Sober by Act of Parliament

by Fred A. McKenzie

The unreasonableness of the second proposition may best be seen from the fact that in many towns a very large proportion of the public-houses do not pay their way. Yet every one of these places is valued at a price far above its value as an ordinary business house; consequently, if the authorities were to pay the terms asked by the owners on closing them, they would actually be giving considerable sums for losing concerns.

It may be asked why, if such houses do not clear their expenses, their proprietors keep them open year after year. The reasons are twofold: First, the houses are usually owned by brewers, who fear that if they abandon the licences, rival brewers may persuade the magistrates to grant additional licences in other parts of the place. Secondly, the establishments are often used as traps for depriving the inexperienced of their stock of money. The process is very simple. A house owned by a brewer goes to the bad, custom falls off, and the receipts fail to cover the outgoings. Thereupon the tenant is given notice to quit; and a salaried manager, skilled in the art of drawing custom, is placed in charge of it. This manager is usually a man well known in the neighbourhood, and with plenty of friends. He belongs to nearly all the friendly societies in the place, Buffaloes, Oddfellows, and the rest; he can give a tip on the coming race with any man, and he is “hail fellow, well met” with every Tom, Dick and Harry. All his friends, of course, flock to patronise him; the brewer is careful to supply specially good drink; a pull over is given for every one’s measure; and soon the takings of the house are increased enormously. Then the place is advertised, and a novice is attracted by it. The brewer’s agent shows him the books, and is able to prove that the business is going up by leaps and bounds; and so the novice is persuaded to pay, say £100 in cash for the good-will, and take over the house. The manager who has drawn all the custom leaves; and his friends leave with him. The poor new publican soon finds that he is losing money every week, and before long he begins to get in debt to the brewer. This goes on until his debt amounts to the price he paid for the good-will. Then the agent visits him, explains that as he is evidently not suited for the trade he had better go. The brewer will kindly allow the £100 paid as good-will to go to cancel the debt; and the tenant must leave as quickly as possible. The house is then used for the fleecing of another novice; and so on.

If any reader doubts the truth of this, let him consult some experienced publican who is not afraid to speak the truth, or let him notice in any moderate-sized town how often many of the smaller licensed houses are advertised as being “under new management”.

Now, it cannot be said that the owners of such houses as these mentioned have the slightest equitable claim to any consideration. The only way to avoid paying money to such would be to base any scheme of pecuniary compensation not on the artificial trade value of the house, but on the actual profits gained, as shown by the books and vouchers of the place and by the publican’s income-tax returns.

A second limit to any scheme of compensation should be that no one, save the licence holder himself, should be entitled to any consideration. Big brewing firms that have bought up large numbers of licences are well acquainted with the risks attaching to them. The British public may be anxious to treat the poor licensed victualler generously; but it will hardly sanction the appropriation by wealthy wholesale firms, that thrive by fostering public misery, of large sums of public money. This is the opinion of many by no means opposed to any compensation. Mr. Gladstone, in the House of Commons (15th May, 1890), in speaking of this matter, declared: “This I must say, I cannot conceive any state of things in which the State authority would have the smallest duty or the smallest warrant for looking to anybody in these transactions, except the man with whom it deals—that is to say, the man to whom the licence is issued, and on whom it imposes its responsibility”.

In any plan of compensation the money should be raised from the publicans themselves. Those remaining benefit by the closing of other houses; for there are fewer shops selling drink, and therefore those left get more custom. This has already been done successfully in Victoria by means of increased licence fees, etc.

As the publicans have no legal claim to consideration it cannot be expected that any scheme for their compensation will be permanent. It will rather provide for a softening to them of a time of transition.

Within these limits, surely some practicable scheme can be formulated. The following, while dealing liberally with the keepers of licensed houses, would yet be an advance on the present position. Let it be arranged that for ten years the men at present holding licences shall be allowed to retain them; and if during those years the authorities wish to close any public-houses they shall pay the holders compensation based on the following scale: during the first two years, five years’ purchase, reckoned on the average profits of the previous three years; during the third and fourth years, four years’ profits; during the fifth and sixth years, three years’ profits, and so on till at the end of the tenth year no compensation would be payable. The funds for such payments to be raised by increased licensing fees and an extra tax on liquor. No money to be paid to any person but the licence holder himself. At the end of the ten years the number of houses could be reduced to a fixed scale, say one for every 500 or 1000 of population.

The principal objectors to such a compromise would probably be the teetotalers. But they would do well to consider whether it will not hasten forward the coming of that sober England for which we all long if some method can be found of breaking through the present intolerable deadlock. There is nothing opposed to temperance in granting compensation. It is merely a matter of policy, not of principle: though, to hear some reformers talk, it might be imagined that the idea of partly recompensing licence holders for their loss involves some terrible wrong.

Both Sir Wilfrid Lawson and Mr. Caine have in the past admitted that a compromise about compensation might be worth considering. In the House of Commons (5th March, 1880) Sir W. Lawson said: “Honourable members tell me that there ought to be something about compensation in my resolution. If I would only do that they would find it in their hearts to vote for me. Now I do not want to condemn compensation, but this is not the question which is before the House. The question is, whether it is right to force these houses upon an unwilling neighbourhood; and if it cannot be done without compensation, let us have compensation. I am very sure that if ever my resolution is crystallised into an Act of Parliament this House will never refuse a fair demand from any body of men.”