1922 Encyclopædia Britannica/Public Assistance
PUBLIC ASSISTANCE. A marked feature in the social-economic history of the 20th century, and one which became even more marked in its second decade, has been the growth in public expenditure in relief of private wants. “Public Assistance” is of two kinds, direct and indirect. Direct public assistance is the receipt of any benefit in money or in kind at the expense of the rates or taxes which is wholly or partly unpaid for by the recipient. Direct public assistance includes objects like old-age pensions, unemployed benefit, children's meals and medical assistance. Indirect public assistance includes cheap baths and wash-houses, main drainage, cheap railway tickets, sanitary inspection and regulation generally, the control and maintenance of water supply and roads. It is with direct public assistance only that this article deals.
In the form of general doles, public assistance has always exercised a most disastrous influence on the countries where it prevailed. In the ancient world the State was founded on slavery and the citizens were a minority. In Athens the payment of citizens for attendance at the public assemblies and religious ceremonies known as the theoric fund, exercised a corrupting influence on the democracy from the time of Pericles, and Aristotle lays down the general proposition: “Demagogues distribute surplus revenue to the poor. These receive them and are again in want. For such help to the poor is like ‘the cask with holes in it.’ ” The free distribution of corn at Rome had the same results. At first it was sold cheap to the poor in 121 B.C.; then in 58 B.C. it was made free. At first only one-eighth of the citizens took part in the distribution, but within little more than a decade the proportion had increased six-fold, and the number reached 320,000. Cæsar reduced the number to 150,000, but in Augustus' time it rose again, and the rise continued till as Gibbon relates “in the age which preceded the fall of the Republic only 2,000 citizens were possessed of an independent substance.” When the imperial granaries, namely Sicily and Carthage, were lost, the wretched people, by this time quite destitute of self-help and self-reliance, were thrown back upon voluntary charity and the Church.
Great Britain.—In modern times England has been the “classic land” for State-regulated public assistance. The system dates from 1601, the 43rd year of the reign of Elizabeth. During the Middle Ages the poorer classes depended on the feudal chiefs and the Church. As the feudal system decayed the poor fell back on the ecclesiastical foundations, and in the oft-quoted words of Fuller, the abbeys “dispensed mistaken charity, promiscuously entertaining some who did and many who did not desire it: yea! these abbeys did but support the poor whom they themselves had made.” With the dissolution of these abbeys these poor people were thrown back on the State, and under the Statute of Elizabeth, which lasted unimpaired till 1834 and in 1921 was still the basis of the Poor Law, a compulsory assessment was made “for the relief of the impotent and the setting of the able-bodied to work.” (See under Charity and Charities, 5.880 seq.)
The administration of the Poor Law proceeded for 230 years with variations of leniency and severity till 1785, when a period of excessive expenditure set in, which in some cases swallowed up the whole of the annual rateable value of the land and reduced the nation to the verge of bankruptcy, leaving the population in a state of complete demoralization. In 20 years from 1783 the Poor Law expenditure had more than doubled itself, and in 1817 it had reached the enormous total of £7,871,811 for a population of about 11,000,000. In 1832 a Royal Commission was appointed which conducted a thorough inquiry and collected striking evidence on the moral deterioration. It appeared from the evidence that the change made in the character and habits of the poor by once receiving public relief is quite remarkable. They are demoralized ever afterwards. “The disease is hereditary,” it was contended, “and when once a family has applied for relief they are pressed down for ever.” The receipt of relief by a man has been compared in its results to the loss of virtue in a woman. They are never the same again. The commissioners state that pauperism seems to be an engine for the purpose of disconnecting each member of the family from all others: of reducing all to the state of domesticated animals fed, lodged and provided for by the parish without mutual dependence or mutual interest.
The Commissioners showed that the bulk of the abuses and evils disclosed were the direct result of indiscriminate outdoor relief. They laid down the principles: (1) that the pauper's condition shall be less eligible than that of the independent labourer of the lowest class who has to bear the charge; (2) that the function of the State should be limited to the relief of destitution, such destitution to be tested by the willingness to enter a workhouse or institution; (3) that remedial relief as opposed to the relief of destitution should be left to voluntary charity. The main truth is that in all public relief there must be an element of deterrence and some check or test to prevent general pauperism.
