THROUGH FUNDS CREATED IN THE EXCISE AND CUSTOMS BY DEDUCTIONS FROM SALARIES.

An attempt was made, therefore, early in the nineteenth century, to establish a system of granting superannuation allowances, and to make it apply to the rank and file of the civil service as well as to the high officials. From a very early period superannuation funds had existed both in the departments of Excise and of Customs. The Excise fund, which was originally called "The Excise Charity Fund," was established by a Treasury minute, dated February, 1686, by a deduction of 3d. in the pound on the salaries of all "genera] riders, general supervisors, collectors, surveyors, gaugers, and clerks. In the disposal of the money the following rules were to be observed: First. No officer who had not served seven years was to receive any sum of money or pension, unless disabled by accident.

Second. The pensions were to vary according to the grade of the officers, the maximum being £30 ($146) and the minimum £15 ($73). Third. No officer was to be allowed a pension, if, from any other source, he possessed an income equal to the pension assigned to his grade.

An act (49 Geo. 3, c. 96) was passed in 1809, which granted to officers incapacitated by age or infirmity, after ten years' service, three-fourths of their salary, taken on the average of the last seven years. The same proportion of last salary was granted to officers disabled by accident, irrespective of length of service, but it was provided that no such superannuation should be granted to an officer in receipt of less than £180 ($875.97) per annum.

The Customs fund appears to have existed at least as early as the year 1708. It was confined at first to the inferior officers of the service. The rate of deduction was 3d. in the pound and the fund was increased by the fines imposed on officers for breach of discipline. Gradually the benefit of the fund was extended to classes higher in rank than those for which it had originally been formed. A Treasury warrant of 1779 added landing surveyors, landing waiters, and other superior officers. Fees belonging to 196 offices, abolished in 1798 by the 38th of Geo. 3, c. 86, were 'turned in to the superannuation fund.

The first formal proceedings of the Government looking toward the establishment of a general system of superannuation allowances are found in Treasury minutes of 1802, 1803, and 1807. The first minute, dated July 30, 1802, granted allowances ranging from £100 ($486.65) to £200 ($973.30) on retirement in consequence of physical infirmity, under the name of compensation, to a few classes of officers of the Customs. No regulations were made as to age or length of service. The second minute, dated the 10th of August, 1803, was passed

because the Lords of the Treasury had discovered that the allowances granted the previous year did not bear a fair proportion to the emoluments of the respective offices. They fixed, therefore, the sums which were to be taken as the annual incomes of the several grades and then prescribed a graduated scale of allowances, according to which one-third of the salary was allowed to officers who had served ten years and were reported incapable of executing their duties; one-half was allowed after service of from ten to twenty years, and two-thirds after twenty years, to officers retiring at less than sixty years. In the case of officers more than sixty years of age two-thirds of salary was allowed after only fifteen years of service. The third minute, dated November 7, 1807, extended the arrangement to numerous other classes of officers of the Customs, and in this position the matter stood at the passing of the general act of 1810.

SUPERANNUATION ACT OF 1810.

REPORT OF COMMITTEE OF 1808 THE BASIS FOR ACT OF 1810.

In the year 1808 a report was made by the Committee on Public Expenditures on the subject of the pensions, sinecures, and reversionary grants paid out of the public revenues, which led to the first general enactment on the subject of superannuation. Although there was at that time no regular system of superannuation, except in the Customs and Excise, as explained above, a large number of retired allowances, included under the general head of "pensions," came under the notice of the committee. The entire want of fixed rules governing the grant of superannuation allowances was noted and deplored by them. Their attention was drawn particularly to a large amount of "dead wood" in some offices, the practice having arisen, in case of deficiency of the fee fund, of carrying pensioners on the regular civil list. This meant that much of the sum voted for any office for current expenses was not paid out in the form of salaries to those carrying on the work, but was spent for pensions to those no longer able to work. The committee held that "annual allowances ought not to be granted generally, and without special reasons, to persons retiring from official situations," and that when pensions were granted in any office the accounts should be kept entirely separate from the salary account.

In view of the loose way in which provision was made for the payment of superannuation allowances, the committee recommended that a stricter account be kept of pensions granted and the reasons for their bestowal. They suggested the expediency of limiting allowances to a certain proportion of the former salary and laid stress on the principle that duration of service should be taken into consideration

in fixing the amount of the allowance. Their recommendations are contained in the following extract:

Under all these circumstances your committee do not hesitate in submitting to the House, that all allowances in the nature of pensions, which are not strictly superannuations, should be classed under their proper head, and paid at the exchequer; preserving, at the same time, entries of such pensions, together with the circumstances under which they have been granted, on the establishment of the offices in which the services have been performed.

It may be also expedient to limit the sums in which allowances may be applied to cases of superannuation, so as not to exceed a certain proportion of the former salary.

The regulations under which superannuations are granted in the Customs deserve the attention of the House, as uniting a due consideration toward long and meritorious service, with a just attention to economy.

By a resolution of the House of Commons of Ireland, 7th April 1784, no yearly allowance was permitted to be placed on incidents in cases of superannuation, except for officers who shall have served forty years without censure, or officers who shall have received a wound or hurt in the service, amounting to a total disability, or for widows of officers who shall have lost their lives in the service of the revenue; but by a subsequent revision of that resolution, 26th July 1793, twenty-five years were substituted instead of the term of forty years, as being sufficient to answer the purposes of the said resolution respecting the placing on incidents any yearly allowance for superannuated officers of the revenue, who have already served, or shall have served, the said term of twenty-five years without

censure.

