act to prevent injurious publicity of the secrets of business. The hearings are public, so that public opinion may be properly informed, but the court can at any time, at its own discretion or at the request of any of the parties, go into secret session. In other countries than New Zealand we say public opin- ion is the supreme court in determining the issues between labour and capital, but, except in New Zealand, we give pub- lic opinion neither any means of informing itself as to the facts nor of effectuating its opinion if it forms one. New Zealand gives the court power to ascertain all the facts by compulsion, if need be, and then places in its hands power to enforce the conclusions of this public opinion. In Amer- ica the public are helpless to learn the facts of a dispute; in New Zealand they are sure of learning them all and correctly. There is a new "Song of the Shirt" in New Zealand under NEW SONG OF THE SHIRT 267 the compulsory arbitration law. The employers of the sew- ing women in Auckland gave notice shortly after the new law came into effect of a reduction in wages. Under the old regime of the woman who sits in unwomanly rags, with fingers weary and worn, these sewing women would have had no recourse but to retreat from their crust and tea and garret to a weaker cup of tea and a scantier crust and a dingier garret. But under the compulsory arbitration law the old "Song of the Shirt" is a "lost chord" in New Zea- land. In this case the women's organisation called the manufacturers into court. They had to show their books and to make good every statement as to their profits and the wages their women were earning. While this debate was proceeding in the rooms of the Arbitration Court the sewing women sat secure in their factories, lighted and ven- tilated and safeguarded by the sanitary and other care of the state, and their work went on. The sewing woman did not have to strike, she could not be locked out, her work could not be taken from her, her wages could not be cut down except by the approval of the court. This is the new Song of the Shirt. One of the by-products of the arbitration law is the pre- vention of frauds on the public. When in the course of investigation of any labour troubles revelations are made of frauds practised in the trade, the judges in their awards can make rulings which will put an end to them. In a dispute in the tailor trade it was shown that it was the prac- tice of some firms to deliver to customers factory-made goods on orders for custom-made clothing. In its decision the court stopped this by requiring that all custom-made work should be done in the shop of the employer. The workingmen know and resent the deceits they are com- pelled to perpetrate. These are often, as in this case, an injury to them as well as to the consumer, for they are 268 A COUNTRY WITHOUT STRIKES forced to do inferior work at inferior prices, or to see work that they should do go to others, as in this case. The open court room of compulsory arbitration gives them the chance to let out the trade secret and protect both the public and themselves. The workingman or employer who does not want to obey the award of the court need not do so. There is no com- pulsion to work or to keep the factory open, but the em- ployer who closes his factory can reopen it, the workingman who leaves his work can begin work again, only in exact compliance with the terms of the award. The award may have been made for two years. Labourers and capitalists under the regime of private war amuse themselves by try- ing to starve each other out, careless meanwhile that they are starving also the public interests concerned in the in- dustry. But these tactics are futile in New Zealand; the state cannot be starved out. Any workman may stop work and any employer may shut down during an arbitration or after an award for any good reason other than to escape or defeat the jurisdiction of the court, but it will be of no use for him to stop work or shut down with any hope of evading it. The working- man can come back to work, the employer can reopen his factory during the life of an award and this may be for two years only by obeying all the points of the decision of the court. The principal 1 opposition to the law came from employers, but they are now seeing that it can be of as much service to them as to the workingmen. One of the most interesting uses I found made of the law was to protect a majority of the employers in a trade from the guerilla competition of a minority. I learned of cases where manufacturers were actively promoting the organisation of their employes into trades-unions, for an THESE EMPLOYERS LIKE IT 269 appeal to the Court of Arbitration. They were doing this in order that unscrupulous competitors might be restrained from cutting wages in order to enable themselves to cut prices. One of the largest employers of the colony described to me the situation of things under the act as one of "perfect comfort." "Under the old system," he said, "our differ- ences with our men had to be settled by a brutal fight. Now two committees meet before the court, and meanwhile the industry goes on just as if nothing were the matter." Another large employer declared that for the first time in the history of the colony manufacturers now are able to make future contracts with confidence, since the awards fixed all the conditions of labour perhaps for years ahead. In the report recently submitted to the Victorian govern- ment by the Honourable R. W. Best, its Minister of Lands, after a tour of investigation made by him in New Zealand to study its land and labour laws, he quotes the following to show how some of the principal employers regard the act : "Speaking at a special meeting of the Dunedin Chamber of Commerce, on October 19, 1897, to consider certain bills then before Parliament, Mr. James Mills, Managing Director of the Union Steamship Company, and one of the largest employers of labour in New Zealand, is reported by the Otago 'Daily Times' to have said that 'personally he thought the Conciliation and Arbitration Act was a very beneficial one and one of the most important that had been passed, and he felt that they were under a debt of gratitude to the present government and to Mr. Reeves for maturing the bill in its present shape. Probably the measure was capable of improvement, and it would be improved from time to time, but he was sure that compulsory arbitration was the true solution of all labour difficulties.' ' In an address by the Right Honourable Richard J.Seddon, 2/0 A COUNTRY WITHOUT STRIKES the Premier of New Zealand, at a representative gathering of London capitalists interested in the mining industry, one of the strongest points which the Premier made to encour- age the investment of English capital in New Zealand mines was the stability given to business enterprise by the arbi- tration law. "With us," he said, "a strike of the miners is impossible, as it is also impossible for the owner of the mine to shut down. That is a condition of things which does not pre- vail anywhere else. There is a safeguard for you. The result has been this, that even the employers, who were the first to object to that legislation, are to-day the strongest in favour of it, because where they have strikes of any kind where there is a large amount of capital invested the effect of that capital being laid up for weeks, and exactions being demanded which that capital could not bear, would be as distastrous as it would be to our mining. The law, as it stands now, has prevented disputes which, if there had been an industrial struggle, must have meant a loss of about a million of money to us as a small community, whereas the whole cost of the proceedings would not amount to 1000." The employers, most of them, like compulsory arbitra- i tion. It enables them to make their business arrangements for months or years ahead with certainty, and without the necessity of putting "strike clauses" in their contracts. It relieves business of one of its most harassing annoyances the perpetual friction with labour. A little easy manoeu- vring with the men brings cut-thoat competitors before the court and puts them under the compulsion of law to pay the same wages and give the same treatment to their men as decent employers do. The workingmen like compulsory arbitration. It ensures them at all times and under all circumstances a full and WORKINGMEN LIKE IT 271 fair hearing for their demands. When they are resisting a reduction or demanding an increase of wages it enables them to learn the facts of the situation and all of them. It fixes the product of their labour not by a false "law of the market" as interpreted by the greed or the whip hand of a master, but by the true "law of the market" never be- fore ascertainable. For the first time in civilisation the organisation of labour is not merely tolerated, but given a premium. The law fixes a living wage or a minimum wage, and yet allows the superior man all the advantage his strength and skill deserve. Again for the first time in history the toiler has found a place where he meets his employer on equal terms, with no temptation to cringe or to bully. This law puts in the hands of the workman an irre- sistible means of stamping out the moment it appears in any industrial centre the first tendency to sweat the working people. An employer in any part of the country detected in an attempt to cut wages or worsen conditions can be called be- fore the court and straightened out, and what might have developed into a widespread spoliation, running from one competitor to another, justified by this merchant because it had been adopted by that competitor, is arrested at the very start. The satisfaction of the workingmen is universal, and this feeling is shared by the labourers of other colonies. At the Trades-Unions Conference in Sydney, New South Wales, in 1899, it was resolved that the New Zealand method of compulsory arbitration was the most satisfactory one for the settlement of labour disputes, but no such law has yet been enacted by the New South Wales Parliament. It must not be supposed that strikes are impossible under the new law. Unorganised workingmen may still strike. There can be no arbitration if all the masters and all the 2J2 A men in a dispute agree not to appeal to the law. Organ- ised labour may strike if not registered under the law. If registered it may withdraw by giving three months' no- tice. There have been one or two unimportant strikes, but the broad fact is that organised labour does register, does not withdraw, and that neither it nor the unorganised men strike. When, last year, an important amendment to the law was proposed it went through the New Zealand Parliament with- out a word of opposition, although it was one of the storm- iest and angriest sessions which had been held for many years. If any real damage had been done to the interests of the colony by the law, or if there was any popular feel- ing that it was tyrannical, then was certainly the oppor- tunity to show it. The principal opposition paper of the colony, the Otago "Daily Times," declares that it is im- possible to assert that the effect of the law has been in- jurious. But in the administration of this institution it is being proved again, as everywhere, that eternal vigilance is the price of the survival of any good thing. Lawyers are creeping more and more into the cases, with no gain in expedition or justice, and the late judge of the court, Judge Edwards, now succeeded by Mr. John C. Martin, for- merly Public Trustee, made several decisions which greatly limited the field within which strikes and lock-outs can be prevented by law. He refused to allow grocers' clerks the right to appear in the Arbitration Court, ruling that theirs was not an "industrial" pursuit and consequently not en- titled to the benefits of arbitration. And the same judge excluded street-car men and livery-stable employes because not engaged in "industrial" pursuits. These decisions have called forth a great deal of criticism and protest in New Zealand. The position of the court appears to be that no FALSE PROPHECIES OF EVIL 273 occupations are industrial except manufacturing. It is pointed out that this is a use of the word which is not sup- ported by any philological or economic authority, nor by any other judicial authority. The principle of this decision would shut out seamen from the arbitration of the court, and yet it was to save New Zealand from a repetition of the maritime strike of 1890 that the law was primarily passed. Public opinion in New Zealand seems to favour the more sensible view that where strikes and lock-outs are there is the field of the law of arbitration, and that industrial mat- ters are any that involve the relation of capital and labour, of employer and employe. "The reason of the law is the law," Blackstone says. The evil which the law sought to remedy was not eco- nomic civil war in a few places, but in all places. A strong movement is now being made in the Parliament of 1900 to add to the law a clause which shall put it beyond the power of any such interpretation to defeat its obvious purpose. If this succeeds we may expect to see the mercantile as well as the manufacturing world brought within the sphere of industrial peace. Premier Seddon, in receiving a delega- tion bearing a protest from the grocers' clerks against their exclusion from the Arbitration Court, declared himself in favour of an amendment of the law which would bring all workers within its provisions, and this will undoubtedly be achieved in the legislation of this year, in which the hand of Mr. Seddon and his party will be supreme. As to the effects of the law on public welfare the facts are eloquent. It was predicted that the experiment of arbi- tration would introduce an era of industrial disturbance which would be fatal to the prosperity of the country. The following figures of the number of hands employed in the factories of New Zealand tell how this prophecy of evil has been falsified. 274 A COUNTRY WITHOUT STRIKES Year Hands employed Increase 1895 29,879 4028 1896 3 2 387 2508 1897 36,9*8 453 1 1898 39>672 2754 1899 45,305 5633 In Victoria we have seen that the exports fell off in some of the industries affected by the minimum wage law, which is a kind of arbitration law, but no such result has followed in New Zealand. In his introduction to my recent book, "A Country Without Strikes," the Honourable William Pember Reeves says : "The only serious argument beyond the theoretical ob- jection to state interference in any form which has been brought against the law by English writers has been a state- ment that it has hampered enterprise and checked the growth of manufactures in the colony. New Zealanders know this to be quite baseless, for they know that the manufactures of their colony have fully participated in the prosperity of the last quinquennium. For some years past labour in almost every trade has been fully employed, the numbers of the workless have fallen progressively, new factories have been opened, new buildings erected, and the shopkeepers who deal with the working classes admit that business is better and bad debts fewer than at any time in the last twenty years in the colony. The annual reports of the chambers of commerce and the periodical reviews of trade and business published by the New Zealand newspapers on both sides in politics tell the same tale." The Compulsory Arbitration Court of New Zealand has an aspect of even greater importance than the industrial peace which is assuredly a very great aspect. In this arbi- tration court New Zealand has achieved what the people of INTERNATIONAL ARBITRATION 275 the world have been sighing for for centuries cheap, uni- form and speedy justice. It points the way to the realisa- tion of the dreams of quick and true justice for all, which is the greatest need and the dearest hope of the people of the world. And the Compulsory Arbitration Court of New Zealand is a light on a hill to those who are seeking a means of establishing international arbitration. The nations will get arbitration only as the people of New Zealand got it by compulsion. When the nations make up their minds that the duty of arbitration shall be mated with the right of arbitration, and that as no nation ought to fight no nation shall fight, and that as every nation ought to arbitrate all nations shall have the right to demand arbitration, and when they, as the people of New Zealand did, create a tribunal with the power to enforce these rights and duties and to punish any people that violate the new international law, then, and not till then, shall we have the possibility of inter- national arbitration. Law and order must have its police- men between nations as well as within the nations. The only country in the world where there have been no strikes or lock-outs for five years is the only country in the world that has a compulsory arbitration law. That coun- try is New Zealand, and New Zealand is to-day not only more prosperous than it ever has been before, but, so far as my observation goes, is the most prosperous country in the world. Not even a New Zealand advocate of compul- sory arbitration would claim that its prosperity was due to compulsory arbitration, but the prosperity certainly has fal- sified all the predictions that disaster would follow. CHAPTER XI QUARANTINING THE PANIC OF 1893 THE panic of 1893 struck Australia on time and struck it hard. In six weeks half the great financial concerns of the Australian continent went to the wall. This meant much more there than it would mean for us, for the Australasians are the most highly financed people in the world. What the statistician calls "the banking power of the people" is greater there than anywhere else. We of the United States then had sixteen times the population of Australia, but only five and one half times its banking capital. The banking power of Great Britain, the financial centre of the nations, is $120 for each man, woman and child, but for young and distant Australia it is $185 each. At the beginning of April, 1893, the four millions of Aus- tralians had a banking system in full career, with assets in round numbers of $900,000,000. In May, $450,000,000 of this lay in ruins. Though New Zealand was in its track the cyclone never arrived there. The democracy of New Zealand does not believe in the alleged immutability of the laws of nature, including the laws of trade. This high area of money dis- turbance on its way from Australia in 1893 was successfully countered by a more powerful anti-cyclonic pressure gener- ated by the wit of democracy. At that time, 1893, the Bank of New Zealand was a private institution, largely owned in London, but it was the chief bank of the colony, and kept 276 BETTER THAN GOLD 277 the cash of all the principal business concerns and the funds of nearly every public body, including the general Treas- ury. There were 1486 of these public accounts, among them charitable aid, town and road boards and 633 school committees. The government had nearly $10,000,000 on deposit, and in this was the money of its Postal Savings Bank. There were also a number of private savings bank balances. The bank had $55,000,000 of the $76,000,000 of the banking assets of the colony. One sixth of the popu- lation was directly involved in its fate. It had $22,000,000 of deposits belonging to 35,000 depositors. These figures are not small even to us. New Zealand's remoteness and its insular independence made the earthquake wave of panic move slowly toward it. No signs of trouble were visible to the public when, in 1893, the banks held a meeting and asked for a legal tender law like that which had been passed by Parliament in New South Wales earlier in the same year. This legal tender law was not what we should understand by that term. It authorised the banks to issue a dollar of circulation for every dollar of property they had in excess of what they owed. But it also obliged the Treasury to give gold for these notes whenever presented. By this law, in other words, it offered to guarantee all the notes and to cash in gold the surplus assets of the banks to the last dollar if necessary. This made their surplus liquid, as bankers say not merely as good as gold, but as good as gold coin, which is something even better. This offer of relief made the relief unnecessary. The banks found no need to use the new privilege given them, and their issues of notes actually declined. For another en- tire year, until June, 1894, the smooth current of New Zea- land business went on without a ripple, while all the rest of the world was passing through failure and liquidation. 278 During the year 1894 there was a decline of only $68,000 in the banking deposits of the colony, and a contraction of about $1,250,000 in the loans; prices were falling, but the shrinkage in revenue and exports and imports was slight, and the country was prosperous. But on Friday, June 29, 1894, Parliament and the Min- istry were thunderstruck to learn from the officials of the Bank of New Zealand that that institution would not be able to open its doors on Monday morning unless it had help. There was but one day to decide what to do and to put into law. It was not a question of saving the bank, but saving the country. Its welfare for a generation was at stake. Parliament, putting all party differences aside, by an overwhelming majority passed, without change, a measure presented by the Ministry. It acted without any other information about the bank and the crisis than the assurance of the Ministry that the bank was sound and would weather the storm if assisted. That in this leap into the dark Parliament was following blind leaders did not appear until afterward; fortunately so, for if the Ministry and Parliament had known what they found out later, their power of action would have been crippled, as happens to those who know too much. By this legislation Parliament granted an advance from the colony to the bank of $10,000,000, repayable in ten years in 1904. The money was got by the sale in London of $10,000,000 of bank stock paying four per cent, a year guar- anteed by New Zealand. In addition the stockholders were called upon to pay up $2,500,000 on their reserve liability. The government inserted the head of the camel of public ownership into the tent of this private bank, by putting a representative of its own at its head as president, with the right of veto on any transaction, and subjected the manage- ment to the scrutiny of a public auditor. A WRECK 279 As happened under the Legal Tender Act of 1893, tran- quillity followed. There was another year of peace in New Zealand, and in New Zealand alone, for everywhere else the boa-constrictor of panic contraction was crushing trade and industry in the pitiless way the business man struggling with bankruptcy, and the workingman tramping the roads for work, know so well. But in 1895 again out of a clear sky and with no warn- ing the Ministry came to Parliament with the announce- ment that the bank for which they had done so much, on the assurance that if done all would be safe, had been found by the president and the auditor put in by Parliament to be practically a wreck. All the capital was gone. Of the bank's nominal assets of about $55,000,000, over $13,000,000 were but the refuse of sheep ranges and other real estate, which had been taken on foreclosure from its reckless borrowers by this reckless lender. The good properties had long since been sifted out and sold. Every effort had been made by the representatives of the state to retrench and rebuild, but this burden of dead real estate had been found to be too heavy to be borne. "There is still a magnificent portion of the business which is sound," Parliament was told by its representative in the bank; "but unless this load of effete matter is lifted the bank can no longer be carried on." Unless immediate help is given, "such a calamity will result," he continued, "as has never yet been experienced by any British colony." This was sickening. The Ministry, on the strength of the assurances given them, had assured Parliament the year be- fore that the bank was solvent, and that the loan of $10,000,- ooo would launch it anew upon a career of prosperity with- out the loss of a cent to the people. Now the truth came out that the bank was gone, and the $10,000,000 were 280 QUARANTINING THE PANIC OF 1893 gone also unless the Treasury put in still more millions. The same Ministry was still in power, and friends and enemies united in the outbursts of indignation with which this news was received. But a joint committee of both houses of Parliament and of both parties found, upon in- vestigation, that the bad news was true and that whoever was to blame the bank could not survive without further relief. It unanimously recommended that this be given. After less than a week's debate Parliament went in $15,000,000 deeper. It did this by taking preferred stock in the bank to the amount of $2,500,000 making itself the largest stockholder and by guaranteeing the bank to the extent of $13,000,000 against all losses on the sale of its derelict real estate. This was the full nominal value, and was admittedly at least $4,250,000 more than the real value. Then Parliament divorced the bank from the land business in which it should never have been embarked. The real estate was taken out of its hands, and a company especially formed to market it. The state by its guarantee practically enabled the bank to cash all the land that it had to take for bad debts $13,000,000 and assumed itself the weary task of selling it off, which was certain to consume many years and involve heavy losses. The stockholders were again called upon and summoned to pay in $5,000,000 more on their reserve liability, if they could raise it, as many of them could not. The bank was empowered to buy a competing bank to increase its chances of making money. The business of the colony in Lon- don was taken from the Bank of England and given to the Bank of New Zealand to add to its earnings, and a gov- ernment director was put on the board of management. As a method of relief this was far more effective than such a proceeding as that of the State of New York, which, in our panic of 1837, passed a law suspending all rights of the TWO HUNDRED MILLIONS 281 people to proceed against the banks for the enforcement of their obligations. In all, in these three years, 1893, 1894 and 1895, the gov- ernment and the people only 750,000 of them went in to the tune of $37,500,000 made up as follows: $10,000,000 in 1893 f r tne guarantee of the note issue which they did not have to make good, as the circulation was not needed by the business of the colony and was never put out; $10,- 000,000 in 1894 for the guarantee of the bank stock; $13,- 500,000 in 1895 guaranteed the bank on the sale of its real estate; and $2,500,000 for the new stock subscribed for by Parliament. Adding to all this the $7,500,000 which the stockholders were called upon to pay in, we have a total