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 INDUSTRIAL AND LABOR 
 
 RELATIONS 
 
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COMMISSION TO STUDY SOCIAL INSURANCE 
 AND UNEMPLOYMENT 
 
 HEARINGS 
 
 BEFORE 
 
 THE COMMITTEE ON LABOR 
 
 HOUSE OF REPRESENTATIVES 
 
 SIXTY-FOURTH CONGRESS 
 First Session 
 
 ON 
 
 H. J. RES. 159 
 
 A RESOLUTION FOR THE APPOINTMENT OF A COMMISSION TO PRE- 
 PARE AND RECOMMEND A PLAN FOR THE ESTABLISHMENT 
 OF A NATIONAL INSURANCE FUND AND FOR THE MIT- 
 IGATION OF THE EVIL OF UNEMPLOYMENT 
 
 APRIL 6 AND 11, 1916 
 
 WASHINGTON 
 
 QOVEENMENT PRINTING OFPIOE 
 
 1916 
 
COMMITTEE ON LABOR. 
 
 House op Rephesentativbs, Sixty-fourth Congress. 
 
 DAVID J. LEWIS, Maryland, Chairman. 
 
 JAMES P. MAHER, New York. 
 WALTER A. WATSON, Virginia. 
 EDWARD KEATING, Colorado. 
 W. C. HOUSTON, Tennessee. 
 H. W. SUMNERS. Texas. 
 EDWARD B. ALMON, Alabama. 
 CARL C. VAN DYKE, Minnesota. 
 
 J. M. C. SMITH, Michigan. 
 EDWARD E. BROWN, Wisconsin. 
 JOHN I. NOLAN, Calitomia. 
 JOHN 6. COOPER, Ohio. 
 EDWARD E. DENISON, Illinois. 
 MEYER LONDON, New York. 
 
 Chas. T. Clayton, ClirTt. 
 
CONTENTS. 
 
 Statement of— Page- 
 
 Dr. John B. Andrews 16 
 
 Joseph P. Chamberlain 32 
 
 James L. Cowles 115 
 
 Miles M. Dawson 5 
 
 Samuf 1 Gompers 120, 121 
 
 Dr. Royal Meeker 116 
 
 Charles F. Nesbit 104 
 
 Rufus M. Potts 17 
 
 Miss Juliet Stuart Poyntz 45, 189 
 
 Dr. I. M. Rubinow 36,176 
 
 Dr. N. 1. Stone 108 
 
 James W. Sullivan 186 
 
 Appendix A. — Extracts, report of Rufus M. Potts 190 
 
 Appendix B. — Recent trend of real wages ,. . 239 
 
 Appendix C. — Unemployed insurance, British act 254 
 
 Appendix D. — Unemployment insurance, present status 261 
 
 Appendix E. — Social benefits provided by trade-unions 276 
 
 Appendix F. — Immigration, speech by Hon. Meyer London 303 
 
 3 
 
COMMISSION TO STUDY SOCIAL INSURANCE AND UNEM- 
 
 PLOY MENT. 
 
 Committee on Labor, 
 House of Representatives, 
 Washington, D. C, April 6, 1916. 
 
 The committee met at 10 o'clock a. m., Hon. Edward Keating 
 presiding. 
 
 Mr. Keating. Under a special rule adopted by the committee this 
 morning was set aside for hearings on House joint resolution 159, by- 
 Mr. London, a joint resolution for the appointment of a commission 
 to prepare and recommend a plan for tne establishment of a national 
 insurance fund and for the mitigation of the evil of unemployment, 
 
 Mr. London. Mr. Chairman, I will ask Mr. Dawson to open thje 
 discussion and to give us an outUne of the problem. 
 
 STATEMENT OF MR. MIIES M. DAWSON, CONSULTING ACTTJ- 
 AEY, NEW YORK CITY, 
 
 Mr. Keating. Will you give your name, address, and occupation 
 to the stenographer ? 1 presume we will pioc^d under the rule wa 
 had the other day, by which the witness will bo permitted to make 
 his statement, and members of the committee will question him at the 
 conclusion of his statement. 
 
 Mr. Dawson. My name is MUes M. Dawson, consulting actuaryT 
 New York Qty. 
 
 Mr. London. Mr. Dawson, you are one of the authors of the book 
 Workingmen's Insurance in Europe ? 
 
 Mr. Dawson. Yes; I am a joint author of the book, " Workingmen'3 
 Insurance in Europe," written by Dr. Lee K..Frankel and myself, as 
 the result of a study of social insurance throughout Exu-ope on behalf 
 of the Russell Sage Foundation. I was also sent abroad by the 
 Government two years later to study the cost of workingmen's com- 
 pensation insurance in European countries, the result of which study 
 wiU be found in the September, 1910, Bulletin of the.Bureau of Labor- 
 
 My interest in this subject, however, did not begin with that 
 investigation, but began with the introduction of social insurance in 
 the countries of Germany and Austria, over 30 years ago, and my 
 acquaintance with the languages in the countries of Europe, including 
 all of those except Russia, which have adopted social insurance up 
 to the present time, I think, has kept me in very close touch, as well 
 as my personal acquaintance with the men who have been associated 
 with it. 
 
 The way in which the general subject is looked at by many people, 
 Mr. Chairman and gentlemen of the committee, is that it is a mere 
 attempt to aiCcomplish something, wliich may or may not be desirable. 
 
b SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 on behalf of the workmg classes, as if it was a piece of class legislation. 
 I am not going to speak to you long, but I wish to premise what I say 
 by two statements, which I think will be of service to the committee 
 in that respect. Both of these statements are from Dr. Georg Zacher, 
 the greatest authority upon the subject of social insurance in the 
 world, and were made to me personally in a letter written to me. 
 One of them is that from the actual statistics collected by the Gov- 
 ernment of Germany there was an increase in the average longevity 
 of the German males, the men of Germany, from the j^ear 1870 to the 
 year 1900, during which social insiu-ance had been introduced and 
 made effective in Germany, equivalent to 12 years added to the life 
 of every man in Germany. 
 
 Now, remember that those 12 years were in most cases added to 
 their lives during the period when they were most productive, and 
 best able to take care of their famiUes. 
 
 I know, as an expert upon longevity, that this statement is not 
 untrue. I know that the reputation of Germany in regard to mor- 
 tality has changed from that of one of the worst in Europe dm-ing 
 that period, and has been improving steadily up to the present time, 
 at least up to the time that the war commenced, from that position 
 to one of the very best. I know that the records of the German 
 insurance companies from an investigation of their mortality, with 
 which I am also familiar, being a member of the Deutscher Verein 
 fiir Versicherungs Wissensqhaf t in Germany and otherwise in position 
 to have information on these points, I know that the improvement 
 in the Hves of those who are insured in the German insurance com- 
 
 J)anies, a large majorijiy of whom were subject to the social insurance 
 aws, has been equally marked. 
 
