Taxes and Charity

When you give to charity services, where does your money go ?

MARY HATHEWAY October 1 1939

Taxes and Charity

When you give to charity services, where does your money go ?

MARY HATHEWAY October 1 1939

Taxes and Charity

When you give to charity services, where does your money go ?


MIDDLEBOROUGH is imaginary -an average Canadian town. Late on a September night Dr.

Peters and his guest, Hugh Donald, smoked their pipes on a balcony overlooking Middleborough. Rain had stopped, and a fragrance reached them of earth and wet fallen leaves. “Is that water over the dam I hear?” Donald asked.

“Yes. We have quite a power plant down there.”

"Much unemployment in Middleborough now?”

“One pocket empty in every five or six.

In all that district down there between the cereal factory’s elevator and the sawmill, hardly a soul is earning.”

‘T bet you know the inside of every house, doc. Tell me about them.”

“Mostly on relief, of course. Some of the younger men get a few days a week on the new' bridge—our government relief project.

But lack of jobs is not the whole story.

There are 10,(XX) of us in this town, and 1,500 are public dependents; some because of unemployment, the rest would be public charges anyway. Take old Bert Connors. He worked in the sawmill all his life, till the depression hit and he was laid off. When they did take a few men on again they took younger ones. A year of unemployment used up all Bert’s savings.

He is seventy-three now and drawing his $240 a year from the Government. He won’t work again.”

“Old age pension?”

“Yes. Then there is Mrs. Joe Horton.

She has three youngsters in early grades at school. A nice little woman with grit and pride. She is the only one in town who thinks she is getting away with the story that Joe is working in Northern Ontario and sending her money. Poor Joe is in the provincial insane asylum, and Mrs. Horton draws her needy mother’s allowance from the Government. Next door to her are the Brocks and Mrs. Hardy. Now there is your microcosm of dependence,


“I’m listening,”

"John Brock had a job in the power plant until about ten years ago. Since then it has been a few odd jobs and relief. Now' every person in his house is living on unearned money from one source or another. John draw's relief. Mrs. Hardy is some sort of relative, a widow of about forty-three, almost totally blind. She pays board out of her $240 a year blind pension.

Mrs. Brock is one of my patients in the public ward at the hospital. Jessie, the only daughter, is at the T. B. sanatorium—free patient, of course. Harry, the oldest, was gashed in a brawl, and I sewed him up in jail yesterday. But Young John is the one I am most concerned about.”


“Well, he is eighteen. Compare the past ten years of his life with the same period in his father’s life. When Old John was eighteen he had heard Very Old John talk about his work in the mill as long as he could remember. He probably knew how' many bolts there were in every piece of machinery. He had met the foreman, and understood the quality and quantity of respect due him. He knew the detail of every accident the mill ever had, and how it should

have been avoided. He knew all about rush orders and slack times and every other crisis in a workingman's life. He was apprenticed to industry in his high chair.

"Now look at Young John. He was eight w'hen his father last went out with a lunch pail. He hardly knows a bolt from a belt. He knows nothing about care and cleanliness and shipshape work—or fire hazards, or discipline. He is slow and awkward with his hands because he never had anything to use them on.”

“I get you. He’s unemployable.”

“He’s worse than that. He’s in the industrial school after

having been in and out of juvenile court for ten years.” “No excuse for a fellow like that.”

“Oh, come, Hugh! When you were eighteen, what did you want more than anything?”

“To prove to the world that I was just as good at football as you were at cutting up cats.”

“So your ego was hungry for approbation in spite of eighteen years as the son of one of the most respected families in the neighborhood. Well, how about Young John? His father is a down-and-outer, he has never seen his mother in anything but dirty, ill-fitting, second-hand clothes—”


“Soap costs money. Hot water does things to the gas bill. D)ok at the facts, Hugh! When Young John was in school some fellows had bikes and some had candy to share, but John’s turn to be the centre of admiration just never came. Now all he can do to leave his mark in the world is to outwit Policeman Tim Bailey and get the worst tonguelashing Judge Hodgson ever handed out. The industrial school may turn him out at least able to handle tools.” “Meantime the rest of us pay taxes.”

“Don’t we! There is the refuge down on York Street. A bowl of soup and a bed for the night. There’s Miss Gleeson, the public health nurse—and thank heaven for her ! And there is free vaccination, free diphtheria immunization, placarding for contagious diseases. It all costs money. But when I feel like grumbling about my taxes I think of J. B. Hoyt and what he pays, and that stops me.”

“Who is J. B. Ployt?”

“Hoyt Outfitting Company. His father started the business and made money. J. B. carried it on and became the town’s rich man. They supply the mining and lumbering camps north of here. Used to employ most of the town. J. B. is still wealthy, but he has his problems.”

“Must be tough to pay present-day taxes and try to keep a business profitable. What would his taxes run to?” “I wouldn’t know, Hugh. But I did sit down with him one night and figure the cost of tax-supported charities in this town—the things we have just been talking about, the Brocks and Mrs. Hardy. We calculated it at $263,000 annually. That is five per cent of the town’s total income. It is more than the output of the cereal factory, or the mill, or the powerhouse, and nearly as much as the mining output of the whole district the town serves. How our industries can raise their heads with that burden is more than I can see. And it isn’t as if taxes were all.”

“No. There are the tag days.”

“That is what J. B. and I got to talking about that night. Organized charity raised $20,000 in this town last year: the Orphans’ Home, the Y.M.C.A., the Community Centre down on King Street—”

“What in thunder is that?”

“For one thing they teach youngsters to use tools before they get into court instead of after. Then there’s the Boys’ Club, the Welfare Association, the Nursing Home and the Hospital Aid.”