of $45,500,000 as the sum for which the people and the stockholders be- came liable to rehabilitate this concern. Leaving out the $10,000,000 liability on the guarantee of the notes, which was never called for, the total advances by the state to this private bank reached the sum of $26,000,000. Against this the colony has for its reimbursement what it can get out of the sale of the real estate there is cer- tain to be a loss of at least $5,000,000 on this item and whatever the bank can repay from its profits, all of which are ear-marked for its indebtedness to the state, excepting a lim- ited sum conceded to those stockholders who have responded to all the calls made on them. These advances were practically an addition, and a very considerable one, to the public debt of the country, which already in 1893 was in round numbers $200,000,000, but they do not appear in the debt statements. For the express purpose, among other things, of avoiding all appearance of debt expansion, the new obligations were created in the form of guaranteed bank stock, guaranteed real estate debentures and Treasury purchase of bank stock. When Parliament in 1894 was scared into a panic lest there should be a panic, and, under the whip of the ministe- rial majority, put through in a one night session, between two days, an advance of public money of $10,000,000 to this private bank, it supposed, and there is no doubt the Ministry also supposed, that the bank was an honest bank and solvent, but caught through no fault of its own, in one of the whirlpools of the financial deluge that had just swept Europe and America and Australia, and that it needed only a temporary lift to right itself. But the representatives of Parliament who went into the bank to protect its advances found that the Ministry and Parliament had been deceived, and that the institution was in the condition in which the sister of Lazarus thought his body must be after it had been three days in the tomb. Worse still, the truth gradually forced itself into recog- nition that the affair with the Ministry and Parliament, June 29, 1894, was a coolly planned scheme of the directors and leading stockholders to throw upon the country the liabilities of a bank after they had swallowed its assets. It was a "raid" arranged in London. The command of it was entrusted by the London capitalists concerned to a man whom they sent on from that city, because they knew he had the confidence of the colonists, as he had once lived among them, and had been in the management of this very Bank of New Zealand. Hastening from London to Wel- lington this gentleman opened fire. "There was a revolver pointed at our heads," the Premier afterward told Parliament. "If the bank and the country are to be saved from ruin, the bank must have $10,000,000," this gentleman said at a conference with the Ministry and the leaders of Parliament at three o'clock in the morning, and it must have it "to-day," and "to-day" he got it. A BIG HOLE TO FILL 283 The letter in which he formulated this demand and the act of Parliament responding to his "hold-up," bear the same date, June 29, 1894. In this letter he gave the assur- ance that "this does not imply that any heavy losses in the bank's business have been made. To the best of my knowl- edge and belief no such losses have been made." Upon his arrival from London three weeks before, he had been given a statement prepared by the officers of the bank, showing a loss of $5,877,000 on the real estate transactions alone; but he "forgot" this, saying only in an off-hand way that there was "a big hole to fill." The statement of the bank which he submitted showed a profit on the last year's business. When asked what security there would be for the $10,000,000 demanded, he pointed to the "paid-up capi- tal" of $4,500,000 and the stockholders' reserve liability of $7,500,000, and declared it was not to be questioned that that was an "ample margin." But this capital was then all gone ; every cent of it lost. He assured Parliament in the strongest language that by the advance of ten millions, "the state will not lose one penny." He was a shrewd fellow and knew his people. He sugared his pill with talk about this opportunity for New Zealand to establish for itself "a national bank," like "the great nations of the old world." The owners of the bank had squeezed out dividends as long as there was a cent squeezable, and then, and not till then, they saw the admirable advantages of a "state bank." What he said, Parliament did, and did it "to-day," and London knew it was afterward discovered what Parlia- ment did before it was done. A friend of this man said in Parliament the year after, "He is very astute, and capable and careless hearers might be led to erroneous conclusions by such a gentleman." 284 QUARANTINING THE PANIC OF 1893 As soon as the work he had been sent to do was accom- plished he left the country. When asked in Parliament where this "astute" gentleman was, the Premier could only reply, "Where, O where?" He went to South Africa, but evidently he did not organise the Jameson raid, for had he been its leader it would have been successful. A legislative investigation disclosed that the bank had been in an unsound condition since 1888, and that the direc- tors had been paying dividends which were not earned. A large part of the losses had been due to loans which the directors had made to themselves, not only on insufficient security, but under circumstances which led a committee of stockholders, in 1888, to hint at the desirability of criminal proceedings. Between 1888 and 1893, when the bank was unloaded on Parliament under cover of the threat of a panic, its directors had paid out $1,328,000 in dividends, some- times seventeen and one half per cent, a year, and alto- gether nearly one hundred and fifty per cent, on the amount of its paid-up capital. And yet, during these very years, the bank was making losses at the rate of $8400 every day, a total of $20,000,000 in all, of which $15,453,000 were plainly confessed by being "written off." During a large part of this mad career of financial dis- sipation the gentleman who had "put the revolver to our heads" in 1894 had been active in its management. A ring of directors and speculators had used the money of the de- positors and stockholders to financier swindling "booms" in land. As bank directors they made loans to themselves as land speculators. "Undrained swamps and barren hilltops," anything that there was a chance to sell at a profit to the gullible public was good enough security for these men. The bank had been the greatest enemy of the bona fide settlement of the people on the land, and had been the friend of the land grabber and jobber. A FAILURE OF JUSTICE 285 "For twenty-five years the management had been so reck- lessly extravagant that no words could be found too strong to characterise it," was said by one of the members of Par- liament. , "This inflated concern has hung over the colony for years like a nightmare," said another. "We have found it to be a den of gambling, dishonesty and rascality, and we have not yet reached the bottom of it," said still another. The stockholders' committee in 1888 had threatened crim- inal proceedings against the directors who had paid divi- dends that had not been earned. Immediately upon this intimation that the directors should be punished, some one appeared in the lobby of Parliament and obtained the pas- sage of a law, almost in silence and without a division, which not only allowed them to continue paying such un- earned dividends, but "looked backward" and legitimised their illegal and probably criminal acts in paying them in preceding years. Commenting on this one of the members of Parliament said : "At all times we have found that capital exercises an un- due influence on the legislature." Whatever the Bank of New Zealand wanted from the government it was always able to get. A loud cry for punishment arose in Parliament when the rotten character of the institution was made clear. One of the special objects of a Parliamentary committee of 1896 was to uncover the guilty men and ascertain the exact facts on which they could be indicted and tried ; but the man who had been made president of the bank by Parliament to pro- tect its interests refused to testify on this point. Others who knew the facts followed his example. The investiga- tion became a farce and the matter was allowed to slip out of "practical politics." 286 QUARANTINING THE PANIC OF 1893 In Australia, for some reason, the fate of swindling bank managers and directors was very different. Scores of them were sent to jail and stayed there for years. Perhaps the fact that the panic was averted in New Zealand and the public was not maddened into vengeance accounts for the failure of justice. The members of the Ministry pledged themselves to pursue the matter "as sure as the sun rises to-morrow," and to find out and punish those "who are now living in wealth and luxury at the expense of the poor un- fortunate stockholders and taxpayers of New Zealand," but nothing has been done to redeem the promise. Although these damning facts came out in all their de- pressing details in the year after Parliament made its first advance of ten millions, and while it was deliberating what to do further, if anything, "not a single member" of the joint committee representing both parties and both houses of Parliament, appointed to discover the truth and make a plan, "thought for a moment," as one of its members said in the debate, "of allowing the bank to stop," and Parliament took the same view by a large majority. It was, perhaps, the severest test of its good sense and good temper the New Zealand democracy has ever had. The country had dropped $10,000,000 into a bottomless pit, and was asked to drop in some $15,000,000 more to save itself by saving a bank which was incontestably a sink of financial corruption and incompetence. What made action favourable to the bank especially bitter to the Liberal party then in power, was that the institution had always been one of the bulwarks of "conservatism," and had thrown all its influence against the progressive policy of the people. Political processions of the Liberal party marching along the streets would stop cheering when they came to the building of the Bank of New Zealand and give it rounds of dismal groans. A PENALTY FOR FOLLY 287 "It was the greatest foe of liberalism in the country," a Liberal said in Parliament, but still he supported the bill to keep it afloat. Parliament undoubtedly represented public opinion cor- rectly in not allowing its indignation and resentment to blind it to the true issue. It was urged, in and out of Par- liament, when the first appeal was made in 1894, that there was nothing in the circumstances of New Zealand that threatened it with panic. Prices were low, speculation ab- sent, indebtedness not inflated. The bank, it was said, should -be left to dig its way out of the pit it had digged itself into or to perish there. But the great fact was, and the democracy saw it, that this private bank was the source of supply, the dealer in control, of the greatest necessity of modern life credit, on which the production and distribution of all the other necessities depend. It owned the most important piece of machinery in the colony. It was the heart of the inflow and outflow of the country's industrial blood. This administra- tion of credit was a great public trust. When the trustees abused their trust, the public had neglected either to control them or to assume the trust itself. The million or two that might be lost now was a penalty for the belated recognition of the folly of leaving an article of such universal necessity as credit, to be exploited by a private enterprise at its own sweet will. It was a price the public had to pay, for awakening to the public interest, in an economic function not less important than the national de- fense against a foreign foe; but it was also a cheap price to pay for escape from such devastation as the people of New Zealand had just seen sweep over Australia and Europe and America. This was the situation of New Zealand, and the common sense that saw this point and acted on it was the common 288 QUARANTINING THE PANIC OF 1893 sense of the average man. Some of the most successful business men in Parliament, and some of the members most experienced in public life, opposed every suggestion of re- lief. Thirty-three of the members were new men. Par- liament was denied all information except that there was an emergency. The other bankers in the colony could not be summoned to advise, for they were representatives almost wholly of foreign houses and competing banks; and this was a crisis which must be settled on New Zealand lines for New Zealand. There was no time to deliberate over a plan for "nation- alising" the credit machinery. Do what we demand and do it "to-day," the men in possession of the machinery said, or we will blow the whole thing up, you and ourselves in- cluded. Had the bank stopped as these men threatened, all the money of the government would have been locked up in London, and at home its savings bank depositors would have been unable to draw their money ; the Public Trust office and Life Insurance Department and the Advances to Settlers of- fice would have been crippled; the 35,000 depositors of the bank would have been left without funds to carry on their business or to pay their current bills ; the thousands of bor- rowers would have been called upon to pay their loans $75,000,000 at a moment when they would have been un- able to get money anywhere else, and could have sold their property only at ruinous sacrifices. Industry would have been suspended, workingmen and women thrown out of work, forced sales would have started the prices of mer- chandise and land on a downward grade. Imports would have declined, and with them the customs revenue. The receipts of the railroads would have followed the same course. There was a foreign trade in and out of $65,000,- ooo a year, and a private wealth in land, improvements, THE BETTER BANKER 289 machinery, merchandise and other property of $750,000,- ooo, all dependent upon the maintenance unimpaired of the credit system of the country. The failure of the bank would have been a stroke of paralysis followed by death for many and slow recovery for the rest. This was the situation with which a surprised Parliament found itself faced on the morning of June 29, and which had to be settled "to-day." The democracy, though inexperienced and taken by sur- prise and deceived, has proved itself a better banker than the "private enterprise" which affects such scorn for the "state" except when it wants some privilege from it. The Premier said in 1893, in Parliament, that he would not allow any bank in the colony to fail. The remark was received with cheers on all sides of the house. The people and their representatives had not the slightest notion how serious was the responsibility they assumed, when the hour struck the next year for them to redeem this jaunty promise. Yet, though so inexperienced, their performance has been so successful that it is well worth the study of democracy everywhere else. As Lowell says, the world has come to have but one set of nerves, and we all have the same head- ache at the same time. First. The democracy prevented the panic which the private banker had prepared. Second. The frauds were investigated to the bottom which private banking had perpetrated and concealed. Third. For the first time the New Zealanders now have a bank which they know all about and they are the only peo- ple who have this. The kind of thing that has gone on behind the scenes in many another country in Europe and America, but has been sedulously kept behind the scenes, has been democratically spread out in this New Zealand experience for everyone to look at. 290 QUARANTINING THE PANIC OF 1893 Fourth. Under democracy all the revelations of finan- cial unsoundness were published to the world without pro- ducing the slightest ripple of disaster. The merest whis- per of such publicity would have sent a private bank to the wall. Fifth. The stockholders who had allowed their directors to wreck the bank, were compelled to make good their re- serve liability to the utmost farthing of their ability. Sixth. In the Australian liquidation the depositors had to lose part of their money. They were "impounded" as the word is. In New Zealand the depositors lost nothing. Seventh. The funds which should have been kept liquid for daily use the capitalists locked up in real estate specu- lations which dragged on for years. The democracy sepa- rated the land business from the banking business, and cleared up all the bad debts, real estate and other. Eighth. The government put in all the new capital re- quired. Ninth. The stockholders for twenty years had been un- able to install directors who would direct. But the state has got itself honestly and intelligently represented. Tenth. The democracy shrewdly bought another bank to reduce competition and get the benefit of consolidation. Eleventh. The government, because it is the govern- ment, is able to get capital cheaper than the bank when in private hands. It borrowed in London at four per cent. The bank would have had to pay at least six. Twelfth. For the first time this great organ of the finan- cial life of the colony is under the regime, which, in its motive, takes equal account of the welfare of the borrowers, stockholders and the general public. The private director might think of all these, might wish he could consult all these interests, but he would be Utopian and a bankrupt if he allowed his action to be influenced by them. But that RECUPERATIVE DEMOCRACY 291 democracy should be so influenced is a matter of course and helps, not hinders, its success. Thirteenth. Notwithstanding all the dark predictions at the time, it now promises that none of the money advanced will be lost, and that the stockholders who have been able to keep their stock paid up will be saved. They would cer- tainly have been ruined either by the continuance of the old management or by liquidation. At the last meeting of the stockholders to elect the two directors to whom they are now limited, it was shown that there was a prospect of divi- dends in a future not very remote. These anticipations are confirmed by the last report of the business of the bank laid before Parliament in July, 1899. The deposits and loans are up to their former level. The bank is paying interest on all its obligations, and is re- ducing the principal of its indebtedness out of its profits. It is earning the interest on all the money advanced and invested by the Treasury. In addition, it is also paying to the Treasury out of its profits, as provided for by the scheme of liquidation, $250,000 a year toward the losses which are made in the sale of the bank's "cats and dogs" of real estate. The sale of this real estate is proceeding at a rate which promises a total loss of about $5,000,000, but this will not fall on the state, but on the bank which must make it up out of its profits. It paid last year $250,000 toward this deficit, and, as its profits increase, its contributions to the deficit will increase. The New Zealanders claim for themselves and their bank now the best position in the Australasian colonies, and the figures bear out the claim. That is worth a great deal of money to the country and is bringing in a great deal every year. The colony is prospering and the bank will share in all the gains of the community. So recuperative is democracy 292 QUARANTINING THE PANIC OF 1893 the spirit of reciprocity perpetually fed with new strength from the ever renewed youth of the people. If the debt to the Treasury is not extinguished in 1904, when its advances fall due, it will be an easy thing to arrange an extension. There was more than a touch of justice in this bank's coming home to roost with the government. The public works policy of 1870, by which large amounts had been borrowed in England for wholesale construction of railroads and other public improvements, and for assisted immigra- tion, had had much to do with inaugurating the era of spec- ulation which had demoralised the bank. The beginning of its unsoundness was found, in 1894, to date back twenty years. The managers had been tempted into reckless bank- ing by being given on deposit a large amount of this bor- rowed money. They naturally sought to find employment for these deposits. If bank managers do not get deposits they are dismissed; if they get deposits and do not loan them they are dismissed; if they loan them and lose them they are dismissed. The state, too, had practically certified the bank to be safe to the people by putting its money their money on de- posit with it. A determined colonial treasurer could have kept himself posted at all times as to its real condition or he could have withdrawn the public account. The Ministry through its bank directors comes into the most intimate connection with the business movements of the colony, but never has there been the least whisper, in the press, or on the platform, or in Parliament, that any im- proper use has been made of this power. The last time the bank came before Parliament, when, in 1896, the government strengthened its representation on the board of directors, one of the most influential members of Parliament, and one of the best known citizens of New Zea- land, the Honourable M. S. Grace the brother of Ex- NO PALMS GREASED 293 Mayor Grace of New York took occasion, in words which were not challenged, to declare that, throughout the whole affair, there had been absolutely no corruption, political or ministerial. He said : "It is probably the first time in history that such ex- traordinary and complex legislation, involving millions of money, has been affected without any greasing of palms. What would such an operation have cost in London, in Paris, Berlin or Rome? Any person who has had any op- portunity of knowing London can conceive what such an operation would cost. Whatever our follies and they are of a transcendental character our people are not politically corrupt." There can be no doubt that the plan of relief by the Treas- ury advance of $10,000,000, which Parliament was so per- emptorily called on to make "to-day," was unnecessarily expensive. The proof of this is found in the fact that the money, when advanced, was not needed. The year after the advance was made, in 1895, tne manager of the bank wrote to Parliament that this advance of $10,000,000 "had filled the bank's coffers with money, for much of which either no employment whatever could be found, or only nominal rates could be obtained." Such a plethora was doubly obnoxious under the circum- stances. It was a heavy tax on the people and a renewed temptation to the bank. A "State Bank" had been suggested in New Zealand be- fore these occurrences, and every new development in the affair gave texts for and against. The sentiment in favour of such a bank is not as strong in the democracy of Aus- tralasia, perhaps, as it is in that of Switzerland, where year before last it received a large vote; but there is in both Australia and New Zealand a large constituency for such a proposal. 