 That is one of the statements that Dr. Zacher made to me. The 
 other statement made was this, that the experience of the Govern- 
 ment in connection with this investigation was that not only the 
 health, but also the heiglit, the weight, physical strength, "and ability 
 of those who were called into the service of the German army had 
 been one of steady improvement, showing a very marked difference 
 between 1870 and 1900, and also even between 1900 and 1910. 
 
 Those are two facts which might be contrasted with the conditions 
 which exist in other countries. During that same period, there was 
 no improvement worth mentioning snown by apy statistics with 
 which I am familar — and I am very famihar with all of them, as I 
 am a Fellow of the Royal Statistical Society in London, and also a 
 FeUow of the Institute of Actuaries of Great Britain, in both of 
 which all of the statistics can be found upon the subject— -during that 
 same period there was not only no such improvement in Great 
 Britain, but, in addition, there was a very considerable diminution 
 in the average condition of those who offered themselves for service 
 in the British army — so marked a loss that public attention was 
 repeatedly called to it. 
 
 iTow, I speak of these things because this subject should be con- 
 sidered not merely from the standpoint of how we may most effec- 
 tively assist those among our people who may be, on account of their 
 financial condition or on account of their want of organization, or 
 whatever it may be in the poorest position to protect themselves 
 and their families ; we should not only assist them on their account, 
 
SOCIAL INSUBANCE AND UNEJV^PLOYMENT. 7 
 
 but we have the greatest possible reason for assisting them or our 
 account. 
 
 But, Mr. Chairman and gentlemen of the committee, this is not 
 the only consideration. There is a third consideration that I believe 
 should DC brought especially to your attention. Dr. Frankel and I 
 found, and I found later when I was there the second time that the 
 remarkable improvement in the efficiency of the people in connec- 
 tion with the industries of these countries, an increase in efficiency, 
 which, as you know, has attracted world-wide attention, which 
 changed the reputation of German worlcmen from that of a rather 
 thorough but exceedingly slow and plodding type of workman, 
 which was their reputation when I was a boy, to that of easily the 
 most efficient workmen of all Europe, and made the Austrians in 
 spite of the fact that they were so badly broken apart in regard to 
 race conditions, only second to the Germans in that regard — that 
 this increase in efficiency, while undoubtedly partly due to the intro- 
 duction of special schools in Germany and Austria, meaning voca- 
 tional education, and also partly due to the introduction of compul- 
 sory military service, and the creation thereby of a special form of 
 discipline was chiefly due to social insurance. 
 
 Now, this was not the testimony merely of those concerned, like 
 my friend. Dr. Zacher, in social insurance. It was their testimony 
 without a single exception; but yet more was it the testimony of the 
 leading employers of Germany, many of whom were consulted by us, 
 and many others consulted by others, and what they stated about it 
 made public, and it was the testimony of the officers of the German 
 Government generally; and moreover, it was also the testimony of 
 the leaders of the social democratic party, which represents virtually 
 all of the workmen of Germany, and of all the representatives of the 
 workmen of Germany in the sickness insurance associations. All but 
 universal is the expression of opinion among those who have been 
 consulted upon the subject, by, for instance, Lloyd George, represent- 
 ing the British Government; and you will find it made public in the 
 documents published giving the results of his interviews, and by those 
 who were consulted by Dr. Frankel and myself, and those who have 
 been consulted by innumerable others who have gone there from our 
 own country, as well as from other countries, that the principal thing 
 operaMng to make a wonderfully efficient, healthy, long-lived people, 
 was the thing which we are here to talk concerning to-day. 
 
 The resolution that is before you to-day is not a resolution in- 
 tended to ask immediate action on the part of the Congress of the 
 United States, to introduce a system of social insurance. It is not a 
 bill introducing a system of social insurance. It is a bill intending 
 to ask for the appointment of a commission, with a moderate appro- 
 priation, and with certain powers to investigate what can be done in 
 the United States in this regard^to investigate what is already beirig 
 done in the Unite'd States in this regard, what its effects are, where it 
 falls short, what good it has already accomplished, what good it is 
 believed can be accomplished through existing means, and^ where 
 existing means necessarily falls short of doing that which we woula all 
 like to see accomplished. That is the bill that is before you. 
 
 Now, I might ^suggest that there is one very fruitful line of in- 
 vestigation right at the outset, which I do not doubt will occur to 
 many of you. The intimation has been made in the resolution itself 
 
8 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 that it miglit be |)ossible to establish a national fund, or national 
 funds for these social insurance piirposes.' One of the investigations 
 that it would be wise for this committee to undertake is regarding 
 opinions, and the grounds upon which those opinions rest, of those 
 most competent to .serve the committee, concerning whether such a 
 measure, if it were offered, would be constitutional, under the Federal 
 Constitution. I gave an amount of time, estimated at my office, 
 on the part of the employees only, omitting my own time, at a net 
 cost of over $2,000, to the investigation of that subject, in connection 
 with the Federal Commission on Employers' Liability. You will 
 find the result of the work which I did there in the report of that 
 commission, both the briefs and the argument presented; and you will 
 find also that the attorney representing the New York Central Lines 
 (I may say entirely independently^ for I never met him until I met 
 him in the room, after his brief had been printed), arrived at almost 
 identically the same conclusion, namely, that the Federal Govern- 
 ment had ample power to introduce a system generally throughout 
 the United States, as regards the classes of employees that were there 
 under consideration, at least, for the establismnent of a Federal 
 workmen's compensation fund. 
 
 Now, I am not prepared to say at this moment, except in the 
 most general way, that necessarily the investigation there made 
 would cover the subject we are discussing here. My own impression, 
 as the result of the work which I did at that time, is that the argu- 
 ments there advanced would be almost equally applicable to the 
 subjects covered by this resolution, and that there is, if not entirely 
 a clear road, almost a clear road before you, should the commission, 
 after it has made its report, recommend that something be done by 
 the Federal Government nationally, and should Congress decide that 
 that was the wise way to handle it. 
 
 But now, of course, there are two reasons why, after this report 
 of a commission such as this has been rendered. Congress might 
 decide that national action is not desirable. They are, first, the 
 constitutional question, about which Congress might have a different 
 opinion from that which I have just tentatively expressed; and, 
 second, the practical question as to whether it might not be wiser 
 to leave it to the States, or to adopt a policy of encouragement such 
 as was adopted in Denmark and in some other countries in relation 
 to this subject, or in relation to a part of it. 
 
 Whatever the determination of Congress might be upon those 
 questions, I take it that it is of the highest importance that Congress 
 and the people of our country be advised of all that can be discov- 
 ered upon the subject, that is pertinent to the determination whether 
 social insurance produces such a result as I have, in the opening of 
 my address, called to your attention; what the powers of the Na- 
 tional Government are in relation thereto, and what it can do for 
 the protection and the betterment of the conditioils of our peoplo 
 through this means; what is now being done, whether well or badly, 
 and what can be done to make it work well, if anything, and what 
 needs to be done to supplement it, if it should be permitted to con- 
 tinue at all, or what needs to be done to substitute a better system 
 for it; and whether, after all these questions have been considered, 
 and the best light obtained upon them, it is wise or desirable that 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 5* 
 
 this matter -be undertaken as a Federal matter, on behalf of the 
 whole people of the United States, or that it be left to each State to 
 deal with entirely by itself, without action by Congress of any kind, 
 or that a policy of encouragement and subsidization, such as has 
 been adopted by some countries of Europe, be introduced. 
 