These general, unqualified expressions, have been, perhaps, liable to misconstruction, as if they were calculated to convey a sort of right of superannuation after twenty-five years of service; whereas it is to be presumed that it never would have been the intention of the House of Commons to countenance a new claim on the part of the officers, but, on the contrary, to impose a restraint upon executive government, from granting any such allowances even to superannuated officers, unless where they had served meritoriously the prescribed number of years, or had otherwise been incapacitated in the public service, as described in the resolution.

With regard to the salary and emoluments of each separate department, the public ought unquestionably to be served as cheaply as is consistent with being served with integrity and ability; but it must be recollected that what makes office desirable in the higher departments is not the salary alone, but the consequence and consideration attached to it, the power of obliging friends, and of creating dependents; and in the lower degrees the chance of gaining advancement by industry and talent. The principle of gradually increasing salaries after certain periods of service, and at fixed intervals, if they are not made too short, is highly to be approved, as holding out a due encouragement to diligence and fidelity. In all cases of superannuation, duration of service should be an essential requisite, and even then regard should be had to the condition of each individual, as to his ability of continuing the official labors, and to his situation in life from other causes.

In many instances, where allowances have been granted as compensation for the loss of office, or upon the plea of superannuation, the persons who have obtained them have, at subsequent periods, been appointed to other offices, in both which cases it is obvious that the allowances ought to have ceased.

The true principle applicable to all offices is, that public money should not be granted without reference to duty; and all exceptions whatever ought to be justified under the special circumstances attending such case. (")

MAIN FEATURES OF THE ACT.

As a result of the report of the Committee on Public Expenditure and their recommendation that the regulations under which superannuations are granted in the Customs should be considered by the House, "as uniting a due consideration toward long and meritorious service, with a just attention to economy," the Act of 1810 (50 Geo. 3, c. 117) was passed. The principal features of this act were the provision for an annual statement of the increase and diminution of public salaries, pensions, and allowances, the prohibition of the practice of charging superannuations or compensations on the expenses or funds of any office without the concurrence of the Treasury, and the separation of military and naval pensions from civil allowances in the annual estimates of the Army, Navy, and Ordnance. Provision was also made that in offices having a fee fund, compensation and superannuation should be chargeable in the first instance on such fund, the deficiency, if any, being made good, in the offices of the Secretary of State, the Privy Council, and the Treasury, out of the civil list; in other cases by a parliamentary vote. The scale of remuneration was similar to that prescribed by the minute of 1803 for retired officers of the Customs, with the addition that any officer over 65 years of age might receive a pension of three-fourths of salary in case he had served forty years or more, or the whole of salary in case his length of service had been fifty years or more.

Since this act made pensions to Customs and Excise officers payable out of the public revenues, a Treasury minute was passed March 26, 1811, directing that the accumulated Customs fund, consisting of about £165,000 ($802,972.50) stock should be paid into the exchequer. Two acts were passed in the year 1812 directing that the Excise fund, consisting then of £73,900 ($359,634.35) three per cent consols, the value of which was £45,324 ($220,569.25), should also be paid into the exchequer.(")

The superannuation funds which existed in the Customs and Excise having been appropriated by the Government and paid into

a Report on the Operation of the Superannuation Act. 1857. Appendix XII, pp. 154, 155.

↳ Report on Civil Service Superannuation. 1856. p. 2.

the exchequer, there existed then under the Act of 1810 a general system of granting superannuation allowances to the civil service out of the revenues of the country without the existence of a superannuation fund of any kind. This act continued in force for twelve years, and during that period pensions were granted from the Consolidated Fund without any abatement from salaries, and entirely at the cost of the public.

The Act of 1810 was undoubtedly intended to operate as a check upon the grant of pensions. It had, however, exactly the opposite effect. The act made no regulations to check retirements from office. The liberality of the pension scale established was really a temptation to seek retirement. It should be noted that although one-third was fixed as the maximum allowance for ten years' service, the Treasury was left at liberty, as soon as the ten years had been exceeded by the smallest interval, to grant one-half. Furthermore, the superannuation was to be calculated upon the salary of which the individual was in receipt at the time of retirement, not on the average of that received during a certain number of years. A great increase in the pension charge resulted. The charges of the years 1810 and 1820 for superannuation allowances, including compensations for loss of office, in the purely civil departments were, respectively, £94,550 ($460,127.58) and £291,068 ($1,416,482.42), and those of the civil branch of the Ordnance Department had increased from £27,916 ($135,853.21) to £54,718 ($266,285.15).(“)

SUPERANNUATION ACT OF 1822.

TREASURY MINUTE OF 1821 THE BASIS FOR ACT OF 1822. The next important step in the history of English superannuation measures was taken by the Treasury. In a minute of August 10, 1821, it laid down a principle that proved to be extremely influential in the subsequent legislation on the subject. This was a period of marked reduction in public expenditure following the war, and it was the spirit of retrenchment which animated the Treasury minute. "My Lords are of opinion that it is essentially necessary that some new regulations should be adopted, with a view of limiting this branch of the public expenditure in future (that is, the superannuation allowances), and they are of opinion that the mode of regulation which seems in all respects most eligible, is, to require that the individuals themselves who may hereafter enjoy the benefit of superannuation allowances, should be called upon to contribute to a superannuation fund, to be administered under the direction of their Lordships." This Treasury minute contained recommendations for a plan along the lines afterwards established by the Act of 1822. On January 8,

a Report on the Operation of the Superannuation Act. 1857. Appendix XII, ,p. 157.