294 QUARANTINING THE PANIC OF 1893 One of the most prominent business men in the colony said in Parliament, in opposing the first advance of ten millions : "Long before we are done with this bank it will silence the outcry for a state bank, at least for this generation." But by another member, the attempt thus to use this trying experience to discourage any connection of the state with banking, was met by the cogent remark that the trou- ble was not in any way due to the connection of the state with the bank, but to the private rascality that had com- pelled the state to interfere. "Private banking has been a shame and a scandal all over the world, and has brought the various colonies affected almost to ruin." This member hoped never to see the day when the Bank of New Zealand would be again managed by private capi- talists. I found the opinion widespread, among the best informed, that the government was certain to be compelled to continue to keep its hand in the management of the bank, beyond the period first fixed for the termination of its guarantee 1904. The bank, no matter how well it may do, cannot by that time repay the Treasury, which will have to go on to get its money back. One plan which has been proposed to escape the evils of political management is that the state should put the bank under the charge of a "non-political board." A precedent in point is furnished by South Australia. This colony has organised its state mortgage bank in precisely this way to keep it out of politics. It is managed by a board of trus- tees, who are not responsible to the Ministry, who can be removed from office only by very difficult steps, and who, therefore, can act independently and carry on the bank for strictly commercial interests. But this device is not a pop- AN APPALLING POSSIBILITY 295 ular one in New Zealand. The New Zealander is a polit- ical animal, and does not believe in confessing bankruptcy by making assignments of his political powers to "non- political boards." "Parliamentary government is played out," the leader of the Opposition exclaimed in debate on one of the bills far the relief of the bank one reorganising the management. The house had been then sitting for twenty-three hours continu- ously on this measure. It was, as he said, utterly exhausted. He complained that Parliament had not been allowed even a few hours to read the evidence and the report of the in- vestigating committee on which the bill was based, and was called upon, without time for study or proper debate, to pass the proposed law at one sitting. He begged for an adjourn- ment for a few hours that the house might be able to qualify itself to decide the grave and important question involved in the bill of the management of the bank in which the Treas- ury now had a liability of $26,000,000. This request the Ministry, for reasons it thought suffi- cient, refused to grant, and the bill was passed by the house after a sitting of twenty-four hours at two o'clock in the morning, but failed in the other house. The first legislation for $10,000,000 was put through in one night. An attempt was made to push the second pledge of $17,000,000 in the same way, but the protests of the members finally secured a week's time. There is an appalling intimation here of the possibilities of Parliamentary government, especially in view of the in- creasing tendency to add commercial and economic functions to political duties ; that is, to go into business, or to control business. The power that Parliament forges is the mighti- est known to man. No citizen so humble or so far away as to escape ; no one so strong that he can resist. A few words put after the magic formula "Be It Enacted," and the prop- 296 QUARANTINING THE PANIC OF 1893 erty, welfare and morals of millions suffer change for good or bad over continents, and a mortgage is fastened on the happiness and the energies of unborn generations. Evidently as democracy grows more powerful and "the people" comes nearer, our present Parliamentary methods must give way to something less impulsive, something less like weather and more like growth. One of the greatest disasters the world has ever seen awaits the people who attempt to administer enterprise on socialistic principles through present Parliamentary methods. It would break down as no other civilisation has broken down before. All that a co-operative society is, Par- liamentary government is not in the administration of business. Banks, railroads, mines, insurance, manufacturing, "state theatres," "municipal restaurants" cannot be run by mass meetings, stump speakers, caucuses and ministerial pull no more than private banks and business can be so run. What we know as "politics" and socialism are incompatible. De- mocracy itself will see that democratic industry must not be at the daily mercy of majorities of one and of "all-night" sessions, nor of officials appointed to please politicians. Perhaps the school will take the place of the nominating convention. With public schools and colleges as the gates to all public industries, aptitude instead of office-seeking will determine the choice of vocation, examinations instead of influence will give the appointment, and performance in- stead of pull will give promotion. We shall have selection instead of election; processes working with the steadiness of nature's laws instead of waves of popular feeling which defeat in the long run the popular will. A happy combination of circumstances like that in New Zealand where the country was young, the people honest, and the "general good" still a slogan, may make such an BREAKING BANKS, BREAKING HEARTS 297 episode as we have described in this chapter a success, but it would be folly not to see that the success was a "fluke,"and that to count upon it would be to make it impossible again. A special providence watches over children, fools and de- mocracies until they count on it. But, though a fluke, the success of the New Zealand anti- panic remedy in this incident is incontestable. There was no run on the Bank of New Zealand, no bank in the country had to close its doors, in New Zealand alone there was no panic. The financial wind there did not blow where it listed. The New Zealand Canute said to the commercial sea of troubles floating in everywhere else, "Thus far and no farther," and it stayed. In every other centre of finan- cial civilisation thousands of people's hearts broke as they stood in line before the doors of breaking banks. A comparison of the statistics of the three principal col- onies of Australasia tells the story : BEFORE AND AFTER THE PANIC New South Wales, Victoria, New Zealand, New South Wales, Victoria, New Zealand, New South Wales, Victoria, New Zealand, New South Wales, Victoria, New Zealand, BANKING DEPOSITS 1891 1897 42,988,550 40,114,033 50,183,551 37,742473 17497,436 I9,95 8 ,78i IMPORTS 25,383.397 21,744,350 21,711,608 15,456,482 6,503,849 8,055,223 EXPORTS 25,944,020 23,751,072 16,006,743 16,739,670 9,566,397 10,016,993 PUBLIC REVENUE 10,036,185 9,304,249 8,343,588 6,887463 4,I93942 5,079,230 Gain Loss 2,874,517 12,441,078 6,255,126 1,551,374 2,192,948 732,927 450,596 885,288 731.936 1,546,125 298 QUARANTINING THE PANIC OF 1893 In bank deposits, in the totals of trade in and out, and in the revenue payable by the people, between 1891 before the panic and 1897 after the panic, New Zealand alone shows a gain, with the exception of the exports of Victoria. New South Wales and Victoria fell backward. This fact, that there was no panic in 1893 in New Zea- land, must take its place with the other fact we have chron- icled that, owing to the compulsory arbitration law, there has not been a strike or lock-out in New Zealand for five years, as two of the most remarkable achievements in the history of this remarkable country. CHAPTER XII "AND THEN WE SMASHED THE MONEY RING" ITS Advances to Settlers is the most characteristic feature of New Zealand's aid to industry. This began as a policy of Treasury loans to farmers on their land. It was initiated in 1893, and has since been imitated by New South Wales, Victoria and South Australia. The world over one of the greatest obstacles in the way of the small farmer and the large one is the difficulty of getting capital. Often there is no money to be bor- rowed in the district where he lives, or, if there is, it is in the hands of rich neighbours or banks, who know noth- ing but their bond and the pound of flesh. But in New Zealand the settler has only to go to the nearest post-office to get into communication with a money-lender who charges no commission or brokerage, and no fees, except for actual expenses, never exacts usury, offers no cut-throat mortgages for signature, .will let him have any amount from as little as $125 to as much as $15,000, has never foreclosed, does not try to induce him to borrow more than he really needs, if he has no freehold will lend on leasehold and good- will and improvements, gives him thirty-seven and a half years to pay the money back, and accepts it from him in small instalments of principal with every payment of inter- est, so as to make it as little of a burden as can be, will allow him, if he happens to have $25 to spare, to pay it in at any time to reduce his indebtedness, and when it finds itself mak- 299 300 THEN WE SMASHED THE MONEY RING ing a profit out of its business, instead of accumulating a fortune, gives him the benefit by reducing his rate. When the New Zealand farmer goes to the post-office for his mail there faces him on the walls this notice: ADVANCES TO SETTLERS THE GOVERNMENT ADVANCES TO SETTLERS OFFICE HAS MONEY TO LEND Upon Fixed or Instalment Mortgages in Sums of from to On Freehold or Ground Leasehold, for use for Agricul- tural, Pastoral, Dairying, or Market-Gardening Purposes. Borrowers have the Right to Repay the loans Partly or Wholly AT ANY TIME. Fixed Loans are Granted upon Freeholds for any Term not Exceeding Five Years, and Instalment Loans FOR 6 YEARS: Interest Five Per Cent, with (in the case of Instalment Mortgages) an Additional One Per Cent, on Account of the Repayment of Principal. All Costs very Low. No Commission or Brokerage Fees Charged. This is the notice the South Australian farmer finds at his post-office: SOUTH AUSTRALIA On approved securities at FOUR AND A HALF per cent, per annum, repayable by equal half-yearly instalments on April i and October i, extending over periods of from ONE IF HE WANTS THE MONEY 301 to FORTY-TWO years. Borrowers have the privilege of paying off ANY PORTION or the WHOLE of the PRINCIPAL, should they so desire, ON ANY ist of APRIL or ist of OCTOBER, and when any portion of principal is paid off, the INTEREST is REDUCED PROPORTIONATELY. Each half-yearly instalment contains a PORTION OF THE PRINCIPAL, so that, at the expiration of the period for which the loan is granted, THE WHOLE SUM is PAID OFF and the borrower is entitled to the discharge of his mortgage. No CHARGE is MADE for EITHER PREPARATION or DISCHARGE of MORTGAGE, the ENTIRE COST to the bor- rower being the fees for registration. Applications to be made to Mr. G. S. Wright, the In- spector-General of the State Bank, from whom further information may be obtained. South Australia does a little better with its State Bank than New Zealand. New Zealand charges its borrowers five per cent. South Australia offers money at four and one half per cent., and makes no charge for either the prepara- tion or discharge of the mortgage. If our farmer needs some money the clerk at the window will give him a printed form on which to write his appli- cation. In reply he will perhaps receive a note like the fol- lowing, which is a copy of one of the forms used by the State Bank of South Australia: THE STATE BANK OF SOUTH AUSTRALIA Adelaide, 189 SIR: I have to inform you that it is very unlikely that the amount asked for in your application would be granted ; and to avoid putting you to unnecessary expense I shall be glad, before asking you for a valuation fee, if you will in- 302 THEN WE SMASHED THE MONEY RING form me what is the least possible amount that will answer your purpose, and what you require the money for. Yours faithfully, G. S. WRIGHT, Inspector-General. Mr. Or perhaps his application is looked upon more favour- ably, and he gets this answer : THE STATE BANK OF SOUTH AUSTRALIA Adelaide, 189 SIR : I have to inform you that the Trustees of the State Bank have approved of a loan of .... on the security offered in your application, which will be available on the due execution of a first mortgage of the security offered. To avoid delay, please advise when a settlement is likely to take place, so that a check may be in readiness. I am, sir, Yours obediently, G. S. WRIGHT, Inspector- General. Mr If the loan is made the New Zealand or South Australian farmer receives his money through the post-office ; he makes his interest payments there ; the whole transaction is made as easy and simple for him as possible. When the decline of prices began in 1893, after the panic which ravaged every country but New Zealand, the Aus- tralasian farmer had to sell in the world's market his butter, grain and meat at steadily falling prices, but the mortgage companies and banks would not lower their rate of interest on the money he had borrowed, nor would they make fresh THE FARMER BETHOUGHT HIMSELF 303 loans at rates which corresponded to the universal shrink- age. They thought they had the advantage of position, and naturally they meant to make the most of it. Whereupon the New Zealand farmer bethought himself of an advantage of position he had. He had the govern- ment, or, more accurately, he was the government, and its power he knew well by previous experience. He was demo- cratic enough to believe that that power is never put to better use by the people than to increase the welfare of the people. The people pay the bills; they have the right to the benefit. The New Zealand democrat saw that he could use his power as a citizen to obtain for himself as an individual the advantage of the low rates at which gov- ernment can get money. Thereupon he that is, his Par- liament passed a law directing the Treasurer to borrow $15,000,000 on bonds in London and loan the money so obtained to the farmers, market-gardeners and cattle men of the colony at enough of an advance to pay the expenses and accumulate a reserve fund for bad debts. As the Treas- ury of the nation could borrow money in London, in the international money market, at three to four per cent. the price realised for the three per cent, consols sold in this case was 94 8s. gd. for one hundred it could loan it at five per cent, and make a handsome profit. The New Zealand farmer is a very practical man. He enjoys being addressed at country fairs and political mass meetings as a "bulwark" and "mainstay," and "bone and sinew" and all that, but he also likes to see some substantial benefits accompanying these honeyed words. In this case he did not take long to decide what to do, nor how to do it. The decline in prices began in the years immediately preceding 1893. The Advances to Settlers law was passed in 1894, and the money was in hand in May, 1895. The preamble of the act read: 304 THEN WE SMASHED THE MONEY RING 'Whereas, by reason of the high rates of interest charged on the mortgage of land, and the heavy incidental expenses connected therewith, settlers are heavily burdened and the progress of the colony is much retarded, and 'Whereas, it is expedient that the government should afford such relief in the premises as is consistent with the public safety, "BE IT ENACTED," etc. Seven million five hundred thousand dollars were bor- rowed at first, and $2,500,000 more have been borrowed since $10,000,000 in all. The Conservatives opposed this project with unanswer- able demonstrations that it must be futile, since the rate of interest is fixed by the "law of the market," and that government, which can "create nothing," can no more in- terfere with these laws than with the laws of the tides. But the result has proved that in New Zealand part of the "law of the market" is that the New Zealanders as a gov- ernment can borrow money in London at three or four per cent, and then lend it to themselves at four or five per cent. By an amendment of the law in 1899, the owners of city and suburban property, at first excluded, are allowed to borrow this "cheap money" under certain limitations. It is recognised that the industries of the towns are handi- capped by usury as well as those of the country. The business which has been done under the act is shown in the following statement furnished me by the officials : GOVERNMENT ADVANCES TO SETTLERS OFFICE, NEW ZEALAND Number of applications received up to January 31, 1899 8778 Amounting to 2,881,316 WHO WERE FURIOUS 305 Number of applications on which, up to January 31, 1899, advances were authorised 683 1 Amounting to 1,994,115 Number of advances authorised which were declined by applicants, up to January 31, 1899 808 Amounting to 369,295 Balance, being amount of advances authorised to and accepted by ap- plicants (to number of 6023) . . . 1,624,820 NOTE. The amount authorised to and accepted by ap- plicants (1,624,820) includes mortgages repaid and rein- vested on mortgage. In April, 1900, the office announced that the number of loans had increased to over 7000, "and we have not lost one shilling. For the year there is not one penny of prin- cipal or interest uncollected." The amount advanced by the department has been $10,000,000. The government supporters could well afford to ask in the last campaign : Where could the loan company be found that could show such a record as that ? The State Bank of South Australia has so far loaned $1,862,600, and the amount of interest in arrears, March 31, 1898, on the transactions of several years was only $472. The citizens who voted for this to help the farmer got their own reward in a general reduction of their rates of interest and in a new prosperity. All over the colony rates came down with a run ; not only the government borrowers but all the borrowers felt the benefit. A small group of capitalists were furious of course, but it is not this class which controls the administration of New Zealand. 306 THEN WE SMASHED THE MONEY RING The people have done more than make money by this financial "self-help." They have released themselves from a degrading servitude to the money-lenders. "They used to have to go," the Honourable J. G. Ward has said, "with their hats in their hands, and beg and beseech the few who had control of money before they could get it; they had to pay an extravagant rate of interest; not infrequently they were compelled to do their trading with the institution from which they got a loan. Now borrowers are sought after if their security is good, their rate of interest is low, and they are relieved of the despicable compulsion to deal with a business concern because they have secured a loan through it. The farmer now can sell his produce where he pleases." A high official, one who has had a potent hand in this legislation and all the other recent progressive movements, gave a breezy explanation of the land and money legisla- tion of 1892 and 1894: "We smashed the land ring by the land and income tax laws and by our land for settlement laws, and then we smashed the money ring by state lending. The two rings worked in with each other. The action of the state in entering the money market has made an average re- duction of two per cent, on 32,000,000 of landed indebt- edness, and 32,000,000 of other debts. This is a saving- of 1,200,000 a year to the country. In other words, the London loan of 2,000^000, which, at three per cent., costs the country 60,000 a year, is costing the people really less than nothing. There is a vast saving going into their pock- ets every year in greater comfort, independence and hope." Here is a political economy which creates wealth by capi- talising political brotherhood. The official statement of the purposes of the law, in the New Zealand Year Book for 1899, speaks with almost equal NOT RULED BY MONEYED MEN 307 plainness. Referring to the general decline caused by the advances to settlers in the rates of interest throughout the colony the Year Book says: "This result, while it may have diminished the incomes of a few persons resident within the colony has benefited thousands of deserving settlers and led to large areas of land being brought under cultivation that, but for the Ad- vances to Settlers Act, would still be in their natural state." "You would be surprised," a prominent member of the Ministry said, "at the small power of the moneyed men in this country. They can never get possession of the rail- roads nor telegraphs. The government competes with them in the rates of interest. They see the borrowers who need to come to them growing fewer. They do not dare to build up large estates." The Premier of South Australia, too, in his annual speech to the people, in 1896, emphasises the fact that the State Bank has forced capitalists, rather than lose their busi- ness, to "reduce their rates in a way that would not have been dreamed of but for this competition," and, he adds, "a good thing, too," with cheers from his audience. The rate of interest charged on the advances to set- tlers is five per cent, a year, but the amount paid each six months is at the rate of six per cent. The extra one per cent, is repayment of principal. There are seventy-three semi-annual payments, so that the whole debt is cleared off in thirty-six and one half years. On a loan of $500 the borrower pays $15 every six months for thirty-six years. The last payment is $9. On freehold property sixty per cent., on leasehold prop- erty fifty per cent, will be loaned by the state. Whenever a farmer has $25 "to the good" in his pocket it will be ac~ cepted in reduction of his indebtedness, and he may pay off the whole at any time. The charges for examining the 308 THEN WE SMASHED THE MONEY RING property and preparing the papers are all regulated by a fixed schedule, and are most moderate. No person in the Advances to Settlers office is allowed to take any fee or reward from any one seeking a loan. The average amount loaned is under $1500. A considerable number of the bor- rowers pay before the money is due. Ninety per cent, pay within a fortnight. Two thirds of the borrowers wanted the money to pay off existing mortgages made with private parties at high rates. Absolute secrecy is guaranteed the borrower. New Zealand went to the London market for its money, but the manager of the South Australian bank informed me that he got all his funds at home. He disposes of his bonds largely to savings banks and insurance companies. He sells his three and one half per cent, bonds in Adelaide at a premium and lends the money to the farmers at four and one half per cent. He saves by this use of home capi- tal a considerable amount of interest money which in the case of New Zealand was wasted from the fact that the Treasury, after selling its bonds in the London market, was not ready for some time to use the proceeds, and these con- sequently lay idle. The advantage of the South Australian method is that the State Bank, when an application is ap- proved, say to-day, sells the bonds to-morrow, and can pay over the money to the borrower the next day. The operation of the New Zealand act has been so suc- cessful that the rate of interest is to be reduced. In his budget speech for 1899 Premier Secldon, after showing that on the last $2,500,000 borrowed in London for advances to settlers the earnings were $125,000 a year, although the money cost only $75,000 a year, gave notice that he pro- posed to allow the people the advantage of this profit, and "reduce by one half per cent, per annum the interest charged upon advances to settlers." CHAPTER XIII GOVERNMENT AND COMPANY, UNLIMITED ALL the Australasian commonwealths are zealous seconds of their people in the international duels of the market. When the producer of Australia goes to Europe to sell his meats, wine, or wheat, in competition with all the other pro- ducers who rendezvous there, he has his country behind him and before him, too, since it is awaiting his arrival, and has, in most cases, even instructed him in advance what to bring and how to raise it, and, as will appear, does even more than this. The butter market of London is a colosseum of competition where, behind the individual sellers from Denmark, Canada, New Zealand, Victoria, the United States and France, are to be seen the governments to which they belong urging them on, telling them how to strike, and refreshing them between the rounds. The United States Agricultural Department in 1898 issued 501 different pamphlets and gave them a circulation of over 7,000,000 copies. The country that does the least for its producers is the one whose farmers are being most completely competed out of their own market England. No home market is enough for any community in these days of "expansion." All the Australasian colonies are committed to the policy of backing up the industries of their people at home and in the foreign markets. Queensland has advanced money to 39 310 GOVERNMENT & CO, UNLIMITED build co-operative sugar-mills ; South Australia has its Lon- don export depot and state bank; Victoria receives, grades and ships fruit, butter, rabbits, tobacco and other things, and has a very generous system of bonuses. Boldest of all is the "cheap money" scheme of New Zealand. New South Wales does less than any other colony. It is more like England in its "let alone" ideas. But in the dry lands it is digging wells to supply the farmer with "cheap water," which is to him quite as important as "cheap money" to the well-watered New Zealander. All the colonies subsi- dise the miner and prospector or "fossicker." Queensland gives a bounty on home-sold wool if home grown, and has two travelling dairies going about the col- ony for the instruction of farmers. But most important is the part it takes in the battle of the nations in the world's sugar markets. In proportion to its population of only 500,000, this country's re-inforcement of its sugar pro- ducers has been the most generous of all. In 1885 the Queensland Parliament appropriated $250,000 to be ad- vanced for the building of sugar-mills for associations of growers who had no mills in their vicinity and no means to build for themselves. One of the purposes of this legislation was to help in the solution of the great economic problem of Queensland whether sugar can be grown there as it is in New South Wales by white labour alone. It was made a condition of the loans that only white men should be employed. In the first years the experiment was not very successful. The co-operators got into trouble among themselves, and their irritation against the management was so great in some cases that the members boycotted their own mills. The associations did not pay their interest to the Treasury, and, in defiance of the express stipulation of the law, they crushed cane grown by black labour. STATE SUGAR MILLS 311 Still, in 1893, enough had been accomplished in the opin- ion of Parliament to call for a wider effort. A new law, the Sugar Works Guarantee Act, was passed appropriating $2,500,000 for the erection of sugar-mills, and in September, 1899, the Minister of Agriculture declared himself to be in favour of a further appropriation of $2,500,000. The state derives large benefits from this policy. I found that it had been the means of settling hundreds of people on land in districts where only dozens were before; and this process of settlement is still going on. This in- creases the amount of taxable property, the growth of popu- lation and the business of the railroads, all of which adds to the revenue. The policy has been popular with the farmers because there are a hundred and one contracts of all kinds for them and their teams, in connection with building and operating the mills. It has been popular with the labouring men and the radicals because of its co-operative feature, and because they saw in the development of co-operative sugar planting a re-enforcement of their campaign against imported col- oured labour. Some of the large banks and landowners favour it because it increases the saleability of land. Any group of Queensland farmers who wish to go into sugar-cane culture, and are not within reach of a mill where they can market their cane, need only get together and for- ward an application, asking that an official be sent to inves- tigate and report. If he finds that their land is suitable and that there is enough of it, and that the farmers know their business and mean business, the project is sanctioned. The farmers must give their guarantee that the land will be kept in cultivation to a sufficient extent to provide employment for the mill. The planters then incorporate themselves and make appli- cation in legal form for the needed amount of money. The 312 GOVERNMENT & CO., UNLIMITED plans of their mill must be submitted for official approval, and when this has been had, their lands and the mill to be erected are turned over to the government under a mort- gage and bill of sale. On this security the Treasury ad- vances the money, not giving it over direct to the associa- tion, but using it to pay for their mill. The construction is superintended by a state official, and "progress payments" are made only upon his certificate. While all these prelim- inaries of organisation, issue of debentures and building of the mill are going on, the farmers are clearing and plant- ing their ground. The Treasury at first undertook simply to guarantee the bonds of these companies at three and one half per cent., but in practice from the beginning, and now by law, takes the debentures itself and advances the cash. The latest returns, those for 1899, show eleven mills to have been built under this plan. They have received ad- vances of $2,324,805 out of the authorised appropriation of $2,500,000. They have a capacity of 48,000 tons of sugar in the season. The total product of the colony last year was 163,734 tons. They have made a net profit of $95,280; have paid interest of $101,770, and up to June 30, 1899, owed $182,225 in interest, and $281,300 on the repayments which according to law were to be made each year in "re- demption" of the principal. The percentage of profit earned by these mills varied from three and one half per cent, to twenty-two and one half per cent., the average being nine and one quarter per cent. In mitigation of the failure of the mills to pay all of the in- terest they owe, they plead the fact of a very heavy fall in the price of sugar and a succession for three years of bad seasons. A hot controversy rages around the question of white against black labour. One of the effects of federation will be to put an end to the use