On these principles the new Poor Law, the administration of which was handed over to the Commissioners, was based, and it was exercised with such efficiency that in 1871 with a population of 22,500,000 the cost was almost exactly the same as in 1817 with a population of 11,000,000; in other words the cost of pauperism per head of the population had sunk from 14s. to 7s. Between 1873 and 1883 the percentage of those in receipt of direct public assistance was slightly over 3% of the population, the lowest point reached being 2.9 in 1878 and 1879. In the meanwhile the working-classes had not only recovered their self-respect and self-reliance but had through their own organization, the trade unions, the friendly societies, the coöperative societies and the building societies, provided a complete answer to all the difficulties of the Labour problem. In these trade unions and friendly societies they themselves without help from the State had elaborated methods by which provision was made for sickness, accident and old age. Their coöperative societies provided them with the necessaries of life of excellent quality at little over cost price; their building societies provided them with the means to acquire their own houses. At the beginning of the 'nineties a complete survey of the whole problem was taken by the Royal Commission on Labour, and it appeared that the income of 542 trade unions was £1,790,000 and the membership 1,080,000. There were 29,742 friendly societies with a membership of 8,320,262 and funds of more than £26,000,000; also 1,624 coöperative societies with 1,119,000 members and £17,000,000 capital; the sale of foods amounted to £48,500,000 and the profits to £4,774,000; while the assets of the building societies (£50,700,000) brought the total capital funds traceable to the working-classes up to between £90,000,000 and £100,000,000, quite apart from their deposits in savings banks, etc., which a competent authority estimated at another £160,000,000 at the very least. So different was the position that Mr. Ludlow (the chief registrar of the friendly societies) could say in his evidence before the Commission: “Now the black spots in the country may I think almost be counted on the fingers. In former days it was very nearly black, with but few white spots.” This wonderful development of self-help embraced all skilled labour and was gradually taking hold of the unskilled, giving the English workingman a knowledge of business and a training in self-government such as the working-man in no other non-English speaking country possessed in anything like the same degree, if at all.
The serpent however was in the grass. The politicians saw capital in the working-man as a voter. In 1886 the first breach was made in the Poor Law system by the institution of municipal distress committees which withdrew the unemployed to a certain extent from the workhouse test. In 1890 the fees for elementary education were remitted, that the poor might have more wherewith to pay for the food and clothing of their children, but it was not till the beginning of the 20th century that, to use Aristotle's expression, more holes were made in the cask. In 1905 the Unemployed Workmen's Act was passed. In 1906 the Children's Meals Provision Act was passed, in 1907 the Administrative Provisions Act, in 1908 Old Age Pensions were adopted and in 1911 the system of National Health Insurance was introduced with its famous bribe of “9d. for 4d.” By 1913 it was no longer possible to form any idea of what proportion of the population was living on its exertions and what was depending on public subsidy, or what was the administrative cost. In January of that year therefore, the writer, with the support of friends on both sides of politics, began to ask for a return which would give the facts and figures. In 1919 the fourth edition of that return was published, and later information enables the following picture to be given in 1921.
In 1890 the expenditure on public assistance from rates and taxes was £25,000,000, in 1901 £40,000,000, in 1911 £68,800,000, in 1919 £172,800,000 according to a return which includes figures as old as 1916 (No. 160, 1920), and for the year ending March 31 1921 no less than £332,000,000 (including war pensions) as far as can be gathered from statements in Parliament. The beneficiaries from the last-mentioned return appear to number not fewer than 28,000,000 out of a population which cannot be put higher than 48,000,000. In other words 58% of the population in 1921 were receiving help from public funds, at a rate of about £6 11s. per head, as compared with 4.6% at a rate of 7s. per head in 1871.
With regard to the total of 28,000,000, on the one hand there is, as will be seen, a great deal of fraud and overlapping which may tend to reduce the number, but on the other hand there are a great many gaps in the figures of the return, the figures relating to the National Insurance Unemployment Act being given at 58,000—much too few for the year ending March 31 1921.
We must now say a few words as to some of the holes in the cask, and on the means, if any, of regulating the money poured in or stopping the leaks.
The principal British Acts concerned are (1) the Education Act with the Provision of Meals Acts, etc.; (2) the Old Age Pension Acts; (3) the National Health Insurance Acts; (4) the Public Health Act, (a) as to hospitals and treatment of disease, (b) as to maternity and child welfare; (5) War Pensions and Ministry of Pensions Acts; (6) Housing of the Working Class Acts; (7) Acts relating to the relief of the poor; (8) Unemployed Workmen's Act; (9) Unemployed Insurance Act. No account is here taken of the bread, coal and railway subsidies, which amounted in 1920-1 to about £87,000,000; they are omitted because they affected the whole population and were temporary.