 Now, I beg to suggest to your commission, that, in the course of 
 the investigation, if it is ordered, there should be a very careful in- 
 quiry made into the existing means of dealing with these questions in 
 this country. I fancy that you would be somewhat astounded to 
 learn, in regard to sickness msurance, for instance, that there are 
 tens of thousands of the most feeble of our people, the least able to 
 make provisions for themselves, that are to-day paying in the form 
 of 3 and 5 cents, coUecfed at the back door by agents of industrial 
 sickness insurance societies and companies, in order to obtain for 
 themselves this form of protection, on a basis where from one-half 
 to as high as three-fourths of aU the money that they pay is wasted 
 and not directly applied to provide that which they are purchasing. 
 I fancy that before the hearing is over you wiU have evidence, much 
 more in extenso than I will undertake in this opening address to 
 offer, that that is true; but I may say that, on behalf of the super- 
 intendent of insurance of this district, under the authority of Con- 
 gress, I have, myself, investigated, perhaps, the very best of those 
 mstitutions which the most helpless of our entire population, the 
 negro population, has built up, and I found that it was costing 60 
 cents to get less than 35 cents in benefit to its members; and that 
 was in an institution operated on a sound basis, carrying adequate 
 reserves, not carried on as a spoliation, but merely doing those things 
 which it was necessary to do, under the existing disorganized condi- 
 tion, in order that the people who needed this kind of protection the 
 very worst could obtain it at all. 
 
 There are also "dollar-a-month" casualty companies doing busi- 
 ness with the more helpless white laborers chiefly, which are man- 
 aged about as, extravagantly and several of which have an evil record 
 in repudiating their just obligations. 
 
 There is also another form of social insurance that is in operation , 
 in our country, which I am sure you are more or less familiar with, 
 and that is the means of furnishing money by which the members 
 of a family can be buried; because industrial life insurance, in the 
 main, not exclusively, as carried on in the United States, is nothing 
 but burial insurance. In fact, it is confined by the laws of the prin- 
 cipal States, as regaids children, to an amount of money estimated 
 by the legislature not to be much more than ordiiip.rily required to 
 furnish a decent burial, and you will find, if youwill Iodic into it, that 
 in order to get somewhere from 35 to 40 cents worth of benefit out 
 of each dollar of premiums paid in 5 or 10 cent installments at the 
 back door eveiy week, the most economical record that they have 
 been able to make, in the largest company of the whole list, is an 
 expenditure of another 35 cents out of that dollar, and that the 
 average is in the neighborhood of 50 cents. 
 
 Now, those are some of the things which, if the resolution is not 
 already drawn in such a manner as to give you full authority to 
 investigate them, ^s regards their operation, and to consider to what 
 extent the Congress of the United States, under a Government set 
 
10 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 up, as stated in the very first words of the prologue to our Constitu- 
 tion, "To promote the general well'are'" can do to remedy these 
 conditions, and introduce something which will serve this purpose 
 better and more economically, you should provide for hj amendmg 
 it suitably. 
 
 There is another branch of insurance being carried on, which comes 
 within the range of social insurance, and some exceedingly interesting 
 inquiries could be made about that. It is the one branch of social 
 insurance we have dealt with in a legislative way so far in the United 
 States. It is called workmen's compensation. We now have a 
 majority — I think about two-thirds — of all the States in the United 
 States, with workmen's compensation laws, more or less futile in 
 effect, some of them very good and some not so good, so that we 
 have right at home a problem as to which method of providing in- 
 surance of this character is best for the people of this country, 
 from the standpoint of economy and efficiency, and concerning 
 which is the best method we have the most contrary statements 
 going out all over the country. We have the twisting and distortion 
 of everything that turns up. I may say that I do not think it is 
 entirely one-sided, but it is chiefly on the part of the insurance com- 
 panies interested in the earning of money in carrying on this busi- 
 ness, but not exclusively, because when you get the facts about 
 that you will find unfairness on both sides. 
 
 Now, that is a branch of investigation which this commission, if 
 appointed, can take up and judicially determine from the actual 
 facts which of the methods already in use in this country (and we 
 have almost every method that was ever in use in any country in 
 use here) is operating best for the common advantage, and then 
 determine whether the Congress of the United States, under a Con- 
 stitution which opened with a preamble that one of the purposes of 
 that Government is to promote the general welfare of its people, 
 has any office to perform in that regard. 
 
 Now, there is another thing. The report of the Commission on 
 Workmen's Compensation and Employers' Liability, the Federal 
 commission, has been before Congress for three years past. It was 
 a very partial and incomplete report in many respects. It covered 
 only railroad employees. It did not even cover the other classes of 
 employees that are in interstate commerce or in foreign commerce. 
 It gave no protection to sailors, either upon the high seas or upon 
 the rivers and lakes. It would have only given protection, had it 
 passed, to railway employees, and the protection which it offered to 
 railway employees was bad in form, as it created the condition where 
 there would be one constant contest between the railroad company 
 and the injured employee, and thereby the union to which he belonged; 
 and these provisions made it so unsatisfactory and unacceptable to 
 the railway employees that the only workmen's compensation legis- 
 lation in this country that has been defeated by the opposition of the 
 workingmen themselves was this same bill reported by the Federal 
 commission. 
 
 Now you have an opportunity, through the new commission which 
 you would establish, to study that question, study the previous report^ 
 conclude wherein it was faulty, and then conclud^ whether this 
 Government could not at least cover all interstate and foreign, com- 
 merce employees, including sailors upon the high seas, rivers, and 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 11 
 
 lakes, whether in interstate commerce or foreign commerce, and also 
 whether it might not be able to introduce a perfected system of work- 
 men's compensation for all the worldngmen of our country, so that 
 a man who was injured in one State in the course of labor would 
 not be treated differently from one who was injured in another 
 State, which is a more or less ridiculous thing for us to permit in 
 this Nation of ours. 
 
