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CHAPTER 8: THE HOUSING OF THE WORKING-CLASSES AND OF THE POOR BY ARTHUR RAFFALOVICH - Thomas Mackay, A Plea for Liberty: An Argument against Socialism and Socialistic Legislation (LF ed.) 
A Plea for Liberty: An Argument against Socialism and Socialistic Legislation, consisting of an Introduction by Herbert Spencer and Essays by Various Writers, edited by Thomas Mackay (Indianapolis: Liberty Fund, 1981). Foreword by Jeffrey Paul.
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THE HOUSING OF THE WORKING-CLASSES AND OF THE POOR
It is a distinguishing feature of the end of this nineteenth century that human sentiment has become more than ever anxious about the condition of the working-classes, and has turned to a study of their position and to a search for ways and means of improving their lot.
Economists of the liberal school form no exception. They share in the universal solicitude which at the present time is assuming many forms. Some of these, whether their authors know it or not, are dangerous; some are actually harmful. Reasonable economists refuse to be drawn into accepting solutions too easily formulated. They know, thanks to an industrious study of economic and financial phenomena, what is the true effect of the incidence not only of taxes, but also of the incidence of legislation. They cannot forget, for example, the deplorable effects of the old Poor Law in England. They fear that the plans of the socialists, whether of the study, the senate, or the street, the demands of sanitary reformers, the sentimentality of philanthropists, will infallibly lead to consequences diametrically opposed to the results aimed at.
By the side of the claims made in the name of the great mass of labourers, in the name of the industrial proletariate and of the poor, there has arisen during the last fifteen or twenty years a new danger. It has its origin in a false conception of the attributes and powers of the State. We refer to the claims made on behalf of a system of official and governmental hygiene, which pretends to abolish insanitary conditions of life, to make healthy dwellings and workshops, in a word, to take under control the private lives of the citizens. In the opinion of many people at the present day, the modern State should be called on to determine the rate of wages, the length of the working-day, the price of provisions and other necessaries of life; to divide profits among the different branches of native industry, by the aid of innumerable laws, by a protective tariff, and by means of an army of inspectors. The Sanitarians (‘Hygienistes’ in the French term), in their turn, set out a programme of requirements and dictate the conditions under which houses are to be built and inhabited, the nature of the materials to be used, and the number of the tenants.
Hygiene, as M. Leon Say declared at the meeting of the 28th June, 1890, at the Academy of Moral and Political Sciences, has become a science of much wider scope than formerly. It is not content to advise on matters concerning cleanliness, food, and the sanitation of the dwelling-house, but it claims to be able to prevent the spread of epidemics by carrying on an offensive warfare against the germs of disease.
Whether these pretensions are well founded or not, they have rendered sanitation popular. It has also created a group of Sanitarians who wish State protection to be introduced everywhere. M. Leon Say suggests a doubt whether people will be happier when the Sanitarians become master and succeed in regulating our lives to the minutest detail. In his opinion those who look at this matter from the scientific point of view should spare no effort to check this new protectionist movement. M. Leon Say has declared himself before all things a strong advocate of private initiative, all the more so because the limits of the rights of the State in the matter of hygiene cannot be determined.1
This conception of the State, as possessed of the attributes of omnipotence and providence, does not find favour with everyone. But even the select minority, which condemns all this absorption of economic activity, this reduction of labour to a state of pupilage, resists but feebly the pretensions of hygiene, and so it comes that we find in an essay by the Comte d’Haussonville the following phrase, which shows us how far the error which we are discussing has advanced:
The State, I mean by the term the power of the public which is exercised by the central or municipal authority, is primarily the guardian of the public health, of public and moral hygiene. As it is the duty of the State to take measures to prevent the birth of epidemics and to arrest their progress, so also it is its duty in a general way to see that the lives of its citizens are passed under conditions of good hygiene.2
The reader must not suppose from our protest against the meddlesomeness of official hygienists that we are indifferent to the very great importance of good sanitary arrangements, but we believe that there are methods of attaining our ends other and better than those put forward by the prophets of universal interference.
Before embarking on the discussion of the Housing of the Poor, we may here interpose a statement of the elaborate programme of the German socialists which will appear to contain the maximum of demand of this kind.
In 1873 the German socialists considered a petition intended for presentation to the Reichstag. It contained the following points:
(1) Every commune ought to be compelled by legislation to provide lodging sufficient for those within its jurisdiction, and as far as possible in detached dwellings.
(2) Every commune shall be authorised to appropriate lands not yet built on, whoever the proprietor may be, in order to construct dwellings and school-houses; further, it shall be at liberty to exercise this right of expropriation even outside its own territory.
(3) The State shall provide sufficient capital under the form of paper-money.
(4) This paper-money shall be secured as a charge on the lands and buildings. Each commune shall receive the necessary sums in the shape of an advance without interest, and with the obligation to repay after a long period.
(5) Whoever has claim to a dwelling will pay a suitable rent-premium and must himself inhabit the dwelling.
(6) The communes shall remain proprietors of the land and buildings. They may not however disturb any of their tenants in the enjoyment of their premises, so long as the conditions of tenancy are fulfilled. As a temporary measure every commune is obliged to provide shelter provisionally for those who have none until dwellings are made.
