France.

France is, indeed, the pioneer of State-aided pensions for old age. In 1850 an old age pension fund was established. It contained the principle of State aid in the form of a guarantee of 5 per cent; compound interest upon the sums paid by the workmen towards old age pensions. The deposits must be in sums of 4s., or multiples of 4s. The depositor must mention the age at which he wished to enjoy his pension, but the age must not be under 50. Each deposit was regarded as a purchase of a pension of proportionate amount at the age stated. There was no obligation to continue payments at stated intervals. Thus, supposing that a payment of 4s. at the age of 20 would purchase a pension of 1s. a year at the age of 50, the workman at once acquired an inalienable right to a pension of that amount at old age. By every successive addition to his contribution he purchased an addition to his pension. There was no forfeiture, and no obligation to keep up payments. The workman had the option of making his contributions returnable in case of death. By three month's notice before the date of the term when the pension became due, the payment might be deferred with the view of increasing its ultimate amount; but after the age of 65 a pension must be taken. It was also provided that the pension could not be seized by creditors if it did not amount to more than £14 8s. a year.

In forty years this fund has registered only 800,000 depositors out of 9,600,000 workmen, representing in France the total number of persons receiving salaries or wages. Further, these 800,000 depositors have been in large part brought to the fund by contractors, by industrial companies, or by Benefit Societies.

This state of matters results partly from the fact that the idea of thrift is not yet sufficiently diffused, but above all, the fact that the workers as a whole doubt whether the accumulation of their modest savings can really become productive. Need their be any surprises that the taste for saving has not found the necessary stimulus in the attraction of the average amount of ten shillings a month?

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It is intended to create by the side of the National Pension Fund, created in 1850, a Workmen's Pension's Fund, for the benefit of workmen, employees, small farmers and domestic servants of both sexes, being Frenchmen or Frenchwomen, with incomes under £120 a year.

The fund will be supported—(1) By the contributions of the depositors, increased by equal amounts from the masters that employ them; (2) by contributions by the State.

Every person hiring out his services would be presumed to wish to take advantage of the law, but, at the same time, a declaration to the contrary could be made before the Mayor of the Commune where the depositor lives. When this declaration is not presented, every master will have to deduct from the sums owing to the person whose services he hires a sum of ½d. at least, and of 1d. at most, per working day, and he will be liable to contribute to the savings of his employee in an equal sum. If the funds thus constituted by the co-operation of the men and the masters had had to be paid compulsorily to the Workmen's Pension Fund, the result would have been, so far as the State is concerned, an accumulation of funds and an increase of charge little in harmony with the liberal character of the law. France would have run the risk, moreover, of putting a drag upon the progress of private enterprise, of discouraging the inspirations of philanthropy, and of limiting the institutions for making provision for the future, and for providing medical assistance, which, on the contrary, it is necessary to stimulate and to expand. There is a great public interest in the development of those institutions in which the democracy is learning the business of government. Everything that can extend their action is calculated to strengthen the public peace.

A great deal is expected in particular from the benefit societies, which have already, and with such just title, succeeded in inspiring the worker with so much confidence. In order to induce him to deduct from his modest wages the sum necessary to pay for a pension, there are obstacles to overcome, explanations to give, advantages to lay stress on which necessitate the assistance of enlightened men living in the very midst of the persons interested. The benefit societies can be, in this point of view, invaluable auxiliaries.

On every occasion when a payment is made, arising as above-mentioned from the combined contributions of the workman and the master, there will be opened a separate account book, similar to Savings' Bank books. In each account book the contributions of the depositor will be entered. These contributions will be increased by two-thirds by the State. Here, in general outline, is the project, let the worker make the desired deposits from the age of 25 to the age of 55, and at 56 he will enter into possession of a pension which he will enjoy to the end of his life.

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Here is a life annuity formed on capital spent or sunk. Now, would not the ideal be that the worker should be able to save up, not only for himself but for his family? Would not a provision for the families of deceased workmen be infinitely desirable? They wish for it. Of this there is sure proof. When they have their choice between a life assurance where their premiums are not returnable and a life assurance where their premiums are returnable, the workers most frequently declare in favour of the latter, in spite of the greater effort which it demands of them, or the diminution of the amount assured which it implies. This solicitude for the interests of the family is, it may be said, among the most generous instincts of the French democracy. By the savings that he can realise every year during the period of health and strength, with the view of forming for himself a life annuity at the age when he will become unable to work, the workman insures himself only against one of the principal risks to which he is exposed—namely, old age. He does nothing to protect his family against penury, into which his death may plunge them.

But in order to be certain of leaving a provision to one's family, at whatever age death may strike him down, the workman must add to the assurance of a life annuity the assurance of a capital sum on death, by means of an annual premium payable up to the age of assumed inability to work. Thus, by means of thirty-one payments of say 17s. 6d a year, made from 25 to 55 years of age inclusive, one insures for oneself a life income of £5 8s., and in order to obtain the same annuity, and, in addition, to insure on death, at whatever time it may happen, after two years' assurance, a sum of £26 2s., there is needed only a further payment of, say 9s. 7d. a year during thirty years at most.