The Education Act would not at first sight seem to fall under the heading of public assistance, but educationists take an entirely new view of their work to that of other days. “Formerly,” says an education report of the London County Council in 1910, “education was in the main confined (1) to the growth of character, (2) to the growth of the mind. Now it looks increasingly at the social problems which present themselves for solution in the case of the individual child, the problem of physical deterioration, of under-feeding, of impoverished homes and unsuitable employment.” In regard to necessitous children, the same authority remarks: “Necessitous children are not necessarily ill-nourished at the time of application, though they would become so if relief were withheld.” Not a word is said about the duties of the parent. The same is true of the Public Health Acts, the administrators of which do not consider the character of the individual, but solely the health point of view.
With regard to the vast expenditure under the Education Acts, the select committee on national expenditure reported in Dec. 1918 that they had been impressed by the atmosphere of financial laxity in which questions involving education are apt to be considered, and state that under the Act of 1918 neither Parliament nor the Board of Education nor the local authorities can control education.
With regard to the Old Age Pensions Acts which were to diminish Poor Law expenditure and empty the workhouses, the minister who introduced the proposal in 1908 stated that no Chancellor of the Exchequer in his senses would think of adding £3,000,000 to the sum of £6,000,000 which he proposed. In 1921 the amount voted was £28,000,000, and a proposal to add £15,000,000 thereto was only defeated by a majority of 12, the proposer stating that this was but an instalment and that he was in favour of raising the amount of the pension from 10s. to 20s. and reducing the pensionable age from 70 to 60. As to the administration of those Acts it is noteworthy that Ireland with a pop. of 4,390,000 drew £3,329,000 for 181,000 pensioners, while Scotland with a pop. of 4,760,900 drew £1,664,000 for 90,000 pensioners. This looks as if there was a leak somewhere.
Old-age pensioners have from the first received medical relief from the Poor Law, and now, if necessitous, are entitled to receive other relief as well. The separation of the local administration from that of the Poor Law for political reasons has had unsatisfactory results, apart from the extra expense.
With regard to the administration of the National Health Insurance Act, Sir Arthur Newsholme, a well-known authority, has stated that “the system is not actuarially, financially or medically sound, and has involved expenditures in administration entirely incommensurate with the benefit received.”
The overlapping of the insurance system with the Poor Law has involved endless difficulties, and it appears from the Return No. 160 (1920) that the annual expenditure for the year given (1919 is the latest available) was £4,294,000 out of a total expenditure of £20,311,000. It was stated as long ago as 1912 that overcoats, underclothing and food were given under sanatorium benefit, thus relieving public health and Poor Law funds, and sanatorium benefit was only a rechristened form of outdoor relief. As to the Poor Law, it may be observed in passing that its expense increased between the years 1911 and 1919 from £15,000,000 to £18,000,000 for England and Wales alone, and as old-age pensioners left the workhouse their places were filled by those under 70 years of age.
With regard to the unemployed insurance it appears that the reserve of £20,000,000 which existed after the World War was exhausted by June 1921, and that the Treasury was drawn upon for another £10,000,000, while as to the unemployed dole the magistrate at the Thames police court on May 18 1921 said: “It has been said from this bench over and over again that such doles lend themselves to and almost induce fraud.”
All that can be said with certainty as to the national housing scheme is that the losses to the central and local Government on each house annually will amount to an enormous sum. Originally 1,000,000 houses were to be built. In May 1921 the annual loss to the State on each house was placed officially at £60 apart from loss to the rates. This makes an annual loss of about £18,000,000, or a total eventual loss at the end of 60 years of £700,000,000. Thus a privileged class of house-holders will be created at an enormous loss.
The attitude of Parliament to such expenditure gives little hope of a check from that quarter. There is a constant complaint of the apathy and slight attendance at debates on economy, and the late Speaker of the House of Commons pointed out that since 1900 there has been a great change in the attitude of the House towards economy and that now the advocates of economy “do not get a look in.” The Chancellor of the Exchequer frankly said in March 1920 that with such items as old-age pensions, a national unemployment scheme and a national housing scheme, it was impossible to offer a blunt uncompromising refusal to proposals for new expenditure.
With regard to the central authority, economy is unlikely from that direction, for enormous increases have been made either in the shape of additional salary or temporary bonus by Whitley Councils consisting of civil servants to the lower grades and by the Government to the higher grades (including the Treasury), which in both cases, without previous knowledge or sanction of Parliament, the central authority has by circular invited local authorities to follow, and the central authority has a means in the Exchequer grants (which it can give or withhold at will) for stirring up the local authority to spend money.
