CHAPTER XXVIII
A COUNTRY WITHOUT A POORHOUSE
HOW would you like to be sure of a pension from Uncle Sam in your old age? How would you like to know that if your income after sixty-five years of age was less than three hundred and ninety dollars a year, you would get from the government at Washington at least enough money to keep you alive?
That is the situation here in New Zealand. Every citizen is assured that if old age finds him without sufficient money to live on, the government will provide up to a maximum sum of one hundred and ninety-five dollars a year. To widows with children larger pensions are paid.
New Zealand has had an old-age pension law for more than a quarter of a century, and everyone now seems to think it is a fine thing. Certainly there are no poorhouses here, as we know them, and the old-woman beggar is conspicuously absent.
According to New Zealanders, their country was the first in the world to pass a non-contributory old-age pension law. In fact, I find New Zealand claims to hold twelve “Firsts” in social legislation. After listening to the enthusiastic talk of the people, I have been surprised at what their country, situated in what we think of as the most remote corner of the globe, has to show. According to my notes, New Zealand was the first country to:
Provide non-contributory old-age pensions;
Introduce conciliation and arbitration of industrial disputes;
Establish universal penny postage;
Start government grading of butter, cheese, and hemp for export;
Go into the state insurance business;
Set up state maternity homes;
Open a government tourist department;
Give women parliamentary suffrage;
Operate state coal mines;
Organize a state department of public health;
Enact minimum wage laws for women and minors;
Build houses and sell them to workmen.
All these “firsts,” and the fact that she has the lowest death rate in the world, back up New Zealand’s claim of being the “Newest England” and a “Brighter Britain.”
The old-age pension law was one of the many acts for the benefit of the common people put through by Seddon during his long term as premier. He introduced the bill and fought it through to passage in the face of considerable opposition. He took the position that pensions from the state were not a matter of kindness or charity to those past the ability to work, but only their rightful due.
The law is so worded that pensioners need feel no humiliation in accepting state funds. Its introduction states that:
“It is just and right that every person who has for a number of years assisted by his (or her) work in the development of the country, and has also by payment of taxes contributed to its good government, should be protected against want in his (or her) old age.”
The law provides that the pensioner must have been a resident of New Zealand for twenty-five years prior to his application; that he must not during that time have been imprisoned for five years for any offence, and that he must not during the twelve years preceding his application have been in jail four months or on four occasions for an offence punishable by one year’s imprisonment. The applicant must not during the past twelve years have deserted his wife and children and must have lived a sober and reputable life in the year preceding his application. All applications are made at the post offices, where such as pass the examinations are given certificates, each entitling its owner to a pension for one year. The certificates have to be renewed every year.
Since the first pension law was enacted, the amount of the annual allowance has been several times increased. Already the government has paid out more than forty-five million dollars in doles to the aged, and there are, I am told, about twenty thousand people now receiving these pensions. This is considerably more than one pensioner to every hundred persons in the country.
If the United States had a similar law, with the same proportion of pensioners, we should have 7000 of them in Washington, almost 90,000 in New York, 40,000 in Chicago, 28,000 in Philadelphia, and a thousand or more in each of a score of other cities. In the whole country we should have a million and a half pensioners, and if each received $180 a year, the amount of the average pension in New Zealand, the total distribution of money among our old people would amount to more than $288,000,000. As a matter of fact, this sum would be only about $30,000,000 more than our government now pays out each year in pensions for old soldiers and their dependents, not including the payments to veterans of the World War.
One of Wellington’s big buildings is the government life-insurance office. Here you may find out just how much the body politic is willing to bet on the chances of life and death of its people. The government has been in the life-insurance business for fifty years, but it has never forbidden the private companies to operate, and competes with them right along. Indeed, it is said that the latter are getting most of the new business because they put more life and energy into selling insurance than the state institution does. The government life insurance company uses the postmasters as its agents, and thus has offices at every crossroads. It requires as strict a physical examination as any private company, but its rates are low and the insured feel certain of their money. There are now some sixty thousand state policies in force representing an insurance of about eighty-five million dollars.
The state insurance business is managed like our private life-insurance companies and upon similar calculations of the chances of life and death. It sells some policies on the paid-up system and has also a savings-fund plan. Special rates are granted to those who abstain from intoxicating liquors, and another form of policy provides annuities for government clerks after they are sixty years of age. Fire and accident policies are also written in competition with the commercial companies.
One reason the government went into the business was the fact that the companies operating in New Zealand at that time were charging rates as high as those in the United States, England, and other countries, where the “expectancy of life” is not so great as it is here. The New Zealanders are wonderfully healthy. They live, on the average, eight years longer than we do. It may be that their lives are lengthened by the amount of protection and security they have from their various government enterprises. Moreover, the country is not over-populated, there is no competition with coloured or cheap foreign labour, a living wage is guaranteed to all, farms may still be had on comparatively easy terms, there is little poverty throughout the Dominion, and the general level of comfort is high. The average wealth for all persons over twenty years of age has been estimated at four thousand dollars, and that notwithstanding the fact that there are few millionaires in New Zealand and not many persons who are rich according to our standards.
