reaching pensionable age or just after has continued to be felt and to be dwelt upon. It has lately been officially recognized by passage of the Act of September 20, 1909. It seems strange, therefore, under all the circumstances, that the whole subject was not thrashed out with more thoroughness, with the help of the expert actuarial talent that was available at the time the momentous change was made.

The indifference of the commissioners of 1857 to the actuarial phases of the problem is evidenced by various details in their report. They recommended, for instance, the adoption of a new scale of retired allowances, without making a single calculation as to the cost of such a change. They also recommended that the age of voluntary retirement be reduced from 65 to 60 years, without apparently considering the enormous increase in the cost of annuities purchased at the earlier age, an increase caused by two counts, the greater number eligible at the age of 60 and the higher scale of values.

INDIFFERENCE OF THE COMMISSION TO COST OF FREE PENSION SCHEME.

The most obvious and fundamental objection to any universal pension scheme is that of the expense which it puts upon the people of the country. This well-known fact was noted by the commissioners, but did not deter them from recommending a general pension. Their discussion of that subject was confined to the following paragraph:

The single, but not unimportant, objection to this solution of the difficulty is, the additional charge which it would impose on the public revenue. We are not disposed to treat lightly the pecuniary view of the question, and we are well aware of the reluctance which the Legislature must feel in imposing an additional burden on the public finances. (")

The commissioners appear to have made no attempt to calculate, or even estimate, the amount of that "additional charge" which they recommended. Convinced, apparently, that a civil pension, payable out of the public treasury, was the only solution of the problem which was puzzling them, they seemed resolved not to "count the cost." REPEAL OF THE TWENTY-SEVENTH SECTION OF THE SUPERANNUATION ACT OF 1834, 1857.

The report of the Superannuation Commission was submitted to the Treasury Lords on May 15, 1857. On June 30 Lord Naas in the House of Commons moved for leave to introduce a bill to repeal the twenty-seventh section of the Superannuation Act of 1834, which was the section providing for deductions from salaries. The bill met with opposition from the Government, but was finally passed by a large majority in both houses of Parliament.

a Report on the Operation of the Superannuation Act. 1857. p. XXI.

BILL FOR REPEAL INTRODUCED BY LORD NAAS.

In the course of his speech asking for leave to introduce the measure Lord Naas reviewed the history of superannuation measures in England down to the passage of the Act of 1834, and then proceeded to point out some of "the inequalities and anomalies" of that act, such as the fact that "out of 56,740 employed in the civil service, at salaries amounting in the aggregate to £5,595,000, ($27,228,067) only 15,311 were subject to abatements; the other 41,429, whose salaries amounted to £3,172,000 ($15,436,538), were guaranteed their pensions, but suffered no abatements." In addition to these inequalities, he considered that there were three weighty objections to the whole system of the civil service: First, that the civil servants were not altogether sufficiently remunerated, the average pay being only £141 ($686) per annum, and of two-thirds of that number the average salaries amounted to but £86 ($418) per annum; second, that many of those who contributed to the fund did not get any benefit from it, the most delicate calculations of all the actuaries in the world not being able to persuade the six out of the seven who never received any allowance that they were fairly treated; and third, the fact that the amount of reduction was more than equal to the whole superannuation paid, the tax amounting to upward of £66,000 ($321,189) a year and the allowances paid to only about £11,000 ($53,531), and the entire contributions of the civil servants during the twenty-seven years the act had been in operation to £900,000 ($4,379,850), of which £80,000 ($3,893,200) only had been returned to the contributors in the shape of allowances, leaving a balance of £820,000 ($3,990,530), which if it had been funded would have amounted to £1,000,000 ($4,866,500). Lord Naas referred in terms of warm approval to the report of the Superannuation Commission, saying that, considering the high position and experience of the commissioners, and the long time that the question had been debated, he was justified in looking at their decision in the light of an arbitration between the civil servants and the Government. On their decision he rested his whole case, and he craved the attention of the House to this very important passage of their report (which is the one usually quoted wherever authority is sought for a sweeping condemnation of contributory systems, but which seems to the student only a frank confession of the commissioners' puzzled and baffled consciousness).