By the terms of the French Bill, depositors will be able to contract with the Life Assurance Fund, established by law of July 1st, 1868, a life assurance for a sum varying from £20 to £40, equivalent to the total amount of the sum that they would have to pay individually to the "Workmen's Pension Fund. The assurance would be contracted on promise of payment of thirty annual premiums.

It must be borne in mind that the benefit of the law is reserved exclusively for French workmen. This being so, there would perhaps be room for fearing that certain masters might give the preference to foreign workmen. To ward off every danger, it is indispensable that foreigners take no advantage from any privilege. As the only way to put them on an equal footing with the French workman it is proposed that the masters shall pay in respect of each foreign workman one penny per working day. No one will attribute the character of a tax to the contribution that it is proposed to ask from masters for their foreign hands. It is neither a poll tax nor an impost on individuals. It is solely designed to prevent French workmen from losing the advantages that it is intended to assure to them.

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In July, 1891, the boldest financial scheme of State-aide a pensions was laid before the Chamber of Deputies in France. The promoter of the scheme, the Minister of Finance, says:—"We propose to associate the State with the formation of this pension fund by a contribution equal to two-thirds of the total contribution asked from the workmen and the masters. It is admitted as an axiom in economic science that the intervention of the State is legitimate in all cases where private initiative fails. Now, if ever, is the opportunity for the application of the principle. The State intervenes merely to complete what isolated individuals are unable to do; it merely comes to the aid of the thrifty workman, who, if left to himself, could not, on his wages alone, make sure of bread for his old age. The Bill provides, moreover, for the fixing of a maximum for pensions, which does not exceed the needs of maintenance, because it is only on the basis that the pecuniary encouragement of the State can be for the public good. In these conditions it seems that even the most rigid theorists cannot dispute that it is legitimate for the State to make a financial contribution. Perhaps the Socialistic tendencies may be discerned in this reform; but a word—and especially the word 'Socialism,' which has been so much abused—cannot be a determining reason for the rejection of a proposal that tends only to strengthen and fertilise individul action. The Republic must be based only upon freedom. The opposite system would strike at the notably independent character of the French workman, who would not unwillingly endure the authoritative tutelage of the State. Accordingly, while the new law assumes that those that can profit by it intend to obtain the benefit of it, it would suffice to destroy this presumtion, if they made a contrary declaration before the Mayor of the Commune in which they are employed."

"The contributions which are asked from French workmen would therefore be solely voluntary. The pension system would not be at all compulsory. The worker would be the artificer of his own future security; he could, in case of necessity, break off, and afterwards resume his payments. It is his decision that would, in each case, engage those of the master and the State, while those on their side would be liable to contribute to the service of the pensions only if the persons interested themselves contributed to it. So far from constituting an invasion of the freedom of the citizens and an attack on private enterprise, the scheme relies on the spirit of individual fore-sight and providence. The new burden, moreover, would constitute, in part only, a simple transfer of charges. By securing the old age of the labouring population the cost of public relief would be to a large extent diminished, and by the amount of this diminution the item of pensions in the budget would fall to be reduced. If France has no poor tax, it certainly has a budget for the poor. To transfer a part of the expenses of this budget to an account opened for provision for the future, would not be merely to undertake a page 18 justifiable financial operation; more than that, it would be to accomplish a high moral reform."

In conclusion, the Minister of France says:—"The Government is far from pretending to offer a perfect solution; but, by developing by means of these important advantages, the taste for saving among the working population, it believes it will effect a considerable advance. It will be happy to have the remarks of the representatives of the country on the subject, and to accept the practical improvements that may result from them. It addresses itself, therefore, with confidence to Parliament, which will be heartily desirous of assuring to the workers the security and dignity of old age. It appeals to the general goodwill in this work of social provision for the future and social equity."

The detailed arrangements for carrying out the French project will be settled by an Administrative Decree. For example, it will be necessary to make a special effort to remove all those small difficulties which at present give a pretext for indifference even to the best disposed workman. It is indispensable that, without loss of time and without formalities he shall be able to pay in his contribution, whether every day, or at any time when he is at leisure to do so. It is believed that for this purpose there might be turned to account a method already explained, according to which there would be placed on sale at the Treasury, in the town-halls, and at the tobacconists', stamps to the value of five or ten centimes (½d. or 1d.), which the workman and his master would then affix to a special sheet bearing the name of the depositor, and which would be cancelled. Every three months at least, the depositor would present these sheets, either at the town-hall of the commune in which he is or at the tax-collector's, and he would be credited on his pension-book with the amount of the value of his stamps. Whatever executive arrangements may be made, this principle will always have to be kept in view—namely, that in order to assure the success of a popular system of pensions the means of saving cannot be rendered too accessible to the workmen, and finally, that by a special provision of the law, the retiring pensions shall not be subject to legal seizure. This privilege will render the pension! absolutely secure.