in the following year, another minute was issued recommending a general revision of the salaries of the civil establishments.

MAIN FEATURES OF THE Act.

Based on these two minutes, an act of Parliament was passed in August, 1822 (3 Geo., 4, c. 113), which granted the same liberal scale of retiring allowances authorized by the Act of 1810 but required contributions from all civil servants whose salaries exceeded £100 ($486.65) per annum. This act required that upon salaries between £100 ($486.65) and £200 ($973.30), 24 per cent should be deducted; that upon salaries of upwards of £200 ($973.30), 5 per cent should be deducted, to the extent of the regulated salary authorized by the minute of January, 1822; and that for any salary which any officer then holding office might receive above the regulated amount, 10 per cent should be paid. It was also directed that the abatements so made from salary should be formed into a fund, to be carried to the credit of the commissioners, for the reduction of the national debt at the Bank of England. Provision was made that, if any civil servant died in office, the whole amount of his contribution was to be paid to his legal representatives. Even after his resignation or removal from office, his contribution was paid back to him, provided he had not received any benefit from the fund.

The object of this act was thus explained by the Chancellor of the Exchequer:

The persons who, in ordinary cases, were to receive these allowances, it was intended to make contribute to a fund out of which such allowances in future were to issue. That arrangement would operate as something like reduction of salaries; but it would be a case of infinitely less hardship to make persons contribute in the active part of their lives to a fund which, in the decline of life and in retirement, would be a provision for them, than suddenly, and at one blow, to cut down their salaries without holding out any corresponding advantage. (")

REPEAL OF THE ACT.

This law held less than two years, for on June 24, 1824, it was repealed by an act of Parliament (5 Geo., 4, c. 104), which directed that all superannuation allowances granted after that date were to be paid from the Consolidated Fund and all contributions received under the previous act were to be returned to the contributors. There is a Treasury minute, dated January 25, 1824, which contains the details of that repayment. The sum then in hand, after paying the few pensions during the interval, amounted to £107,800 ($524,608.70), which was repaid in the proportions there specified. ()

a Report on the Operation of the Superannuation Act. 1857. Appendix XII, p. 158. ¿ Report on Civil Service Superannuation. 1856. p. 3.

The reason for the repeal of the Act of 1822 was the plea on the part of the civil servants that compulsory deductions from their salary constituted a violation of contract on the part of the Government. The debates which occurred in Parliament on the subject. indicate that the repeal was made entirely on that ground. The system of deductions was not popular with either Parliament or the civil service.

In the meantime the charge of superannuation allowances continued to increase. In 1827 it amounted, including compensation allowances, in the purely civil departments to £484,081 ($2,355,780.19); in the civil branch of the Ordnance to £64,364 ($313,227.41).(")

SECOND PERIOD OF FREE PENSIONS (1824-1829). REPORT OF SELECT COMMITTEE OF 1828, RECOMMENDING REESTABLISHMENT OF SYSTEM OF DEDUCTIONS.

In the year 1828 the Select Committee on Public Income and Expenditure made important recommendations in regard to the salaries and pensions of civil employees. This committee inquired into the salaries given to the clerks in the India House, the Bank of England, two insurance offices, and one of the principal banking houses of London, and compared them with the salaries granted clerks in the civil service. As a result of this inquiry they stated in their report on salaries that "there does not appear to be any fixed system of superannuation allowances in commercial houses, and although some such allowances are given, the amount of them is small." They then proceeded to indorse the principle of deductions from salary for the purpose of creating a superannuation fund in the following language:

The committee are aware that there is not a strict analogy between the duties performed by clerks in public offices and those in commercial establishments; still, as far as comparison can be made, it appears that the salaries in the Ordnance Department admit of diminution. At present, without precluding themselves from hereafter advising a further reduction on a general and systematic principle, should it appear proper on more accurate investigation, they confine themselves to a recommendation to revert to the principle laid down in the minute of the Treasury in 1821, of making these salaries subject to a charge for forming a superannuation fund, the details of which they intend in the course of a few days to submit to the House in a separate report on superannuation allowances, half-pay, and pensions. (")

In the committee's report they accordingly recommended the reestablishment of the system of deductions. They alluded with

a Report on the Operation of the Superannuation Act. 1857. Appendix XII, p. 158. b Idem, p. 159.

approbation to the principle laid down in the Treasury minute of August 10, 1821, that pensions should be provided by making deductions from the salaries of the persons entitled to them. The select committee proposed that deductions should be made from all salaries, both of those who had taken service previously to that date and of those who might afterwards enter the service. They recommended that those already in the service should be pensioned on the then existing liberal scale (the difference between the value of their pensions and the value of their contributions to be made up from the public purse), but that those who might afterwards enter the service should be given pensions equivalent only to the value of the deductions from their salaries so that the public might not eventually have to bear any part of the expense of these allowances. They pointed out that the loss occasioned the public by the repeal of the Act of 1822, which they considered to have been an admirable measure, was no less than £500,000 ($2,433,250). They stated that from 1822 to the end of 1827 the superannuation and compensation allowances had increased in annual amount from £331,746 ($1,614,441.91) to £484,081 ($2,355,780.19). (@)

The Chancellor of the Exchequer accordingly introduced a bill founded upon this report, and intended to give effect to the recommendations contained in it. He introduced it in language which showed plainly enough that the main interest of the Government in connection with the bill was the reduction of expenses rather than the establishment of a model superannuation measure, and that the deduction from salaries was preferred to a reduction of salaries. His speech is reported as follows:

The House had appointed a committee for the purpose of revising the expenditure of the country; and that committee had almost unanimously declared that such a measure as that which he had introduced ought to be carried into effect. Standing in the situation which he had the honor to fill, he should have been charged with a high degree of cowardice, if, after such a recommendation, he had refused to bring the measure before the House. On that account he was prepared to vindicate the bill, and to state the reasons on which the committee had come to their decision. The whole expenditure for the service of the country, the committee found to amount to twenty-one millions, and of this, five millions were appropriated to the ineffective service, including superannuation, pension, and retired allowances. The committee was anxious not to deprive the country of the active service of those who were engaged in the public departments; and they therefore turned their attention to consider if it were possible, without any deviation from just principle, prospectively to diminish the expenditure for services that were passed. Of the five millions which the ineffective service of the country cost, the committee found that nearly half a million was appropriated to the payment of the civil pensions, and this sum has been increased

• Report on the Operation of the Superannuation Act. 1857. Appendix XII, p. 160.

within a few years from £330,000 [$1,605,945] to £447,111 [$2,175,865.68]. Finding that this sum was increasing so rapidly, they thought it their duty to recommend the measure before the House. He knew that the committee had balanced long between a reduction of the salaries, and this measure of making the officers contribute to their own superannuation. He, for one, opposed the reduction of salaries, because they had been fixed in the year 1821, after the effects of peace had been fully felt, and the measures for restoring the metallic currency had been adopted. It was better, on the whole, he thought, and the least likely to affect the future prospects of the different officers of our civil establishments, to adopt this measure relative to their superannuation, than to alter their salaries. (")

Sir Henry Parnell also stated that the opinion of the committee was in favor of a considerable reduction of salaries, but that they had taken, instead, a course much more favorable to the clerks, namely, that of proposing to reduce them by a small percentage, in the way provided in the Act of 1822. And he added his conviction that "the clerks had much better consent to this arrangement than defeat it, and thus make it necessary to examine more closely what ought to be the exact reduction which the public interests required to be made."

The bill was withdrawn, however, in consequence of an objection made on hehalf of the civil servants, on the same ground as before, that the imposition of deductions would, as regards them, be contrary to their terms of service. Strong statements were also made to the effect that the salaries were not sufficiently high to bear deductions, although the select committee had recorded its opinion otherwise, as follows:

It is obvious that in recurring to the provisions of the Act of 1822, the rate of salary attached to each office should be such as may be deemed fairly sufficient to bear the deduction which it is proposed to make from it; and when it is considered that the Treasury revised and fixed the salaries of the several departments in 1821, when the deductions in aid of the superannuation fund were first established, it does not appear that a revival of that principle would press too hardly at the present time, and under the present circumstances of the country, upon the fair emoluments of the officers and clerks who are now in office. (')

TREASURY MINUTE OF 1829 REESTABLISHING SYSTEM OF DEDUCTIONS.

Although the bill was withdrawn, Treasury officials did not give up the notion of reducing pension charges by exacting contributions from the civil servants. They observed that the objection which had been made successfully against the Act of 1822 and the proposed bill of 1828 that deductions from salary would mean a violation of the terms of contract did not apply to future entrants. They accord

a Report on the Operation of the Superannuation Act. 1857. Appendix XII, p. 160. b Report on Civil Service Superannuation. 1856. p. 4.

ingly proceeded to issue the famous minute of August 4, 1829, directing that contributions should be paid by those who might afterwards be appointed to the service. The text of this important minute. reads as follows:

My Lords have under their consideration the necessity of adopting some regulation, with a view to reduce, at a future period, the heavy charge which is now annually incurred in providing superannuation for such persons as are incapable, from infirmity of mind or body, of discharging the duties of their public situations.

My Lords trust that they shall be enabled, at an early period, to make such an arrangement as shall be just to parties entering into the public service, while it shall ultimately lead to a large reduction of expense.

My Lords therefore deem it advisable that a distinct intimation should be given to every individual who may hereafter enter into the civil service of the Crown at the time of his admission to office; that he will be subjected to a deduction from his annual salary and emoluments, and to such regulation with respect to superannuation as my lords may hereafter lay down.

Let a communication therefore be made to the several offices hereinafter mentioned, directing them, in every case of appointment to office, to make such a communication to the person appointed, and to make a deduction from all salaries and emoluments not exceeding £100 [$486.65] a year at the rate of 24 per centum per annum, and from all other salaries and emoluments at the rate of £5 [$24.33] per centum per annum, for the purpose of providing, in such manner as my Lords may hereafter direct, for superannuation on retirement of such persons as shall hereafter enter the civil service. (a)

In issuing this minute the Lords of the Treasury acted under the general financial powers entrusted to them by Parliament. This Treasury minute was in effect nothing more than a prospective regulation of the salaries of all civil servants who might enter the service after the date of the minute. The Treasury had always been accustomed to exercise the full and entire right of raising and reducing the salaries of the lower grades of the permanent civil service, submitting the salaries so revised to Parliament, at its next meeting, in the estimates. A minute dated June 15, 1832, directed that the fund realized by these deductions from salaries was to be 'invested in exchequer bills to be held subject to the disposal of Parliament, and it was so held till Parliament decided on the question by the Act of 1834. After Parliament had sanctioned the deductions by that act, the amount of the deductions was directed by a minute of November 14, 1834, to be stated on the face of the estimates submitted to Parliament for the ensuing year, and to be deducted from the sum voted to defray the charge of superannuation and retired allowances. Previous to 1832 the superannuation estimate had been confined to the pensions of officers of certain departments which possessed no

❝ Report on Civil Service Superannuation. 1856. Appendix No. 1, p. 346.