These propositions, and even the idea of petitioning, were strongly opposed. By a large majority it was declared that these propositions were reactionary and altogether too moderate; that their authors wished to deceive the people of Berlin, and that the meeting rejected all such rubbish. Workmen were invited to join themselves to the association of German workmen in order to solve the Social question by common action on the lines of Liberty.3
To show what is asked for in France, we may state that an administrative commission was appointed, in 1883, by the Préfet of the Seine in order to study the question relative to the creation in Paris of cheap dwellings. A score of projects and petitions were examined by this commission, a labour which has not yet borne fruit. Nationalisation of the soil according to the gospel of Henry George, and schemes for lotteries were agreeably mixed. One councillor demanded in the interest of the town of Paris the confiscation of the soil within the circle of fortifications, and the compensation of landlords by means of communal bonds secured by mortgage and redeemable. M. Lerouge proposed the construction, by the town, of three-storied houses on the land adjoining the fortifications within the walls by means of capital raised (1) by a loan of 300 millions of francs, (2) by a tax of 2 francs per head on every one coming to Paris from a distance greater than twenty-five kilometres. The Federative Socialist Union of the Centre demands the application of the surplus of the forthcoming budget, to the construction by the town of Paris of workmen’s dwellings, and the establishment of a tax of 20 per cent on dwellings remaining unoccupied for a month. We meet also many proposals for a lottery with a capital of a milliard of francs, for the purpose of making dwellings for those members of the Parisian proletariate whose income does not exceed a certain figure.
In England the demand made on the State varies. At one time it is for the multiplication of inspectors of nuisances and an enlargement of their duties and powers; at another it adopts the language of the Social Democratic Federation, and insists on ‘the compulsory construction of healthy artisans’ and agricultural labourers’ dwellings in proportion to the population.’ The Glasgow municipality has already made some experiments in the building of artisans’ dwellings, and the London County Council is proposing to build common lodging-houses.
To sum up the views of these reformers, some are in favour of a nationalisation of dwellings; others demand that the State or the local authority shall build for its own functionaries, for workmen and for the poor; others wish to combat the usury of the landlord, the excessive price sought for dwellings which are insanitary and too small.
Among the most important factors of development physical, moral, and intellectual, the Dwelling must be placed in the first rank; it is the sphere in which the life of the individual and of the family is passed. No one denies the inconveniences, physical and moral, of the insanitary dwellings inhabited by a portion of the working-class and by the poor. The miserable condition of their homes, the overcrowding which reigns there with its following of disease of all kinds, with its accompaniment of crime and vice, the permanent danger which results therefrom to public health and public order, all these have been oftentimes brought to light. We are not dealing with a curse purely local, for indeed it appears to be universal. Everywhere we meet the same melancholy phenomena, in France, in England, in the United States, in Germany, in Switzerland, in Austria, in Belgium, in Holland.
Attempts have been made to remedy this by legislation, by sanitary regulations, and by the assistance of charity. Progress has been made; but it has not been possible to transform the dwellings of the workmen and of the poor (I speak of the great mass of the wage-earning class) into proper and comfortable quarters; above all, it has not been possible, even by artificial means, to increase the resources and wages of the poor to any sufficient extent.
The knot of the difficulty is the poverty of those who live huddled up in infectious hovels, ignorant or indifferent to the requirements of hygiene, of modesty and decency. This may be the result of circumstances or may proceed from evil habits of intemperance and idleness, or from mere absence of desire, due to inexperience of better things.
All the harrowing descriptions which we have read, and which we have been able to verify, combine to make more pressing the solution of the problem—‘How to improve the housing of the working-class and of the poor?’ It is admitted that the present condition is deplorable as regards the health not only of the inhabitants themselves, but of the whole town, because these insanitary dwellings are the breeding place of infectious diseases. The misery which they endure in this respect makes workmen and the poor an easy prey for the propagation of revolutionary ideas; a social danger is thus added to the physical danger. The lodging of the poor is one of the most complicated subjects and most difficult of solution. It forms one of the branches of the entire social problem equally with questions of food and clothing. The same rules and the same principles, with certain restrictions obvious enough to common sense, apply to this whole combination of problems. The part of the State and of municipalities is clearly indicated—their mission is above all a mission of hygiene and of police—it is to make war on insanitary dwellings; but this action must be subordinated to some indispensable conditions.4
One cannot under any circumstances ask the State to supply dwellings or food gratuitously, or under cost price, without doing an injustice to those who do not share in these favours, and without risk of demoralising the poorer classes. Such food and dwelling at a cheap rate entail a loss on the State, which requires the imposition of a tax to meet it. This increase of taxation falls on the whole nation, and falls most heavily on the poor. Such State aid has moreover a further disadvantage. It discourages private enterprise and private industry. If the State constructs, or causes others to construct, houses to be let below cost price, it impedes private building and produces a result the very reverse of that hoped for.
Insanitary conditions proceed from the great crowding of human beings in buildings which were not made for the accommodation of so great a number of persons, from the entire neglect of sanitary rules, and from the accumulation of filth.
The causes of this overcrowding are the extreme poverty of the inhabitants which prevents their seeking for houses, healthier, larger, and in consequence dearer, and which forbids any great number of them living at a distance from the place where they earn their living; the increase of population due to natural causes and also to the constant immigration of workmen drawn from the country or provincial towns towards the capital; lastly, the demolition of quarters inhabited by workmen, which have disappeared to give place to new streets, railway stations, and markets, or which have been swept away for reasons connected with the health or embellishment of the town. For this extreme want there is no remedy. Poverty is incurable. For the cure of bad habits, in respect of cleanliness, we must arm ourselves with patience. This is a matter of education.
By the aid of an active and energetic watchfulness on the part of local authorities, we might, it will be said, prevent the existence of insanitary dwellings, force landlords to keep their property in a better state; we might exercise a closer inspection of the construction of new houses and require that they come up to a certain minimum of sanitation. But it must not be forgotten that in many countries laws and police regulations have not been wanting, that there has been no lack of weapons in the administrative arsenal. We must not lose sight of the fact that legislation against bad sanitation requires, in order to be effective, a complicated and costly staff of inspectors perpetually on the move; that the application of rules depends less on the officials and magistrates than it does on the inhabitants themselves, who are more disposed to evade than to conform to regulation. If the poorer classes inhabit garrets, cellars, holes and corners, without light or air in houses badly built and badly kept up, it is because they cannot find better at a price which they can pay, and they prefer to lodge in these hovels rather than not be lodged at all. So we are brought back to our problem the solution of which, to say the least, is very difficult—given a great town, to furnish the poor population which accumulates there, with lodging, suitable, spacious, airy, and provided with everything that is desirable.