 Then you come to unemployment. I remember very well having 
 said to Mr. Varley, who was at the head of the Ghent system of 
 employment insurance — the first that made a success in Europe — and 
 who is now secretary of the International Association of Unemploy- 
 ment, that in my opinion unemployment insurance was a matter 
 which could be scarcely carried on successfully except on a national 
 scale — that is, with any great or marked success — owing to the fact 
 that your local fund in a city can easily be completely swamped by 
 local conditions and owing to this further fact that one of the most • 
 important reasons why we should have a social insurance system 
 and an unemployment system was so that we can get at causes ; and 
 we can not get at causes that are widespread throughout an entire 
 nation by merely having a local fimd. If we have a national scheme, 
 a national plan, then the causes that are operative throughout the 
 entire Nation come to hght. I remember naming to him, as an in- 
 stance, when I was at Zurich at a meeting of the International Asso- 
 ciation for Labor Legislation, before the Litemational Association of 
 Unemployment had been estabUshed — I remember stating to him one 
 instance which I am sure wiU interest the members of your committee, 
 viz, that we had the very pecuhar, laughable, ridiculous, and shameful 
 condition in 1893 in the United States, owing to our foUy and our 
 inability to deal otherwise than as a poUtical question, to be fought 
 out in rancor between the two parties, with the currency of our Na- 
 tion, which since then has been so much more successfully dealt 
 with — we had the absolutely shameful condition where miners were 
 starving in Pennsylvania because coal could not be sold, and the 
 farmers were burning their com in Kansas because they could not 
 get coal; and I said to him that a local association like he had in 
 Ghent, on unemployment, could not by any possibility take care of 
 a situation Uke that or get any hght on it or see any more about it 
 than I was able to see, while a national association on unemployment 
 would find that a real investigation, not on partisan lines, not in order 
 to cairy out some special doctrine or some special theory, ought to be 
 made relative to those things which should operate to facihtate ex- 
 change, but which in practice at times broke down and operated to 
 prevent exchange. 
 
 I speak of this as illustrating the fact that those of us who have 
 given the most attention to this subject of unemployment insurance 
 are quite of the opinion that it can not be, with any real or marked 
 success, coped with except through Federal action. That view was 
 adopted on the recommendation of a namesake of mine, who, by the 
 way, is not a relative, or a man whom I know personally, Mr. William 
 Harbridge Dawson, an eminent Englishman, by Lloyd George, and 
 was adopted as a part of the insurance plan introduced in Great 
 Britain a few years ago; and, although criticisms have been made 
 against the sickness insurance plan in Great Britain, which was not 
 quite so well conceived and carried out, I have not heard of any very 
 
12 SOCIAL INSURANCE AND UNEMPLOYMENT, 
 
 serious criticisms of their unemployment insurance plan. On the: 
 contrary, I think its operation is regarded everywhere as one of the, 
 shuiing successes of the whole social insurance movement. 
 
 I have but one matter more to mention. I have written the chairr 
 man of your committee abeady about it and I now call it to your, 
 attention and also to the attention of Mr. London pubUcly, whom I 
 have also already written about it. I think it would be wise if this, 
 resolution were changed — it is my impression ; I will put it up to you — 
 so that, instead of a commission you would have either a committee 
 of the House of Eepresentatives or a joint committee of the two Houses 
 of the Senate and House of Representatives. My reason for think- 
 ing that is that the work of the committees — take the Pujo committee- 
 as an example, and several other committees — has in recQnt years 
 been very much thorough and much more satisfactory and has 
 resulted in something much more frequently than the work of a com- 
 mission. I am not fuUy informed as to the power of a commission. 
 I doubt if I could get the information, either, by searching the 
 decisions. 
 
 The power of Congress to delegate authority to its own committees, 
 is complete. That has been settled long, long ago. The House of 
 Representatives can vest one of its committees, so far as the requiring, 
 of attendance of witnesses, the production of papers, and everything 
 of that sort is concerned, with such power as it has itself, because that- 
 committee comes back to itself to enforce its orders. I know that 
 in the work of the Armstrong committee, in New York, in the great 
 insurance investigation, where I was Mr. Hughes's chief assistant, we 
 considered that of the very greatest possible importance; and you 
 may remember that we forced the attendance of men of great emi- 
 nence in the United States, some of whom were most reluctant wit-, 
 nesses, and we required their testimony concerning things about 
 which they were even advised by counsel that they could not be. 
 required to testify. That advice was not good, and they appeared 
 and testified. I know that it was Mr. Hughes's opinion that the 
 power of a committee to do this expired with . the legislature that 
 appointed it, on December 31, at midnight; and I am quite confident 
 from what little I have looked into the matter myself, and I have, 
 looked into it somewhat, that a commission practically gets all its 
 testimony by pure courtesy of the person who appears and .testifies; 
 that he absolutely could not be compelled to do so at all. 
 
 That is one reason why I think a committee of the two Houses 
 would be preferable to a commission. Another reason is that a com- 
 mittee of the two Houses would be fully familiar with what it was 
 undertaking, experienced in legislative matters, and matters con- 
 cerning Congress. 
 
 Now, there is one objection to that course, and I should mention 
 that along with the other. It is that such a committee would have, 
 of course, only persons who are Members of Congress upon its body;.; 
 consequently could not select persons who are connected with labor,' 
 organizations who were not in Congress, persons who are connected 
 with the employers' organizations who were not in Congress, nor^ 
 persons from colleges, or experts upon the subject, and so on, to 
 serve. I personally do not consider that that is of any great impor- 
 tance. The most unportant thing is that the committee should be, 
 so organized that there would be brought before it in an orderly,. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 13 
 
 fashion, without there beiag any possibility of the information being 
 withheld, and to that end the cooperation of those in our country 
 'Who are interested in this subject, both in favor and against social 
 insurance, could easily be obtained. 
 
 The most successful investigation, I think, by general consent in 
 the whole country was the insurance investigation that I referred to. 
 It was presented to a committee, as I am presenting this to you to-day, 
 the counsel of the committee having entire charge, and being persons 
 in whom the committee had confidence. The result was an assem- 
 
 ■ blage of evidence on the insurance evils in New York, which was not 
 only convincing to the Armstrong committee, but to the entire pubUc 
 
 ' and to the legislature, and was an investigation of such a character as 
 that, by common consent, of even those who were most opposed to it 
 at the time. The legislation that followed has been an unmitigated 
 constant blessing to the people of the United States, including those 
 engaged in the insurance business, ever since ; and 1 have more confi- 
 
 'dence personally that you would produce the best results by the ap- 
 pointment of such a committee or by doing the work through this 
 committee than would come by the adoption of the resolution in 
 exactly its present form. 
 
 ■ Mr. London knew my opinion about that and had no objection to 
 my speaking to this committee about it ; otherwise I would not have 
 done so. 
 
 Mr. SxJMNEES. You stated there that since this insurance had been 
 established in Germany that the period of longevity had been extended 
 " 12 years. I just wondered if you would state very briefly how you 
 connected that up with this insurance. Of course, a great many 
 things have happened in Germany for the betterment of conditions 
 whidi surround the workingman. You stated that 12 years had been 
 added and that those were 12 years during the productive period. 
 
 Mr. Dawson. Chiefly; yes. 
 