of Kanaka or coolie labour on the THE WHITE MAN'S PRIVILEGE 313 sugar plantations of Queensland. New South Wales raises its sugar with white labour, and will never consent that Queensland shall have the advantage of the cheaper labour from the South S^a Islands if it is cheaper. On the other hand, in federation Queensland will get the benefit of a protective duty against foreign sugars. This will inure wholly to its advantage, as it alone of the colonies produces more sugar than it consumes. The intense "white" policy of Australian labour parties will make it impossible for Queensland to continue, now that federation has come, her importation of the Kanakas and coolies. Even before federation and without the help of the Labour Party in the other colonies, the Labour Party of Queensland has been able to impose so many restrictions on this black labour as to take away a very large part of the profit of it. Mr. Michael Davitt has given some very interesting and accurate details in his book about this labour situation in Queens- land. The official returns show cases in which "free" Kanakas receive $750 a year. Many draw from $3.75 to $6.25 a week, with housing and rations. They receive all this whether well or sick, and if sick, must be given proper medi- cal attention. The black man is not allowed to plough nor drive a horse on the road, nor to work in the mills. This work is the privilege of the white man. I found the officials of the Agricultural Department at Brisbane believers in the feasibility of cultivating the cane fields with white labour. They told me that the small planters who are going into these co-operative mills by the help of public money are cultivating their cane fields with their own and other white labour. They employ a few black men, but this black labour is decreasing, and it is thought will continue to decrease. The supply is small, and the black man is rapidly becoming sophisticated enough 314 GOVERNMENT & CO., UNLIMITED to get as much as the white man, and is, at the best, not as valuable as the white. But Professor Skertchly, the State Geologist of Queens- land and late President of its Royal Society, on the other hand assured me that it was impossible for the white man to live and labour in the tropics, and especially emphasised the impossibility of the white race propagating itself. He says that the statement that white men can and will labour in the sugar fields "is a political cry and not a proven fact." "Tropical agriculture," he says, "requires not only a hot but a moist climate, and it is this steaming atmosphere with but little change of temperature which surely, even if slowly, undermines the vitality and energy of the white who unwisely attempts a style of life for which nature has unfitted him through centuries of education in less trying regions." This question is wider than Queensland. Our Hawaiian and Philippine and West Indian accessions make it a burn- ing issue for the United States. Benjamin Kidd, in his book on "The Control of the Tropics," insists that the white man cannot live and work and transmit himself in the tropics. But Alfred Russel Wallace opposes this view in a most interesting contribution which he made to the "London Daily Chronicle" of November 2, 1898. As the result of twelve years in the tropics, spent in work, he says that it is "because white men as a rule do not work enough in the open air in the tropics that they suffer in health." They who "suffer most in the tropics," he says, "are women of the ruling classes," and they are the ones who do no out- door work at all, and have the fewest outdoor occupations and amusements. He goes so far as to affirm that the trop- ics, on the whole, are more conducive to health than the temperate regions. They are, he says, the most lovely and THE ROAD TO PARADISE 315 most enjoyable abodes for the human race, for there it can live with the least amount of labour, and secure the greatest amount of leisure for the development of the higher nature. But the white man can do this only as a true settler, not as an exile and fortune hunter. He must not have his work done by hiring native labour, a more or less modified form of slavery, according to Mr. Wallace, but must work himself with his hands as well as his head. With these results of his experience and observation be- fore him, Mr. Wallace offers "as a clear and definite solu- tion of 'the problem of the tropics,' " that "they must be gradually occupied by white men in co-operative association to establish permanent homes." And these, he goes on to say, "surrounded by the glories of tropic vegetation may in time become something like a legendary paradise." At Hawaii I found the large planters fully conscious of the coming perplexities of their labour supply under the laws of the United States. Indeed these perplexities had already arrived. Some attempt has been made to fill the labour void by the importation of Japanese, but the experience at Hawaii has been the same as that which is indicated by the significant utterance of a Queensland planter, in an agricultural conference at Mackay, in Queensland, in June, 1899, who spoke of the "intelligent, enterprising and unde- sirable Jap." The Jap is too intelligent and too enterpris- ing to submit to the treatment which the Chinaman will bear without a murmur. The Chinaman never resists, but there comes a moment when the Jap takes his knife and goes for the overseer. On the steamer that brought us back to America was an agent of a syndicate of Hawaiian planters coming to the United States to induce American farmers to settle in the islands, to grow sugar for the large mills. In Queensland a similar movement is under consideration. 316 GOVERNMENT & CO., UNLIMITED One of the proposals discussed at the Queensland Agricul- tural Conference just spoken of, was a plan for the assisted immigration of farm labourers from England, Germany and other European countries. "It is in Europe," said the principal speaker on this sub- ject, Mr. G. W. Pott, "that we will find the labour we re- quire. In Great Britain, Germany, Denmark and other European countries, we will find a class of farm labourers, thrifty, sober, industrious, accustomed to long hours of steady toil, and paid at a rate of wages in many cases below that paid by us to the Kanakas." To crown the efforts to advance the sugar industry, it is proposed by some of the leaders in the Labour Party of Queensland that the colony shall establish a "state sugar re- finery." This would refine the sugar of the planters at actual cost. The commonwealth would then act as a broker for the sale of the sugar it refined, and turn over to the pro- ducer all the profit less only a small charge to cover its out- lay "as South Australia does with its producers," one of these leaders said to me. New South Wales gives no subsidies, but its sugar inter- ests, as the statistics show, are prospering at about the same rate as those of Queensland. The colony of Victoria re- cently appropriated $250,000 to establish a sugar-mill at Maffra, and subsidised the farmers to grow beets for three years, and when I was there the officials were sanguine of success. But since then comes news, in September, 1899, that the mill has been closed. New Zealand was the first to subsidise the sugar industry. It has been giving bonuses and other help for 'twenty-two years, but nothing of value has yet been accomplished. Victoria is a protectionist colony; New South Wales, free trade. It is one of the paradoxes of Australia to see these two states, with policies so opposite, side by side, and THINKING WHAT CAN BE DONE 317 both flourishing, so far as observation and statistics show, about equally well. The credit of all the Australasian colonies is inseparably bound up with the ability of their people to obtain, by sales in foreign markets, the means to pay the taxes out of which interest and principal on the very heavy debts abroad must be met, to say nothing of the taxes to be paid at home. They have, therefore, all of them, taken hold with their peo- ple to make the export trade as successful as possible. "It has been my business for years," the Under-Secretary of Agriculture at Melbourne said to me, "to sit here and think out what can be done to help our producers." His department has established travelling dairies and model schools, and sent lecturers all over the country to tell the farmers how to take care of their milk, and how to get the best results in butter and cheese. The teaching was at first practical, now it is scientific. Refrigerating cars were put upon the railway lines, cool stores were provided at the country railway stations, refrig- erating chambers were built in Melbourne, and the depart- ment undertook to inspect and brand butter for export. A bonus of two to six cents a pound was paid for several years on all butter sold abroad for which the seller could show his receipted bill of sale. The industry has now been so well established that the bonus is discontinued. In its cold-storage warehouses at Melbourne the govern- ment grades, packs and ships the butter. This cold storage was at first provided free, as it still is in New Zealand, but now a charge is made. At first no poor butter was allowed to be exported under the official brand, but lately what is called a "fire brand" has been adopted, under which inferior butter may be shipped for the use of pastry cooks. Victoria acts as the representative of the shippers collec- tively in making contracts with the steamship companies for 3i8 GOVERNMENT & CO., UNLIMITED freight, and these contracts include the use of refrigerating chambers. "A wonderful success has attended this help to the dairy interest of Victoria," the Under-Secretary for Agriculture said. "Victoria is now the largest exporter of butter except Denmark." If butter from a particular factory has anything the mat- ter with it, an inspector goes there and finds out what the trouble is. Under the direction of the cattle inspector diseased cattle are killed without compensation to the owner, on the ground that such animals are of no value to the owner or anybody else. The export business in poultry has been developed in sim- ilar ways. The size, weight, etc., of the shipments are of- ficially regulated. The experiment has been a success, but not as successful as that in butter. The government initiated the export of frozen rabbits. The Under-Secretary for Agriculture, looking about for "things that could be done to help the producers,'"' saw in the destruction of rabbits a great waste of food. The rab- bits are now received at cold-storage chambers, sorted out, and all those that are fly-blown and otherwise imperfect rejected. This inspection is carried on with incredible swiftness by men who have grown expert. When I was in Melbourne there were 900 tons of frozen rabbits in the warehouses. The wholesale price which is received in London for these rabbits runs from sixteen to twenty cents each. This export and the requirement that landowners keep down the rabbits hold in subjection the pest which once threatened all the pastures of Victoria with ruin. What Pasteur failed to accomplish with his scheme of inoculation with contagious disease is being done by the demand of the markets. BONUS OF TEN DOLLARS AN ACRE 319 Victoria has sent to America for the best tobacco expert whom our Washington Agricultural Department could rec- ommend to it, and he is now at work under a three years' engagement, doing all that he can to improve the tobacco culture of the colony. Under his advice the Minister of Agriculture has established an experimental farm to give instruction to the tobacco growers, and a bonus is being paid of several cents a pound on all tobacco sold abroad. A shipment of fifty tons had just been made when I was in Melbourne, and as much more was to be shipped the next week. Fruit culture has been developed by the payment of a bonus to the growers of ten dollars an acre in gradual in- stalments, covering six years. A horticultural expert is sent around the country to teach the principles of the art. Attention is given mainly to the export of apples. These are shipped by the growers in ordinary crates to the cold stores of the department ; they are then chilled to bring out the blemishes, after which they are sorted and shipped again in refrigerating chambers. Orchards are inspected regu- larly also upon request. If insects or other plagues are not removed according to directions, the growers are fined. The expert tells the farmers what trees to plant and how to take care of them. An analysis of soil is made for a nominal charge. This was at first made free until it was found that the analyses were asked for without being used. Special hopes are entertained of the future of the wine industry. The state has established a school of viticulture and has started three vineries, and it also gives a bonus in case of the opening up of a foreign market. An export of honey sent to London, under the auspices of the Agricultural Department, brought back the report from that city, unaccustomed to the peculiar flavour given by the eucalyptus, that "this honey might possibly be use- 320 GOVERNMENT & CO., UNLIMITED ful for medicinal purposes, but for no others." Not dis- couraged, however, by this, the export continues and is creating a constituency of its own. In all its dealings with the producer, the rule of Victoria has been to let him choose his own agent in London, if he desired to do so. If not, it will undertake to find one for him. A horticultural school started recently by Victoria was meant for men, but it was announced that if women wanted to come they would be admitted. To every one's surprise the school was at once flooded with women. Every seat was taken, and further admissions had to be refused. Well-to-do women come because they want to learn enough to see that their gardeners do the right thing; poor women come to add another means of making a living; and a familiar figure is the factory girl who has been warned by her doctor that she must betake herself to an outdoor life, if she would live. There are lectures and practical work in gardens and orchards adjoining the school. In 1896 $775,000 was thus spent by a people numbering only 1,100,000 in the development of agriculture and min- ing. An allowance up to $2.50 an acre is made to the lessees of pastoral land for improvements that add to the stock-carrying capabilities of the land. The work of irrigation which in the United States is left to private enterprise has been taken up in Victoria by the state. A commission was sent some years ago to America to study the results of our experience, and, upon the publi- cation of its report, Victoria embarked upon an extensive scheme. Up to 1896 the colony had already spent over $2,000,000, and had plans which contemplated the expen- diture of nearly $4,000,000 more. This was in addition to an advance of nearly a million to private companies, to whom further advances will be made of several millions of dollars. THE EDUCATIONAL CAMPAIGN 321 The Mining Department in many districts sets up bat- teries at which it crushes ores for a small charge. Money is also advanced to companies and parties of not less than four miners for the prospecting and development of new territory. To promote the growth of manufactures the Ministry asked the Commissioner of Railroads to carry coal at a uni- form charge of a half penny a ton a mile. The commis- sioner, however, refused. It was no part of his business, he said, to do the work of other departments and develop the country at the expense of the railway department. The controversy was settled by an allowance made out of the Treasury to the railroad department of one farthing a ton a mile, which just saved the railway department from loss, and coal is now being carried at the rate of a half penny a ton a mile throughout the colony, the Treasury standing the loss. One of the unique contributions of the state to the devel- opment of industry in Victoria has been the educational campaign. It set to work systematically to teach the peo- ple co-operation. Little pamphlets were printed and dis- tributed throughout the colony reciting the methods by which co-operation had been made the wonderful success it is in England and in Continental Europe. Lecturers were sent out to talk to the people on the same subject. The re- sult has been that the whole country is now dotted with co- operative dairies and creameries. There are joint-stock creameries also, but the co-operative farmers are doing much the largest part of the work. Its free trade bias is shown in the different procedure of the colony of New South Wales when it followed the lead of Victoria and established a Board for Exports. This did not begin operations until 1897, and has therefore not as yet achieved the results which have been noted in Victoria. 322 GOVERNMENT & CO., UNLIMITED New South Wales emphasises the fact that it does not buy or sell any article or produce on behalf of the owners. Its principal aim is to open neglected markets. It provides cold storage and shipping facilities very much as Victoria does, but everything of that sort in New South Wales "has to be paid for at commercial rates," the report says, "so that no undue advantages are given to exporters at the expense of the general taxpayer." The state, in South Australia, makes advances to the pro- ducers on the value of their shipments, but the producer of New South Wales must look to private sources for such accommodation. Agents of the London merchants in Syd- ney make advances to the extent of half or three fourths of the probable selling value of products as soon as they have received the brand of the Board for Exports. A very con- siderable increase of prices is reported as one of the benefits which have been received by the producers from the estab- lishment of this board. The statistics show the benefit Victoria has had from its policy of bonuses on the export of butter. In the years 1888 and 1896 the exports of butter from New South Wales increased from 764,960 pounds to 2,707,088 pounds, while those of Victoria increased from 1,202,649 pounds to 22,- 170,790. The export went as high as 25,660,782 in 1895, but was cut down by the drouth. South Australia follows Victoria in this policy of state aid to the producer, and has added to it a characteristic fea- ture of its own called the Produce Export Department. This receives products at the ports of shipment in South Aus- tralia and disposes of them in the London market. The Pre- mier, the Honourable C. C. Kingston, in his annual speech to his constituents, in March, 1896, said: "We thought that while throwing open the land we ought to enable the people to live on it and get a market for their products." ALL THE FARMER HAS TO DO 323 The law for this experiment was passed in 1893, and the work was begun in 1894. At the formal opening of the depot in 1895, the Minister of Agriculture, the Honourable John A. Cockburn, said that the liberal legislation for the settlement of the people on the land, and the work done by the Agricultural Bureau, with its innumerable branches throughout the country, and by the Agricultural College, was of little use if the producers were not somehow enabled to place their produce advantageously on the world's mar- kets. It was for this reason that the depot was established, and the Minister of Agriculture predicted "that when the history of the colonies came to be written, it would be seen that no more important step than this was ever taken by any legislature, and that it was a step which, at no distant date, would be followed by all the other colonies." "Before the state moved in this direction," he said, in an address in Philadelphia, in 1899, "the small farmer or fruit grower was practically unable to reach the markets of the world, even if there was a great demand for his produce. The rates for freight and insurance were so high on small shipments that practically they were excluded. So the state stepped in and by grouping together the little rivulets of produce into one shipment, sends them forward at the lowest possible charges. The state in this way has brought the world's markets within the reach of the farmer and fruit grower. "All the farmer has to do in South Australia, when he wishes to send a box of honey, butter, or some sheep abroad, is to write to the Agricultural Department, and if they are approved and forwarded, the farmer has noth- ing more to do but to sit at home and wait returns by check." The department receives at Port Adelaide, in South Aus- tralia, for sale in London, cattle, rabbits, poultry, alive or 324 GOVERNMENT & CO., UNLIMITED dead, butter, grain, wine, honey, fruit, and any produce for which there is a prospect of a demand. In fact, the state meets the farmer long before he comes to the doors of the receiving depot in Port Adelaide, for the railway station to which he delivers his stuff is its property his property and after he makes his delivery there the state does the rest, all the way to London and back. At the opening of the Produce Export Depot, in 1895, the Minister of Agriculture pointed out that instead of con- ducting their business entirely with distant agents in Eng- land, as they had been doing, the producers could "now go into partnership with the agent-general in London and the manager of the London depot, who would act as principals for them, and would see that they got full justice and fair play. The government does the business at both ends," he said. The men who raise the food and raw material of the world do well if they make a bare living, and the wealth somehow sticks to the men who sell it for them, but the Produce Export Department of South Australia is a com- mission merchant or broker who can have no secrets from its customers. The public accounts tell the exact story of all the dealings down to the last cent of the receipts and ex- penditures. Here is the only broker of whom the producers know that they get precisely what he gets, less the neces- sary cost of the marketing. The commonwealth puts its fraternal arm about the far- mer even before he goes to the railway with his shipment. Besides employing experts to tell him what to raise and how to cater to the customer, it analyses his soils and fertilisers, and supplies seeds and cuttings. Minister Butler of the Agricultural Department, in an address at the Agricultural Bureau Congress, in September, 1898, speaks of how he sends inspectors who get samples of SAVING BY LOSING 325 fertilisers from the dealers, which are then examined by an official analyst. The results of the analysis and the ap- proximate fertilising value and any other papers which the minister thinks necessary are then published in the state's "Journal of Agriculture," together with the price which the dealers ask. There is no attempt to fix the prices at which the articles are to be sold, but the department means to see to it that the buyer shall know precisely what he is getting. The much abused "state" does not seem to be wholly lacking in business ability. The report of its Produce Ex- port Department notes that, during the summer months when there was little produce being brought in for export, the cold-storage rooms were rented out to butchers, produce dealers and others. This saved for them very large quantities of stuff which otherwise would have perished, and it gave the department an income and enabled it to keep its em- ployes at work instead of shutting down. Democracy can do business at a loss and still make money. A homely illustration of this is shown in the operations of this export department with rabbits. It loses money on the rabbits which it receives, sorts, refrigerates and ships, as it charges the same price as is fixed in Victoria, where the business can be done much cheaper as it is very much larger. But the Minister of Agriculture points out that, though not directly remunerative, this business is remunerative indi- rectly. It gives employment for labour, increases the railway revenue, converts what has been a scourge into cash, and enlarges the capacity of the country to carry sheep. Were these rabbits not thus made a marketable commodity, they would be ruining some of the best lands in the colony. "Individual enterprise" could not look beyond the im- mediate loss, but democracy, acting in this way, with one 326 GOVERNMENT & CO., UNLIMITED mind for the common good, is a larger sort of "individual enterprise." It fulfils Browning's fine definition of the people, "A people is but the attempt of many To rise to the completer life of one." Animals may be delivered at the export depot at Port Adelaide, South Australia, either alive or slaughtered. If delivered alive, the department will see that they are prop- erly killed, dressed, chilled, shipped and sold, and the gov- ernment, which is not too big to do little things well, informs the producers that "when the slaughtering is undertaken by the department, the fat and skin will be returned to the owner," but "the remaining by-products become the property of the department." South Australia will even receive ducklings, goslings, or any other kind of poultry alive, if the farmer so prefers, and will kill, dress, grade, pack, freeze, ship, insure, sell and remit, all according to a schedule of charges furnished the shipper in advance. It goes a good ways farther back than that in its care of the shipper. Not content with seeing that he ships no butter to London that is not up to grade, it goes back from the butter to the bull, in whose virtues the excellence of the butter must originate. In the report for 1898 the Minister of Agriculture notes the purchase of eight bulls, five Jerseys, two Ayrshires and one Holstein, which have been sent to various dairying centres. By 1899 there were twenty-three bulls stationed in different parts of the province. The town bull has long been a familiar figure in the agricultural industry of the world. Here we have the appearance for the first time of the "state" bull. Danton proposed a similar enterprise to the revolutionary govern- ment of France. A STATE SHIP 327 Like Victoria, South Australia has stimulated the butter business by the giving of bonuses, and, in his speech in 1896, Premier Kingston pointed out the effect of this butter bonus. Up to 1893, when the bonus was given, the total value of the butter sent to England had been only $6000. The export in the two years since has been $550,000. When he was giving particulars of the beneficial results of the working of the export department, he was interrupted by a voice in the audience, which exclaimed, "You will want a state ship next." "Yes," the Premier replied, "to carry some people away." Then, leaving the jest, he acknowledged that the colony had serious thoughts of supplying ships as an additional link in their facilities, and the same enterprise is under consider- ation in New Zealand. Special efforts are made by South Australia to develop the sale of wine in London. The exports have increased rapidly, and the colony is now debating whether to subsidise co-operative wine cellars in South Australia, or to establish state cellars of its own. The struggle to find a market in England for colonial prod- uce runs up against serious obstacles in the trade customs of the mother country. The London agent of South Aus- tralia reports that he is unable to get the attention of certain houses unless he is willing to fall in with the "custom of the country" and pay commissions "varying in degree with the importance of the firm." His efforts to market olive oil were blocked from the fact that the leading firms in London dealing in that com- modity were interested in continental oils, and were not only unfavourable to any new competition, but would "crab" any other oils a market expression which needs no elucidation to those who understand crab locomotion. They have "vested interests in their own goods to protect." 