“Accounting for the $20,000 you spoke of?”

“Yes. Then we calculated another $20,000 goes into empty pockets by way of tag days and benefits, gifts to church poor boxes and just plain man-to-man charity.” “Ah, yes. At the moment, as I happen to know, you are buying high school books for the son of one patient, paying the fuel bill of another—”

“And you are looking after your cousin’s wife’s sister. We are all glad to do that sort of thing, but it makes the annual cost of tax and voluntary charity in this town $300,000.”

“That looks ruinous.”

“I am not sure, Hugh. If Lew Haley didn’t pay his taxes to clothe the needy, they wouldn’t come to his store for shoes. If the same dollar bill comes back to you three times instead of once, your income is three times as much.”

“It all speeds circulation, yes. But meantime fifteen per cent of your population are getting—let’s see—only five per cent of the community’s income. What about the threat of extreme poverty to a sound, sturdy people?”

“Hugh, you are right. That is the crux of the whole matter. J. B. thinks the charities, properly run, offer the only solution.”

“Your Welfare Association? What can it do?”

“Teach families to live as decently as possible even if they are on relief. The Community Centre and Boys’ Club make an organized fight against shiftlessness.”

“Why bother with shiftless fellows?”

“It is a normal protective adjustment, Hugh. They either accept their fate or go haywire. Most of them accept it. And when poverty and unemployment become acceptable to them, we call them shiftless. Then take the Hospital Aid and Nursing Home. Fred Hackett is in the Home now, getting well. In a couple of months he will be supporting his family again. Without some philanthropist to give him the health he can not buy for himself, his family would be permanently destitute.”

“And cost the community a lot of relief.”

“Exactly. The problem is to prevent destitution. Only modern charity has any formula for that.”

“If I double my charity subscription, will my taxes come down?”

“They might now, Hugh. They might.”

Take roughly one thousand Middleboroughs and you have Canada.

Out of a population of 11,000,000 our public dependents van,', in good and bad years, between fourteen and twenty per cent. The cost of tax-supported measures to supply the necessities of life to destitute, defective and delinquent persons, together with a relatively negligible item for general public health, was calculated for 1936 by H. M. Cassidy, then British Columbia’s director of social welfare, as follows: Dominion, $109,111,000; provincial, $98,429,000; municipal, $55,452,000; total, $262,992,000.

At the Canadian Conference on Social Work in Vancouver last year, Dr. Cassidy, as its president, made this statement: “Social servicesadministered largely forour greatarmyofdependentscost thecitizensof this country more than the total annual value of the wheat crop, more than the net value of production in forestry, or in electric power or in construction, nearly as much as the net value of mining activity, and about the same as the operating expenses of our steam railways: one quarter of the total cost of government and at least five per cent of our total national income in such a good year as 1937.”

How these expenditures are increasing is indicated in the Report of the Dominion Commission on Unemployment Relief, dated March 31, 1938, which shows that Dominion Government outlays in “direct relief, relief works and special aid to drought areas” alone, grew from $18,000,000 in 1930 to $44,000.000 in 1937. Contrary to popular belief, however, unemployment is only part of the problem, and the Labor Gazette of May, 1939, shows (to select only one item) $28,283,284 for old age pensions. This is the annual outlay of the Dominion Government, seventy-five per cent of the total payments. The rest is made up by provinces and municipalities, and the figure takes no account of administration costs.

When to unemployment relief, relief works and old age pensions are added blind pensions, needy mothers’ allowances, poor relief, child welfare, grants to hospitals, grants to mental and tuberculosis institutions and services, jails and industrial schools, war veterans’ unemployment assistance and needy war veterans’ allowances, we reach the figures estimated above by Dr. Cassidy. This is the cost of keeping dependent persons alive.

Preventive measures to rehabilitate them and save others from becoming destitute are the chosen field of organized subscription-supported charity.

According to the Canadian Welfare Council’s publication of last January, fourteen community chests in nine cities across Canada spent, in 1938, between six and seven millions. Even in the cities concerned these are by no means the only channels of giving. In Montreal, where four different chest campaigns are undertaken annually, there were during the first half of this year five other major campaigns, one to raise $1,000,(XX) for the Children’s Memorial Hospital.

It is estimated that the total given away annually in organized, semiorganized and personal charity in the nine chest cities is roughly $10,000,000.

One quarter of the population is found in these nine cities, and there is no reason to believe the other three quarters is less generous on the one hand, or less needy on the other. Where there is less organization there is more personal charity, and another ¡ $30,000,000 for the rest of the Dominion is indicated also by such incomplete but significant figures as are available.

It would appear, therefore, that $40,000,000 is the amount of the cheque that John Doe writes annually in favor of the charities This outlay is largely for prevention of destitution.

Add this to the tax figure of $263.000,000 and we may say that at least $300.000,000 liasses annually from the “haves” to the “have-nots."

An economist could determine how much business would suffer if this stimulus to money circulation were discontinued.

Perhaps he could determine also, how much sounder the national economy would be if the same, or a better, circulation were maintained through application of all this idle man power to development of the country’s ample resources. It was a basic finding of the National Employment (Purvis) Commission that the first requisite toward this end was that the idle man power should not be allowed to rot. Of the three hundred millions being expended annually, more than eighty-five per cent goes to supply the hare necessities of life to destitute, defective or delinquent persons: only fifteen per cent goes toward solution of the problem by prevention and rehabilitation. Is this a reasonable proportion?

Certainly it is arguable that we should increase the total outlay by increasing the j preventive services, in order to reduce the total outlay by transferring a sizable per! centage of our man power from the debit to j the credit side of the ledger.