SMALL CAPITALISTS

Evening Post, Volume CIX, Issue 120, 25 May 1925, Page 3

SMALL CAPITALISTS

TO THI IDITOIC,

Sirj—l read your sub-leader entitled "Small Capitalists," with a great deal of interest. You quote Professor Clay as saying, in answer to Mr. Kunciman, M.P., that "two per cent, of the people in Britain own two-thirds of the capital of the country."After quoting other figures from different sources, you conclude with evident satisfaction that this indicates tha tendency of the poorer-paid classes becoming possessed of an ever greater amount of capital. But. it is unfortunate that you omit to further quote from Professor Clay when ho says that 75.4 per cent, of the population possess 7.6 per cent: of tho total national wealth in holdings under £100; whilst 0.3 per cent, possess 37.6 per cent, in holdings over £25,000.

In answer to a question by Dr. Hugh Dalton, M.P., in the House o£ Commons, the following figures were supplied :—That the value of estates subject to estate duty has risen from 373 millions in 1920-21 to 442 millions in 1923-24. Considering that the national wealth_ is computed to be £15,600 millions, it seems that the disproportion in the ownership of wealth is still very great. Some sixteen years ago Sir Leo Chioza Money, in his book, "Eiches and loverty," proved statistically that there are thirteen million people .in Britain always on the verge of starvation. To any serious student who will honestly admit facts, it does not seem as if the ■ social inequalities are very much less now. The only conclusion one can logically come to is that such a state of affairs is inherent in our present social system, because the owners of the means of production cannot use up all tlm wealth they receive, and the producers of the wea}th do not get all they can use.—l am, etc., H. WEBSTER, 23rd Slay. [Professor Clay's estimate of the distribution of national capital, to which the correspondent refers, was for 1920----21 (the only year for which the necessary information was available), and is therefore four years old. The complete table was: 75.4 per cent, of persons (under £100) owned 7.6 per cent.. of the national capital; 12.2 (£ICO-£SOO\ owned 4.5 ; 6.0 (£SOO-£1000) owned 6 3 • 4.5 (£IOOO-£5000) owned 17 6- 14 (£SOOO-£25,000) owned 26.3; 03' (over £25,000) owned 37.6. But our point was this: Professor Clay, while submitting a four-year-old estimate as a' reason for doubting the inferences drawn by Mr. Eunciman from more uti-to-date but incomplete figures, yet admitted : "A pre-war ■ estimate shows greater _ inequality; but the agitators have still something to go on." Even more strinking were the income statistics which-, we quoted showing that£755,500,000 in 1912-13 to £l,320".000.000 ' in 1922-23, the income "returned, but exempt from taxation (because it was received by persons having loss than-the-taxable amount—the poorer-paid) had risen from £356,000,000 to £1.570,000.----000. ■ The correspondent's reference to . the value of estates subject to estato duty conveys- nothing whalevejr,. as every estate which exceeds £103 is subject to duty. The inference drawn us to more even distribution of both capital and income is strengthened by more recent information from an American journal. The statistics show that whereas in 1916 the group of taxpayers with incomes above £4000 a year received 793 of the total corporation dividends reported in U.S.A., in 1921 they received only 46.8 per .cent. As dividends are paid on shareholdings it follows that an equally large proportion of the capital had passed from the hands of S e nnaltlS- In 1917 taxpayers in the- £200-£IOOO a year group received 9.5 of itlie dividends, in 1922 18 4 their share rising from 190 to 491 million dollars. Between 1912 and 1924 American savings bank depositors increased from 12.6 millions with deposits of 8400 million dollars, to 38.8 millions, with 20,800 million dollars. We have no' means of estimating the share of New Zealand's national wealth which is in the hands of wage-workers, and the persons in the smaller business and salaried classes. Even the income-tax returns do not afford a fair indication as dividends from companies have hitherto not been included by. individual taxpayers. The returns which are being obtained this year will show something, but will not be complete, as they will not include the holdings of persons (including wives) whose income is bslow the returnable amount. Nevertheless, we thing it is generally accepted that wealth and income are both much more evenly distributed here than in Great Britain; and it is fair to assume that, as equality is undoubtedly becoming greater in' U.S.A. and Britain, so there is a similar tendency here. Ed.]