328 GOVERNMENT & CO., UNLIMITED The Agricultural Department of South Australia makes freight contracts for the shippers, and the Minister has stated that the Australasian colonial governments are all working together to secure reductions in freights and other charges. The state puts its stamp "Approved for Export" on no wines or butter, or other things, without knowing that they are precisely what they pretend to be and what they ought to be. "If articles are inferior," says the Minister of Agri- culture, "we have nothing to do with them." However, if rejected, the department does not withhold its further help from the unfortunate producer. It undertakes to sell for his account any shipment which it has rejected as unfit for export. His produce, therefore, is not thrown back on his hands as a total loss. The success of the Produce Export Depot has been incontestable. Its business doubled in 1898. In a bulletin issued in February, 1899, the Minister of Agriculture an- nounced that the storage capacity is to be increased at once to more than double, and that estimates and plans for new works with still larger capacity are being prepared to go into operation probably in the following year. Best of all, the slight deficit of the previous years has been wiped out, and the returns of the business for 1899 fulfilled the promise of the previous growth that the tax- payer will not be called upon to pay anything for the ex- periment. The first half year's work in 1899 shows a bal- ance sufficient to pay interest at the rate of three per cent, on the investment, and there was a profit on the whole year's operations. Through the export depot the producers get higher prices, and steadier the South Australian apples sent to London through the depot brought the highest price of any mar- keted there. The Minister of Agriculture estimates that the export depot has added ios., $2.50, an acre to the FARMERS' SUB-TREASURY SCHEME 329 value of all lands in South Australia fit for growing lambs, butter, wine and fruit. Following the same policy as that of New Zealand as to railway charges Minister But- ler promises that as soon as the export depot "is able to pay anything like four per cent, interest above expenses its charges will be proportionately reduced. That is where the advantage of the state having the department comes in. In a department carried on by private enterprise you could not expect such a reduction, but we have no shareholders to whom a profit has to be paid." South Australia advances money to the farmer at both ends of his labours. It lends him money through the state bank, as has been described, on his farm, and then, when his produce has reached the export depot, if it has passed the inspection and has been "approved for export," it will lend him money on the value of the shipment. In its directions to shippers the statement is made that "advances will be made on produce at the discretion of the Minister, interest being at the rate of five per cent, per annum." Oceans of ridicule were poured on the agitation a few years ago, among the American farmers, to get the national treasury to advance them money on the security of their wheat, cattle and other products. The farmers were and are being bled to death by the elevators, commission men and railroads, and they wanted and want relief. That which seemed so preposterous to the critics of the farmers of the United States we find is in actual operation in many of the Australian commonwealths New Zealand, Victoria, South Australia, Western Australia, for instance. These Anglo-Saxons are "self-helpers," if there ever were any. There has been of course a strong Australian opposition to all this from those who believe that the government should perform none but negative functions, but even the most pronounced of these laissez-faire theorists are being 330 GOVERNMENT & CO., UNLIMITED won over by the indubitable success of the experiments. In defending this policy Dr. Cockburn, once Minister of Agri- culture of South Australia, has said : "If you bring hope into the life of the farmer and make him sure of his reward and that his profit will not be taken away from him you make him more efficient. Instead of sapping private enterprise we are assisting private enterprise. We are not anxious to organise patriarchal institutions, but fraternal ones." This policy can be seen at work nearer home. The ex- port business of Canada in butter and cheese has been in- creased by wonderful percentages. One cause is the very stern prohibition of spurious products, like filled cheese. Another is the direct aid given to the industry. Any one who wants to understand the subject of "Government & Company, Unlimited," can do no better than to read the reports of the Canadian Commissioner of Agriculture. The Dominion makes loans to the farmers in Prince Edward Island and in the Northwest territories in aid of the con- struction of butter and cheese factories. It gives a bonus to creameries for a costly cold-storage plant in accordance with official plans. The provinces of Quebec, Nova Scotia and New Bruns- wick also give bonuses, some of them considerable ones, to promote the erection of factories and creameries. The government of Canada which seems to have an "eagle eye," as well as "private enterprise" further ob- served that the cheese factories, since they could make their product only in the summer, had to be idle during the win- ter. To put a stop to this waste of time, capital and la- bour, it undertook to teach the farmers that butter could be made in their cheese factories in the winter time, and to assist them, financially and otherwise, during the pioneer period. It gave the necessary instructions and contributed DIFFERENT KINDS OF HUMAN NATURE 331 part of the money and machinery needed. To induce the farmers to go into this new departure of winter dairying the Dominion even undertakes to run the works itself at first, to push the sale of the butter, and to make monthly advances of money to the farmers on the value of their product. Like Victoria, Canada acts as an evangel of the gospel of co-operation among the farmers, and puts in the full plants required for co-operative dairies. It usually finds the farmers reluctant in the beginning, but has invariably changed them into hearty supporters of the experiment. In many districts the farmers are organising themselves and establishing co-operative dairies wholly at their own expense, provided the government will run them in their behalf during the initial period. Of course "we cannot change human nature," but per- haps there are different kinds of human nature in the world. The Dominion of Canada seeing, like the Australian col- onies, that cold storage is indispensable to export and that export is indispensable to the modern producer, has for years been spending large sums to supply its farmers with cold storage on the railways and steamship lines in all di- rections. This was done, with Treasury help, on seventeen steamships between Great Britain and Montreal alone in 1897. One result of this intervention of "politics" was to perfect the refrigerator service, which had been such in name only ; for "private enterprise" had been so careless and unscientific that instead of keeping its cold air around the contents of the cars it had been pouring it out along the tracks through leaky pipes. It was New Zealand that originated the system of grad- ing for export and it grades for domestic use as well which has been so widely adopted in the other colonies. This was at first opposed as "interference with the liberty 332 GOVERNMENT & CO., UNLIMITED of the subject." But the dairyman did not take long to find out that it was the gift of a new liberty to be told at once of defects in his butter, due to some carelessness or fault of the farmer or manager of the creamery. This makes it possible for him immediately to correct it and not go on shipping a poor article the whole season to London, only to learn, too late, that it had been found unsaleable there. The colony in addition provides cold storage for products for export, and makes no charge. The grading protects the good farmer from the bad, the honest from the dishonest. New Zealand was the first to give a bonus on export, which it did, in 1882, by paying a prize of $2500 for the first export of fifty tons of cheese. In the same year it gave the same prize for the first shipment of frozen meat. It was also the pioneer in acting as the schoolmaster of co-operation. If the farmers of any district want to es- tablish one of the co-operative dairies, of the success of which in different parts of the world they hear so much, the Agricultural Department will send an expert to look over the ground, and if he finds that there are cows to supply enough milk and that a sufficient amount of capital can be raised by the farmers, the department supplies, free of charge, plans and specifications for creameries and for the machinery. A recent law authorises the advance of money for the erection of creameries, provided the farmers find a proper proportion of the capital themselves, and applica- tions are now being received for this purpose. Flax grows everywhere in New Zealand, and a prize is offered for an improved process for treating the fibre. Bonuses have been given for the successful manufacture of new products felt and other things. New Zealand has under consideration a plan for a gov- ernment warehouse in London. It maintains a produce THE PUBLIC BUYS A PATENT 333 commissioner in London, and he is urging that the col- ony should open at least one shop in each town of im- portance in England, solely for the sale of New Zealand meat. A still more ambitious suggestion comes from Vic- toria. Minister of Agriculture Taverner, after a visit to England to study the marketing of Australian products, has made a report recommending that the various Australian colonies should combine to erect large, cool stores at the London docks, to cost $1,125,000, and also that they estab- lish produce exchanges in various parts of London. While doing his studying Mr. Taverner also did some business for his constituents. He arranged for direct steam- ship communication for the first time between Victoria and Manchester, and also got reductions of freights on colonial products averaging fifteen per cent. The local authorities of New Zealand are empowered by Parliament to use their money to aid in the development of mining, and Parliament appropriates suitable sums to sub- sidise roads to the mines and to give rewards for the dis- covery of new fields, both to individuals and companies. The government has expended hundreds of thousands of pounds for races to supply water to the miners. It gets but small returns on this directly, but public enterprise has a broader basis than immediate profit. Counting in the sums received from miners for miners' rights and the gold duty and the amount of general taxes paid by the miners it has been figured in certain cases that the amount appro- priated for this industry really pays nearly five per cent, a year profit, and public opinion in New Zealand sustains the expenditure as a whole as highly desirable for the general good. In 1897 the state appropriated $50,000 for the pur- chase of a cyanide patent for the reduction of refractory ores in order to throw it open to the public at reasonable rates. 334 GOVERNMENT & CO., UNLIMITED New South Wales pays miners a certain bonus for every foot they go down. This is usually expected to amount to about half the cost of sinking the prospect hole. If the prospect is a failure it saves thousands of dollars that would have been spent in the neighbourhood by others, and if one prospect in many proves to be a strike the colony is amply repaid. New South Wales also reduces ore experimentally for the public. It will apply every process necessary to deter- mine its value and the proper way of treating it, and for this it makes a small charge. This is a work, as Minister Mc- Lachlan explained to me, which private industry could not undertake in the present state of development of New South Wales. The individual miner could not find out what to do. He would probably buy the wrong machinery or go in for the wrong process. The huge water-pipe (of American manufacture) which has been laid by Western Australia to the gold mines of the Coolgardie district is one of the mining wonders of the world. Queensland, in aid of deep mining, will advance pound for pound on the expenditure by private parties, pro- vided the experiment has the approval of the state geolo- gist. In aid of ordinary prospecting it will advance ten shillings a week to each man. The following is a specimen of the kind of "political" news which one finds in the New Zealand papers : "The Agricultural Department has decided to make its first shipment of poultry to London in February. The de- partment has arranged to kill and dress all birds sent to the depots, to be established at each of the four chief ports, and it will also be willing to send them to the home mar- ket at the risk of the owners. A small charge will be made for killing, dressing and packing. The cost of ship- ping the birds to London will be equally reasonable." NO MORE PILGRIM FATHERS 335 The people do not take this kind of thing as in any way a favour or privilege. No such idea of the relation between himself and his government ever enters the mind of the New Zealander. He is the government, and he expects it to do what he wants as if it were his hand. I read in my morning paper of Christchurch : "Considerable feeling was shown at the meeting at Marshlands last night with respect to the failure of the De- partment of Agriculture to fulfil their promise to send a trial shipment of onions to England." And of course a deputation was appointed to call the department to account. All this seems to be a good illustration of the origin of all the Australasian "socialisms." They have been the natural recourse of a new people coming into existence in the midst of the modern complex industrial system. Al- though in a new land the Australasians found themselves compelled to produce for the world's markets in sharp com- petition with the people of all other countries. They must pay interest and must buy expensive machinery and must live expensively. From every quarter of the globe other peoples are pouring products into the markets, with the help of the reaper, the binder, the railroad, and all the other now-a-day processes. The primitive age of colonisation is past the Robinson Crusoe age. With the natural shrewdness of the Anglo- Saxon, the Australasians have recognised this and have borrowed abroad and socialised at home. Colonisation in this age of the world cannot be the Pilgrim Father thing it was one hundred years ago. One of the trusts or monopolies in New Zealand is the "shipping ring," which has drawn a cordon of high rates and poor service between New Zealand and the rest of the world. The people complain of this bitterly, for it produces 336 GOVERNMENT & CO., UNLIMITED some results very characteristic of monopoly. Coal is very dear in Wellington $9.25 a ton because by some sort of "an agreement between gentlemen" the steamers from Aus- tralia do not bring in the cheap coal of that colony, and the New Zealanders are left to the tender mercies of the steamship company in control of their country, which also by a happy coincidence happy for it owns the princi- pal coal mines in addition to the steamers. Its freight rate from the New Zealand mines to the New Zealand mar- ket is twice as much as that for bringing coal from New South Wales, several times as far. An excursion to the Sounds of the West Coast, which are more beautiful than the fiords of Norway, is made every year by the steamers of this monopoly. The owners of a boat not belonging to this combination, thinking the sea was free and that they might as well make a little money in a dull season, advertised to carry tourists to Milford Sound. At this they were promptly notified by the monopoly that if they persisted in this invasion of "our field," it would at once put on a boat to compete with them in their own ter- ritory. There are constant complaints from shippers of prod- uce abroad of their treatment by the transportation com- panies, both as to rates and accommodations. The New Zealand government is continually interfering in their be- half and frequently secures important reductions. It has also subsidised steamers, but that has not worked satisfac- torily. It cannot always see that full cargoes are ready, but the subsidised boats demand full pay nevertheless. The Agricultural Department is now asking Parliament for power to enter into contracts with steamship companies in behalf of the producer. Premier Seddon, in his speeches during the last campaign, gave frequent instances of the active and successful intervention of the Ministry in behalf STATE STEAMERS, MINES AND STORES 337 of better freight rates for the producers. As one item, it succeeded in getting the freights on flax reduced by 3 a ton. In opening the annual show at Dunedin, in 1899, the Pre- mier stated that he had been negotiating successfully for steamship communication with the Cape and even beyond, to India. In a speech just before the November election, 1899, he said, referring to his success in breaking down the former monopoly and reducing freight rates, that, if the steamship companies attempted to get the same rates as formerly, he would stump New Zealand from end to end, and the result would be a line of government steamers for the carriage of New Zealand produce. The price of coal in New Zealand was the subject of a Parliamentary investigation in 1899. It was found that the "shipping ring" was complete and that there was no com- petition. The Various ports were apportioned out among the different companies, like Roman provinces. Twice as much was charged for the shipment of coal to intermediate ports as to the principal markets like Wellington. The committee found that the price of coal could be reduced materially without any interference with the wages of the miners or the legitimate profits of the trade. Besides suggesting some minor reforms the committee recommended "that the government take into consideration the advisability of procuring steamers for the purpose of conveying coal purchased by the government at the port of shipment," and the "opening of retail agencies under state control." The Opposition laughed at the idea that the state go into the coal business "as a huge joke," but the Premier took quite a different view of it. In the debate on the re- port he said, "The state can get screened coal for its rail- ways at less than $5.00 a ton, and why should the working- men have to pay $10.00 a ton? It will pay the state to buy coal at those rates and retail it from depots at $6.25 a ton." 338 GOVERNMENT & CO., UNLIMITED The Premier was not afraid to point out where the policy which began in the purchase of coal must end. "The time is not far distant," he said, "when the state will be working its own coal mines. I do not see why it should not do that as successfully as it works the railways." Later, in a public speech dealing with future legislation, the Premier announced his intention of promoting a bill to fix the maximum price to be charged for coal. At the same time he promised a bill to regulate the rents for poor shopkeepers who were unable openly to take part in political organisations because of the pressure of their richer cus- tomers. Evidently the people regard Premier Seddon's programme with favour. In the election which soon fol- lowed, in November, 1899, he and his party were re- turned to power, for the third time consecutively, and with a larger majority than ever. The old, too old, world is sterilising its wealth, its life, by the political economy of hell, into the deaths and debts and despotisms of war. The living capital of the interna- tional money markets that would reproduce itself in ever more and more harvests, commodities and homes we are changing into dead capital armaments, soldier boys' graves and billions of government bonds to mortgage the many to the few for all time. But of the $40,000,000 in- crease in the New Zealand debt since 1891, $31,000,000 went into peopling the land, and railways, harbours, ad- vances to settlers, etc. It costs $1,092,565 a year in inter- est, and earns $1,434,350. Eight of the other nine millions were spent for land and public works. Most of the last million was for debt refunding. Of th'e Australasian na- tional debts of $1,064,859,095 in 1897, $907,389,505 stand for railroads, water, sewerage, telegraphs, bridges, har- bours, immigration, and most of the remainder for "other works and services" is equally fertile. CHAPTER XIV PENSIONS FOR VETERANS OF WORK IN the post-offices everywhere throughout New Zealand one sees on the walls a notice headed : "OLD-AGE PENSIONS," giving directions for obtaining the forms with which appli- cations for pensions must be made, and telling what to do with them. The post-office is used extensively in the machinery of the old-age pension office. It supplies applicants with the necessary papers, forwards them, and receives from the Treasury and distributes every month the payments made to those who become pensioners. New Zealand is the first country, and so far the only country, to pay old-age pensions out of the proceeds of gen- eral taxation. Denmark began the payment of old-age pensions in 1892, but there the funds are contributed only in part by the na- tion, which obtains them from drinkers, through a tax on beer. In New Zealand every taxpayer contributes, since the money for old-age pensions is taken out of the consolidated revenue. In Denmark the "total abstainers" have no other national part in this measure of justice or generosity than to tax it out of the non-abstainers. 339 The first payment of pensions under the law was made to the successful applicants shortly after my arrival in Christ- church. Punctually upon the opening of the door at nine o'clock the little corner of the office in the Post-Office Sav- ings Bank Department set apart for this payment was filled with old men and women. Entering with anticipation and not infrequently anxiety on their faces they came out in happier mood. The measure was denounced in Parliament as one that would be invoked only by paupers and loafers, by the disso- lute and the drunken. But no such words would fit the old and forlorn men and women I saw in the magistrate's courts undergoing examinations for pension allowance. There were signs of self-indulgence on the faces of some, but the great majority bore only the scars of suffering, privation and failure. Out of fifty or more, I saw only one who could have sat for the portrait thus drawn by the opponents of the bill, and he was peremptorily rejected. Woman suffrage came in New Zealand almost without notice and without agitation. Old-age pensions were dis- cussed in and out of the New Zealand Parliament for sev- eral years. Woman suffrage has cured no old problems, and, so far, has created no new ones. A slightly larger percentage of women than of men exercise their right of voting. The influence of women has been felt helpfully in legislation; it was due to this that instead of being abso- lutely forfeited the stipend of an old-age pensioner convicted of drunkenness or other minor offences has been made pay- able to his wife or some guardian. As early as 1892 Dr. Duncan McGregor, who is at the head of the charities of New Zealand, urged some substi- tute for the relief given by the charitable-aid boards. He pointed out that the drift of legislation and debate in Ger- many, Denmark, England and other countries indicated THE CONSERVATIVE IF 341 the rise of a strong public sentiment "in favour of a more sympathetic, discriminating treatment of the aged poor. The idea is that the respectable poor ought not to be treated as thriftless spongers and broken-down drunkards, but rather as worn-out soldiers who have deserved well of their country. Our unjust system of distributing the proceeds of labour, it is argued, must compel society to face the duty of making such provision for deserving old age as shall not involve any sacrifice of self-respect in accepting it." The Progressive Liberal Association, which has been the source of much of the energy that is actualising itself in New Zealand legislation, took up old-age pensions. Like the head of the Department of Charities, it emphasised the argument that something better than poor relief was due the victims of our "system of cut-throat competition." These radicals, however, insisted and still insist that pensions should be made universal, so as to avoid all suggestion of pauperism in the recipient, and the same demand was made by the Trade and Labour Conference of the New Zealand trades-unions in 1900. In the elections of 1897 candidates for Parliament were asked everywhere throughout the colony whether they were in favour of old-age pensions, and they almost always an- swered that they were, the Conservatives adding, "if" any way could be devised for making them practicable. The "squire" class, which foresaw increased taxation for their lands, incomes and inheritances and this, indeed, the friends of the scheme freely promised them fought it most bitterly. Their first move was an attempt to convert it either into a compulsory insurance fund, in which no one should share who had not previously contributed, as had been done in Germany, or to make it universal which is now the favourite English checkmate for this reform. Discussion led to a decisive rejection of the universal and 342 PENSIONS FOR VETERANS OF WORK contributory features. To the argument for restricting pen- sions to those who contributed, Premier Seddon replied: "All our aged colonists have contributed; they have con- tributed large sums to the colony's revenue." He pointed out that property throughout the colony had been greatly enhanced in value, sometimes one thousand per cent., by the railroads and other public works built by the expenditure of public moneys, the interest on which these old colonists had helped to