 Mr. SuMNERS. Could you state very briefly 
 
 Mr. Dawson. Well, the increase of the average age of the German 
 people during the period that I refer to was from about 36 years to 48. 
 'Now, a great deal of that, of course, was in the preservation of infant 
 life— there is no doubt about that — so that there was some part of the 
 ■12 years that was there represented. That was at ages under the age 
 when people become productive ; but vastly the larger part of the 
 average of 12 years added to a hfetime was between the ages of, say, 
 18 and about 60. 
 . Mr. SuMNEES. That is all, sir. That answers it. . 
 
 Mr. Dawson. Of course, social insurance was not the only thing, 
 but you must realize it must have been the greatest thing, because 
 'social insurance covered aU the working population of Germany dur- 
 ing sickness, or as a result of accidents, and aU those things, so you 
 see that made directly for longevity. .... 
 
 ■ Mr. Beowne. When you began your 12 years' experunent did you 
 have accurate statistics up to that time, to show just what the mor- 
 tality was at that time ? 
 
 Mr. Dawson. You mean in Germany? 
 
 Mr. Beowne. Yes. , . . , 
 
 Mr. Dawson. Oh, yes; they had a very good statistics system, and 
 they did know what the average longevity was in 1870. 
 
 ■ Mr. Smith. What is the child-labor Uw in Germany? 
 
14 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. Dawson. Germany's minimum age for child labor, I think, is 
 14 years. There may be others who can answer that more definitely, 
 but I think that is correct. They have, however, an appi entice 
 system. 
 
 Mr. Smith. At what age ? 
 
 Mr. Dawson. I think it is 14 years. They have vocational train- 
 ing before that, however. 
 
 Mr. Smith. Compulsory school education ? 
 
 Mr. Dawson. On, yes, thoioughly; and not only compulsory school 
 education, but compulsory vocational education in the schools^ in- 
 dustrial education. 
 
 Mr. Keating. I would like to suggest to the witness that he place 
 in the recoid, for the purpose of making the record clear for the ordi- 
 nary reader, a definition of social insurance. I think you wiU find 
 that the term is somewhat confusing to a number of people who 
 might be reading the record of this proceeding. 
 
 Mr. SuMNERs. I wish, while you are doing that, that you would do 
 this also, if you will pardon me. I am from an agricultural district, 
 I wish you would place in the record something to show that this 
 sort of insurance does not stimulate the disposition to shirk and be 
 sick, and take advantage of this sickness when you are not sick. 
 You see what I mean ? 
 
 Mr. Dawson. I do. 
 
 Mr. SuMNERs. I wish you would put in the record something in 
 regard to that. 
 
 Mr. Dawson. Social insurance, in general, is the insurance of work- 
 ing men and women, and their families, against those contingencies 
 which do not relate to property, such contingencies as sickness, 
 accidents, permanent invalidity, invalidity due to old age, maternity, 
 the death of parents, or others who are the bread winners of the 
 family, leaving dependent women or children, and the like. 
 
 Mr.' London. And unemployment ? 
 
 Mr. Dawson. Oh, yes, and unemployment. That is correct. 
 Pardom me for the omission. 
 
 Mr. Keating. And the German laws cover those various phases 
 of social insurance ? 
 
 Mr. Dawson. The German laws cover all but unemployment. 
 There is unemployment insurance in Germany, but it is local, in 
 different parts of the country. They have no federal or national 
 system of unemployment insurance in Germany. They have a sys- 
 tem of national or federal unemployment insurance in Great Britain, 
 that is the best of all; and they have one in Denmark, which I 
 
 Bersonally investigated and am very familiar with, and also one in 
 orway. Those are the only three countries that have at the present 
 time federal unemployment insurance. 
 
 Mr. SuMNERs. What, in your judgment, is the proper division of 
 the contribution to be made by the laboring people, by the employers, 
 and by the Government, so as to insure the benefits, without encour- 
 aging indolence, and increasing the ill health of the community? 
 
 Mr. Keating. The committee will be in order. 
 
 Mr. Dawson. May I resume, Mr. Chairman ? 
 
 Mr. Keating. Yes. 
 
 Mr. Dawson. Two questions have been asked, and one of them is 
 whether social insurance has increased what we call technically sirau- 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 15 
 
 lation of being sick or malingering, which means lingering sick or dis- 
 abled much longer than the disablement actually continues. The 
 definition that I have given of malingering, by the way, I think, would 
 help you somewhat to pronounce it. It is not "malinjering," but 
 "malingering" — the "g has a hard soimd. 
 
 . It is perhaps true theoretically if not practically that any method 
 by which workmen are provided even partially with an income while 
 sick or continuing to be disabled will cause them to ren^ain away from 
 work somewhat longer than it would if they had, no such provision. 
 That imdoubtedly is true. Many a man has continued at work when 
 he ought not to be at work, because he could not see his family .suffer, 
 and because he had not the means to command the medical attention 
 and nursing that he requires. To what extent it may have caused 
 some people to pretend that they were still disabled after the dis- 
 ability has entirely disappeared is always an open question. 
 
 You wiU find men who represent the Prussian "Junker" crowd — 
 most of us feel that the conduct of Germany is not, perhaps, entirely 
 wan anted in the present war, and know perfectly well who has been 
 responsible for all of the things that- we do not like in that war, as 
 well as pretty much all of the things in the Geiman handling of 
 matters that we do not like. It is quite true that the representa- 
 tives of the "Jimker" crowd — meaning the "younger nobihty" — 
 and that includes old. men as well as young men — have always, 
 because they were opposed to everything that the others stood for, 
 shouted that it was causing all of the workmen of Germany to become 
 shirks. Diiring the period that they had been making those charges, 
 you will have to bear in mind that the efficiency of the German work- 
 man has been raised to the nth, power, and somehow the result of 
 that shirking seems to have been better than where there has been 
 no shirking in other countries. 
 
 In regard to simulation — the pretending that one has a disease 
 right from the outset when he has none — it is almost impossible to 
 tell. The excellent medical organization under a good social insur- 
 ance system renders it almost absolutely impossible; but there may 
 be, ancl perhaps have been, cases where, when a man, when he was 
 actually disabled at the outset, has been able to fool the doctors for 
 a time as to whether he was completely recovered. The induce- 
 ment to do so is very small. It would only be a man of very infe- 
 rior character who would think of doing it, because he is depriving 
 himself of a very much larger income than the insurance furnishes, 
 and, besides, he is put under verv severe restraints. He has to stay 
 in the house, and even, possibly, in bed, in order to obtain the 
 benefit. But such things may happen. 
 
 A very grtat American philosopher, Ralph Waldo Emerson, once 
 wrote a perfectly splendid tssay called "Compensation." It is 
 probable t5iat we could never have any fairly good thing in this world 
 without some compensation. 
 
 Another great philosopher, who wrote in verse, said something 
 about little fleas hd-vdng lesser fleas upon their backs to bite them, 
 and lesser fleas still lesser fleas, and so ad infinitum. In other words, 
 I do not expect that we wiU ever have anything so perfect that there 
 may not be some little matter agaitist which we have got to guard. 
 
