population in old age are not in the poorhouses, not public charges, and not economically dependent in any sense whatever. By an analysis made some years ago of the proportion of paupers in Massachusetts almshouses, among the total population at ages sixty and over I found that only two in every hundred were in this unfortunate predicament, and that even at ages ninety and over the proportion was less than 5 per cent. Now, it seems to me of far greater importance than the question why there should be poverty in old age (which in fact is simple enough and really requires no extended analysis of methods or motives) to ascertain how it is that the 98 per cent. who are not in almshouses have managed to keep out of them and what their respective conditions really are.

Summarizing the foregoing remarks and conclusions, they appear to confirm the view arrived at by a strictly scientific and impartial analysis of the available facts that:-

The only state pension plan which is likely to meet with public approval must be on a non-contributory basis, corresponding to the recent English act and the more or less similar laws of New Zealand and New South Wales.

The economic or social necessity for such a radical innovation has not been established for the state of Massachusetts or for any other American state.

The term "pension," as used in connection with the agitation for systematic financial provision for the aged, is misleading in that what is guaranteed is not a pension in the true sense of the word, but poor-relief under another name.

At the present time, of the population of the United States sixty-five years of age and over, 1.6 per cent. are in almshouses, and, while of the remainder quite a proportion, no doubt, are dependent or physically infirm, they are not a very heavy burden to the tax-payers under the prevailing methods of charitable relief. In Massachusetts out of every one hundred of the population over sixty-five years of age, only 1.4 are in almshouses, and no very decided divergence from this proportion is met with in other states.

The age sixty-five is usually suggested as a minimum, and

seventy is generally conceded to be too high to result in any material improvement in the financial circumstances of the aged. The demand, however, is practically certain, in course of time, to be for a reduction of the pensionable age to sixty, which, of course, would enormously increase the cost of whatever state pension scheme might be adopted.

A serious consideration is implied in the probability that invalidity, or physical unfitness for work, at other than the pensionable age period, would be considered as of equal right entitled to systematic state support, and the tendency would be to follow the method of New South Wales, and make such invalidity or incapacity pensionable at ages sixty and over. (In Denmark the age is fifty-five.)

The ultimate cost of a state pension scheme varies with the pensionable age adopted, the pensionable amount granted, and the pensionable proportion of the population within the pensionable class. In New South Wales the proportion actually receiving pensions at ages sixty-five and over is 40 per cent., but there are strong reasons to believe that the proportion in the United States would be larger, provided the pension were granted as a right, and not as a privilege.

A minimum pension rate fairly in conformity to the American standard of life would need to be at least $2.50 a week, or about $130 a year. The Massachusetts proposals, however, have been as high as $260 a year, which, of course, would impose a decidedly greater burden upon the tax-payers of the state. In proportion as the amount payable is increased, the numbers who would take advantage of the pension grants would be increased.

As to the probable pensionable proportion of the population, it is safe to assume that the large majority of the aged, if entitled to a state pension as a right, would avail themselves of their prerogative under whatever legislation might be adopted.

In the United States at the present time the estimated population aged sixty-five and over is 3,557,000, and, if 50 per cent. of this population were to receive pensions, the annual cost

at the rate of $130 a year would be $231,190,000.* In the state of Massachusetts the population aged sixty-five and over may be conservatively estimated at 162,000, and 50 per cent. of this population, at a pensionable rate of $130 per annum, would require an annual expenditure of $10,520,000, exclusive, of course, of the cost of administration. If the pensionable age were reduced to sixty, the cost for the United States, upon the preceding assumption, would be $366,132,000, and for the state of Massachusetts $16,424,000. If the pensionable age, however, were placed at seventy, the cost for the United States would be $133,256,000, and for Massachusetts $6,228,000, exclusive, of course, of the expenses of administration.

The administrative expenses have been estimated at 3 per cent. for the Australian Commonwealth, but they would probably in this country attain to a somewhat higher proportion, and hardly be less than 5 per cent. of the total pensionable

amounts.

The final total cost of a state pension scheme on the noncontributory plan would have to be raised by additional taxation, and the source of such taxation would probably be a substantial increase in the poll tax, or a special tax on inheritance, an income tax, or, finally, a stamp tax on wages.