The per-capita deposits in New Zealand banks are steadily increasing, showing that the country is accumulating wealth. In 1890 the average was just under one hundred dollars for every one of the population; twenty years later it had risen to a little more than one hundred and twenty-five, and the latest figure is two hundred dollars. The present assets of the six principal banks total more than three hundred and forty millions of dollars, and their liabilities come to less than three hundred millions.
The postal savings banks are banks of deposit, paying interest of from 3¼ to 4 per cent. on all accounts. At present the deposits approximate a total of $220,000,000 held by about 680,000 depositors. This equals one savings account to every 1.8 persons of the population. Deposits as low as one shilling, or twenty-five cents are taken, but no interest is paid on any sum below $5 or above $25,000. On sums up to $2500 the rate is 4 per cent.; on larger amounts it is 3¼ per cent.
On the beautiful curved shore of Hawke Bay, protected from the ocean by a breakwater, is Napier, the chief shipping point of a large meat- and wool-producing district.
In the Mt. Cook Range of the Southern Alps are ten peaks more than ten thousand feet high. The great Tasman Glacier provides thrills for the most expert mountain climber.
New Zealand has its building and loan associations, though not to the same extent as the United States. The farmers have also organized all sorts of coöperative associations. The stock of the New Zealand Loan and Mercantile Company, a big firm which buys up produce and ships it abroad, is owned chiefly by the New Zealand growers from whom it buys. I have visited a big store, the stock of which is held by its customers. It has a large capital, and its manager told me that it paid ten per cent. dividends. It is much like one of our department stores, with the prices marked on all articles offered for sale. Many of the meat-freezing establishments are managed by stock companies, in which the sheep and cattle owners are interested, and most of them pay good dividends.
There is a National Provident Fund, which any one between the ages of sixteen and fifty may join, provided that his income during the three years prior to joining has not been more than fifteen hundred dollars. No medical examination is required. A contributor to the Fund is protected in case of incapacity to work, his children and widow receive an allowance upon his death, and on reaching the age of sixty he receives for the rest of his life a pension of from two dollars and a half to ten dollars a week, according to the scale of his contributions. Married women contributing to the Fund get a bonus of thirty dollars on the birth of each child. The applicant joins by filling in a form at a postal money-order office or local office of the Fund and paying his first weekly contribution. Although the Fund is only about ten years old, it has nearly twenty-two thousand contributors.
Another institution in which New Zealand takes especial pride is the office of the Public Trust, the first institution of its kind in the world. Through this the government acts after the fashion of our commercial trust companies. A public trustee is appointed for the whole country and he has under him a staff of lawyers of high reputation. Suppose a man dies intestate; the Public Trust administers his estate. If you want to make your will, the Public Trust will draw it for you and you may make the Trust your executor. Suppose you have been acting as trustee to an estate and wish to lay aside your responsibility; the Public Trust will take it over. If an insane person has no guardian, the Public Trust will look after his affairs. Unless expressly directed otherwise, all money coming into the office goes into a common fund. This is invested by the public trustee in first-class securities for the benefit of the estates in his charge.
The Public Trust now handles estates and funds to the value of more than one hundred and twenty-five million dollars, and the amount is growing every year. More than thirty thousand wills are on deposit in the office, an evidence of the increasing public confidence in the institution. Although it was established to give the people service at low rates and not to make money, and though its fees are never above three per cent. the office has been so well managed that it not only pays for itself, but yields a profit of more than fifty thousand dollars a year. While it is a government institution, the Public Trust provides its own buildings and pays taxes and postage just as if it were a commercial enterprise. Its employees are under the civil service and hold office during good behaviour.
Practically every New Zealand post office is a telegraph office, a telephone office, a savings bank, a government life-insurance and pension agency, and a money-order office, so you see postman and postmaster have plenty to do. There are now government telephones almost everywhere, although they are not so numerous in proportion to the population as they are in the United States. Telephones are still considered somewhat in the class of luxuries. In the hotels, for example, one rarely sees a telephone in every room, but there will be an instrument in the hall on each floor.
But there is another side to the picture of New Zealand’s government activities. A man is worth not what he makes, but what he has left when his debts are paid. It is the same with a nation, and New Zealand has rapidly rolled up a huge public debt. At the end of the century it owed about two hundred and twenty million dollars, or more than three hundred dollars per head, or fifteen hundred dollars per family of five. This debt kept on growing, and then was more than doubled by expenditures in the World War, which were a tremendous burden to a small country like New Zealand.
Suppose the same conditions to prevail in the United States with its one hundred and five million inhabitants. Instead of the twenty-two billions we now owe, we should owe more than eighty-seven billion dollars, or almost exactly four times the sum that we and our children, and our children’s children for generations to come, must be heavily taxed to pay.
On the other hand, it must be remembered that nearly half the total debt of New Zealand is invested in railroads, telephones, telegraphs, hydro-electric systems, farm land, and loans to settlers. These investments pay interest, and are represented by assets of much greater value than the amount of borrowed money spent upon them.