Let us resolutely exclude heroic remedies, which can only be worse than the disease. We mean the remedies of socialistic formulas. There is no one formula or panacea. It is to the progress of comfort, moral education, of the practical instruction of the industrial classes, that we must look for the gradual amelioration of the hygienic conditions of populous centres. Public administrators can without doubt carry out useful works and improve the general state of sanitation by the construction of drains, and by procuring water at a reasonable rate; general rules also can be established for the safe guard of the public health, but it is wise to think twice before allowing authority to interfere in the domain of private life, on the plea of the public safety.
It cannot be forgotten that every infraction of the liberty of contract carries in itself the germs of retribution. Try to protect the workman against the extortion of his landlord by the intervention of the law and we all know the unfortunate consequences which result. It is useless to waste our time over projects of fixing a dwelling-house tariff by the local authority.
Among the most efficacious means of influencing the homes of the working-class, we must set the improvement of ways of communication and facility and cheapness of transport.
Satisfactory results have been obtained by private initiative by the construction of model mansions, of working-class cities. The portion of the working-class who are in the easiest circumstances, those who earn a regular wage, have to some extent obtained their requirements from this source, and in consequence there are so many the less to be brought into line with the others.
It is the business of private industry, of philanthropic enterprise, of associations of workmen themselves, to supply better dwellings. If the buildings set apart for the dwellings of workmen brought in a fair revenue their number would at once increase. But I repeat, it is only by reflex action that we can hope to reach those whom the English call the residuum, the dregs of destitution. The work must proceed step by step, stratum by stratum. First, we must offer houses relatively comfortable and healthy, with an option to the tenants to become owners. Here we shall be dealing with the élite of the working-class, and with small employees (these last are as interesting as the workman and have much more to complain of, for they are liable to more expense), but the indirect result of the improvement will be felt down to the very bottom of the scale.
I have insisted from the very beginning of this paper on what I might call the negative side of the problem, on the objections to every intervention of the local or national authority, and to State trading in dwellings. I have insisted on the great difficulty of the problem, on the poverty of those who inhabit crowded, unhealthy, and inconvenient rooms, and on the excessive price, in proportion to their resources, which they have to pay. The more modest the income, the more serious becomes the proportion of it absorbed by rent. In the workman’s budget the fifth or the fourth part of his wages is devoted to rent.
I have hastened to arrive at positive results in order to come in view of the bright side of my subject, and, after having displayed its difficulties, to show what private initiative has been able to undertake. Progress must come from the élite of the governed acting for themselves. The weight of a sound and persistent public opinion is an essential factor, and we can all do something to keep it watchful and awake. We must try to prevent the return of those periods of apathy and indifference which follow the shock of a somewhat lively agitation, the revelations made by writers, or the close of an epidemic. But, even during these periods when attention wanders to other objects, philanthropists or economists, reformers or capitalists follow their voluntary mission, seek to educate the rich and comfortable classes, and to call them to a recognition of the social duties which they have to perform.
We may be permitted to pay a compliment to the Academy of the Moral and Political Sciences, which for the last forty-one years have devoted much serious attention to this grave problem. The Society of Social Economy, under the influence of MM. Picot and Cheysson, has devoted many sittings to the question, and, taking one step further, has by means of private initiative organised an enquiry and addressed an appeal to men of public spirit. It carries out, in its own organ La Réforme Sociale, the publication of the reports which it has collected.
The English parliamentary enquiries are well known, as is also the private enquiry made in Germany by the care of the Verein für Sozialpolitik.
During the Universal Exhibition of 1889, a Congress on cheap dwellings was held at Paris, which voted, among other resolutions, to recommend the formation of national societies. It should be the object of these bodies, by means of conferences, publications, collection of information, to encourage the industrial- and working-class in the construction of healthy and cheap houses, by the help of co-operation or local associations. It recommended also the formation of an International Society for the study of questions relating to the improvement, sanitation, and construction of cheap dwellings.
At the conclusion of a conference held on the 1st February, 1890, at Paris, the French ‘Association des habitations à bon marché,’ was founded. It numbers more than 300 members, and has control of a considerable capital. It does not itself engage in building, but makes it its business to stimulate public opinion by lectures and by pamphlets, and to assist with advice and information, those directly interested (the wage-earning and working-class), as well as the capitalist class, in the construction of houses to be let at low rentals. Its action has already made itself felt in France. Here in truth is an example of private initiative worthy of imitation outside of France.
The collection of works dealing with the housing of the working-class and of the poor would already fill a library, and it increases every day.5
Great successes have been achieved on a practical basis. They have been gained where the matter has been treated on a business footing, not as a matter of charity pure and simple. It is of the highest importance to prove that the capital engaged in the construction of sanitary dwellings is not lost, that it has obtained a fair remuneration, and that it has every chance of security. Proof of this is indispensable, if other capital is to be attracted. It has been proved to demonstration in England, in France, in the United States, in Belgium, in Denmark. The capitalists, who have either turned builders themselves or subscribed to joint-stock companies, or bought and repaired old houses, have, it is true, limited the remuneration of their capital to a sum lower than that which some owners derive from the purely commercial development of their real estate.
They content themselves with a return of 4 per cent in France, in England, and in Germany, and of 5 or 6 per cent in the United States. They have got rid of the charitable character of their enterprise, which is humiliating for those who profit by it. People do not appreciate a gratuitous benefit equally with that which they have gained for themselves at cost of personal exertion. To be complete we must add another category, namely philanthropists, like Peabody, Michel and Armand Heine, who have devoted large sums of capital to the inauguration of the work, leaving the rents to accumulate for the extension of the operation. The tenant in such cases enters into an ordinary contract, and, as far as he is concerned, the transaction is of a purely commercial nature.