It has not been without much anxious consideration that we have arrived at the conclusion that it is our duty to recommend the abolition of deductions for the purpose of superannuation, without any corresponding reduction in the salaries on which such deductions have been charged. Our first impression in entering on the inquiry referred to us was adverse to this arrangement; but on a careful review of all the difficulties of the case we became satisfied that, with a view to public interests alone, we could recommend no other set35885-S. Doc. 230, 61-2-6*

tlement of the question as likely to be permanent and satisfactory. We are aware that the present system of deductions has had high authorities in its favor, and at the time when it was introduced it may have been considered a convenient mode of carrying into effect the unpopular measure of a general reduction of salaries. Nevertheless, for the reasons which we have already stated, we believe it to be unsound in principle; and we think that its inherent defects have developed themselves in difficulties of administration of which the effect has been to create a mass of anomalies and inconsistencies most injurious to the public service. In this as in other similar cases it may be found impracticable to escape from a vicious principle and to establish a reasonable and uniform system without some temporary pecuniary sacrifice; but believing that there is no other satisfactory solution of the difficulty, being confident that the ultimate advantage of the public will be much more than a compensation for any possible temporary loss, and having regard to the importance of maintaining the character and efficiency of the civil service, we are of opinion that by the recommendation which we have made we shall best discharge the duty which has been assigned to us.(^)

Lord Naas said, in conclusion, that he thought he had shown that there was a sufficient reason for the immediate abolition of the superannuation tax, and as the Government declined to do anything in the matter, he called upon the House to support his bill. The remedy which he proposed was to introduce a bill containing but one clause, repealing the twenty-seventh section of the Act of 1834, which authorized the deductions. This course, however, he said, would not prevent the Government from imposing such conditions as they might deem necessary.

BILL OPPOSED BY THE MINISTRY.

To the student of the subject it would seem that Lord Naas had given sufficient proof of the anomalies and inconsistencies of the law, but had hardly shown that the abolition of deductions was the correct and only remedy for them. This failure of Lord Naas was pointed out by Sir. G. Cornwallis Lewis, the Chancellor of the Exchequer, who rose to the defense of the Government, saying: "The subject is too wide, the questions involved are too large, the civil service, whose interests are affected, is so important, and the sum of money which the noble lord proposes to vote away is too great to allow me to be silent on this occasion." After reviewing the course of previous legislation he concentrated his arguments on the sensible plea that no piecemeal legislation should be enacted by the House, but that the subject should be considered, as a whole, in all its bearings, and action taken only after the actuaries' final report had been submitted and the subject thoroughly discussed in the light of that report. He said that:

The question which now arises is whether the House shall at once proceed to repeal the clause in the Act of 1834 without any further

a Hansard's Parliamentary Debates, 3d series. CXLVI, pp. 690-698.

legislation on the subject, merely upon the suggestion of the facts brought under their notice to-night. The noble lord did not state to the House that the recommendations of the commissioners involved a great number of questions which do not belong strictly to the subject of these abatements, and if he founds his case upon the report of the commissioners he is bound to give effect to the whole of their recommendations. * * * Another part of the question which must be considered is the great magnitude of the sum involved, and the importance of not taking a hasty step or legislating on imperfect information on account of the large pecuniary interests which are at stake. * * * I am perfectly willing to concede to the noble lord that the present system, under which superannuation allowances are granted, is full of anomalies and inconsistencies, and that the present rule with respect to the abatement is far from satisfactory. I can not admit, however, that the creation of a fund was ever promised, either by Parliament or by the Government; neither can I admit that there has been any breach of a contract by any Government. The commissioners themselves distinctly state their opinion that no such breach of contract has taken place, and that the civil servants have no claim on the ground of equity for the proposed change. The commissioners recommend the change on the ground of expediency. They say, "the system is a bad one; you must pay forfeit for the abolition of it; you can not get rid of it without surrendering £60,000 ($291,990) or £70,000 ($340,655) a year, and we think the system is so bad that we advise you to abandon it, even at that cost." I admit, then, that the system is a bad one, and I regret that it was ever introduced. * * *Looking, then, to the extensive consequences of the simple alteration of one clause which the noble lord proposes, and considering the necessity of legislating upon this subject-if it is to be legislated upon at all-in a more comprehensive manner and with a wider regard to consequences than is now proposed, it is not in my power to vote in favor of the motion of the noble lord. I would also say that I do not see how the Government would be justified in undertaking to do anything with regard to this question until the report of the actuaries has been received. The subject is now under the consideration of the actuaries, and the commissioners promise the result in a supplementary report. Under all the circumstances then, and looking at the position in which the question stands, I do not see how it would be possible for me to accede to the motion of the noble lord. It is for the House to say whether the question can be decided in this summary manner, and whether, as guardians of the public purse, considering the large sum of money involved in this motion, they think themselves justified in deciding in favor of it.(a)

