Chapter 4, are multiplied by 30 to form the figures in columns 3 and 4.

The results are exceedingly interesting.

THE DIVISION OF PROPERTY: AN ARGUMENT FROM THE DEAD TO THE LIVING

+---------------------------+---------------------+ | | THE DEAD. | | +---------------------+ | |Averages of the Death| | |Duty Records in the | |CLASSES OF ESTATE. |five years 1904-5 | | |to 1908-9. | | +---------+-----------+ | | (1) | (2) | | |PERSONS. | PROPERTY. | +---------------------------+---------+-----------+ | | | £ | |Less than £100 net | 15,956 | 900,000| |Less than £300 gross | 18,917 | 3,600,000| |£300 to £500 gross | 9,288 | 3,700,000| |£100 to £500 net | 6,074 | 2,700,000| | +---------+-----------+ |Total Estates not over £500| 50,235 | 10,900,000| | +---------+-----------+ |£500 to £1,000 net | 10,404 | 8,600,000| |£1,000 to £10,000 net | 16,910 | 62,100,000| |£10,000 to £25,000 net | 2,338 | 41,000,000| |£25,000 to £50,000 net | 910 | 35,100,000| |£50,000 to £75,000 net | 291 | 19,400,000| |£75,000 to £100,000 net | 145 | 13,200,000| |£100,000 to £150,000 net | 133 | 16,900,000| |£150,000 to £250,000 net | 90 | 19,700,000| |£250,000 to £500,000 net | 54 | 20,600,000| |£500,000 to £1,000,000 net | 19 | 13,600,000| | Over £1,000,000 net | 7 | 18,100,000| | +---------+-----------+ | Total Estates over £500 | 31,301 |268,300,000| | +---------+-----------+ | Grand Total | 81,536 |279,200,000| +---------------------------+---------+-----------+

+---------------------------+-------------------------------------+---------+ | | THE LIVING. | | | +-------------------------------------+ | | |Figures of columns 1 and 2 multiplied| AVERAGE | | |by 30 upon the assumption that each |VALUE OF | |CLASSES OF ESTATE. |dead property owner in column 1 | ESTATES | | |corresponds to 30 living ones. |PER HEAD.| | +-----------------+-------------------+ | | | (3) | (4) | | | | PERSONS. | PROPERTY. | | +---------------------------+-----------------+-------------------+---------+ | | | £ | £ | |Less than £100 net | 478,680 | 27,000,000 | 56| |Less than £300 gross | 567,510 | 108,000,000 | 190| |£300 to £500 gross | 278,640 | 111,000,000 | 398| |£100 to £500 net | 182,220 | 81,000,000 | 444| | +-----------------+-------------------+---------+ |Total Estates not over £500| 1,507,050 | 327,000,000 | 216| | +-----------------+-------------------+---------+ |£500 to £1,000 net | 312,120 | 258,000,000 | 826| |£1,000 to £10,000 net | 507,300 | 1,863,000,000 | 3,672| |£10,000 to £25,000 net | 70,140 | 1,230,000,000 | 17,536| |£25,000 to £50,000 net | 27,300 | 1,053,000,000 | 38,571| |£50,000 to £75,000 net | 8,730 | 582,000,000 | 66,600| |£75,000 to £100,000 net | 4,350 | 396,000,000 | 91,034| |£100,000 to £150,000 net | 3,990 | 507,000,000 | 127,067| |£150,000 to £250,000 net | 2,700 | 591,000,000 | 218,800| |£250,000 to £500,000 net | 1,620 | 618,000,000 | 381,481| |£500,000 to £1,000,000 net | 570 | 408,000,000 | 715,789| | Over £1,000,000 net | 210 | 543,000,000 |2,585,714| | +-----------------+-------------------+---------+ | Total Estates over £500 | 939,030 | 8,049,000,000 | 8,571| | +-----------------+-------------------+---------+ | Grand Total | 2,446,080 | 8,376,000,000 | 3,424| +---------------------------+-----------------+-------------------+---------+

In the first place, the total property comes out at £8,376,000,000 which is about £5,400,000,000 less than the estimate of private property arrived at in Chapter 5. This is not surprising. There can be no question that a considerable amount of property evades the Death Duties. On page 78 will be found details, taken from the Reports of the Inland Revenue Commissioners, of the various descriptions of property which passed in the year 1908-9. Take the item "Household Goods, Apparel, etc." It amounts to but £6,000,000. Now, in Chapter 5, as the reader will remember, I formed an estimate of £550,000,000 as the value of such effects, this estimate being £400,000,000 lower than that made by Sir Robert Giffen twenty years ago. The £6,000,000 is officially described as relating to "household goods, pictures, china, linen, apparel, etc." Multiplied by 30 it gives but £180,000,000, which is certainly £300,000,000 less than it should be. It will be seen that "Book Debts, Stock, Goodwill, etc.," figure for only £17,000,000 in 1908-9, pointing to under-estimation. Similar undervaluation probably obtains in regard to other items of property, while bonds to bearer frequently escape taxation. Of investments in places overseas a very great part undoubtedly escapes death duty.