If this supply of healthy and relatively cheap dwellings has not brought about a lower rate of rent it is because the supply is still limited. We know, however, of places where rent has decreased in the immediate neighbourhood of these more comfortable houses, notably at Lyons. Even when it is not possible to supply accommodation at a price appreciably lower than the market rate, it still remains that new dwellings, built in a spirit of progress and philanthropy, present conditions of health and convenience far superior to anything to be found by their side. In this way, the means of having a real home which will keep together the members of the family, and prevent them from seeking outside for unwholesome distractions, is placed within the reach of the working-class, particularly of the élite of that class.
Long ago the question of working-class dwellings has been solved, as far as concerns the part of the population which works in factories established outside of the towns. For the most part in the great mining and mineral industries, as well as in the country factories for spinning and weaving, etc., where a great number of workmen are regularly employed, the dwellings necessary for the workman and his family have been added as an annexe.
This creation of such villages as are to be seen in the industrial regions of the north, east, and west of France, forms part of the normal outlay of capital required from large employers of labour. The employers have an interest in attracting and retaining in the neighbourhood of their works the labourers whom they require, and in settling them there under conditions favourable to their health and to the moral and material welfare of their families. It is this clear understanding of the interest of industry which has created these groups of working-class dwellings, and which makes the extension of the system certain, especially where the nature and importance of the establishment render it possible.
For France we may quote the case of Anzin, le Creuzot, Commentry, Blanzy, Beaucourt, Noisiel. In the coal districts of the north in 1875 eighteen firms out of twenty-three had built 7000 houses, at a cost of eighteen million francs. The rent of these was very considerably lower than the ordinary rent of such houses. In England many instances of this kind can be quoted; the best known are the establishments of the Salts at Saltaire, Messrs. Hazell, Watson & Viney, printers, at Aylesbury, Messrs. Cadbury Bros., cocoa manufacturers, at Bourneville, Messrs. Unwin Bros., printers, Chilworth, Messrs. Courtauld & Co., crape manufacturers, Halstead, and the many colliery villages belonging to large-minded employers of labour like the Peases of Darlington. In America the industrial village is more familiar, and the best example is furnished by the American Watch Co. in the village of Waltham, which has now the largest watch factory in the world. In Prussia seventy industrial firms have built 529 houses, of which their workmen may become owners; 1141 have built 8751 houses for letting. Out of 4850 industrial firms 34 per cent have provided, directly or indirectly, for the lodging of their workmen (1878). In the coal basin of Saarbruck 3742 houses have been built. The miners’ banks have contributed 2,062,000 marks, the State, the proprietor of the mines, has advanced 1,897,000 marks, of which, in 1874, 814,000 marks had been redeemed. At the Silesian mines, in 1872, 450 houses had already been built, containing house-room for 1800 families. The most important experiment was that of Krupp at Essen, where out of a staff of 65,776 persons, 18,698 in 1881 were living in houses belonging to M. Krupp.
These few figures show that it is in their own best interests that employers have been prompted to provide for the housing of their workmen. In a certain number of cases they have in addition given facility to their men to become owners of their houses by payment of annual sums, calculated so that the purchase-money is met by payments spread over a more or less extended period.
Very great importance rightly attaches to the possibility of turning the workman or the petty employee into a landed proprietor. It is the best means of encouraging the spirit of order, of economy, and of inculcating the all-valuable sentiment of personal responsibility.
Among the institutions which aim at the creation of cheap dwellings we must distinguish the different objects which each has in view.
(1) Those which aim at building small houses, with facility given to the tenant to become owner by means of annual instalments. Such building can be done by associations of working-men and small capitalists, by joint-stock companies, or by individual capitalists.
(2) Those which aim at building large houses with accommodation for many tenants.
(3) Those which seek to improve old houses.
These objects are pursued by a variety of organisations, viz.:
I. Building Societies. Those who attach a great value to individual action, to self-help, and to the co-operation of individual effort, will understand why we put Building Societies in the first rank.6 Their name of building societies indicates the primary object of these associations, but it no longer describes their present mode of operation. They no longer build (at most they finish the construction of houses left unfinished by borrowers). They are essentially loan societies, their capital comes from contributions paid as a rule month by month, but their advances are only made on the security of real estate, land or houses. The peculiarity of these advances is that they are repayable, capital and interest, by monthly payments. It follows that as these societies receive a portion of their capital at once they are able to make advances much larger in proportion to the actual value of the mortgaged property than an ordinary creditor. This mode of advance is very advantageous to persons of small fortune. The workman earning a good wage, the clerk, the small shopkeeper, although he has but a small disposable capital, is able to buy his house, and often becomes owner of it at the end of twelve or fourteen years, for a total sum of not much in excess of what he would have had to pay in rent alone.
In the United Kingdom, on Dec. 31, 1886, there were 2079 societies, of which 1992 were in England, 46 in Scotland, and 41 in Ireland. Their mortgage property amounts to £53,101,000. They owe 35-1/3 millions to their shareholders and £15,837,000 to other depositors.7
A building society often works in alliance with an estate or land society, which purchases at a low price large areas of land and re-sells them by lot with the extra profit which the building of a city gives.
The English co-operative societies have organised building departments, or have affiliated themselves to building societies.8
The number of co-operative building and loan associations spread throughout the great American republic may be fixed at between 3000 and 3500. The savings accumulated during forty years in the shape of houses and land and paid by the occupants and their families, must certainly exceed one hundred millions, reckoned in English money, and reaches perhaps one hundred and sixty millions. For the last twelve years in Philadelphia alone these accumulations of capital are reckoned at twenty millions sterling, and the yearly deposits at more than one million. At the present time the deposited savings amount to forty millions sterling for this town alone. In the whole country there are six times as many building societies as here.