On the whole then, there seem few weapons in the hands of those who would stop the progress of a democratic nation on the road to ruin. But they comprise, first, a complete statement of accounts showing how the money is raised, how it is spent, what is the administrative cost and who are the beneficiaries, whether worthy or unworthy. Secondly, the institution of a strong but small central commission, as in 1832, to ration the administration of the whole of the new system of public assistance, taking care not only to punish fraud and put down overlapping but also to make the position of the beneficiaries (apart from war pensioners) less eligible than that of the lowest class of independent workmen, and introduce some stringent and deterrent test. Lastly, to make it clear that all this vast expenditure from the rates and taxes, however carefully disguised, falls in the long run most heavily on the working-classes, by wasting the fund from which come new enterprises and increased wages on myriads of officials who make the poor man's life a burden to him.
- (G. Dr.)
United States.—Owing to the fact that the United States is still a new country with a comparatively small number of poor, the need in its communities for public assistance in the relief of poverty and attendant ills has been much less urgent than in European countries. One consequence is that the “right to relief” has been recognized in the laws of only a few of the states. That every man ought to support himself and his family is, or has been, the working social theory of Americans of all classes. They have looked with disfavour on continued subsidies and other payments which might seem to be part of a routine, preferring to provide temporary assistance when necessary, treating each case as an emergency, in the expectation that the beneficiary will soon be able to shift for himself. They have declined to recognize formally the existence of a necessitous class. Hence much of the relief work in the United States up to 1921 was still done by privately supported agencies.
In the decade 1910-20 it became obvious, however, that a change had begun. Americans seemed to be losing their aversion to paternalistic government, and the newer proposals for social betterment tended to call for some kind of legislation involving an extension of state or municipal activity and for an appropriation. Among the more progressive states and cities it became the rule to establish departments of public welfare, which, though their duties and perhaps their theories were somewhat vague, nevertheless made incessant demands for further appropriations and for fresh welfare legislation. It is characteristic of the American point of view, however, that this welfare movement concerned itself less with the lowest forms of poverty or with the most helpless layer of the dependent than with improving the conditions of life among wage-earners in general.
The tendency to extend the range of Government activity in welfare work did not escape serious criticism. This criticism was perhaps most emphatic with respect to the ever-widening scope of the work undertaken by public health departments. The point was made that in so far as these bodies exceeded the limit of indispensable activities they were “pauperizing” the public. The accepted view was that the duty of sanitary authorities was not to help any one family to be healthy, but to prevent any one family from disseminating disease. But it is almost impossible to draw a line between necessary functions and those which are largely philanthropic. Thus many cities maintained a large staff of physicians and nurses whose duty it was to visit schools and even households, giving advice and treatment free. From the private practitioner's point of view this work was an encroachment on his legitimate sources of income, but free medical treatment in the case of school-children, for example, is merely an incident of free education, for the ability to receive education is in large degree dependent on physical fitness. It should be said, moreover, that in most cities free treatment was not given unless the recipient was unable to pay, and that in any case the community was only protecting itself by promoting the health of its individual members. The same question was involved in the establishment of sanatoriums in many parts of the United States for the treatment of tuberculosis and other communicable diseases, both aiding the sufferer and safeguarding the public from him, as had been done in the case of the insane for many years. In some of such institutions a nominal charge was made, but by far the greater part of the expense was paid by taxation. Hospitalization came to be expected as a right, regardless of the ability of the patient to pay the cost of treatment. Thus the American public was being taught to feel that the state or county or city was bound to provide certain kinds of public assistance which had been regarded as outside the scope of state subsidies.
Of the newer proposals for public assistance none gained more rapid headway than that for mothers' allowances or pensions. The first such law was- passed by Missouri in 1911, and granted allowances to widows with children and to deserted mothers; by 1920 there were similar provisions in 39 states. These allowances ranged from $2 a week for each child up to $25 a month for the first child and $15 a month for each additional child. The age limit, after which the allowance was to cease, was placed at 13 years in some states and as high as 18 in others. Up to 1920 the aggregate of these allowances had not become so large as to alarm taxpayers, and in so far as the system saved the children from being committed to public institutions orphan asylums and the like it was undoubtedly beneficial. Legislation for mothers' allowances, no doubt, tends to create a demand for old-age pensions, but up to 1921 no state had yet undertaken this form of subsidy. Taxes for mothers' allowances were mostly levied and administered by the county governments.