 As regards the distribution of the cost which I would recommend — 
 which is the second question — my answer is purely my personal view, 
 
16 SOCIAL INSTJEANCE AND UNEMPLOYMENT. 
 
 and it would be better to canvass the matter by the commission if 
 appointed or by the committee if appointed. To distribute the cost 
 ■of social insurance between the workmgman, the employer, and the 
 State is recognized everywhere by experts on the subject as war- 
 ranted in all forms of ^social insurance excepting accident, where the 
 thing occurs or grows* purely out of the industry. It is well recog-. 
 nized that there should be a contribution by the workman, because 
 he is receiving a direct benefit that has no relation to the carrying on 
 
 ■ of the industry, a large number of sicknesses being sicknesses that the 
 people in safe occupations have. Death also is common to all of us 
 without regard to occupation, although a certain proportion of deaths 
 are caused by occupation. Contribution by the employer is war- 
 ranted as a means of causing the cost of sickness insurance above what 
 
 ■ it would cost in safe occupations to be paid by the consumer as a part 
 of the cost of the product. That makes, also, for pre^^ention. 
 
 The contribution of the State is warranted, because if this is taken 
 " up as a State or national matter, it is taken up for the reason that I 
 originally gave, because we have concluded that it is for the gen- 
 eral welfare of our people. Its benefits are not confined to the im- 
 mediate recipients of the insurance. The benefits ia Germany have 
 not been confined to the workmen and their families; they have 
 accrued to the whole German people. If we could increase the 
 average lifetime of the American people by any such period as 12 
 years, largely falling within the productive period of life, I think we 
 would all say that it would be a tremendous benefit to the whole 
 American people. If we could increase the eSiciency of our people, 
 ' so that their productiveness was greater, a similar result would lol- 
 low. Everything, in other words, that tends to make a better people 
 is to the advantage of the whole people. There is no reason why a 
 part of the cost should not be borne by the Government. We have 
 settled the question in the United States that the supervision of our 
 general affairs, when carried on by the Government, should be paid 
 for out of Government funds, and this, if introduced at all under any 
 system, even if it was purely a voluntary system, would nevertheless 
 caU for supervision and there would be the same ground, therefore, 
 for contributing toward that cost as there would be for voting an 
 appropriation to the commission which I hope you will appoint. 
 
 Mr. Keating. We thank you very much, Mr. Dawson. The com- 
 mittee has appreciated your testimony. 
 
 STATEMENT OF DR. JOHN B. ANDREWS, SECRETARY OF THE 
 AMERICAN ASSOCIATION FOR LABOR LEGISLATION, NEW 
 YORK CITY. 
 
 Mr. Keating. Give the stenographer your name, occupation, and 
 - residence. 
 
 Mr. Andrews. John B. Andrews; secretary of the American Asso- 
 ciation for Labor Legislation; 131 East Twenty-third Street, New 
 York City. 
 
 Gentlemen of the committee, I am very glad indeed to take this 
 
 opportimity to go on record definitely in favor of the most careful 
 
 study of social msurance, because it seems to me clear, now, that 
 
 "insurance against sickness, better known as health insurance, is just 
 
 • as inevitable in America at the present time as we can now see that 
 
SOCIAL INSTJEANCE AND UNEMPLOYMENT. 17 
 
 workmen's compensation for industrial accidents was inevitable five 
 or six years ago. 
 
 It is clear that we have entered in this country, just as they have 
 entered in all the leading countries of the world, upon careful investi- 
 gation of industrial conditions, and upon the most constructive pro- 
 posals for meeting industrial evils; and it has been found in many 
 countries of the world that there is a device which has been most 
 effective in bringing about the right kind of careful consideration of 
 these evils, in order to bring about their prevention. This device is 
 the insurance method. It has .been successful in dealing with work- 
 men's accidents, because it places a continuous economic pressure 
 upon those -who are responsible for the bad conditions. It brings 
 about, furthermore, the cooperation in a very direct way of those 
 who must be vitally interested personally in preventing the injuries, 
 partly because in that way they can reduce the cost of the insurance. 
 
 There is nothing, therefore, too idealistic about the method of 
 insurance. It is exceedingly practical, and in no way has its practi- 
 cableness been shown with greater convincingness than in the pre- 
 vention of injiu'ies. I assume that the resolution or bill which is 
 before the committee this morinng is open to change, if it is recom- 
 mended by members of this committee to the House, and I believe 
 it should be made perfectly clear that this will be a scientific, careful 
 study of the problems for the purpose of providing a proper solution 
 of them in this country. 
 
 With these few remarks in order to go on record for this investi- 
 gation of social insurance, I will close. 
 
 Mr. London. You refer to sickness insurance only. Do you limit 
 yourself to that ? 
 
 Mr. Andrews. I have spoken especially for health insurance, but 
 I am content that the same system be used for meeting other con- 
 tingencies in the life of the worker. I have no hesitancy in saying 
 that I believe this investigation should be made very broad, and not 
 merely to include the study of sickness insurance. 
 
 STATEMENT OF ME. ETJFUS M. POTTS, IlfSTJEANCE SXJPEEIN- 
 TENDENT OF THE STATE OF IlIINOIS, AND CHAIEMAM" OF 
 THE COMMITTEE OF THE NATIONAL CONVENTION OF 
 INSUEANCE COMMISSIONEES TO INVESTIGATE SOCIAL 
 INSXJEANCE, SPEINGFIELD, ILL. 
 
 Mr. Keating. Give your name, address, and occupation to the 
 stenographer. 
 
 Mr. Potts. Rufus M. Potts; I am insurance supermtendent of the 
 State' of Illinois, chairman of the committee of the National Conven- 
 tion of Insurance Commissioners appointed in December last to 
 investigate the subject of social insurance. I reside at Springfield, 
 
 As chairman of that committee I started to work several employees 
 to determine the exact status of the working people and the masses 
 in general, in the United States, and of the European countries that 
 have social insm-ance, and of countries that do not have social insur- 
 ance. We assembled every pubUcation deahng with this question 
 that could be reasonably obtained, printed in the English language, 
 
 39501—16 ^ 
 
18 SOCIAL INSTJKANCE AND UNEMPLGYMENT. 
 
 and then I had one man who reads, writes, and translates French 
 and German to investigate the pubUcations of those countries dealing 
 with this question. We have assembled all information obtained in 
 the various publications, and now have my report ready to present 
 to the commissioners on the 17th of this month at its meeting iia 
 St. Louis. I have the preliminary report with me, but at the present 
 time it stands as the report of myself and not of the members of the 
 committee, as they have not had an opportunity to inspect same, 
 and I do not wish to file it until I have their approval and consent 
 that it be filed. 
 