In Philadelphia out of a population of 900,000 souls, 185,000 were workmen, and out of this number it is calculated that 40,000 to 50,000 workmen were owners of their own houses. It is true that at Philadelphia the land on which the town is built permits an unlimited extension, and each year the city surrounds itself with a new ring of neat little houses of red brick, each of which forms the home of a single family. The public health is better at Philadelphia than at New York. From the point of view of poor-law and charitable relief the comparison is equally favourable, for with its 900,000 inhabitants Philadelphia hardly spends more than Boston, which has a population of 360,000. Workmen are not afraid to go for lodging to the suburbs and to make a railway journey of an hour or three-quarters of an hour twice a day. The system of street railways is nowhere so fully developed as at Philadelphia. In New York building societies have made great and sudden progress. From January to September, 1888, more than 15,000 persons became members.
We may congratulate ourselves on this rapid development; we have here the proof that, with the aid of suitable associations, persons earning two shillings per day can create a capital and can lend it to others. At the same time it is not necessary to deny the dangers which may result from ignorance of the most elementary rules of finance and account-keeping, and from a tendency to speculate among those who lead and form the membership of these societies.
The system of building societies is certainly one of the best contrivances to give birth to a spirit of economy among persons who have but a very small income to spend. It offers a great attraction to those who pay rent for house or boarding-house accommodation and who wish to free themselves from it. Borrowing, which so easily demoralises a workman, becomes in this case a stimulant to thrift and wise household economy.
Outside of the Anglo-Saxon countries we meet with associations for building in Denmark. At Copenhagen an association has been founded, in 1865, by the workmen of the firm of Burmeister and Wain. It numbered, in 1884, 13,500 members; it has aided in the construction of 562 houses to the value of five and a-half million francs, and inhabited by 4381 persons. A quarter of the sums advanced has been repaid, and 200 new houses are being built. Similar societies exist in many Danish towns; in Switzerland (notably at Bâle); in Germany under the influence of Schulze-Delitzsch, the great promoter of the co-operative movement in Germany, great importance has always been attached to the co-operation of small capitalists for the purpose of combined action in the construction and purchase of houses; but it does not seem that this movement, which has produced such remarkable results in England and the United States, has been equally fruitful on the other side of the Rhine. Instances are to be found at Insterburg, Halle, Flensburg. In 1886 a society of this kind was formed at Berlin (Berliner Baugenossenschaft). The system adopted is that of a weekly deposit, giving a right to a share of 250 francs. When anyone has been a member for six months and owns at least one share, he may lay claim to a house when its building is finished. If there are several candidates, lots are drawn.
We shall speak later of the permanent society of Orleans. At Reims, the real estate union (L’Union Foncière) was founded, in 1870, by the employees and workmen of the town. It is a co-operative society for the construction of working-class dwellings, and commenced its operations in 1873. Members of the society are required to pay an entrance fee, which is not returnable and to contribute an annual deposit of twenty-five francs at the least, bearing interest at five per cent. The society possessed some years ago forty-eight houses, each of which had cost from 4500 to 6000 francs. The yearly instalment to be paid by those who mean to become proprietors in twenty years varies from 250 to 450 francs.
At the risk of seeming to lack method, we must here interpose a word in passing on the co-operation of Savings Banks, fed as they are by the thrift of the poorer classes. In Italy and in the United States they employ a part of their funds for mortgage loans, to facilitate the construction of cheap houses. Men whose opinion is entitled to respect have urged the same duty on the Savings Banks of France. Thanks to M. Aynard of Lyons and to M. Rostand of Marseilles, a first step has been taken in this direction.9
II. We come next to the Joint-Stock Company (Société anonyme), whose business it is to build cheap houses and to sell them by means of yearly instalments to workmen. The list is happily a very long one, and we cannot pretend to set it out in any completeness.
In the first rank, on the continent, we must mention ‘La Société des Cités Ouvrières’ of Mulhouse. With a capital of some hundred thousand francs, to which are added loans guaranteed by the Society, 1200 working-class houses have been built in the space of thirty years; a thousand of these houses have been paid for by purchasers by means of a deduction from their wages, the amount of which has not been much in excess of the ordinary rents paid in other parts of the town.10 At Paris we find ‘La Société anonymedes habitations ouvrières de Passy-Auteuil’ founded with a capital of 200,000 francs. This society has limited the maximum interest payable on its capital to 4 per cent per annum. It has thus been able to fix the rent of its houses between 438 and 480 francs (all instalments of purchase-money included), in addition to a sum of 500 to 1000 francs payable on entrance.
At Lille ‘La Compagnie immobilière de Lille,’ founded in 1867, with a capital of 100,000 francs, which was increased by a gratuitous subvention given by Napoléon III, has built 301 houses, of which 201 are sold to their occupiers. The price of each of these is about 3000 francs; onetenth is payable in advance along with the cost of registration, the balance by instalments, monthly or fortnightly, during a period of fifteen years as a maximum, with power to pay at an earlier date. Since the origin of the society the annual interest of 5 per cent has been regularly paid to its shareholders.