Another and most important point is that a considerable amount of property eludes the Death Duties through gifts by the living. The following figures are significant:—

COMPARISON OF (1) INCOME TAX ASSESSMENTS AND (2) ESTATE ASSESSMENTS

Gross Assessments Net Estates to Reviewed for Income Tax. Death Duties. Million £ Million £ 1895-6 677.8 213.2 1896-7 704.7 215.8 1897-8 734.5 247.3 1898-9 762.7 250.6 1899-1900 791.7 292.8 1900-1 833.3 264.5 1901-2 867.0 288.9 1902-3 879.6 270.5 1903-4 902.8 264.1 1904-5 912.1 265.1 1905-6 925.2 272.2 1906-7 943.7 298.5 1907-8 980.1 282.3 1908-9 1010.0 270.9

It will be observed that there is a remarkable lack of correlation between the income tax and the death duty assessments. The former have grown most satisfactorily. The latter grew in the first few years of the operation of the Harcourt revised Death Duties and then became, for practical purposes, stationary. There can be no doubt that the explanation is to be found in the increase of gifts made _inter vivos_ to avoid the payment of death duty, and that the estates reviewed in 1908-9 should have been nearer £400,000,000 than £300,000,000.

Parliament has tried to meet this avoidance by enacting (Finance Act of 1909, which was passed into law in 1910 after rejection by the Peers in 1909) that gifts _inter vivos_ shall not be exempted from death duty unless made more than three years prior to the death of the giver.

The apparent discrepancy between the £8,376,000,000 arrived at on page 75 and the £13,700,000,000 arrived at on page 65 is therefore not an inaccuracy, but an accurate consequence of the facts referred to.

As it stands, then, the table on pages 74-75 represents the greater part, but not the whole, of the property of the persons to whom it relates. Nevertheless, it gives us as accurate an idea of the manner of distribution as though it dealt with the whole.

CLASSIFICATION ACCORDING TO (1) SIZE OF ESTATE AND (2) DESCRIPTION OF PROPERTY, OF THE GROSS VALUE OF THE ESTATES WHICH PASSED AT DEATH IN THE FISCAL YEAR 1908-9

+-----------+----------+-----------+----------- | Stocks, | | Money | Trade | Funds, | Cash in | lent on | Assets, Size of Estates. |Shares, and|the House |Mortgages, |_i.e._ Book |other like | and in | Bonds, | Debts, |Securities.| Bank. |Bills, etc.| Stock, | | | | Goodwill, | | | | etc. ---------------------------+-----------+----------+-----------+----------- | £ | £ | £ | £ Not exceeding £300 gross | 239,910| 1,263,509| 119,186| 222,528 Between £300 and £500 gross| 392,345| 974,686| 211,362| 262,508 £100 to £500 | 265,873| 354,133| 110,053| 664,130 £500 to £1000 | 1,586,521| 1,633,265| 760,018| 863,702 £1000 to £10,000 | 21,247,265| 6,169,300| 7,281,737| 4,296,571 £10,000 to £25,000 | 18,767,290| 2,345,310| 4,112,023| 2,184,906 £25,000 to £50,000 | 17,675,813| 1,454,151| 3,111,506| 1,704,057 £50,000 to £75,000 | 10,562,035| 726,051| 1,561,811| 1,334,990 £75,000 to £100,000 | 7,534,683| 572,995| 1,354,405| 852,908 £100,000 to £150,000 | 10,175,403| 567,701| 1,479,966| 668,643 £150,000 to £250,000 | 9,738,895| 317,672| 888,356| 736,528 £250,000 to £500,000 | 11,377,749| 860,505| 1,648,587| 1,244,988 £500,000 to £1,000,000 | 3,370,659| 36,126| 280,636| 1,177,432 Over £1,000,000 | 6,318,402| 616,113| 82,533| 1,059,061 ---------------------------+-----------+----------+-----------+----------- Total |119,252,843|17,891,517| 23,002,179| 17,272,952 ---------------------------+-----------+----------+-----------+-----------