 In the study of this question, I am convinced that it is the most 
 important social and economic question before the world to-day. 
 It is the only medium of effectuating social justice. It is the system 
 whereby individual wage earners are able to capitalize their earning 
 capacity for themselves and with the cooperation of the Govern- 
 ment for both the Government and themselves, instead of it being 
 capitalized, used, consumed, and destroyed by their employers as is 
 done in many cases. It not only provides a method of capitaliz- 
 ing the earning power of industrial worker, but applies likewise to 
 all producers, breadwinners of moderate means and circumstances. 
 It is serviceable to the laborer in the agricultural districts; in fact, 
 it is indispensable in every field of endeavor where the producer 
 receives less income than is necessary for his proper maintenance 
 and the support of himself and his family or dependents, according 
 to the American standard of living. Therefore it will affect at least 
 50 per cent of the wage earners of the United States, as more than 
 that number receive less than a sufl&cient sum to support their 
 families and educate their children in keeping with the American 
 demand for human maintenance, upbuilding, and wholesome living. 
 
 Mr. SuMNEES. May I interrupt you right there to ask you to 
 explain how taking care of these sick people would increase the 
 ordinary earnings of the people who are not getting enough in a 
 state of health to take care of them ? 
 
 Mr. Potts. Beginning with the fundamental principle that our 
 people are our greatest asset and to produce the greatest good to the 
 greatest number should guide aU operations and that human effici- 
 ency is the chief basis of all achievements, then when we establish a 
 system that increases human efficiency by overcoming in so far as 
 possible sickness and all other things that make them mefficient, we 
 are standardizing human surroundings, raising our chief asset to its 
 highest value and are leading toward social, economic and Govern- 
 mental altruism. The efficiency of our people or lack of efficiency 
 of our people, that is, of the masses, is the greatest and most disturbing 
 problem we have to contend with to-day, and when by a system oi 
 social insurance we up-build our greatest asset by giving them oppor- 
 tunity to have human comforts, by making them well, by placing 
 them where wholesome surroundings keep them well, by securing 
 for them sufficient wages so that they may purchase wholesome food, 
 suitable clothing, obtam good housing, we have brought about a most 
 remarkable standardization of our people. This condition we hope 
 will come in the next few years and can only come through the \mi- 
 versal adoption of social insurance. "When we raise the standard of 
 our individuals, we do likewise of the community, of society as a 
 whole, of our States, and of our Nation. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 19 
 
 Mr. SuMNEES. I agree with you there, but what I was trying to 
 get at is, how the insurance of a man against sickness is going to meet 
 the situation, when he is not getting enough really when he is well. 
 
 Mr. Potts. To provide for men when they are sick and to be able 
 to tide them over during the interval of sickness, is a social and eco- 
 nomic question that can be worked out as easily and applied as faith- 
 fully, as is now being done through sickness occurring to persons 
 from occupational diseases under workmen's compensation. The 
 same method and the same procedure should be followed for that 
 purpose. There is no question but what the fact of the recurrence 
 of illness in communities and to individuals is of such imiformity and 
 certainty, as to be utihzed as a foundation for establishing a table 
 of rates whereby a proper premium basis can be obtained that will 
 produce a sufficient amount of money to provide for sickness when- 
 ever it occurs. That amount of money, as said by Mr. Dawson, wiU 
 not be equal to the amount earned by the person to whom it is paid. 
 The question of simulation and malingering — simulation, of course, 
 in sickness — wiU not have a disturbing effect, because he only gets 
 enough to tide him over his illness and keep him out of the abyss of 
 poverty, whUe if working, he gets enough to keep him within his usual 
 standard of Hving according to his wages. 
 
 Another feature is, that sickness insurance is limited to a certain 
 nimaber of weeks in a year, and it is likewise limited in some countries 
 in proportion to the amount paid into that fund or contributed by the 
 producers themselves. The man who is not a producer contributes 
 but little to that fund, and would be able to sec\ire but little from it 
 in case of sickness, and a man assuming "simulation" who is not a 
 producer under tne system of social insurance, wiU become as much 
 of a disgrace as our tramps of to-day or present idle rich, who exist 
 as inexcusable leaches and pests on the society of this coimtry. The 
 amoimt and method of payment in such cases is purely an actuarial 
 problem wnich actuaries will be able to work out and which wiU in 
 no sense become burdensome, because the number of weeks is limited 
 and the amount of payment is also graduated and hmited. 
 
 Mr. SuMNEKS. Wtiat percentage of this insurance ought to be taken 
 care of by the employee, and wnat percentage by the employer, and 
 what percentage by tne Government 'i 
 
 Mr. Potts. Tnat would vary somewhat, depending on the manner 
 in which it is administered and the necessary expense attendant to 
 its effectuation. 
 
 Mr. SuMNEKS. Take our Government here in the United States. 
 
 Mr. Potts. In our Government the Government itself should pro- 
 vide for the administration of the insurance either by the payment of 
 a sufficient per cent of the fund or to administer it as a governmental 
 function. 
 
 Mr. SuMNERS. In addition to the administration expense, should 
 the Government make any contribution ? 
 
 Mr. Potts. If the Government administers the fund itself, which 
 is the only and final solution of this question, I doubt if the Govern- 
 ment should make any further contribution to the fund; but if the 
 fund is administered, as is being done now in various parts of Europe, 
 whereby the Government contributes a small per cent, the employer 
 a reasonable per cent, and the employee also a reasonable pet cent, 
 
20 SOCIAL INSUEANCE AlfD UKEMPLOYMENT. 
 
 local conditions would govern as to the per cent each should contri- 
 bute. If the sickness results from occupational diseases, it might 
 necessarily be charged as a part of the industry and the whole amount 
 paid by the employer, just as is done now in workmen's compensation 
 m this country, and, in that event, under a proper development of this 
 system of social insurance — when it once gets to where it maintains its 
 normal balance, which it will after a reasonable tryout — the Govern- 
 ment should administer it, the employee should pay possilby 40 per 
 cent and the employer 60 per cent. In case of trade unions haying a, 
 considerable number of members, like they are in my State in the 
 miners' union, the estimated payment could be added to the annual 
 wage-scale agreement and cared for as an overhead charge to the cost 
 of production. Likewise, the employer would add his payments also 
 to his cost of production, and it will extend upward to where the whole 
 of society meets this loss and carries the burden instead of percolating 
 downward, as it does now, whereby it is borne by the wage earners, 
 causing an oppressive condition that is distressing beyond tolerance 
 in the United Statps. 
 
 Mr. SuMNEES. Is it better to have the community as the unit? I 
 hope you will pardon me for asking these questions. These other 
 folks are all wise about this matter, but I am trying to find out for 
 myself. 
 
 Mr. Potts. I am glad to have you ask them, and I will answer 
 them if I can, and if I can not there are others here who will be able 
 to do so. I do not wish to announce a stand on that proposition 
 at this time, because there are so many things entering into it. My 
 judgment is, however, that the final solution will be the whole United 
 States, owing to the fact of the mobility of labor, and that the United 
 States should be the unit in considering this question. 
 