At Saint-Quentin ‘La Société anonyme Saint-Quentinoise’ has its home (price of a house 2500 francs). At Amiens ‘La Société anonyme des maisons Ouvrières,’ founded in 1865, with a capital of 300,000 francs, has created a new quarter, built eighty-five houses, sold at a price below the usual price of the neighbourhood (price of houses 3523 and 2762 francs, payable by monthly instalments of 20 francs in fifteen years). Nine-tenths of the capital has actually been repaid; interest at 5 per cent has throughout been earned for the shareholders, and there remains 170,000 francs profit, which is to be used for the establishment of a school of domestic economy and apprenticeship.11 We have spoken above of the Union foncière of Reims. At Nancy La Société immobilière, with a capital of 200,000 francs, has built fifty-seven houses, costing from 4500 to 7000 francs, all sold to workmen. It has always paid 5 per cent to its shareholders until 1884, since then 2-1/2 per cent, and is now in liquidation. At Havre a company, ‘La Société Havraise des Cités Ouvrières,’ was formed in 1871 with a capital of 200,000 francs under the direct influence of the Mulhouse association. It has built 117 houses representing an expenditure of over 500,000 francs. In 1884 it had sold already fifty-six houses, of which thirty-eight were entirely paid for; conditions of sale—first deposit 300 francs, complete purchase in fifteen years by monthly payments of 24 francs, in twenty years by monthly payments of 20 francs. The interest is limited to 5 per cent. At Bolbec there is a Société des Cités Ouvrières with a capital of 100,000 francs.
At Orleans, in 1870, two workmen resolved to create the ‘Société immobilière,’ whose object it is to develop the spirit of thrift by giving facilities for the acquisition of property. It has built 220 houses in 1887, all of which had found buyers who are paying off the purchase-price in periods of twenty-five years.
In Belgium we may mention ‘La Société Verviétoisé (of Verviers) for the construction of working-class dwellings; ‘La Société Liégeoise des maisons Ouvrières,’ with 425 houses, of which 237 are sold.
In England, we know the Artisans, Labourers, and General Dwellings Company, whose object is to supply at a very low price a house for each family; it was instituted as a reaction against the system of barracks.
Not being able to build in London itself, it has gone into the country to seek for large areas. Up to 1881 it endeavoured to encourage workmen to become proprietors. But at the present time the company is buying back the houses in order to avoid the evils of sub-letting and overcrowding. The company has created regular little towns, 6000 houses. Its capital is about £1,250,000; the dividend is 5 per cent.
III. We now come to our third category, to those institutions whose object it is to build houses for a large number of tenants, but with good sanitary arrangements and a higher degree of comfort. In this class we must put the various societies and foundations which exist in London. These have spent nearly four millions, and house 70,000 persons. We can only name the Metropolitan Association, the Peabody Gift, the Improved Industrial Dwelling Company, the Society for Improving the Condition of the Labouring Classes.12 The capital employed is remunerated at the rate of 3 to 5 per cent. In the case of the Peabody legacy there are no shareholders, and the revenue is employed to extend the work. An interesting enterprise, which is less known, is that of the Surrey Lodge Estate, founded under the auspices of Miss Cons, who lives in the midst of her tenants, and pays 4 per cent to her shareholders.
In Paris, thanks to the munificence of the Messieurs Heine, ‘La Société philanthropique’ has built its first block of dwellings, Rue Jeanne d’Arc, in the middle of the XIIIth arrondissement. The building contains seventy-seven rooms divided among thirty-five tenancies.13 Two other blocks are to be erected in different parts of Paris, in quarters where healthy dwellings are most rare. A dwelling with forty-five tenements has been begun in the boulevard de Grenelle.
At Rouen (December, 1885), 500,000 francs have been raised, and six separate houses built containing ninety-five tenements.
At Lyons, in June 1887, tenants took possession of the first group of houses built by MM. Aynard, Mangini, Gillet. These gentlemen have contributed from their own pocket 200,000 francs, and to this has been added a loan of 150,000 francs from the reserves of the Savings Bank. The remuneration of the capital is guaranteed at 4 per cent. The promoters of the enterprise at Lyons having thus obtained a solid base of operations and these definite results, founded a company with a capital of a million; 200,000 francs deposited by themselves, 300,000 francs to be raised in shares, 500,000 francs advanced from the reserves of the Savings Bank. They then bought 7500 metres for the building of twenty houses. At Marseilles, thanks to the efforts of M. Rostand, the Savings Bank of the town has been authorised to give assistance to a similar enterprise. It is only just to make the savings of poor people flow in this direction. Since 1882, the Savings Bank of Strasbourg undertook to devote 392,000 francs from its reserve to the construction of working-class houses. In Italy, the funds of Savings Banks and of the Sociétés de secours mutuels, are employed in the building of small houses.
At Brooklyn, we find the Improved Dwellings Company, founded by Mr. White, which pays a dividend of 6 per cent. At New York there is the Improved Dwellings Association, which divides 6 per cent, and a more recent enterprise, The Tenement House Building Company, which limits its dividend to 4 per cent.
To Miss Octavia Hill belongs the merit of inventing a system of her own, of which we cannot speak with too much respect. Her aim is the improvement of the housing of the poor by the purchase of insanitary houses, which are then put into a good state of repair, and managed economically in such fashion as to obtain a fair return upon capital, and all this without a suspicion of charity or socialism. In place of a dole, time and personal service is given, and the beneficial influence of intercourse between the tenants and their landlords or rent-collectors, who are all actuated by a spirit of well-considered philanthropy. In 1885, Miss Octavia Hill and her imitators were owners of fifty-seven buildings of the value of £311,767, and affording accommodation for 11,582 persons.
Miss Octavia Hill has founded a school not only in London but even in the United States, notably at New York and Boston, in Germany, at Darmstadt, and at Leipsic. At Berlin a company has been formed; its council numbers M. Gneist among its members. It purchases houses, repairs them, lets or sells them, and seeks to develop in them habits of order. The authorised capital is one million marks, of which 348,000 marks are subscribed.
