THE WOES OF THE WELL-TO-DO.
THEpeople with settled incomes rarely complain, and therefore are never pitied ; but they have been hit very heavily in recent years. They are not ruined, and a, section among them, those who own urban and suburban properties, remain very prosperous ; but that section being excepted, the surplus of the whole class, the money they can spend as they please, has been heavily cut into, to the dismay of many tradesmen, some of whom, the booksellers, for example, are in the highest degree useful to society. The Irish landlords, to begin with, are nearly ruined ; and though the English landlords as a corporation have not suffered, the extension of suburbs round all great cities compensating them for the reduction in rural rentals, still thousands of families have been compelled to " retrench," that is, not to buy any luxury which can be done without. They are suffering exactly as they would be if subjected to an income-tax of 7s. 6(1. in the pound. Mr. Goschen's " Conversion," though a statesmanlike measure, and a great saving to the taxpayer, mulcted thousands more, especially women, the classes protected by trusts losing a million at least of their income, and not feeling, as they cannot sell. the compensating rise in the value of all other solid securities. The woman with £600 a year lost, it is true, only £50, but it was just that £50 which she felt free to " waste,"—that is, to spend at her own discretion. The rapid series of " conversions " and " payings off " which followed in all manner of stocks everywhere, reduced the in- comes of another class of holders by 20 per cent.,—that is, by just the amount which made them feel able to be free-handed. Then followed the crushing losses in South American stocks. These bonds and shares were held to an enormous extent by the well-to-do, who brought up the general average of return for their investments by placing a proportion of their capital in securities about which there existed some singular delusions. As a rule, people with money under- stand fairly well that high interest means bad security ; but they fancied that Brazil, being an Empire, would always pay ; that Chilian stock was safe, because Chili owed little, and never had a revolution ; and that the tempting bonds of the Argentine and Uruguayan Re- publics might be purchased without undue rashness, because the great house of Baring. " safe as the Bank of England," so obviously believed in their stability. Even the fall of Don Pedro's throne, though it revealed the total want of any solid basis for authority in Brazil, scarcely shook these illusions ; but from that day forward, the financial security of the huge Republic has been visibly decaying. Europe hardly knows what has happened there, though a wild inflation of the currency, followed, as usual, by a mad rush into " promising " but infructuous speculation, is strongly suspected ; but, at all events, exchange has dropped from 271d. per milrei to 12d.—that is, gold is worth nearly two and a quarter times its value in paper —and the coup d'etat of this week has sent stocks worth par under the Emperor down to 60, which, again, may be a mere resting-place in prices. Marshal Fonseca, the new Dictator, is very old, he is a devotee of paper-money—there is nobody like an old soldier for a religious craze, or a currency craze, or a craze for some bottomless speculation—and if any provinces revolt, Brazilian stock may prove no better than that of Venezuela. Then came the Argentine Revolution, the Baring crash, the moratorium, and the flight downwards of the value of local currency, the total effect of which was nearly to halve holders' receipts, and the end of which, already reached in Uruguay, can hardly be in Argentina anything but a " Liquidation," or, in plainer English, a composition with creditors at so much in the pound. If they get, after long delays, a dividend of 12s., they may think themselves very lucky. Most of the railways in Brazil and in the Republics of the Plate have also been affected, and the total amount of discomfort among the well-to-do thereby produced. has been amazing. You cannot enter a room without meeting sufferers by the Baring crash. They have not usually been ruined, though we hear of some terrible personal catastrophes ; but their surplus has been cut away, and as it is easiness which is pleasant rather than a bare sufficiency, they feel even poorer than they are. The bold action of the Bank of England, bold and probably wise, though the truth of the latter adjective has not yet been demonstrated, averted a Black Friday ; but the suffering produced by the crash has been very great, and extends to classes missed out in City calculations. There has been no spare money since for anybody, and the minor artists, all authors except the best, all booksellers, all jobmasters, and all traders who contribute to any form of luxury, except those forms indulged in by the very rich, are bitterly feeling the pinch,—artists in particular, who are always silent., feeling as if the conditions of their world had suddenly grown dark. It is very doubtful, too, if the worst has been experienced. The " crash " of Wednesday in Berlin may prove to be only a signal. The stocks and properties which have fallen in England have been largely held also in Continental cities, and it has been for some time matter of surprise that catastrophes which succeeded, in Paris at all events, gigantic losses like those of the Panama Canal and of the Copper " Ring," should have produced so little apparent impression. The truth is, that although the Continent is much protected by the wider diffusion of property, and by its habit of taking care of francs and florins, hundreds of more or less solid-looking houses must have been gutted of the bulk of their resources, and are standing only till some sharp wind of misfortune blows them down, glutting all markets with the relics of the securities they held. Such a wind may come from Russia any day, for the losses there this year, owing to the drought in twenty provinces, the drying-up of Jewish credit owing to the persecution—an act, financially, of pure lunacy— and the worrying expectation of war which has arisen from the Cronstadt exhibition, will be counted by tens of millions. It will take £20,000,000 merely to keep the peasantry alive for a. year, who meanwhile can produce nothing, and pay no obligation.
We are not., be it understood, taking at all a pessimist view as regards the general economic situation of Europe. The great war, if it came, would suspend the prosperity of the Western world as a drought suspends the profit upon agriculture ; but if peace can be maintained, the nations will soon recover themselves. Much of the " losses" we have spoken of are mere transfers of wealth, the buyers getting rich on properties it ruins the owners to sell. Pro- duction goes on in all the permanent trades at an amazing rate, accumulation never ceases, the wealth of the poor considered as a corporation advances by leaps and bounds —vide the returns of State savings-banks in all countries— and the public treasuries get what they want almost for the asking. The world makes more than it ever did ; and though extravagance, sometimes of the wildest kind, has become a fashion with a class, there is a great disposition to hoard too, and to live far within your means, a disposition promoted, especially on the Continent, by every crash, and every fresh alarm of war. One only need look round the suburbs of any great town west of the Vistula to know that entire sections of society must be living far within their in- comes,—that is, automatically refilling the reservoirs of capi- tal. Our object is only to point out how severely the well-to- do have recently suffered, and if there is no war, will continue to suffer, from crashes and the gradual decrease in the pro- ductiveness of invested capital. It has fallen in thirty years from 5 to 3 per cent., and will fall yet further, till the thrifty grow bewildered, and trust anybody and anything rather than, as they say, keep their money in old stockings. The process is a natural one, and not to be lamented, for, after all, the taxpayers are relieved, and new classes are forced to work instead of idling, which is, on the whole, with some large reservations as to the value of happiness, better for mankind. Still, there is much suffering, or perhaps we should say, a great increase of anxiety, in classes unused to it, which is worth noting as a feature of the day, and which will by-and-by affect visibly the demeanour and attitude of the middle class. Care makes them Conservative, especially on the Continent, where, owing to the habit of dividing pro- perty, of providing dowers for daughters, and of hoarding against old age, pecuniary questions occupy a much larger space in life than is usual in England. It will also, we hope. and in some degree believe, increase the desire for effective culture, either as a protection—which it is not —or a sweetener of comparatively ill-provided life, which it is. The main result will, however, be the anxiety itself, the distinct diminution of ease in a large and influential class for a generation, with its consequences, a wider dis- persion of the young in search of places where the com- petition is not so fierce as in Europe, and a greater tendency towards hard work as the only available corrective for the ills of fortune. Many will count these consequences improvements, and not losses ; but pecuniary anxiety is a canker in happiness, and the happiest class hitherto, taking all things together, has been that of the well-to-do.
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