140 SECTIONAL ADDRESSES. 



in this field, I believe, will be barren, cand in the case of the United States, 

 owing to other powerful factors, the figures would be inconclusive. 



2. Distribution seems to me to be probably less unequal where bequest 

 is trammelled, i.e. the ' legitime " in Continental countries makes for family 

 diffusion and equalit}^ as in France and Germany. But, for what it is 

 worth, we must observe that the two richest countries have freedom, and 

 the next two in order of wealth have conditional bequest. The only 

 considerable one (Russia) with no rights of inheritance is now sinking into 

 poverty, but this tendency, of course, cannot be assigned merely to 

 inheritance custom. In any case, owing to the effects of the war, the 

 comparison must be confined to pre-war years, and the evidence will be 

 found in the tables in my ' Wealth and Income of the Chief Powers.' There 

 is room for research and some comparative study of the diffusive effect of 

 the ' legitime ' as compared wth our own system. It must be remembered 

 that, so far as all past wealth is concerned, without accumulation and 

 concentrative power for new wealth being fullj- maintained, there must 

 be an increase in equality, even if wealth is left to all the children, where 

 the effective birth-rate for the wealthy is not maintained near the national 

 average. If 5 per cent, of the adult population own half the property, 

 then in the two generations (assuming a similar birth-rate to the general), 

 without any new accumulation, and, say, three times the total population, 

 this 5 per cent, would still own one-half, but they would be three times as 

 numerous and their individual shares only one-third the size. Now neiv 

 accumidation must be relatively of great importance if the individual 

 fortunes of the richest people are to be on the old scale of magnitude. It 

 follows, therefore, that in the economics of the venj ricli, current or 

 iumiediate right of accumulation tends to be much more important than 

 inheritance at the second and later stages. Taxation and family diffusion 

 tend to reduce the long-range inheritance effect on the size of individixal 

 fortunes in such a way that, even if inheritance ceased altogether, the 

 existence of the very large fortune would be very marked under the 

 influence of other economic factors. 



3. My conclusions as to the average position or actual standard of 

 life have already been given elsewhere.* During the 120 years prior to 

 the war I concluded that the real position of a typical or standard person 

 in this country — e.g. at the lower decile — had improved four times. During 

 this period the inheritance system has been fully in force. There is 

 nothing to prove that the rate of increase would have been more if it had 

 not been in force. Education and improved health have doubtless done 

 a great deal in this advance, but probably the quota of accompanying 

 fixed and circulating capital per head in improved machinery and transport 

 has been the most effective feature. The question is, therefore, thrown 

 back on to the inquiry, which hardly admits of statistical research, whether 

 the accumulation of capital (regardless of ownership) could be as great 

 under another system. There are four rival systems on which we may 

 depend for the aggregate saving : (1) dependence on the better-off ; 

 (2) equalising individual resources and then expecting each individual 

 small-income receiver to save ; (3) saving through taxation ; (4) collec- 

 tive saving {e.g. company reserves). In my view the third is the least 



■'- Wealth and Taxable Capacity. 