We must here ask permission to refer to the scheme of ‘tenant thrift’ (épargne locative), which M. Coste has explained in his admirable work Les questions sociales contemporaines, 1886, p. 430. It consists in a plan for the gradual acquisition of mortgage bonds which confer a right of lease and a contract for sale of the house occupied by the tenant, with a gradual reduction of the amount of rent. Would it not be possible for insurance companies to make advances to workmen for the purpose of helping them to become owners of their houses? Workmen desirous of owning their own home could easily take out a policy from a life insurance company sufficient to give a reasonable security for the required advance. There could be no investment more secure than the loan to a workman on the security of the house in which he lives. We suggest the following procedure. The workman must accumulate his savings in a bank, until the sum collected amounts to a guarantee for the loan which he wishes to obtain. He then withdraws his deposit from the bank; at the same time he takes out a policy from the assurance company with which he also makes his deposit and obtains a loan. In this way, if he dies tomorrow, it is certain that by means of the policy of insurance the debt will be extinguished.14
I have now arrived at the close of my survey, and it may be interesting to set down the resolutions proposed by me, and adopted by the International Congress held at Paris during the Universal Exhibition, 1889:
(1) The problem of the supply of healthy and cheap houses, owing to the complexity of influences at work, does not admit of an universal and absolute solution.
(2) It is for individual enterprise or for private combination to find the appropriate solution in each case.
The direct interference of the State or of the local authority with the market, for the purpose of competing with private enterprise, or fixing the rate of rent, ought to be excluded from consideration. It is only admissible when the matter in hand deals with means of communication, sanitary police, and the equalisation of rates.
(3) The development of the construction of cheap houses in the outlying parts and suburbs of towns is closely connected with a service of frequent and economical transport (that is, reduced tariff on railways, workmen’s trains, means of access into towns, tramways, steamboats, etc.).
(4) Among the resources to which appeal can be made, it is fit to mention the reserves of savings banks.
The intervention of savings banks in the development of the housing of the poor is legitimate and useful under conditions of reasonable precaution. The legislature can and ought to favour such intervention, by giving more liberty of investment for the deposits and trust funds of savings banks, and by reducing the burden of taxation.
(5) In order to reconcile the liberty of the purchaser with the obligations by which he binds himself in the contract for the purchase of a house, and in order to lighten, in case of death, the liability which falls on his heirs, it is worth while to consider carefully various combinations, e.g. clauses for the cancelling of contract and for the repayment of instalments, life insurances, mortgages, etc.
To the above I add the resolutions passed at the same Congress on the motion of M. Picot, Member of the Institute:
(1) Wherever the economic conditions permit of it, separate dwellings with little gardens should be preferred in the interest of the workman and his family.
(2) If the dearness of the ground or some other cause makes it necessary to build in the centre of the towns houses in which many families are accommodated under one roof, all the conditions of independence ought to be carefully preserved in order to minimise the contact between them.
(3) The plans should be conceived with a view of avoiding all occasion of meeting between the tenants. The stair landings and the staircases should be well lighted, and ought to be considered as a prolongation of the public road. Corridors and passages of all kinds should be carefully avoided.
Each tenement should have inside a w. c., receiving its light from outside and provided with water.
(4) For families with children of different sexes a division into three rooms is indispensable, in order to permit separation of the sexes.
(5) Every restriction by which injury might be done to the complete independence of the tenant and his family ought to be prohibited.
I think this rapid survey of facts justifies our contention that although the difficulty is very great, rapid progress is being made in its solution, that the main obstacles to be removed are:
(1) The doubt that investment in working-class houses may not prove remunerative.
(2) The oftentimes destructive habits of poor tenants.
(3) An inconvenient system of land tenure prohibitive of free trade and enterprise in building operations.
(4) The uncertainty caused by the threatening attitude of municipal socialism.
The first three of these we have shown to be superable; the last can only be cured by a healthier tone of public opinion, and by a fuller appreciation of the success which has attended private initiative.
[1 ] Hygiene has, in fact, become an official career. Those who fill the posts given by the State, seek to make themselves indispensable. One of the most distinguished of French doctors wrote to me recently that it will be necessary to make a new ‘89’ against the tyranny of hygiene, and to risk a revolution in order to gain our liberty of eating and drinking, and to limit the busybodydom of Sanitarians in the concerns of our private life.
[2 ]Cte. de Haussonville Socialisme d’État et Socialisme Chrétien, Revue des Deux Mondes du 15 Juin, 1890, p. 859.
[3 ] M. Engels, the fellow-worker of Marx, and the philosopher of revolutionary socialism, has attacked what he calls the ‘bourgeois’ solution of making the workman the owner of his house. In Germany, according to him, the number of workmen in the small industries who own their houses and a little bit of garden, is very considerable; none of them, however, receive anything but a miserable wage. It is only a trick to enable the infamous capitalist to buy his labour cheaper in proportion to the extra production of the labourer and his family on their own land. As they cannot live by the trade of agriculture alone, they are content with very small wages to make ends meet. This state of things has its influence on the town-workman, and contributes to keep the rate of his wages very low. In time past the ownership of his house was perhaps a benefit to the labourer; today it is a cause of bondage for himself and a misfortune for the entire working-class. According to M. Engels, the insanitary condition and dearness of dwellings are the necessary accompaniment of our present social organisation, and will only disappear with it.
[4 ] We are aware of the English laws of 1875 and 1885 giving to the local authorities the power to improve, if necessary to demolish, insanitary areas in cases where the responsibility cannot be equitably fastened on an individual owner. These laws have been applied in London and Birmingham. In London there has been spent in this way some £1,841,176. The original estimates have always been exceeded, sometimes doubled, or even trebled. 33,000 persons can be lodged in the improved districts.
[5 ] A bibliography has been published by MM. Raffalovich and Rouillet, chez Rongier et Cie, Éditeurs. Paris.
[6 ] According to the definition of the law of 1874, Building Societies are established for the collection of funds or capital in order to make advances to their members on real property by way of mortgage. Some also make advances on shares, but this is the exception.
[7 ] In Leeds, a town of 320,000 inhabitants, two societies account together for 11,000 members. In the last twenty years more than 18,000 houses have passed through the hands of the Leeds Permanent Building Society. The average value of a house is £166. In 1886, 9400 were mortgaged, of which 3000 belonged to workmen. In Newcastle, Birmingham, and Bristol, we find the same facts as at Leeds.
