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British Gothenburg Experiments

Chapter I


THE past twelve months have witnessed a significant movement, under which extended efforts have been made to withdraw a portion of the public-house trade of the country from private hands. These months have seen the formation of Public-house Trust Companies in Great Britain and Ireland under the leadership of Earl Grey, the rapid extension of the People's Refreshment-House Association, formed in 1896 by the Bishop of Chester and Major Craufurd, and of other similar enterprises upon a smaller scale. In all these Companies it is provided that the dividends of the shareholder shall be limited to 4 or 5 per cent, per annum, and that the surplus profits shall be appropriated to objects of public utility. (Already (July 6th, 1901) it is announced that "Arrangements have been, or are being, completed for the formation of Public-house Trust Companies in the following localities : The East of Scotland, Glasgow, Renfrewshire, Northumberland, Kent, and Belfast. Preliminary steps to that end have also been taken in Bradford, Durham, Essex, Leeds, Liverpool, Northamptonshire, Nottinghamshire, Surrey, Sussex, Warwickshire, and Hertfordshire." )

It is difficult to determine the full import of this movement, but it almost certainly marks a perception of the futility of all attempts to exercise effective restriction and control over the public-house trade so long as it continues in private hands. It marks also a growing sense of the absurdity of permitting the enormous profits of a monopoly created by the State to pass into private hands.

And, beyond all doubt, the rapid extension of these company experiments bears witness to the universal feeling that " something must be done" to stay the evils of intemperance. Their formation has been welcomed by a large portion of the press, and they have enlisted the support of many men of wide influence who have hitherto stood aloof from the temperance movement. Impatient of the endless delays in legislation, conscious that the Trade is year by year entrenching itself more firmly and promptly occupying all new ground, the promoters of these companies have determined to do what they can under the existing law, and, if possible, to ensure that any new licences granted shall be held as a trust in the interest of the public, and not be handed over to private individuals to be used for private gain. Public opinion will support the appeal of Lord Grey in his letter to the licensing magistrates in the various Petty Sessional Divisions of Northumberland, that, if they can see their way to do so, they shall offer him, " on behalf of the People's Refreshment-House Association, or some kindred organisation, the refusal of any new licence they may be disposed to grant, before they confer it upon a licensee under conditions which will enable him to lawfully appropriate to his own pocket profits which, under the plan I propose, would accrue to the community."

It is well, however, to recognise from the outset the limitations which, until a large measure of temperance reform has been carried, must necessarily attach to these experiments, and the difficulties, in some directions almost insuperable, under which they will be conducted.

These difficulties have already been experienced in the rural experiments that for some years past have been carried on in different parts of the country; they will press even more heavily upon the Trust Company houses which it is proposed to open in the towns. The true character of these difficulties will probably best appear in a review of the conditions that are essential to the success of company control.


The fullest evidence as to these conditions is to be obtained from an examination of the working of the system in Norway and Sweden, where it has been carried on for more than thirty years under the guidance of able and disinterested men. Before, however, we tabulate this evidence, the question should be answered: What is the success that is sought? Is it merely to have an orderly public-house in which drunkenness shall be forbidden, in which the licence law shall be observed, in which no credit shall be given, in which gambling and all immoral accessories shall be done away with, in which, in short, the present consumption of alcohol (or that part of it which is not distinctly intemperate in character) shall be carried on, though under improved conditions ? Is this the whole of the success that is sought, or does the success aimed at go further and seek to bring about a substantial reduction in the normal consumption ?

This question is fundamental, as upon the answer that is given to it will probably depend the lines of policy of the Trust Companies. It is often assumed that the problem to be solved is solely one of intemperance, by which we mean flagrant and manifest excess, and that apart from this the normal consumption of alcohol calls for no special attention on the part of statesmen and temperance reformers. But surely this view of the problem is inadequate, if on no other grounds, certainly on this, that it leaves out of consideration the serious economic danger that results from the present average expenditure upon alcohol! The present writers have elsewhere (The Temperance Problem and Social Reform) conclusively shown that the average family expenditure of the working classes in this country upon drink cannot be less than six shillings per week—a sum that is probably more than one-sixth of their average family income. This expenditure clearly leaves no sufficient margin for the maintenance of that standard of physical and mental efficiency which is now seen to be of primary importance in the industrial competition of nations. In view of this fact it would seem to be self-evident that no experiment could be considered really " successful" that did not bring about a substantial reduction in the normal expenditure upon drink.

With this preamble we may consider what in Norway and Sweden have been -found to be the conditions of success in company management.