pay. No contributory scheme, again, could meet the needs of those for whom immediate relief was demanded. They could not contribute. "The days of their youth and the days of their earnings are gone," the Premier said. The case for these contributors is summed up in the pre- amble of the law : "Whereas, it is equitable that deserving persons, wllo during the prime of life have helped to bear the public burdens of the colony by the payment of taxes and to open up its resources by their labour and skill, should receive from the colony a pension in their old age. Be it therefore enacted." Great support came to the bill from the undeniable fact that many of the pioneers of New Zealand, men and women who had built their youth into its wealth and progress, had failed, from sickness, miscalculations, the rascality or weak- ness of others, to share in that prosperity. It was felt to be a cruel mockery to print "glowing lives" of these pio- neers in the newspapers, and glorify them in anniversaries and semi-centennial celebrations, and still leave them suffer- ing, as many were, for the bare necessaries of life. How entirely New Zealand, with all its advantages, is in the same economic current as the rest of the world, with the same problems and disabilities in kind, if not in degree, was shown in the debate by the Honourable J. G. Ward. THE ARGUMENT FOR THRIFT 343 "The vast majority of our workingmen," he said, "are casual labourers. They have no certainty from day to day of their incomes ; they have a positive certainty only of their outgoings." The stock argument that these workingmen should prac- tise thrift and pension themselves was answered by one of the members of Parliament. "I should like to know," he asked, "whether the honour- able member has ever visited the homes where workingmen are endeavouring to support their families on six shillings a day, and even then their work intermittent. Out of that six shillings a day one third has to go to rent. They have to keep their families out of the small residuum after the landlord exacts his dues. He would find in these homes hungry children, women at the wash-tub, frugal meals and very few luxuries. I would like the honourable member for Wellington City to go into these homes and they are numerous in the city from which he comes and tell those inmates, 'You must practise thrift.' Thrift out of four shillings a day, with perhaps eight or nine mouths to feed, clothes to find, boots for their feet and books for their school ! Thrift on the miserable wages that some of the employers of labour give to their young men because they will not keep old men, nor will they keep married men, some of them !" That this was a true revelation of the New Zealand eco- nomic situation was confessed in conversation by the head of the Public Trust office. How can a workingman, he said in substance, who works hard and raises eight or ten chil- dren, feeding, clothing and educating them, housing them decently, lay by anything for a rainy day or old age? He cannot, and so we give him an old-age pension. "If such a man," one of the New Zealand radicals to whom I quoted this remark said, "cannot, like the ant or beaver, gain a store for his winter of life, there is something 344 PENSIONS FOR VETERANS OF WORK 'rotten in Denmark.' To burn him out before his time, cre- ating the wealth of which the state boasts in its Year Book, and then invite him to act the part of a happy old age on a shilling a day, seven shillings a week, when even the ordi- nary workingman has to pay fifteen shillings a week for his 'tucker/ is pretty poor charity and no justice at all." It was on this ground that the workingman cannot be sure of making his own provision for old age that the last English Trades-Union Congress voted for an old-age pension law. Their resolution favoured pensions at sixty years of age, or a very important improvement on the New Zealand law at the date of becoming incapacitated. The desperation of the opponents of the bill was fed by the forecast its supporters gave as to how they expected to raise the money. The Premier's chief supporter in the de- bate, the Honourable J. G. Ward, who had been Colonial Treasurer, predicted that the old-age pensions would be- come so popular that the people would insist that the funds to meet them be made sure by having certain taxes "ear- marked" for them. They would not be content to have them left merely as a charge on the general revenue, for that would put them at the mercy of a panic with its deficit, or a careless appropriation bill. He said that "certain classes of luxuries now imported through the customs could and should be specially earmarked" to provide funds to place the old-age pensions beyond the possibility of failure. He thought, too, the graduated land-tax might be "earmarked" for the same purpose. Old-age pensions, he declared, would be continued by the people of New Zealand, and would go much further than in the pending law. The opposition was the most determined, not to say viru- lent, that has been encountered by any of the advanced pro- posals of the present administration of New Zealand during its ten years of office. Over nine hundred speeches were A STONE WALL 345 delivered against the bill as first proposed, and over four- teen hundred against it when submitted to Parliament the last time. Obstruction went to the extremest lengths that could be devised. Single members of the Opposition made as many as one hundred speeches against it, saying anything and everything that could consume time so as to break down even the physical strength of the government majority. This sort of tactics is called a "stone wall" in New Zealand, and to meet it the Premier and his supporters, refusing to adjourn, sustained the strain of a continuous session from Wednesday till Saturday night, when the Opposition finally gave way, and the bill was passed by a handsome ma- jority. The backbone of this resistance came from those who saw that in a not distant future their "unearned increment" would be taxed heavily to provide money to sweeten the lot of the old age which had helped to create it. "Those best able to bear it," Mr. Ward had said frankly, "will have to contribute in proportion to their income and their position to this old-age pension fund." To those who objected to the principle of the bill the Premier gave this reply : "Some years ago when a quarter of a million was asked because Providence had sent disastrous snow storms in the North Otago and Canterbury districts, destroying large quantities of stock and causing much loss to the flock own- ers, this Parliament passed legislation in two days which gave relief to that extent. We allowed a reduction to the extent of 400, $2000, a year in some cases to our Crown tenants. As disaster had overtaken them we relieved them of their obligations. Disaster has overtaken many of the aged of our colony ; they have fallen in the industrial strug- gle. The state has a perfect right to relieve them by grant- ing them pensions." 346 PENSIONS FOR VETERANS OF WORK This was the last word of the debate, and the bill then became a law by a vote of twenty-five to fifteen. This was in 1898. The law was limited to three years, as so new a policy would by that time need amendment. The over- whelmingly Liberal cast of the new Parliament which meets in 1900 makes re-enactment certain. This law in New Zealand comes, after one hundred and two years, to realise the scheme broached by Tom Paine in a pamphlet pub- lished by him in 1796. Under the title of "Agrarian Jus- tice" he proposed that every nation should create a fund to pay to every one upon arriving at the age of twenty-one the sum of 15 to begin the world with, and to pay also 10 a year for life to every person of the age of fifty years, "to enable them to live in old age without wretchedness, and go decently out of the world." Through the courtesy of Stipendiary Magistrate H. Eyre Kenney, I sat by his side on the bench one morning in Well- ington during his examination of thirty or forty old men and women. As the proceedings went on he explained to me the details of the law. Any one over sixty-five is entitled to a pension, if other- wise qualified as specified by the law. Within certain limits of time there must have been no dishonourable imprison- ment, no desertion of husband or wife or children, and for the last five years there must have been a sober and repu- table life. y, The Denmark law separates the deserving poor from the ' undeserving poor. The title of the New Zealand act limits it to "deserving persons," but the New Zealand interpretation of deserving is much more generous than that of Denmark. In Denmark no one who has ever undergone sentence for any dishonourable transaction or whose poverty is caused by his having been a spendthrift or who has received poor relief can have a pension. THE PEOPLE FORGIVE 347 .% But New Zealand forgives the sins of the thriftless, the vicious, and even the criminal. This Christian spirit of democracy was voiced by the Honourable J. G. Ward in the debate. "Those who fall," he said, "may mend. For- tunately the great mass of the people possess the spirit of forgiveness." One may become a pensioner who has been drunk and disreputable, provided that these eccentricities of conduct have not been in evidence for five years previously. One may have been in prison for five years for a dishonour- able crime, and still be eligible if the imprisonment was twenty-five years before. He may have been imprisoned for four months four times for offences punishable by twelve months' imprisonment and still be eligible for a pension if his incarceration is twelve years past. V To be poor in New Zealand is evidently the largest part of the qualification of "deserving." If a man. or woman has been a citizen and resident for twenty-five years the pension is given as a right, subject to the stipulations just described. In other words, if the sheet is clean of drunkenness and idle- ness for five years, of minor offences for twelve years, and of the most serious ones for twenty-five years the pension will be given, no matter how black may have been the pre- vious record. As usually inculcated, love of country is love that goes to one's country. Here is love of country from one's country. In New Zealand, as in Denmark, the pension is forfeit- able. The forfeiture of the pension is absolute upon con- viction for twelve months or more for any offence "dis- honouring in the public estimation," or for conviction of habitual drunkenness. Instructions while I was there were issued by the Commissioner of Police to the police through- out the colony to report on all cases where pensioners squan- der their pensions on drink, and not to wait until the pen- sioners had been convicted of drunkenness. The forfeiture 348 PENSIONS FOR VETERANS OF WORK is discretionary if the pensioner has been convicted only of a minor offence, and also if he is wasting his pension, injuring his health, or disturbing the happiness of his family. In such a case the pension may be paid to his wife or some one else for the family benefit. The latter stipulation is to be credited to the influence of the women and the fran- chise which has enabled them to give political effect to that influence. The pensions are awarded only for a year. At the end of each year the pensioner must again make application and must undergo examination. There can be no doubt that this ordeal of examination, yearly repeated, keeps away some of the more sensitive. In New Zealand, as in Denmark, pensioners are not dis- franchised, as are the recipients of poor relief in England. To receive an old-age pension it is not necessary to be a pauper. Any one with an income short of 52 ($260) a year, or with property of less than 270 ($1350) may re- ceive a pension. The full pension is 18 a year, payable monthly, but no one can receive as much as this who has a larger income than 34 a year or property worth more than 50 in excess of incumbrances. For every pound of in- come over 34, one pound is deducted from the amount of the pension. In like manner for each 15 of accumulated property above 50 in value, after subtracting any mortgage, one pound is deducted. The ideal of the law is that the worn-out veterans of work shall, with the help of the state, have an income, if possible, of 52 a year. To such a one, therefore, who already possesses 34 of income the state pays 18 more, making the 52, which is the minimum set by New Zea- land as the income which it thinks the old soldiers of the industrial army should have. The court room on the morning of my attendance was INDUSTRIAL WRECKAGE 349 filled with a pathetic crowd of men and women, ruined hulks, flotsam and jetsam of the work-a-day life of New Zealand. Some were from one of the benevolent homes which are maintained by the colony for the relief of its aged poor. These are not barred from receiving pensions, and they are also allowed to remain in the institutions if they desire, but in such cases the trustees appropriate part or all of the pension to pay for their keep. There were old soldiers in another court one of the ap- plicants was an Eighteenth Royal Irishman, who wore a Crimean medal, with clasps for Alma, Inkerman and Sebas- topol, and also Turkish and New Zealand medals miners, sailors, workingmen, and wives and widows of the same classes. The examinations proceeded rapidly, from two to four minutes being taken up with each case. Sometimes husbands and wives were present together, and if their cases fulfilled the requirements of the law each went away happy with his allowance of a full pension of 18 each. An officer of the home was in attendance for the purposes of assisting the judge in the examination of its inmates. One applicant was receiving six shillings a week from this benevolent home. He was allowed a pension of 18, $90, a year, or seven shillings a week. "The home will now reduce his allowance," the judge said to me, "or take it away altogether." John Smith was an old soldier. He had been through the Waikato wars and had seen eight years of rough service. The judge looked at his certificate of character. "You have," he said benignantly, "a very good character indeed." The old man's lips trembled and his eyes filled with tears. Of the next, a brisk little old man, the officer from the home said : "This is one of those men, your honour, who goes away 350 PENSIONS FOR VETERANS OF WORK for several months in the summer to look for work in order to take himself off the town. He is the most independent man in the world, sir. He went away last summer as usual, but had to come back since he could find nothing to do." Of another the officer said : "He is an industrious man when able to get work, and when at the home he looks after its washing." Some novel questions arise between the inmates of the benevolent homes who receive pensions and the authori- ties. In one case, at Taranaki, the inmates who received pen- sions took up the position that they were not paupers, since they paid the board for their keep, and therefore they struck against the regulation requiring them to work. This kind of strike is not covered by the compulsory arbitration law. In one home some of the inmates had transferred their real estate to the charitable aid board. When subsequently they were granted pensions they asked the board to continue making them the usual grant or return them the deeds of their property. But the board, while deciding that it would not continue the charitable aid, since they were now getting old-age pensions, at the same time refused to return the property which it held for them. It was afraid that, as the pension law was limited to 1902, it might not be renewed, and the old people would come again on its hands. The pensions make a saving in some districts of three quarters of the sums previously spent by the benevolent homes. There were laughable and affecting lapses of memory in some of the old people. One could not remember where he had registered the birth of his last child. The dates of marriages were often forgotten, and the dates of arrival in the colony. A grave-digger when asked as to his income during the past year could not tell, because he was "paid by the piece," and he had forgotten how many there had been. His case was adjourned to enable him to find out. NOT THAT KIND OF IMPRISONMENT 351 There were one or two who were too sick or too old to come. They had been visited by an officer of the court, and he made a written report on their cases, upon which the magistrate acted as the circumstances required. An old woman trimly dressed, with red cheeks and bright eyes, took the stand and kissed the Bible briskly. They all kissed the Bible, an unsanitary proceeding but helpful to the finances of the government by shortening the lives of some of the pensioners. The judge, always kind in his interrogation of these unfortunate people, was more so than usual to this old lady, so prepossessing in every aspect. "I am obliged to ask you," he said "the law compels me to do so if you have ever been in prison. I anticipate your answer," he added encouragingly. The papers told of one case in which a judge, more con- siderate even than Judge Kenney, hearing the case of an old lady whom he knew to be of irreproachable character, tried to get over the difficulty of asking if she had been in prison by inquiring in an off-hand sort of way: "Have you ever been in any trouble or bother?" The old lady beamed on the bench through her spectacles and innocently answered: "Well, I had a sprained ankle for six weeks some time back, and no one in the house with me." So the judge had to repeat his question in the stern lan- guage of the act. One of the old men, one of those from the benevolent home, when asked if he had ever been in prison, replied in an ostentatiously loud voice, "Yes, for thieving." There- upon the officer from the home explained how this old fel- low had walked off in the clothes given him by the insti- tution, and had been brought back and jailed, just to make an example to prevent others doing likewise. He was al- lowed the full pension. 352 PENSIONS FOR VETERANS OF WORK Only once did I see among the would-be pensioners any one really looking disreputable. He was a vagrant of the most undeniably chronic type. He admitted cheerfully that he had been in prison, but, he urged, "never for any crim- inal offence." He had been turned out of the home for drunkenness. "What else can a man do," he demanded, "if he is turned out, but turn vagrant?" "I shall have to search the criminal record," the judge said. The man stood aside while the court officials went to look him up. They soon returned with a long sheet full of a formidable list of convictions. Some of them were for particularly unsavoury offences. The application was sum- marily rejected. The man stepped down with a cheerful face, apparently as clearly satisfied as the judge that he had been properly rejected. "That," he said, referring to his record of convictions, "was an impediment, I knew; but as I was an old colonist I thought I might as well make the ap- plication." After this applicant had thus shown the cour- age of his "convictions" one of the old naval veterans took the stand. Asked the question about prison, he replied, "I have never been in prison more than twice. All hands went to jail in 1846 for deserting." "That's an old story," said the judge. "The law does not look farther back than twenty-five years." When the pension was granted some thanked the judge, often with tears in their eyes; some went away without a word; some inquired eagerly, "How will I get it?" and were barely satisfied when told. The proceedings were quite informal in their manner, and there was no touch of sternness to confuse the poor creatures. Everything that the judge could do by tone, manner and suggestion to assist them to recall the long- forgotten details of age, marriage, income was done. A WOMAN'S AGE 353 When the name of George Nelson was called the officer in attendance informed the judge that he had died since his application had been put in. The age of some of the old people was extraordinary. One old man-of-war's man was ninety-six, and a dame ap- peared with documentary evidence to prove that she was one hundred and ten years of age. Sometimes when there was no other proof the judge settled the question by telling the applicants that they "looked it." This was perhaps the only occasion on which I ever saw a woman show pleasure at having her age recognised. Family Bibles play an important part in determining ages. To be able to recollect the death of King William and the accession of Queen Victoria is a card which the pensioners like to be able to play. One old woman declared her Bible was too big to bring along. She was sent away by the judge with instructions to bring it, even if she had to fetch it in a wheelbarrow, or a perambulator, or something. In one case where the magistrate asked the witness how long he had known the applicant, the witness replied, "Eighty-one years, your worship." "How long?" asked the astonished magistrate. "Eighty-one years," was again the reply. The witness, who was eighty-six, remembered seeing his friend, now eighty-two years of age, wheeled about "in a sort of box on wheels when he was a little baby." A full pension was granted to a man one hundred and two years of age. Among other witnesses, his claim was proved by a daughter aged fifty-one, who said that she had brothers over sixty. This hardy old man had, in early life, been a shepherd in the Scottish Highlands. An old settler and his daughter both applied for pensions and received them. The father was ninety-five years of age, and the daughter over sixty^five. 354 PENSIONS FOR VETERANS OF WORK There was a case of retribution, long delayed but sure. A widow in her application had stated her age as sixty- seven, but according to her second-marriage certificate, which she had to produce, she was only sixty-four. The court informed her that she could not be sixty-four to be married and sixty-seven to be pensioned at one and the same time, and the too youthful widow was told to wait. In another case a birth certificate tendered in evidence to fix the age of a woman showed to the quick eye of the judge an alteration in one of the figures. The deputy wired to the district officer for the exact figures. The informa- tion was returned, and the lady lost her annuity. The inquiries as to property, income, money in the sav- ings bank, etc., were always thoroughly made, as they are required to be by the law. Many had incomes and owned property, and still received pensions of larger or smaller amounts. Some of the answers were: "I had some property a few years ago." "I earn about seven or eight pounds a year. I get my keep for doing light work." "I never had any property to give away to get the pension." "No income at all." "No earnings last year. I earned something before that as a nurse." "I have earned no money for two years." "I have lived on my children." "I lost what I had through sickness." "I had saved some money and have been living on that. Now I have only 2 IQS. left." "My wife takes in a few boarders ; just makes enough to keep us going." "I live with my daughter. I took in 4 last year for sewing." HE WILL NOT DO IT AGAIN 355 The only property most of them had was their character. This, if vouched for by some responsible citizen, earned them an income from the state when all other sources of income had failed. "Where is your savings-bank book?" the judge asked. The old man did not have it. "You ought to have brought it in," said the judge, "and also your income tax return." Applicants for pensions with post-office savings-bank books, income tax returns, mortgages to pay, and insurance policies are certainly a novelty. This case was postponed, as the judge said, "for search as to the value of your prop- erty, and for an investigation of your savings-bank book." An applicant who had 100 ($500) in the savings bank still got a pension. If the amount had been only 50 he would have been entitled to the full pension of 18, for up to 50 of clear property or 34 a year of income no deduc- tion is made. As in this case there was an excess of 50 over the 50 allowed, and this 50 contains three complete sums of 15, there was a deduction of 3. This left him 15 of pension, which he was duly allowed. "You are not entitled to a pension," the judge said to one applicant. "Your income last year was over one pound a week." "Thank you, sir," the man said as he stepped down. "It shall not happen again." That they had relatives able to support them did not debar persons otherwise qualified from the receipt of the pension. That people attempt to take advantage of the law to relieve themselves of the burden of supporting indigent relatives is certainly true, but the courts can and do compel them to continue to contribute even after the pension has been granted. In one such case the magistrate said : "If your sons think they are going to get out of support- 356 PENSIONS FOR VETERANS OF WORK ing yon because you have an old-age pension they will find themselves in the wrong box. They have yet to reckon with me." Where five sons had been voluntarily contributing eight shillings and sixpence a week for the support of their fa- ther, the court ordered them to continue to pay him one shilling a week each, so that his income would be twelve shillings a week, including his pension of seven shillings. A woman who had received a pension of seven shillings a week continued, by order of the magistrate, to receive sixpence a week from each of her two sons. A husband and wife appeared who had charge of a school- house, he as janitor and she as charwoman. They were helped by their children. Sometimes it took four of the family to do the work. The father made 13 a year. His wife earned 10. As the income of neither of them was 34 a year each received the full pension of 18, the wife getting the same as her husband. No pensions were given to married women until they produced proof of the amount of their husband's income, if any. If this was greater than 104 ($520) neither would get the pension. If it was less than that each would be entitled to a pension with the deduction already explained. In Christchurch I saw the case of a woman whose hus- band was earning 78 ($390) a year. By the law, in con- sidering an application for pension for a wife the income of a husband is halved between himself and his wife. The income of each of this couple was therefore considered, for the purposes of the act, 39 a year. They therefore were both entitled to a pension of 13 a year, making their total income, private and public, 52 a year each, or 104 for the two. "A nice little income, truly," said the judge. The man who admitted that he had drawn all but 50 MAORIS TOO RICH FOR PENSIONS 357 of his money out of the savings bank and given it away, "as he thought that he had too much money," was rejected on the ground that he had deprived himself of property in order to qualify. One of the