[8 ] Sixty societies have spent more than £500,000 in the building of cottages.
[9 ] See Les Questions d’Économie sociale dans une grande ville populaire, par Eugène Rostand.
[10 ] At Mulhouse, the number of houses built on 30 June, 1888, was 1124, against 948 on 30 June, 1887. There have been, therefore, 176 houses built in ten years, costing on an average 3160 marks (3950 francs). The total sum paid by the purchasers is 3,539,495 marks. They remain debtors for 367,681 marks. Turning to the cost price, which is 2,788,220, this shows a profit of 1,118,956 marks to meet taxes, interest, charges of transfer for this period of thirty-five years, say about 50 per cent. In the return for 1877, the sum due was 604,041 marks; it has been reduced to 236,360 marks. The sum paid by workmen in these eleven years has reached 983,663 marks.
In 1877, the house with a story was sold for 3400 marks; houses with a ground-floor only, were sold for 2600 marks. The prices have today risen to 4480 and 2760 marks. The price of the storied house had thus risen 32 per cent and that of the single storied house only 6 per cent; and the rise represents the rise in the price of labour, and in the value of the land. This one-storied house has not been built since 1886; workmen prefer the storied house, and it has been found necessary to enlarge the dimensions. This in part explains the advance in price which is due to the increased value of the ground, the expense of building, and to the improvements added to the original plans.
M. de Lacroix, in a report on the Institutions of Public Utility in La Haute Alsace from 1878 to 1888, asks if this house of 4480 francs, which has now taken the place of that valued at 2760 francs, and which up to this date had been generally built, was not too dear for a working-class family whose income has not increased in the same proportion.
‘It appears that it is not so, and the cause is not that which we could have wished. The ground-floor cottage with its kitchen and two little rooms could only with difficulty be made to serve for more than one family. It was not in fact built for this purpose, and it would have been desirable that it should never be diverted from its original use. The laws of hygiene would have been better observed. But the purchasers in their anxiety to discharge their debt sought too often to create a source of revenue by letting a room or even a small tenement; and it is this cause which has given rise to all the irregular gable ends and additions, which the Society cannot prevent, and which gives to the parts of the towns occupied by one-storied dwellings an aspect so odd and unseemly. Once embarked on this road the workman sees that the storied house lends itself better to this trade, and his demand is therefore for that class of house. The Society supplies his demand, and it is thus that the new storied house of 1887 appeared. But what happens? the owner makes three tenements of his house. One on the ground-floor, one on the first floor, and another in the attics. He occupies one himself, generally the ground or first floor, and lets the two others—one at ten or twelve marks per month, the other at four marks; and in this way he gets nearly five per cent. interest on the purchase-money remaining due after his first deposit of 240 marks has been made. But at the price of how much inconvenience? This house, which is intended to shelter one family of five persons, shelters three families of perhaps ten or twelve persons—and all the rules of hygiene are set at defiance. Too often these houses, without the possibility of objection on the part of the Society, and without, in many instances, its knowledge, pass into the hands of speculators who do not inhabit them, and who have no other object in view but to crowd them as much as possible in order to derive a larger revenue from them.
M. de Lacroix adds, sadly, that the great idea dreamt of by the founders of the Permanent City of Mulhouse, has not yet borne all its fruit. ‘If on the one hand we have succeeded in awakening in some the instinct of thrift and family life, our success in solving the problem of healthy and cheap dwellings is still very imperfect. It is true that the Society could have succeeded completely in this second part of its task if it had retained ownership and merely let its houses. This is done in the country, and in many foreign centres of industry. But the arrangement is not without its difficulties. How is a society to be financed which never realises? What substitute can be found for the moralising stimulus of thrift which takes possession of every man who possesses a corner of land or a morsel of stone?’
We have felt obliged to make this less encouraging quotation. It shows how difficult is the task of improving the dwellings of the poor. Things would not go better if the houses were built at a loss by the State or by the municipality. There are in this matter difficulties which are inherent in all human affairs. English societies have had the same experience; at Shaftesbury Park particularly, I understand. There, attempt has been made to repurchase the houses from the owners in order to prevent the abuses described. It is on this account that some well-informed persons recommend building for lease and not for sale.
[11 ] See Les Maisons ouvrières d’Amiens, par Élie Fleury.
[12 ] According to a table prepared by Mr. Gatliffe, during the last forty years up to 1886, 26,643 families, or 146,809 persons have profited from the improved dwelling movement in London.
[13 ] M. Picot delivered an eloquent address on the occasion of the opening of these dwellings, 18 June, 1888. ‘It is a social triumph, for it shows to the irresolute the possibility of action If the “Société philanthropique” earns 4 per cent on the capital employed, it refutes the wild notions of the Socialists who expect everything from the State, and who demand that the Communes should employ municipal resources, and that the State should use the budget of France for the construction of houses for the proletariate.’
[14 ] I have received from the kindness of M. Cheysson the following note. Let us take for our example the head of a family, aged 35, and a cottage, value 6000 francs. The Society let it with a contract for sale by instalments, payable in twenty years with interest at 4 per cent.
The Society contracts with an Insurance Company a policy stipulating that, if the workman dies before twenty years, the assurance company instead of his heirs, will pay the instalments still due. The annual premium for such a policy would be
Under these conditions the head of the family does not leave debt behind him if he dies. The house is free on the day of his death, and becomes the property of his heirs. This premium is equal to 1.5 per cent of the price of the house. If instead of availing himself of this additional security for purchase, the father of the family devoted this sum to the more rapid extinction of his debt, he would be able to complete his purchase in fifteen instead of twenty years. Which is best for him, to complete his purchase, if he lives, in fifteen or twenty years, or free himself from all fear of an interruption by death of the process of purchase?