1. The elimination of private profit from the sale of drink.

This principle carries us further than is sometimes seen. Not only must the actual dispenser of the drink have no pecuniary interest in the amount of liquor sold, but the manager of a company who appoints and determines the position of the staff should also know that his salary is independent of sales. This vital principle of the elimination of private profit would also be invaded if those from whom the liquor is bought could as shareholders or directors influence the policy of the company.

2. Public cupidity must not take the place of private cupidity, and to this end the appropriation of the profits must be determined by clear statutory law.

The experience of the Scandinavian countries upon this point is exceedingly suggestive. In Gothenburg, as is well known, the city rates are aided by the profits of the Bolag,(Bolag is the Swedish, and Samlag the Norwegian, word for " Company.") and an amount equal to about one-third of the total municipal revenue is annually received from this source. The ratepayers of the city have thus a direct interest in encouraging the sale of liquor. The enlightened founders of the system did not intend that the profits should be so used, but were driven to accept this arrangement owing to the absence of statutory law determining their appropriation. In Norway the company system was introduced later than in Sweden. The Norwegians recognised the danger lurking in the Swedish system, and the Norwegian law of 1871, under which the companies were established, expressly provided that the profits of the Samlags should be devoted to " objects of public utility." It was further provided that the bye-laws of each Samlag should be approved by the central Government. This system was admittedly far better than the Swedish, yet the temperance reformers of Norway justly regarded with apprehension a scheme under which ordinary charities and valuable town improvements were dependent upon the profits of the local drink traffic. To guard against this danger the temperance party were able to embody in the Act of 1894 a change in the method of appropriating profits under which 65 per cent, of the whole now goes to the State. In both countries there has been but an imperfect recognition of the need for providing upon an extensive scale out of the profits of the trade counter-attractions to the public-house.

3. In any town in which a Company is established it must have a monopoly of the retail licences, both " on " and " of."

This monopoly is essential to the full success of the company system. In reducing the hours of sale, in the non-serving of young persons below the age of eighteen, in prohibiting sales on credit, in abolishing adventitious attractions in their houses, and in many other ways the controlling companies have been able to exercise a powerful restrictive influence; but such influence obviously could not have been exercised if within a few doors from the company shops other licensed houses had been open in which none of these restrictions were enforced. The companies, with few exceptions (those which do occur are mischievous), have a complete monopoly of the sale of spirits, but unfortunately neither in Sweden nor in Norway is beer included within the scope of the controlling system. By common consent this is its weakest point. The Scandinavian experience distinctly points to the need of a monopoly extending to the retail sale of all kinds of alcoholic liquor.

4. The system must provide for the full liberation of the progressive sentiment in a locality.

" There can be little doubt," to quote words which the present writers have used elsewhere, (Preface to The Temperance Problem and Social Reform) "that if temperance reform is to advance upon the ordinary lines of social progress in this country, it must do so by giving the localities a large measure of self-government in relation to the drink traffic, and, subject to the observance of a few conditions to be laid down by Parliament, everything is to be gained by the grant of such liberty. The public opinion of the large towns, with their intelligence and municipal spirit quickened by the possession of power to deal effectively with intemperance, will shape itself in definite forms. But there must be a real liberation of the local forces."

This liberation of the local forces can be accomplished under a system of company control if the company is in close association with the municipal government, as in Norway and Sweden. In the Bergen Samlag, for instance, out of forty members of the committee of management twenty-five are chosen by the shareholders and fifteen by the municipal council. The committee, therefore, acts with full knowledge of the wishes and opinions of the locality. The close association of the Samlag with the municipal council is further maintained by the fact that the latter, in conjunction with the magistracy, are (subject to the veto of the State governor) the licensing authority from whom the companies at the expiration of each quinquennial period have to apply for the renewal of their licence. A controlling company so constituted is a responsible body—responsible, in the first instance, to the municipality, and through it to the local community. This system is quickly responsive to an enlightened public opinion. The temperance reformer can influence it either by direct service on the city council or by furthering the return of those in whose policy he concurs.

5. Lastly, if these Companies are to achieve any high success they must be conducted as undertakings having for their object a distinct temperance end, to ivhich commercial considerations must be strictly subordinated.

It may be confidently asserted that the success of the various controlling companies in Sweden and Norway as agencies for the advance of temperance has been proportionate to the degree in which they have carried out the five principles enumerated above. The efficacy of these principles does not depend upon anything peculiar to the Scandinavian soil; they would be as potent in this country as elsewhere. If kept steadily in mind they should aid us in forming an opinion of the value, as temperance agencies, of the companies which have been or are about to be formed in this country.


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