A poll tax of $2 a year would be wholly inadequate to meet the minimum cost requirements, while even a poll tax of $5, as it has been suggested, would, in all probability, still be insufficient. What amounts could be produced by specific taxes on inheritances is merely conjectural. A stamp tax of 2 per cent. on wages would also probably prove insufficient, and as much as 4 per cent., if not more, might be required.

It is probable that the various disqualifications for pensions which have been suggested would gradually be done away with, and correspondingly, of course, the total amounts to be provided for by taxation would increase. A gradual increase in the longevity of the aged would also tend to enhance the financial difficulties of the proposition, so much so that a very material

*At 40 per cent. of pensionable population, the annual cost would be $184,952,000. For details, see the tables in the statistical appendix.

addition to the original and preliminary estimate might be necessary.*

Anticipations of a material reduction in general poor-law expenditures are not likely to be realized, judging by the experience of New Zealand, New South Wales, and Victoria, according to the evidence presented to the Commission on Old Age Pensions for the Australian Commonwealth. The fact is apt to be overlooked that the very large proportion of indoor and outdoor pauperism and poverty applies to other groups than those included within the pensionable group. For illustration, of all the paupers of known ages in almshouses in the United States in 1904, only 33 per cent. were of the age period sixty-five and It is equally doubtful whether any considerable proportion of indoor paupers could be induced to leave their respective institutions, and in time experience would repeat itself, as proven in the case of soldiers' homes, where pensions are paid in addition to indoor support at public expense.†

over.

Arguments that the workers of the nation are quite as rightfully entitled to pensions as workers for the nation, as soldiers, sailors, or civil service employees, are not valid, because general wage-workers and salary-earners are primarily serving their own interests, and not that of the nation at large.

State pensions in old age will not solve the problem of poverty and pauperism, or economic dependence, but, on the contrary, such pensions will materially undermine the thrift function at every period of life. English experience has been to the effect that the prospect of a government pension in old age has prevented large numbers from becoming subscribers to the voluntary superannuation funds of friendly societies, and there is no reason to suppose that the experience in this country would

*For illustrations of the cost of insurance at selected ages, see the tables of the statistical appendix. For an extended discussion of "A Method of Providing with Certainty for Dependent Old Age," by Mr. John F. Dryden, see The American Underwriter for September, 1908. Reference may also be had to my address on "The Problem of Poverty and Pensions in Old Age," American Journal of Sociology for September, 1908.

The most valuable sources of information on the whole subject of pauperism and dependence is the recently published report of a Royal Commission on the Poor Laws and Relief of Distress, London, 1909, Parliamentary Paper, Cd. 4499, price 58 6d., obtainable through P. S. King & Son, London.

not be identical and affect all the various lines of voluntary savings, investments, and insurance.

The possible solution of at least some of the most perplexing problems resulting from poverty and pauperism would seem to lie in entirely different directions than state pensions for the aged. Improved methods of poor-law administration would do much, but even more decidedly beneficial would be the results of an improved system of industrial education, possibly a more just and equitable method of industrial remuneration for work actually and well done. Increased efficiency would materially increase the earning capacity of the wage-earners of the nation, and correspondingly their opportunities to provide in their own way and at their own cost for dependent survivors in the event of death, and for themselves in the event of old age. Strong faith may also be placed in more rational methods of teaching thrift in the public schools and by otherwise inculcating habits of prudence and self-denial, by increased security for the savings and investments of those constituting the large group who work for wages or small salaries and who, in the event of the loss of their savings, practically lose their all. Much more may be done by insurance than has thus far been possible, but it will require time to develop more systematic habits of savings as a prerequisite for the highest development of the life insurance business.* Old age annuities have their limitations and they are not popular with the young, but a healthy public interest should be aroused in this subject by wide-spread agitation and illustrations of the exact cost to be incurred and the benefits to be realized. What has already been done in this direction is of the greatest possible credit to the prudent and thrifty who constitute the overwhelming majority of the population, and, where so much has been done practically unaided and alone by wageearners in their own way and at their own cost, we may be confident that in the future tendencies in this direction will not diminish, but rather increase. Better education is necessary in domestic economy, in the rational expenditure of wageearners' money for both the necessaries and the luxuries of life,

*For details and tables of premium rates, see the statistical appendix.