newspaper humourists of New Zealand ex- plained the omission of a contemporary to publish the names of old-age pensioners in his district, as is done usually by all the newspapers, on the ground that the editor was prob- ably a pensioner himself. Maoris are eligible for pensions, as they are both tax- payers and voters. The number of Maoris receiving pen- sions is one in forty; of the whites, one in seventy. The Maoris are getting proportionately much the largest share of the pensions, and there is to be an investigation. Asiatics are outside the law. The Australasian has no "open door" for the Chinese. The oldest applicant for old-age pensions in Wanganui was a native woman named Katarina Tiratapu, who alleges she was born one hundred years ago in 1799. Four Maoris applied to the court at Kaiapoi. Two of them could not tell how old they were, but they had been at Kaiapoi before the great tribal war of 1827 seventy-two years be- fore. The Maoris are large landowners, and when these began to make a statement of their acres they at once dis- closed themselves to be too rich to be made pensioners. At another hearing there was an old Maori veteran who was a strong disciple of Te Whiti, an adverse claimant as to large tracts of land now held by the whites. This dis- ciple of Te Whiti had, not long before, entered upon this land and ploughed it illegally as an act of defiance. This rebelliousness did not seem to affect his chances, for his case was adjourned only for further inquiries as to his means. This policy of pensions to the natives is of course severely 358 PENSIONS FOR VETERANS OF WORK condemned by some. It is pointed out that thirty shillings a month is a small fortune to old natives a great deal more in proportion to them than to the Europeans. It is also said that little or none of it stays with the recipient, as the younger members of the tribe allow the old natives only the prerogative of collecting the money. There are no pension lawyers as yet, and the methods of examination adopted by the judges were most considerate. But they did not seem careless. At Auckland, for instance, one magistrate threw out over a hundred claims. The judges will accept no testimony as to character from relatives, "for/' as one of them said to me, "we would then have the whole family bolstering each other up." Statements are made by the opposition press of New Zea- land that some of the applicants are "well-trained paupers and hardened loafers presenting carefully prepared evi- dence." Something of this kind no doubt there may be, but the best opinion I could get was that the percentage of fraud which escaped the court is infmetisimal. It is impossible to see the old people in court and in the post-offices collect- ing their monthly payments, and doubt that they are bit- terly in need of the help which they receive. In going from Kurow to Mount Cook by stage we passed some little "cob huts" made of mud and straw squatting close to the river. "Some of our old-age pensioners live there," the driver said. "They are mostly worn-out miners, and would have starved but for that pension. They live in those huts on the public reserves along the river bank, where no one can evict them. They get thirty shillings a month and have no rent to pay. They still do a little gold washing and can keep alive, and they know that if they are ever found drunk they will lose their pension." There was a great meeting at the opera house in Christ- church during my visit to give the thanks of the old-age PENSIONS PROMOTE THRIFT 359 pensioners of Canterbury to the Premier. An address was presented expressing their gratitude and trusting that he might be spared to enjoy the glory of a ripe old age, and to reap the reward of witnessing the happy effects of the measure upon the aged people of New Zealand, and that New Zealand might be further blessed under his direction with other beneficial social reforms. In his reply the Premier claimed for New Zealand recog- nition from the civilised world as the first state to do its duty to its pioneer settlers. He repeated the arguments which he had given to me in conversation that the old-age pensions would not destroy, but, on the contrary, would pro- mote thrift. "There is," he said to me, "now something for the aged worker to hope for. He or she can say, 'If I keep on till I am sixty-five I shall have an old-age pension.' So they struggle along, and sobriety and virtue are encouraged. Under our previous system there was no hope, and weak workingmen or workingwomen took to drink, theft and vice. The others worried on, but in despair, with no en- ergy, breaking down." To the same effect the Honourable William Pember Reeves has said : "The New Zealand pension is more likely to induce the poorest to lay by a few pounds to supplement the state's allowance by, say, the purchase of a little annuity, or con- tinue to earn some small wage for the same purpose, than it is to incite them to waste their last shilling because, for- sooth, when they come to sixty-five they are to be recipients of a shilling a day." The Premier in his speech argued that the pension was not a form of charitable aid. It came from the consoli- dated revenue, to which every pensioner had contributed for twenty-five years. Like education, it was another re- 360 PENSIONS FOR VETERANS OF WORK turn for their indirect taxation. He pointed out that judges and other civil servants of the state received pensions, and urged that the old workingmen and workingwomen should no more be called paupers when pensioned than the super- annuated civil servants. But the Honourable W. H. Mont- gomery, of the New Zealand Parliament, one of the sup- porters of the law, calls it "a glorified system of charitable aid." Still, viewed with all its implications and conse- quences, the old-age pension is something more than a char- itable relief. It is given as a right. It is a step toward an equalisation of property. It does not require that its re- cipients should be paupers. It will inevitably drive the pub- lic to support every public and private means of raising the standard of life, so that the workingmen shall not need pensions. The latest return by the government on the results of the old-age pension law is dated June 19, 1899. The law came into force November i, 1898. The total number of pen- sions granted up to March 31, 1899, was 7487, represent- ing a yearly payment of 128,082 ($640,410). The aver- age pension is about 17 2s. ($85.50). A later memorandum, furnished me by the courtesy of Registrar Mason of the pension office, tabulates the results to June 30 : "OLD-AGE PENSIONS ACT, 1898." Statement of claims as on June jo, Number of claims established .................... 955 " " rejected ...................... 1028 withdrawn .................... 394 " " awaiting investigation .......... 12,566 RESOURCES WILL ALSO INCREASE 361 Number of claims established 955 " deaths 157 " cancellations 32 189 " pensions in force as on June 30, 1899 9316 At the average of 17 2s. the amount payable was, June 30, 1899, at the rate of $796,518 a year. By April, 1900, the pensions had increased to $950,000 a year. The highest amount which has been given to any one by Denmark in its old-age pensions is 16 16^. a year. The Denmark law makes no such statutory limit as the New Zealand law does. It stipulates only that the amount of the pension shall be sufficient to support the pensioner and his family and enough for their treatment in case of sick- ness. An English Parliamentary document, entitled "Provi- sion for Old Age by Government Action in Certain European Countries," gives the returns for Denmark the only other country which has old-age pensions down to 1896, the latest date for which they are obtainable. The number of persons in receipt of relief has increased from 30,957 in 1893 to 36,246 in 1896, and the cost of the relief from 164,616 to 216,317. The sum expended by Denmark on old-age relief has exceeded the total of the appropriations, but the excess was met out of the general fund. The calculations of the New Zealand government were that the first year's disbursements would amount to 90,000, or $450,000. The number of pensioners is certain to in- crease and the disbursements to grow larger, but Mr. Sed- don looks forward to this, as he told me, without appre- hension. "If," he said, "old-age pensions increase, so will the wealth and resources of the country, and the burden will be no greater in proportion." 362 PENSIONS FOR VETERANS OF WORK As to the means by which the funds will be provided for the growing pension list, he said, "If hereafter the burden exceeds our resources, we will tax land and income more, and I have already so intimated." Mr. Seddon asked Parliament, in 1899, to extend the privileges of the old-age pension law to foreigners who, through ignorance or misunderstanding, have omitted to naturalise themselves. He also promised to consider the demand of one of the women's organisations that women should be eligible for old-age pensions five years earlier than men. A radical wit insists that the decreasing birth rate of New Zealand suggests that the country needs a young-age pension. The New Zealand law is imitated in a bill which was in- troduced, late in 1899, into the Victorian Parliament by the Premier, Sir George Turner. The only important dif- ference between the proposed law of Victoria and the New Zealand law is in a provision that pensions shall be paid to persons before they have reached the age of sixty-five if they have been rendered infirm by unhealthy occupations. The New Zealand press considers this a distinct advance upon the New Zealand system. The old-age pension is strong with all classes of the New Zealand people, Conservatives as well as the others, for the pity of it; it is strong with the Liberals for the democratic equalisation of property in it; strong with the poor for its freedom from the taint of the "dole." There can be no doubt that it has captured the heart of New Zealand. It is the most popular of all the advanced legislation of the last ten years. Even those who oppose "on principle" everything done by "the Seddon administra- tion" had words of praise for this. It appeals to a tender- ness of heart which is a characteristic of the New Zealand people. One sees this constantly exhibited in their treat- NO MORE AGED TRAMPS 363 ment of women, children, and the helpless. Perhaps this is due to the prosperity of the country. The warm sun- shine of good times has quickened their sensibilities. It is not that they have more sensibility than others, but they can better give it play. There is nowhere a kinder people, kind to the unfortunate and the stranger ; and the popularity of this helping hand to the forlorn aged is a part of this chivalry. The Secretary for Labour, in his annual report for 1899, comments upon the absence of aged tramps looking for work as one of the specially satisfactory features of the year, and he considers this undoubtedly due largely to the operation of the old-age pensions act. All the world is talking about having some better way of taking care of social wreckage than the poorhouse and the soup-kitchen. The key to the action of New Zealand is the same here as in so many of her novelties. The things others only talk about New Zealand does. CHAPTER XV "A SUBSTITUTE FOR A FRENCH REVOLUTION" THE democratic novelties of New Zealand, excepting its government railroads, life insurance and the Public Trustee, date back only a few years, and are the fruits of the elec- tion of 1890. This uprising of the people was called an election, but it was in truth a revolution just such a revo- lution as it is the intent of democracy an election shall be when revolution is needed. We think of New Zealand as a new country, but the fact is that by 1890 New Zealand was one of the oldest of mod- ern societies in economic iniquity and sin, and in some things the oldest. Though the youngest of nations, it had an ancien regime. Instead of escaping from the evils of the social order by going to a new country, the Englishmen who settled New Zealand found that they had brought all its problems with them, as if these were their shadows, as they were. These evils were not in England but in the Eng- lish in themselves as citizens of the world of wealth in- stead of commonwealth. The concentration of land, capital and other machinery by the few, which has taken half a dozen centuries in Europe, where the "fittest" had to begin with the help only of water-wheels and spears, and has re- quired a hundred years in the United States, needed only a decade or two under the southern sun of New Zealand, where those who were to survive "convey the wise it call" had in hand the machinery of steam, credit and politics 364 NO STANDING ROOM 365 railroads, banks, government bonds, joint-stock companies and representative government representing the represen- tatives. By 1890 a situation had developed in the New Zealand paradise which was intolerable, to those at least who had to live in it the New Zealand people. Its evolution in land had reached an extremer point than it has found either in the United States or England, or even Ireland. The best acres were in the hands of monopolists, who were also absentees, and not only absentees but absentee corporations. One of the most distinguished citizens of Australasia, a man known in the counsels of the empire as well as in the colonies, said to me, "The land and other legislation of New Zealand and the other colonies is due to the extreme be- haviour of the large landowners of the early days. They were almost all men who began without land. They were 'new men,' and had none of the traditions and patriarchal and baronial pride which softens ancestral land-ownership in the old countries. To these men land was simply a means of making money. When they sheared they let the shearers sleep in the open and fed them on the roughest and coarsest fare. They made no sort of concession to the people in any direction. Their policy was, 'Keep off my grass.' ' There was a money ring, too, manipulating the greatest necessity of modern life next to land and transporta- tion credit. Through the banks it took toll of the busi- ness men and of industry and investment. Through the loan agencies and mortgage companies it kept the screw of usury twisting the necks of the farmers, small tradesmen and workingmen. This land monopoly and money monopoly to defend and aggrandise themselves monopoly anywhere must be monopoly everywhere took possession of the greatest mo- 366 INSTEAD OF A FRENCH REVOLUTION nopoly of all government. It was a government of squat- ters, by squatters, for squatters. "Squatter" is New Zea- landese for land monopolist. "Land spotters, speculators and grabbers made laws to suit themselves," says Min- ister McKenzie. The little farmer, forced by unjust and deliberately contrived laws to pay his own and his rich neighbour's taxes, had to sell out his little homestead to that neighbour for what he could get. The workingman, able to get neither land nor work, had to become a tramp. The tradesman had to follow his customers, these farmers and workingmen. The blood of the people was the vintage of the rich. There was a "bitter cry of outcast New Zealand." The roads were marched by sturdy men crowding in from the country to the cities. There were problems of strikes, unemployed in town and country, overcrowding, dear money, idle factories, stagnant markets, and unjust taxation. Premier Seddon has described the condition to which the country had been brought : "We had soup-kitchens, shelter- sheds, empty houses, men out of work, women and children wanting bread. This was how we found New Zealand in 1890. It was to be a country where the few were to be wealthy and the many were to be degraded and poverty- stricken." Another distinguished New Zealander, Mr. W. L. Rees, the biographer of Sir George Grey, said in Parliament, "Unless there is some amelioration of the terrible suffering which this ceaseless competition is inflicting upon the com- munity we are on the brink of ruin and civil war." In a country where everything above the foundations was still to be built, skilled mechanics could get no work ; where millions of acres of the best land on earth lay idle year after year, farmers, though they had money, could get no land. There was the incredible spectacle of an exodus of men and women with wealth and youth and health leaving this A REVIVAL OF RELIGION 367 rich and virgin country to find in other lands the opportunity denied them there. That the turning point should have come upon the defeat of what is always referred to in Australasia as "the great strike of 1890" was certainly not to have been expected HI countries so little industrial as Australia and New Zealand were then. But the unexpected is to be expected, even in those model commonwealths. Discontent had so satu- rated the people that it needed only an initiative, and the workingmen, because organised, could give this initiative most easily. This strike was originally an affair between the steamship companies and their officers. The seamen magnanimously went in to help out the officers, and with still more magnanimity all organised labour in Australasia sympathetically made the strike universal. The classes and masses in their modern representatives, capital and labour, looked civil war into each other's faces. The strike ended in the complete triumph of the capitalists, because the most united, the best organised, and with the clearest conception of just how much the crisis meant. All through Australasia this defeat of labour stirred the popular feeling, in an unaccountable way, to the depths. As often seen in history after great calamities, like panic, fam- ine, or conquest, a religious revival followed this catas- trophe, especially in New Zealand, but it took the form of a revival of that kind of religion we call democracy. A tidal wave of political reformation rolled over New Zealand and Australia. In New Zealand it swept the Conservative party from power, never to return, and inaugurated the changes in the social economy of the country which it has been the province of this book to chronicle. The issue has proved it to be a revolution, but it was not a French revolution. It was, one of its leaders said, "a substitute for a French revolution." But it was a revo- 368 INSTEAD OF A FRENCH REVOLUTION lution. It was not merely a change in parties; it was a change in principles and institutions that amounted to noth- ing less than a social right-about-face. It was a New Zea- land revolution, one which without destruction passed at once to the tasks of construction. Merely as an exhibition of a nation's intellectual force, a manifestation of social energy and a display of the wit of the common people, the work done by the New Zea- landers in the ten years that followed the overthrow of the old regime is unique. The intolerable situation of the New Zealanders was much like the intolerable situation in which Europe and America find themselves to-day, except that in one or two respects their evolution, as in land, had reached an impasse more complete than ours. They were not "scientific" students; they were not "reformers" ; they were not Utopians, not Altrurians only citizens of that sober-coloured continent we might call "Actualia." They were hard-working men and women, without leisure or a leisure class. They were not able, like the Greeks, to spend their days in the market- place talking politics while slaves worked the farms and the mines. They were uninspired men, with no traditions and no theories. They knew nothing about revolution, and had never had to fight for their liberty. They had to make their own living. Their country, in comparison with others, was a toy country, a bijou democracy. I have sometimes thought in New Zealand that the consciousness that their theatre w r as so small stirs these fellow Anglo-Saxons of ours to play the largest possible parts. Athens and Jeru- salem were not big places. The New Zealanders had no philosophy of society, and only a resolve to have the fruits of their own labours and of their own government. They had the help of no eminent statesmen, at least not of any eminent before they made their record here. THE ONLY COMMON PEOPLE 369 They were just "the common people." But they were truly the common people in a sense in which it has not ex- isted since early New England and which in Anglo-Saxon- dom exists now nowhere except in New Zealand the only country wholly English in which practically every settler can read and vote and where the separation of classes has not made common action for the common good impossible. This common people were stung to action by their shelter- sheds, soup-kitchens, relief works, bankrupt traders, tramp workingmen, evicted settlers and the exodus. They set to work to save themselves from this old-world civilisation. In ten years they have produced a budget of reforms, cor- rective and constructive, and of political novelties which will bear comparison with the work of any other revolution, political or violent, of modern times. We are exhorted to take "one step at a time," and are assured that this is the evolutionary method. This theory does not fit the New Zealand evolution, as will be seen if we focus in a condensed statement a catalogue of its almost simultaneous reforms. The creative activity of this democracy antipodean in more than one sense to that of older peoples entered nearly every province in the field of modern industrial statesman- ship land, labour and capital, finance, transportation, popu- lation, poverty and wealth, domestic and international com- petition, and the like. It dealt with the tramp, strikes, lock-outs, slums, monopolies, sweating, panics, foreclosures, tax sales, speculation, usury, evictions, rack-renting, disfran- chisement. millionairism and pauperism. It went beyond remedies for what was wrong, and invented a new alli- ance between the state and the producers, to unite the re- sources of the whole people with those of the individual in a partnership of industry both at home and in the foreign market. 370 INSTEAD OF A FRENCH REVOLUTION Here is the record of ten years: The policy of taxation is reversed. The general property tax on improvements, enterprise and poverty is abolished, and the taxation for national purposes of land and incomes introduced. Taxation is taken off from capital that is work- ing and put on capital that is idle. The small man, because small, is exempted, and the rich man, because rich, is made to pay more, progressively, the more land and income he has. The burden of the old property tax forced the poor men who worked their places to sell out to the rich neighbour, who escaped taxation and grew rich by making no improvements. The new tax is planned especially to make the rich land- owner sell to his small neighbours or to the government, which will subdivide and sell to them itself. The old taxes built up monopolies; the new taxes "burst them lip." To check speculation, to equalise poverty and wealth, to pre- vent great estates these are some of its avowed objects. "No man now dreams," an eminent New Zealander said, "of attempting to found a great landed estate in New Zea- land." The people, by the use of their powers as citizens, get land for themselves through the state by taking it back from the men to whom they have previously sold it, and who have added field after field into great monopolies. The people resume these lands by taxation, by purchase, if the owners are willing to sell, and by force of law if they will not sell. They divide the lands thus recovered into gardens, farms and homesteads for the landless. But to break the vicious circle by which private property in land leads to speculation, rack-rents, foreclosure, depopulation and monopoly the rev- olution institutes a new system of land tenure. It estab- lishes the lease in perpetuity by the state with limitations of area, cultivation and transfer. It inaugurates a policy which is meant, ultimately, to make the state in New Zea- REFORM BEGINS AT HOME 371 land the owner of all the soil of New Zealand and the peo- ple all tenants of the one landlord who will never speculate, nor confiscate nor rack-rent, and whose monopoly is their monopoly. In their public works policy the people establish them- selves as their own contractors. The democracy begins the reform of -the sweating system where all reform should begin, at home, by abolishing it in its own work, doing away with the contractor and the contract system, with all its evils of subletting and of sweating the work- men and the work. It enters upon the practice of direct construction by the state of its own public works and direct employment, without middlemen, of its own labour. The men hired by the new regime to build railroads, bridges, public buildings, make roads, etc., are taken by preference from those citizens who need work. In giving them work the new regime also gives them farms and homes from the public lands near by or from the private estates which it buys and cuts up for that purpose. The workingmen themselves are made their own contractors and taught, even the tramp and the casual, to work together co-operatively. The state as an employer sees and saves for the community the eco- nomic value of the labour of the old and incompetent, the unskilled and the tramp, which the private employer lets go to waste. By compulsory arbitration the public gets for the gui- dance of public opinion all the facts as to disputes between labour and capital, puts an end to strikes and lock-outs, clears its markets and its civilisation of the scandals and losses of street fights between the buyers and sellers of la- bour, and enables both sides to make contracts without strike clauses for years ahead. It transfers the private wars of economic enemies to a court room, as society had previously taken the private wars of the barons from the field into the 372 INSTEAD OF A FRENCH REVOLUTION court room. By abolishing the contractor it abolishes the sweating system in public works, and it banishes the sweater in private industry by compulsory arbitration, with its power to fix minimum and maximum wages and all conditions of labour, by forbidding the employment of boys and girls without pay, by the enactment of an advanced and minute code of factory laws, by regulating the hours of women and children and so of men. It establishes a compulsory half- holiday by law for factories and shops. It forbids the em- ployment of uneducated and physically defective children and of all half-timers. For the unemployed the nation makes itself a labour bureau. It brings them and the em- ployers together. It reorganises its public works and land system so as to give land to the landless and work to the workless. The fraud of compulsory insurance of working- men by their employer is stopped, and the state itself in- sures the working people against accident. For those for whom no private employment is to be had the state provides a "state farm" a shelter, a