The Chancellor of the Exchequer assented to the introduction of the bill, however, on the understanding that the object of such concession was merely to give an opportunity for fuller discussion. The bill was accordingly read for the first time.

On the motion for the second reading of the bill, on July 23, Mr. Wilson, then Secretary for the Treasury, stated the reasons for the Government's opposition to the bill. Taking up, first, the general belief that the contributions which the civil servants of the Crown

a Hansard's Parliamentary Debates, 3d series. CXLVI, pp. 703–707.

had made toward their pensions were considerably larger than necessary to provide for those pensions, he said that he was prepared to admit that if that case could be established, whatever the terms of the compact, it would be politic to abandon the charge or at least to reduce the charge to what was merely sufficient to provide the pensions. Repudiating the idea that there had been any breach of engagement on the part of the Crown with the civil servants, he next said that the whole question resolved itself into one of policy, and that it had been justly stated in the report of the commissioners that, after all, this was a question of the remuneration of public servants, and that the claim of pension could not be separated from the amount of salaries. Reviewing the salary question, Mr. Wilson argued that if there were injustices in the matter of remuneration paid different classes of employees, those injustices would only be increased by the general abolition of abatements from salaries. He said that:

Although the insufficient remuneration of public servants might be a just ground for revising the scale of salaries, it could be no reason for an indiscriminate increase of salaries, without regard to merit or efficiency. The proposition of the noble lord would amount to an indiscriminate increase of salaries throughout the public service to the extent of 5 per cent upon salaries exceeding £100 and £2 10s. per cent on salaries below that amount. Now, supposing some portions of the public service were at present underpaid, an increase of 24 or 5 per cent upon the existing salaries might be quite insufficient to raise those salaries to a proper amount; and would it be any satisfaction to persons in such a position to receive this increase when the same increase was given to a large body of public servants who could not complain of being underpaid? Some years ago a proposal was made to reduce the salaries in all public departments by a uniform rate of 10 per cent, and that proposal was opposed on the ground that if any portion of the public servants were overpaid it would be proper to reduce their salaries, but that the indiscriminate reduction proposed was neither just nor reasonable. *** There was one point to which he begged to call the serious attention of the House. Until the noble lord introduced this bill no proposition had ever been made to give up the abatement unaccompanied by a revision of salary.(")

Coming to consideration of the bill itself, Mr. Wilson attacked it as bound to create an anomaly greater than any which now existed. He showed that the commissioners had pointed out existing anomalies without end, with not one of which the bill proposed to deal. Said he:

It proposed to repeal a single clause in the Act of 1834-the clause, namely, which imposed the abatements. The noble lord left the act in every other respect as it was. Now, the effect of that act was that certain persons only were entitled to pensions. The bill of the noble lord sought to relieve these persons from the payment of abatements, but it did not propose to give pensions to any other class of public servants. The officers of the Poor-Law Board were not entitled

@ Hansard's Parliamentary Debates, 3d series. CXLVII, pp. 249–253.