"An Enormous Boon."
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    We publish below from the pen of Professor Alfred Russel Wallace, O.M., F.R.S., a striking letter on the Insurance Act, in which he forecasts its beneficent effect on the nation.

    The views of Professor Wallace, who celebrated his 89th birthday a few days ago, will command widespread interest and respect, coming as they do from the greatest living representative of the Victorian era.

    Professor Wallace has won world-wide fame as a scientist and philosopher, and as the co-discoverer with his friend Darwin of the principle of natural selection.

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To the Editor of the Daily Chronicle:

    Sir,--By an extraordinary mistake, the exact source of which I have not been able to trace satisfactorily, it has been very widely stated in the Press that I am an opponent of the National Insurance Act. This is not only untrue, but the more I learn about its provisions and mode of working the more inclined I am to look upon this Act as perhaps the greatest and on the whole the most beneficial of all the attempts yet made to grapple with the great problem of poverty. Yet some of the most advanced Socialist papers declare it to be the very worst Act ever passed by our Parliament, and one against which the reaction of public opinion will be so strong as in a year or two to result in the downfall of Mr. Lloyd George and of the present Government.

Compulsion Justified.

    The reasons given for this adverse criticism are, firstly, that it is compulsory, which fact it is supposed will neutralise all the chief advantages of insurance when voluntarily undertaken; and, secondly, that the tax upon employers will be so onerous that it will inevitably be counterbalanced by a reduction of wages or by the discharge of less efficient men, so that the workers will ultimately pay for the whole of it themselves, and will, therefore, be worse off than before. The additional statement is generally made that Mr. Lloyd George and the Government know this very well, and that it is only a temporary bid for popularity in view of the next election. I should like to make a few remarks on these two objections, which, being a kind of half-truths, their fallacy is not always apparent.

    As to compulsion, all remedial legislation in social matters, to be effective, must be enforced by law. All our taxes are severely compulsory, but rarely, except when they involve some gross interference with personal liberty or with matters of conscience, do they lead to any strong opposition. Our Poor-laws, administered by so-called "guardians" of the poor, involve compulsory taxation, while they have produced such a state of things that thousands of those who are in want from no fault of their own prefer starvation to the workhouse. Yet there is no great outcry against the payment of poor rates. Voluntary charity in a myriad form is constantly increasing, but it is so badly administered that, as the most exact inquiries demonstrate, in all our great cities about one-fifth of the whole population exists in a state of want, which is liable at any moment to become actual starvation, involving chronic illness, and culminating in preventable death.

Incidence of Contributions.

    The second objection--that the whole of the benefits to be received under the Act will be ultimately paid for by the workers, and will therefore make the poor still poorer than they are now--is an even more insidious one, because it is founded on the indisputable truth that all taxation, whether actually paid by the rich or by the poor, ultimately falls upon the real producers of wealth, the workers themselves. This is clearly laid down by Adam Smith in the very first paragraphs of his immortal "Wealth of Nations." But the ultimate may be very different from the immediate results, and in this case they certainly are so, because the whole process by which the incidence of taxation is transferred from one class to another is a highly complex one, and is often difficult to follow with accuracy. It is assumed, for instance, that the employers' contribution to the insurance fund will certainly and almost immediately be counterbalanced by a fall in the rate of wages. But those who assume this forget that it may be easier for the employer to make economies in other directions, and this will almost certainly be done when the combined workers are prepared to resist any reduction of wages by a strike, which they will be better able to do because the number of persons withdrawn from the labour market in the early stages of illness or by treatment in the sanatoria will constantly tend to raise wages, and the employers will often find it better to shift the burden on to the consumer by a slight rise in prices.

    Again, it is rarely noticed by these objectors that those receiving the lowest wages pay no contribution at all, those a little better off contribute only one penny a week, while it is only the better paid among the skilled labourers who will pay the full contribution of 3d. a week. Among the wage-earners themselves, therefore, the very lowest will be comparatively the best off; and it is the most absurd travesty of the facts to say, as is often said, that the very poorest will be worse off than before.

Gain to the Community.

    I look upon it as almost certain that the employers will not attempt, and, if they do attempt it, will not succeed in, recouping themselves by the apparently simple but really most difficult method of reducing wages, since it is much more in accordance with the natural tendency of the Act to produce automatically a slight rise of wages sufficient at least to compensate the better organised workers for their own contribution to the fund; while the amount contributed by the State will certainly be a clear gain to taxpayers in general, because it will be very largely paid by the wealthier classes in the form of land taxes, death duties, &c., and also because it will, to a considerable extent, be balanced by a reduction in poor rates and in the need for private charity. Again, though the wealthy who employ many servants at high wages will pay a large portion of it, yet, as the tax is on the number of servants and not on the amount of their wages, this class of people will really pay less in proportion than the middle classes, and will thus have no reason for complaint. As the amount is so small in each case, the middle or upper classes will rarely, if ever, reduce the number of their servants or lower their wages, however much they may threaten to do so.

    I conclude, therefore, that this great Act in its immediate results will be an enormous boon to the poorer classes of the community. It will save thousands of lives now being lost through inability to have early medical care, and will in thousands of other cases remove the hated spectre of the workhouse which darkens their latter years.

    No one knows better than Mr. Lloyd George himself that this Act is only a beginning, but a very comprehensive and well-thought-out beginning, which may be, and probably will be, carried out to its legitimate conclusion--the diminution of extreme poverty and the extinction of unmerited starvation.