waiting-room and a school of work and co-operation. It carries idle men and their fami- lies to idle land and organises them in groups of co-operative workers, giving them shelter and providing them with every necessary tool. For the extirpation of the slums products of speculation in land and of sweating of labour there are the land laws and tax laws to stop speculation and the labour laws to stop sweating, and, besides, the people have empow- ered themselves to take land from private owners within or without city limits for suburban homes for themselves by friendly purchase or by condemnation. Instead of paying heavy profits to middlemen the people can divide the lands among themselves at cost, as they have done with the "re- sumed" farms. The management of the railroads is changed from boards of commissioners, independent of the people, to a Minister Tin for Houses on the Road to Independence. (Page 211.) Land for the Landless, Work for the Workless. (Page 372.) THE POLICY OF MOST ASSISTANCE 373 and Parliament dependent upon the people and responsive to public needs and public opinion. The railroad policy is changed from the use of the highways as money-makers for the treasury, relieving the general taxpayer at the ex- pense of the producer, to their use as public utilities sup- plying that necessity of life transportation at cost. The new policy is to lower rates, never to raise them, and to keep lowering them as profits increase. New lines are built for the people, not for the great landowners. The methods of construction are changed from private contract to co-operative work, largely by groups of unemployed, with special reference to the settlement of them and other landless people on the land. The state takes over the management of the principal bank of the colony. It assumes the role of chief purveyor of credits to the commercial and financial interests, and so doing saves New Zealand from the panic of 1893. The revolution of 1890 does more than follow the line of least resistance it adopts the policy of most assistance. The commonwealth makes itself the partner of the industry of the people. The nation's railroads are used to redistrib- ute unemployed labour, to rebuild industry shattered by calamity, to stimulate production by special rates to and from farms and factories, to give health and education to the school and factory population and the people generally by cheap excursions. To pay for the lands taken back from the private owners, the people get cheap money on government bonds in London, and to equalise themselves with competi- tors nearer the world's markets and to emancipate them- selves from the usurer, the producers of New Zealand give themselves cheap money through the Advances to Set- tlers Act. Money is borrowed in London at Treasury rates, to be loaned to the individual in New Zealand at cost, so that a single citizen of New Zealand gets his money in London at the same rate as if he were the government as in truth he is plus only the small cost of the operation. Instructors are sent about to teach the people co-operation in work and in industry, like dairying, and money is ad- vanced to assist in the erection of creameries. Bonuses are given for the development of new processes. Patents are bought up, to be opened to the people at cost. Millions are spent on water-races and roads to foster mining. The gov- ernment gives free cold storage at the seacoast and prepara- tion for shipment for products to be exported. The firm of "Government & Co., Unlimited," is established a part- nership of the people as a state with the people as individ- uals, in agriculture, gold mining, and manufactures for home and abroad. Women are enfranchised, and legislation for "one man, one vote," enfranchises men, too, and puts an end to the abuses of plural voting in Parliamentary and municipal elec- tions. On election day one can see the baby-carriage stand- ing in front of the polls while the father and mother go in and vote against each other if they choose. Last of all, pensions are given to the aged poor. And this Fraternalism pays. In reducing railroad rates to the people as profits increase the government increases its profits faster than it reduces rates. The country is pros- perous in every department revenue, manufactures, com- merce, agriculture. The democracy is a good business man. The state proves itself a successful money-lender and land- lord. It makes a profit and can lower its rents and rates of interest, and, unlike the private capitalist, does so. Perhaps this is "socialism." Whatever we call it, it is a fact and a success. With the help of policemen and polite society we are keeping socialism out of our streets and par- lours, but we do not seem to be able to keep it out of our governments. THE NEXT STEPS 375 This middle class development of New Zealand does not take the form of the state socialism which demands "the ownership and operation of all the means of production, distribution and exchange." Rather we see the state giving its principal efforts to the stimulation, as a silent partner, wise counsellor and democratic co-operator, of the enter- prise and industry of the individual. While theorists invite the world to choose between the catastrophes of state social- ism and trust socialism, New Zealand finds a way out be- tween these extremes. It was "one step," but that step was nothing less than a complete reversal of policy. Has New Zealand shot its last bolt ? Is its armory empty and its energy spent? No, if we can trust the recent com- plete victory of the progressive party in the election of 1899, the temper of the people as shown in conversation and the outspoken utterances of their statesmen. Here are some of the definite measures which have been publicly favoured by leaders now active in New Zealand affairs: State fire insurance. Further democratisation of transportation by the zone system of rates. Nationalisation of the steamship lines. Nationalisation of the coal mines. Complete nationalisation of the land. Assumption by the government of the business of mining and selling coal. Increase of the land and income taxes for the further equalisation of rich and poor. Removal of tariff taxation on the necessaries of life. Establishment of government offices where "cheap law" can be served out to the people. Regulation of rents for the protection of tenants from political pressure by landlords. 376 INSTEAD OF A FRENCH REVOLUTION Extension of the purchase and subdivision of the large estates so that all the people may have land. State banking to give the people the ownership and ad- ministration of the machinery of commercial and financial credit, doing for the business class what the state with its advances to settlers does for the farmers, tradesmen and workingmen. The nationalisation of the news service. The New Zealand idea is the opposite of that of some theoretical creators of society, that the rich are to become richer and the poor poorer, until the whole population has been sifted into brutes of money and brutes of misery, who will then fight out the social question to the death. New Zealand leads in the actual movement now going on in the other direction the aggrandisement of the middle class. The middle class is not to be exterminated, but is to absorb all the other classes. The world-wide abolition of slavery, the gradual disappearance of absolute political power, the displacement of the individual captains of industry by cor- porations with multitudes of stockholders, are all illustra- tions of this tendency. The key to all the legislative and social institutions of New Zealand is in this conscious and unconscious middle class absorption of the extremes. The New Zealander wants no Armageddon of plutocrats and paupers. One hears little sectarian socialism talked, but is every- where made aware that the people of all parties are moving steadily toward this fixed purpose : they mean to mould their institutions of taxation, land tenure, public ownership, etc., so that there shall never develop among them those "social pests," the millionaire and the pauper. The New Zealand policy is a deliberate exploitation of both capitalists and proletariat by the middle class which means to be itself "the fittest that survives." The capitalists TO BECOME FREE, REMAIN FREE 377 are taxed progressively, and the proletarian is given land and labour that he may also become a capitalist to be taxed. There is nothing really new or sensational about the New Zealand democracy. Its political novelties prove upon in- spection not to be novelties at all, but merely like most American and Australian slang, old English in a new place. The word of the day has been reform, not radicalism ; resis- tance, not reconstruction. The New Zealanders are not in any sense extraordinary. There is only one remarkable thing about them, and that is an accident. They are the most compact and homogenous, the most equal and man- ageable democracy in the world. This is luck not inten- tion but circumstance. The country was too far away from Europe and from the thousand-year-old stream of westward migration to become New Europe, as the United States has done. It became only Newest England what the Puritans and Pilgrims planned; the kind of country those English- men, Washington, Jefferson and Adams, expected would carry on their constitution. "Let us pauperise you now and we will let you democra- tise us by-and-by," the monopolists are saying to the people of the world. To become reformers we are all to become proletarians, who have never reformed anybody, not even themselves. Starving men may fight for a bone, but never for liberty. The New Zealanders think that the best way to become free is to remain free. In New Zealand the best stock of civilisation ours was isolated by destiny for the culture of reform, as the bacteri- ologist isolates his culture of germs. New Zealand has dis- covered the anti-toxin of revolution, the cure of monopoly by monopoly. New Zealand, because united, was able to lead; because she has led, others can follow. THE END APPENDIX STATISTICS OF THE TEN YEARS IN his introduction to "A Country Without Strikes" the Honourable William Pember Reeves, ex-Minister of Labour of New Zealand, and author of its Compulsory Arbitration Law, gave some statistics to show that the industries of the country, falsifying predictions, had prospered during the operation of that bold experiment. The following figures, taken from a recent compilation of the Registrar-General of New Zealand, present the details of progress during the decade 1890-1899, when the land, labour, fiscal, and other reforms described in this volume were set in motion. The population of the colony has increased from 626,658 to 756,506, exclusive of Maoris. Deposits in banks of issue increased 17.97 P er cent, from 12,368,610 to 14,591,223, an increase of 2,222,613; deposits in Post-Office Savings Banks 117.88 per cent, from 2,441,876 to 5,320,371, an increase of 2,878,495 ; unimproved value of land, 11.79 P er cent., from 75,497,379 to 84,401,244, an increase of 8,903,865 ; valued improvements 52.05 per cent., from 36,640,335 to 54,190,103, an increase of 17,549,768; the private wealth 52.05 per cent, from 142,631,461 to 217,- 587,481, an increase of 74,956,020. Occupied holdings increased from 38,178 to 62,485, and the customs from 1,541,395 to 2,042,602. There was an increase of 4,459~ 085 acres in the area of cultivated land, exclusive of or- chards, gardens and plantations. Sheep increased from 379 i6,ii6,ii3 to 19,348,506; cattle, 513,831 to 1,210,439; horses, 211,040 to 260,931. Railways increased in mileage 14.22 per cent., and in gross receipts 44.77 per cent.; the gold output was doubled from 733,438 in 1890 to 1,513,180 in 1899. In percentage the population increased by 20.72 per cent, in the ten years; the imports, 45.28; the exports, 25.15; the customs revenue, 32.48; the cultivated land, 55.63; sheep, 20.06; cattle, 45.52; horses, 24.11; telegraphs mileage, 36.50; and messages, in number, 76.92. The figures of the increase of the public debt, and its pur- poses, have been given on page 338. INDEX INDEX Adelaide, 175 Advances to Settlers, 82, 167, 299, 329, 373 ; for creameries, 208, 374. See also Government & Co., Unlimited Arbitration, see Labour Area, 3 Artisans on the land, 161, 173 Ballance, John, 83, 102, 105, in, 120, 121, 130, 134, 150, 155, 173, 195, 196, 204 Bank of New Zealand, 276 et seq., 373 Best, R. W., 167, 247, 269 Bonuses, 310 et seq., 374 Browning quoted, 326 Butler, Minister, 324 Cadman, A. J., 62, 66, 69 Canada, State aid to industry, 330 Capitalists forced to reduce interest, 307; warned, 106 Capital and legislation, 285 ; no' warred against, 137 Cheap money, 300 et seq. Cheviot estate, 157 et seq. Chinese manufacturers in Victoria, 239 City and country, 244 Civil Service Board, New South Wales, 44 Coal ring, 10, 104, 336 Cockburn-John A., 323, 330 Coghlan, T. A., 44, 101 Common people, 369 Competition, international, 309; by state, 52 Compulsion, 253, 260 Compulsory arbitration, 18,258 et seq., 372; holidays, see Labour; pur- chase of land, 127, 143, 144, 145, 172, 174, 176,230,370,373,375 Conciliation, see Labour Contractor, abolition of, 82, 103, 371 Contracts and safety of the people, in Co-operation, i, 87, 225, 227, 374; in Canada, 331; in land settlement, 83, 1 78, 209 ; in New Zealand, 332, 374 ; in public works, 83, 160, 209, 371 ; at state farm, 202 ; for unemployed, 217, 220 et seq. ; in Victoria, 321 Co-operative butty gangs, 100; coal mine, 87; contracts, 82, 103, 371; criticisms, 101 ; sugar mills of Queensland, 309 et seq. Cowles, James L., 79 Credit as necessity of life, 287 Dan ton, n, 326 Davitt, Michael, 220, 313 Debts, public, 4, 56, 150, 281, 338 Democracy, I, 4, 7, 59, 61, 85, 87, 141, 164, 198, 212, 260, 276, 289, 297, 303, 325, 364, 367, 369, 374, 377 Denmark, old age pensions, 339, 346 Diaz, 85 Education, 45, 212, 230, 246, 372; and politics, 296 ; technical and agricul- tural, 230 Eight hours' movement, 233, 234 Ell, H. G., 123 Exodus, 84, 108, 134, 366 Factory Acts, see Labour Laws Families of workingmen kept together, 200 Farmers' support of labour policy, 242 Fraud prevented by arbitration, 267 Germany, pensions, 341 George, Henry, 120 Gladstone, W. E., 151 Government printing office, 90 Grace, M. S., 292 Grey, Sir George, 81, 121, 126, 129 Hall- Jones, Wm., 102 Horticultural school, 320 Human nature, 331 Immigration, 4, 13, 57, 67, 192, 377 Improved Farm Settlements, see Land 383 384 INDEX Insurance, accident, 257, 372 ; fire, 375 ; life, 12 et seq., 181 International arbitration, 275 Interest rates reduced, 307 Irrigation, 320 Isolation, 3, 377 Japanese labour, 315 Jennings, W. T., 217 Kea,6 Kenney, H. Eyre, 346 Kidd, Benjamin, 314 Kingston, C. C., 86, 224, 307, 322, 327 Labour, accident insurance, 257; arbi- tration, South Australia, 237, 264; bureaus, 197, 198, 200; children, 254; Chinese evasion of minimum wage law, in Victoria, 239 ; compul- sory arbitration, 18, 258 et seq., 372 ; compulsory half-holiday, 246, 252, 253, 254, 372 ; conciliation, 261 et seq. ; and contract system, 83 et seq. ; see also contractor and co-op- erative contracts; Department, 200, 202, 246 et seq., 372; domestic ser- vice, 257 ; employment of boys and girls without payment, prevention act 256, 372; factory inspection, 255, 256; hours, 47, 49, 233, 234, 252, 254, 255, 372; Japanese, 315; labour law penalties, 255 et seq. ; labouring men in Ministry, 196, 243; laws, 223 et seq., 372 ; leaders' evo- lution, 243 ; Leongatha state farm, 230; mental, 251; minimum wage law of Victoria, 236 ; minimum wage in New Zealand, 256, 372 ; mothers, 254; old workmen, 89, 95, 203, 238, 241, 248, 343, 371. See also Old Age Pensions ; organisations, 233 ; parties, 155, 233, 234, 242, 313; pro- gram supported by farmers, 242; seats for shop-girls, 254 ; shop regu- lation, 254, 255 ; state farm at Levin, 202, 372. See Trades-Unions; wages, 47, 89, 97. See Minimum Wage Law ; white against black, 310 et seq. ; workman denned, 175. See Unemployed Land, advances for improvements, 174 ; Ardgowan, 172; artisans as settlers, 161, 173; auction, 141; ballots, 139, 141, 189; Board, 182; bonanza farming, 172; Cheviot estate, 157 et seq., complaints, 163, 180; closer settlement, 82, 94, 157 et seq., 172, 179; closer settlement productive- ness, 166; compulsory purchase, 127, 143, 144, 145. 172, 174, 176, 230, 370, 373,375 ; consolidation, 127, 152,154, 162; co-operative villages, 178; De- partment and unemployed, 200 et seq., 250; distribution, 152; dum- my ism, 128; effect of land tax, 170, 171; Elderslie estate, 170; exami- nations of applicants, 182; Fair Rent bill, 179; freehold, 135, 153, 154, 156, 196, 370; Gladstone, W. E., 151; grant to railroads, 53, 54; gridironing, 127, 133; homestead blocks in South Australia, 1 75 ; homesteads reserved, 146, 157, 181 ; Improved Farm Settlements, 99, 204 et seq. ; irrigation, 320; large es- tates, 68, 107, 116, 122, 133, 156, 170, 370, 376; laws, 137 et seq.; lease- hold conditions, 184; leasehold in perpetuity, 139, 140, 142, 147, 153, 167, 178, 370; Maoris, 29, 178; married men favoured, 213 ; Mc- Kenzie on new Irish land policy, 136; Momona, 162; monopoly, 4, 104, 126, 132, 134, 136, 149, 365 ; mortgages, 133 ; Murray River colo- nies, 221 ; nationalisation, 154* na- tive, 29; New South Wales, 155; Oklahoma, 191 ; owned by absentee corporations, 128, 365 ; petitions for land resumption, 168; prices, 164, 177; private ownership, 155? pur- chase, rule of compensation, 145 ; Queensland, 155 > and railways, 68; ranger, 185 ; rents, 179 ; rents, regu- lation of, 375 ; resumption, 127, 143, 150, 155,156, 172, 174, 176, 180,230, 370; revaluation, 179; Rolleston, Wm., 154, 193; scrutineer, 189; settlements profitable, 180,219; set- settlement and public works, 83 ; settlement and railways, 67; small ownership and large ownership com- pared, 166, 171, 172; speculation, 143, 148, 155, 156, 162, 370; spot- ting, 127, 133; suburban homes, 1 74, 372; taxation, 104 et seq. ; tenantry 133, 151, 154, 173; values increased by state aid to production and ex- port, 62, 329 ; Victorian Minister of Lands on Cheviot, 167; village set- tlements, 92, 94, 170, 172, 173, 174, 175, 178, 180, 193, 195, 196, 204; Waikakahi estate, 180; Whangamo- INDEX 385 mona, 208 ; white men under Maori landlords, 30; women as settlers, 185 ; workmen's settlements, 1 73, 1 74 Langley, Venerable Archdeacon, 102 Law of the market, 304 Lawyers, government, 30; in Com- pulsory Arbitration Court, 263 Levin state farm, 201 Life insurance, 12 et seq., 181 Makohine viaduct, 82, 96 Maoris, I, 6, 9, 29, 56, 105, 178, 205 Martin, John C., 21 March, J. E., 198 Massachusetts Board of Arbitration, 260 McGregor, Dr. Duncan, 340 McKenzie, John, 129, 130, 132, 133, 135, 136, 138, 139, 143, 144, 146, 147, 148, 149, 150, 154, 155, 157, 158, 196, 203, 206, 366 McLachlan, Minister, 334 Melbourne Trades Hall, 233 Mexico, 85 Middle class, 376 Millionaires not wanted, 4, 376 Mills, James, 269 Miners subsidised, 310, 333, 334, 374 Momona, 162 Money for farmers, 299 ; market law, 304; ring, 299, 365 Monopoly, curse of, 104. See Land. See Rings. Montgomery, W. H., 360 Nationalisation, banking, 376; coal, 337,375; fire insurance, 375 ; land, 154, 375 ; lawyers, 375 ; mines, 236 ; news, 375 ; steamships, 50, 337, 375 New South Wales, Advances to Set- tlers, 299 ; before and after the panic, 297; Board for Exports, 321 ; butty gangs, 100; Civil Service Board, 44 ; co-operative colonies for unem- ployed, 226; co-operative villages, 92; eight hours' day in public works, 234; government does not recognise trades-unions, 236; La- bour Party, 155, 234 ; land, 155 ; miners subsidised, 334 ; panic ot 1893. 277; railways, 32, 35, 37, 41, 44. 48, 5. 51. 53. 54. 5 8 ; State aid to industry, 310 et seq. : sugar, 316; unemployed, 198, 199, 250 ; Unem- ployed Advisory Board, 102, 203, 228 et seq. ; wells for farmers, 310 New York and panic of 1837, 280 Oamaru, 52 Old Age Pensions, 2, 9, 112, 339 et seq. Oliver, Railroad Commissioner, 36 Paine, Thomas, 346 Panic of 1893, 276 et seq., 373 Parliamentary government and possi- bilities, 295 Pauperism in England, 108 People, 14, 74, 326, 369, 374 Plunkett, Horace, 227 Population, 3, 4, 10 Postal Savings Bank, 55, 181 Post Office, 55, 299, 339 Pott, G. W., 316 Printers' farm, 218 Progressive Liberals, 122, 341 Public Trustee, 12 et seq., 181 Public Works, 67, 69 et seq., 82, 107, 1 60, 200, 250, 292, 371 Queensland, aid to production and ex- port, 310 et seq. ; co-operative sugar mills, 309 et seq.; land, 155; rail- ways, 32, 36, 37, 41, 42, 48, 50, 51, 53, 54, 58 ; subsidies to miners, 334 Railways, 31-81; Appeal Board, 45, 46, 49; appointments, 39, 42, 43; arbitration, 45, 47; average haul, 50, 51; breeding animals, 33; coal rates, 51; Commissioner system, 46, 47, 70; comparison of rates, 51; con- struction, 69, 372 ; Cowles, James L., 79; criticisms, 63, 64; deficit, 49> Sj discrimination, 35,36; earn- ings, 49, 50; educational qualifica- tion, 45 ; employe's, 39, 42 et seq. ; employes and politics, 38, 48; ex- perts, 43; favouritism, 35; forfeit- ure. S3. 54; f""' 33: genius, 43; holidays, 49; hours of labour, 47, 49; Hungary, 77, 81; land grants, 53. 54? an d land values 13, 68; libraries, 33 ; lime, 33, 82 ; manage- ment by Minister, 71, 372, 373, the Midland, 53; new lines, 39-41, 372; New South Wales, 32, 35-37, 41, 44. 48, 5 1 . 53. 54. S 8 ; newspapers, 33 ; parcels, 33 ; pensions, 49 ; policy, 31, 50, 56, 6l, 62, 67, 72, 373, 374; political pressure, 38, 70; power of public in management, 60 et seq., 75; private, 51, 53, 54; promotion, 43,44; public and private compared, 51,54,56, 59, 66, 67; Queensland, 32, 36. 37. 4'. 48, 5. 5'. 53. 54. 5* ; 386 INDEX rates, 32 et seq., 39, 51, 53, 61, 65, 71 ; rates, gazetted, 42 ; rates high, 51, 73 ; rates to large and small ship- pers, 35 ; rates never raised, 66, 373 ; rates reduced for farmers, 61, 62, 65 ; rebates, 35; reduction of rates, 62, 65; Russia, 35, 77, 81; and school children, 31, 69, 373 ; second class accommodation, 64; seeds, 34; settle- ment, 67, 372 ; South Australia, 32, 36, 39, 48, 50, 58; " starved-sheep rates," 69; stock, 33; suburban trains, 33; Sydney tram-car men, 48, 49 ; Tasmania, 50 ; trades-unions, 47, 48, 73 ; and unemployed, 67, 372, 373 ; vacancies, 43 ; Vaile, Samuel, 72, 75 ; vegetables, 33 ; Victoria, 36, 40, 43, 49, 50, 58, 72; vote, 38, 48; wages, 47 ; water competition, 52 ; Wellington and Manawata, 51 ; Western Australia, 50; and working people, 32, 33, 50, 69, 73, 373 ; work- shops, 57, 58; zone system, 72, et seq., 375 Rees, W. L., 366 Reeves, Wm. P., 106, 107, 117, 126, 136, 247, 259, 274, 359 Religion and democracy, 367 Rents, regulation of, 338 Rings, coal, 10,104,337; government, 366 ; land, 104, 365 ; meat-freezing, IO; money, 104, 299, 365; sheep, 10; shipping, 87, 104, 335 ; timber, 10 Rolleston, Wm., 154, 193, 204 Russia, railways, 35, 77, 81 Salisbury, Marquis of, 254 Savings banks, 55 Schools and government, 296, 297 Seddon, R. J., 31, 62, 68, 74, 80, 84.95, 102, 105, 106, 112, 113, 124, 153, 155, 173, 206, 254, 269, 273, 289, 308, 336, 337. 338, 345. 359. 361, 3 66 Seligman, Professor, 1 14 Settlements, see Land Shipping ring, 87, 104, 335 Shop Acts, see Labour Laws Skertchly, Professor, 314 Socialism, 375 ; Australasian, 335 South Australia, advances to settlers, 299,329; arbitration, 237, 264; con- tracts for steamship freights, 328; co-operative villages, 92 ; homestead blocks, 175; income tax, 118; land, 155 ; land tax, 121 ; produce export depot, 310,322 et seq. ; railways, 32, 36, 39, 48, 50/58; state bank, 294, 300, 305 ; telephones, 55, 56 ; village settlements, 220, 226, 227 Spahr, Charles B., 172 Speculation in land, 155, 156, 162, 370 State, Bank, 293 et seq. , 300 ; as banker, 278 et seq., 376; bull, 326; coal dealer, 337; clothing factory, 101 ; as competitor, 5 2 > in co-operative sugar mills, 309; employer, 371; exporter, 309 et seq. ; farm, 201, 372; as farmer, 159; fire insurance, 375 ; help, I ; hotelkeeper and guide, 34; as insurer, 12, 181,257; as land- lord, 151, 154, 173, 374; as land- monopolist, 371 ; lawyers, 30, 375 ; as money broker, 299, 374; as mo- nopolist,377; news distribution, 3 75; partner, 369, 375; railways, 31-81; railway workshops, 57, 58; real es- tate dealer, 141, 151; savings banks, 55 ; socialism, 375 ; steamships, 50, 327; sugar refiner, 316; telegraphs, 55 ; telephones, 55 " Stone wall," 345 Stout, Sir Robert, 127, 130, 145, 155 Street car lines, New South Wales, 48 Strike of 1890, 10, 46, 233, 259, 367 Strikes still possible under compulsory arbitration, 271 Suffrage, 340, 374 Sugar Mills, New South Wales, 313; Queensland, 309 et seq. Taverner, Minister, 333 Taxation, absentees, 112, 117, 118; Cheviot Estate, 115; Cheviot valua- tion, 158; corporations, 112, 118; death duties, 116; Ell, Henry George, 123; Henry George, 120; illustrative figures, 115; improve- ments exempt, 112, 114; improve- ments taxed, 109; income tax, 105, 112, 117, 118, 119; land and income tax, 105, in, 112, 118, 121, 158, 170, I 7 I > 37. 375 5 land tax and large es- tates, 116, 119; life insurance pre- miums exempt, 118; mortgages, 112, 1 13, 1 14, 1 16 ; for old and infirm tax- payers, 113; Pitt, 124; progressive, 105, 112, 116, 118, 181, 370; prop- erty tax, 109, 370 ; rating of unim- proved values, 120; Seligman, Prof., 114; single tax, 120; small men, 112, 113, 116, 118, 370; South Australia, 121 ; steamship companies, 118; tariff, 122, 375; valuations, 115; yield of absentee tax, 117? yield of INDEX 38; graduated tax, 117; yield of income tax, 119; yield of land tax, 117, 119 Telegraphs, 55 Telephones, 55 Trades-Unions, 10, 47, 48, 73, 74, 87, 233, 236, 264, 271 Tregear, E., 197, 199, 247 Trenwith, W. A., 167 Tropical labour problems, 314 Trustee, Public, 12 et seq., 181 Trust socialism, 375 Tucker, 209 Unemployed, 67, 69, 82, 92, 94, 102, 160, 192, 197 et seq., 203, 228 et seq., 245. 366, 372, 373 Union Steamship Co., 46 Vaile, Samuel, 72, 75 Victoria, advances to settlers, 299 ; aid to export and production, 310; be- fore and after the panic of 1893, 297 ; benefits of policy of bonuses, 322; Chinese manufacturers, 239; con- tracts for steamship freights, 317, 333> co-operative contracts, 100; co-operative education, 321; horti- cultural school, 320; irrigation, 320 ; labour organisations, 233 ; Leon- gatha State Farm, 230; minimum wage law, 236; Minister of Lands on Cheviot, 167; Old- Age Pension Bill, 362 ; railways, 36, 37, 40, 43, 49, So, 58, 72; sugar mill, 316; tele- phones, 55 Village settlements, see Land Vogel, Sir Julius, 13, 58, 67, 130, 192 Wakefield, Edward Gibbon, 8 Wallace, Alfred Russel, 1,314 Ward, J. G., 66, 342, 344, 347 West Australia, 50, 155, 329, 334 Wheat yield, 164, 181 Wingless birds, 7, 117 Women, 185, 202, 238, 252, 254, 314; 320, 340, 362, 374 Workman defined, 175 Workingmen and Ministry, 196, 243 J-5" THE LIBRARY UNIVERSITY OF CALIFORNIA Santa Barbara THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW. Series 9482 IX SOUTHERN REGIONAL UBRARY FACILITY A 000 698 965 1