+----------+----------+------------+---------- | | | | | |Household | | House Size of Estates. | Policies | Goods, |Agricultural| Property | of | Apparel | Land. | and |Insurance.| etc. | | Business | | | |Premises. | | | | ---------------------------+----------+----------+------------+---------- | £ | £ | £ | £ Not exceeding £300 gross | 562,756| 277,353| 100,014 | 598,220 Between £300 and £500 gross| 353,865| 210,848| 94,088 | 967,152 £100 to £500 | 507,869| 239,037| 329,362 | 2,862,200 £500 to £1000 | 844,829| 404,730| 588,750 | 4,120,809 £1000 to £10,000 | 3,553,234| 1,673,603| 4,102,764 |18,168,513 £10,000 to £25,000 | 1,400,980| 849,525| 2,432,372 | 6,516,563 £25,000 to £50,000 | 1,067,993| 633,560| 2,465,454 | 4,322,623 £50,000 to £75,000 | 314,705| 360,607| 1,407,645 | 2,091,525 £75,000 to £100,000 | 337,012| 208,217| 1,741,005 | 1,161,460 £100,000 to £150,000 | 490,791| 364,077| 1,373,393 | 1,635,301 £150,000 to £250,000 | 535,038| 336,487| 1,542,264 | 1,454,949 £250,000 to £500,000 | 279,200| 448,789| 1,611,265 | 1,222,858 £500,000 to £1,000,000 | 179,368|-[A]39,952| 1,649,580 | 614,244 Over £1,000,000 | 282,723| 225,708| 1,253,498 | 307,871 ---------------------------+----------+----------+------------+---------- Total |10,710,363| 6,192,589| 20,691,454 |46,044,288 ---------------------------+----------+----------+------------+----------

[A: Capital transferred in the year to other classes exceeded that brought into these classes.]

+---------+----------+----------- | | | | Ground | | Total Size of Estates. | Rents | Other | Gross | and |Property. | Capital | similar | | Values. |Burdens. | | | | | ---------------------------+---------+----------+----------- | £ | £ | £ Not exceeding £300 gross | 1,505| 388,068| 3,773,049 Between £300 and £500 gross| 5,811| 397,431| 3,870,096 £100 to £500 | 13,008| 517,903| 5,863,568 £500 to £1000 | 43,922| 1,226,606| 12,073,152 £1000 to £10,000 | 571,404| 7,811,769| 74,876,160 £10,000 to £25,000 | 790,506| 4,802,567| 44,202,042 £25,000 to £50,000 | 724,520| 4,199,814| 37,359,491 £50,000 to £75,000 | 371,867| 2,061,497| 20,792,733 £75,000 to £100,000 | 271,003| 1,225,183| 15,258,871 £100,000 to £150,000 | 354,061| 1,485,937| 18,595,273 £150,000 to £250,000 | 561,046| 2,479,257| 18,590,492 £250,000 to £500,000 | 411,398| 2,257,972| 21,363,311 £500,000 to £1,000,000 | 105,066| 992,010| 8,365,169 Over £1,000,000 | 188,350| 6,571,469| 16,905,728 ---------------------------+---------+----------+----------- Total |4,413,467|36,471,483|301,889,135 ---------------------------+---------+----------+-----------

The table is full of striking contrasts. I have divided it into two parts, the lower of which consists almost entirely of the income tax paying classes. We should expect those with incomes exceeding £3 per week for the most part to be the property owners of the nation. It will be seen that the number of persons with £500 of property and upwards indicated by this table is 939,000. This number may be compared with our estimate of income tax payers, which was 1,100,000.

Of the 939,030 persons with £8,049,000,000, as many as 312,120 own between them but about £258,000,000, leaving 626,910 persons with £7,791,000,000.

Of the 626,910 persons with £7,791,000,000, as many as 507,300 have between them £1,863,000,000, leaving 119,610 persons with £5,928,000,000.

And it is amongst the big estates that we must assuredly look for the bulk of the avoidance of Death Duties, which is clearly indicated by the table on pp. 76-77. Thus the closer we get to the facts the more amazing the monopoly of capital appears. It is literally true to say that a mere handful of people owns the nation. _It is probably true that a group of about 120,000 people who with their families form about one-seventieth part of the population, owns about two-thirds of the entire accumulated wealth of the United Kingdom._

It is an inevitable consequence of the monopoly of capital by a few people that the distribution of the national income is as pictured in the frontispiece of this volume. If we were quite unable to investigate incomes, we should know without investigation that the facts as to capital must have as a corollary a grossly uneven distribution of income. If, again, we had merely the known facts as to incomes before us, and death duty statistics were not available, we should be able to deduce from them just such a monopoly of wealth as is examined in this chapter.

As to the insignificant fraction of the national wealth owned by the working and lower middle classes, it is mockery to term it the "capital of the working classes," as is done not infrequently. It corresponds, for the most part, to the squirrel's store of nuts. It stands chiefly for sick pay, unemployment benefits, funeral moneys, bits of jerry-built houses, and so forth. It is rarely industrial capital used for the benefit of the savers.

Those who have so little property cannot bargain fairly for the sale of their services with those who own the national undertaking. A small group of private owners exercises the effective government of the nation through the possession of the means of production, which are the means of life. As for the Government at Westminster, it is impotent because, like the mass of the people, it owns little or no property. It cannot even control the chief source of the national wealth—coal, or the prime factor in trade—railways. The investments of the State, like the investments of the masses, are a negligible quantity. And those rule who own.