Another form of public assistance which grew rapidly in the decade 1910-20 was that connected with the health of children, particularly those attending school. As early as 1892 New York City provided for the inspection by health officers of school-children, and by 1920 practically every city had organized some form of health examination for all pupils attending public schools. In later years the scope of the work was considerably expanded; skilled medical examiners were employed to give especial attention to eyes, throats and teeth, and, where necessary, treatment was often given at public expense. Special open-air schools were opened in many places for tubercular children; and proper conditions maintained for giving the children adequate fresh air, rest and nourishment. In many poorer districts, where the educational progress of the children was found to be retarded by under-nourishment, it became customary for the school authorities to provide a daily luncheon, which was served either free or at a nominal price. In 1919 cities having each a pop. of more than 30,000 expended an aggregate of $1,849,624 on medical work for school-children, and an additional amount of $908,742 on other child conservation work, such as the employment of trained nurses to visit mothers in congested districts and the establishment of infant welfare stations where mothers could obtain medical advice and free treatment for their babies.
To determine the aggregate amount of public assistance in the United States it is necessary to state that such items as those for sanitation, prevention of epidemics, protection to life and property cannot properly be regarded as public assistance. The following tables, based on U.S. Census Bureau reports, show the increase in public expenditures in the period 1913-9 for health conservation and maintenance of charities, hospitals and correctional institutions:—
Health Conservation
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thus the increase in expenditures for the purposes noted was somewhat more than $90,000,000 in six years. These figures, however, include the cost of certain activities which cannot rightly be classed as public assistance, and which are approximately one-third of the total. With respect to the more recent compilations of the Census Bureau, it is possible, because of the greater fullness of data, to exclude those items. Thus a tabulation of the expenditures by the states for public assistance in 1918 would include the following:—
| Health Conservation. | |
| Treatment of tuberculosis— | |
| In institutions | $5,105,556 |
| Elsewhere | 643,981 |
| Treatment of other communicable diseases | 1,488,186 |
| Conservation of child life | 285,674 |
| Other health activities | 764,497 |
| Charities, Hospitals. | |
| Supervision | 849,727 |
| Outdoor relief | 517,827 |
| Care of poor— | |
| In state institutions | 211,995 |
| Elsewhere | 121,101 |
| Care of children— | |
| In state institutions | 1,328,441 |
| Elsewhere | 2,023,205 |
| Care of blind, deaf and mute— | |
| In state institutions | 4,458,758 |
| Elsewhere | 1,713,274 |
| Other charities— | |
| State institutions | 8,924,208 |
| All other | 530,862 |
| Hospitals— | |
| General | 2,613,951 |
| All other | 3,149,100 |
| Hospitals for the insane— | |
| State | 47,860,528 |
| All other | 2,091,304 |
| Total | $84,682,175 |
The expenditures of cities for similar purposes in 1919 were as follows:
| Prevention and treatment of communicable diseases— | |
| Tuberculosis | $5,145,280 |
| Other communicable diseases in hospitals | 4,427,510 |
| Other treatment | 2,271,364 |
| Conservation of child life— | |
| Medical work for school-children | 1,849,624 |
| Other child conservation work | 908,742 |
| Charities and hospitals— | |
| General supervision | 854,466 |
| Outdoor poor relief | 4,631,697 |
| Poor in institutions | 7,715,940 |
| Care of children | 7,125,436 |
| Other charities | 3,570,051 |
| General hospitals | 16,735,615 |
| Insane hospitals | 3,871,082 |
| Welfare commissions | 47,307 |
| Total | $59,154,114 |
With respect to conservation of health, items representing general administrative expenses have not been included in the two preceding tables, although a certain percentage of these undoubtedly belongs under the heading “public assistance.” Whatever their amount may be it is offset by the unavoidable inclusion of certain expenditures for preventive health measures, most of which are undertaken for the benefit of the community at large rather than with the definite purpose of aiding needy persons. Detailed figures showing the expenditure of counties were not available, and it is possible that if the aggregate expenditure for mothers' allowances were known, it would materially increase the totals given in this article.
The available data indicate that, exclusive of Federal provision for former soldiers and their families, and for other agencies for dependents which come under the jurisdiction of the Federal Government, the total expenditure for public assistance in the United States in 1920 was more than $200,000,000, the appropriations originating as follows: states, $90,000,000; counties, $45,000,000; and cities, $65,000,000. It seemed probable that these appropriations would rapidly increase as the more recent projects for public assistance became more fully developed and as the economic reaction following the World War spent itself.
- (F. H. H.)