 Mr. SuMNERS. I am afraid you do not get me. Here is a com- 
 munity. I may not have your viewpoint and you may not have 
 mine, but here is a community, and in that community there are 
 many vocations. 
 
 Mr. Potts. The community. 
 
 Mr. SuMNERS. The whole community? 
 
 Mr. Potts. The whole of the community. It is true that many 
 labor unions are able to serve their own members in a very great 
 and advantageous manner by long-established methods of contribu- 
 tions, but that only relieves the members of a specific vocation of 
 certain oppressive conditions borne by the whole of society, and does 
 not maintain a normal balance of the burdens or\ the whole of society, 
 which we are morally compslled to do in this country. Our form oi 
 government requires that the sharing of burdens and the sharing of 
 profits shall extend to all, but the difficulty is one crowd shares the 
 profits and the other endures the burdens. 
 
 Mr. SuMNERS. Which is more economical, to have these funds 
 administered by the people who are the beneficiaries or to have them 
 administered by the Government ? 
 
 Mr. Potts. 'To have them administered hj the Government is-th^ 
 only safe and economic way. It may be administered in a reasonably 
 safe and a fairly economical manner through other channels, whereby 
 those who contribute — the State or Government select a certain 
 number, the employer selects a certain number, and the employees 
 select a certain number — each in proportion to their respective con- 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 21 
 
 tributioris, and they jointly acting as a commission majr administer 
 the funds with reasonable safety, and on account of being close to 
 those who receive the benefits of the fund possibly some advantages 
 may come from such source. 
 
 Mr. SuMNEES. I do not want detailed answers. I am selfish; I 
 am just trying to get it into my head, and pardon my disposition to 
 shut you off when I get it. Where there are two people in the com- 
 munity earning different salaries and making different contributions 
 to this fund, in the event those people get sick, on what basis are 
 they paid ? 
 
 Mr. Potts. That would be an actuarial question, to be determined 
 upon an equitable basis. Those who contributed a certain portion 
 should be paid commensurate to the percentage contributed, sharing 
 equitably in the fund. 
 
 Mr. SuMNEBS. It is not put on the basis of necessity, but on the 
 basis of contribution ? 
 
 Mr. Potts. Necessity would make contributions sufficient. I do 
 not mean necessity, but I mean the benefits of this fund in its admin- 
 istration should be such as would make contributions sufficient to 
 meet necessities. 
 
 Mr. SuMNEES. You take the fellow that earns S5 and the man 
 who earns $6, he is just as sick as the feUow who makes $6. 
 
 Mr. Potts. That is true; but the amount paid to him must depend 
 in some measure upon his producing capacity, and likewise it must 
 be graded somewhat in accordance with the surroundings that cover 
 each class of industry. 
 
 Mr. SuMNEES. But when he is sick it is not merely the dollar he 
 has lost, but the physician that he h.^.s got to have and the food. 
 
 Mr. Potts. Those are combined actuarial and economic ques- 
 tions, and are only wheels within wheels. They do not go to the 
 fundamental principle, but in my judgment equitable plans for all 
 industries, taken as a part of the entire industry of the country, 
 can soon be worked out. Wherever possible a greater producing 
 
 {)ower would contribute, proportionately at least, to the fund of a 
 ess producing power, whereby it would seek its level somewhere, 
 and the work of society must operate and follow some well estab- 
 lished and equitable plan for the protection of the entire masses, 
 rather than various divisions thereof. 
 
 Mr. London. Before you leave this subject, will you kindly tell 
 us how the commissioners of insurance came to take up the subject 
 of social insurance ? 
 
 Mr. Potts. Demands for relief for the poverty-stricken people 
 in the United States, who are suffering from a most imperfect, waste- 
 ful, and unscientific method of being cared for, have arisen in a num- 
 ber of the States, and being an insurance problem, has been pre- 
 sented to the various insurance commissioners, and it is the policy- 
 of the National Convention of Insurance Commissioners to deal 
 with insurance problems, in so far as possible through committees, 
 and the agitation in the respective States caused the commissioners 
 to appoint a special committee for the purpose of investigating all 
 of these social insurance questions, and such allied questions as are 
 interwoven therewith, and report the result of their investigation 
 to the whole body. 
 
22 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 Mr. London. And you are the chairman of that committee? 
 
 Mr. Potts. I am the chairman of that committee. 
 
 Mr. Browne. I would hke to ask one question. 
 
 Mr. Potts. Certainly. 
 
 Mr. Browne. We have State insurance in Wisconsin, the State 
 that I represent. ' 
 
 Mr. Potts. Yes, sir; you have been administering a State life 
 fund, and also a fire-insurance fund for State property. 
 
 Mr. Browne. We sell insurance at considerably less than the reg- 
 ular old-hne life insurance company. 
 
 Mr. Potts. Yes, sir. 
 
 Mr. Browne. But we have found this difficulty that I do not 
 know but what would arise under any social insurance: We have to 
 compete with the old-hne and the assessment hfe insurance com- 
 panies. They have agents in the field that are going about from 
 place to place sohciting insurance. 
 
 Mr. Potts. Yes, sir. 
 
 Mr. Browne. Now, the State does not do that. It has that insur- 
 ance law. The people can apply to the State, and it sends out its 
 blanks to the coimty clerks and county oflSicers around in each of the 
 71 counties that we have in the State, but we are not writing the insur- 
 ance that we expected to, because of the competition of these agents 
 that are sohciting insurance and misrepresentmg the State insurance 
 pohcies. , 
 
 Mr. Smith. Do they write mutual or stock insurance ? 
 
 Mr. Potts. No, sir. 
 
 Mr. Browne. It is on the mutual plan, I think. 
 
 Mr. Potts. You have two forms of State insurance in Wisconsia, 
 One is the administering of a hfe fund, and the other is the insurance 
 of the State's property by a fire fund. 
 
 Mr. Browne. Yes, sir. 
 
 Mr. Potts. The administering of a life fund in the State of 
 Wisconsin has been very ably and carefully established, and is a 
 fund that wiU itself finally succeed, but it has been abandoned by 
 the present State officials to die. Under the supervision of Insurance 
 Conmiissioner Eckern, of Wisconsin, that fund was greatly stimulated. 
 The new commissioner appears to be not in harmony with the hfe- 
 fund plan, and it is existmg simply without any support whatever. 
 Now, this fimd can not compete with the ordinary system of in- 
 surance for this reason: Insurance institutions have solicitors, and 
 insurance salesmanship is what brings insurance, and the people have 
 not yet become convinced of the necessity of universal insurance or 
 general insm-ance sufficiently to voluntarily support that fund. The 
 way to make a State fund successful would be to make the in- 
 surance compulsory, making the insurance compulsory and leaving 
 it optional with the instirer as to the institution in which the in- 
 surance is to be taken; then under such conditions the State fund will 
 outstrike all others in a very short period of time, with permanent 
 success certain. 
 
 In Wisconsin it is temporarily impossible for this fund to succeed, 
 because nobody wants it, nobody supports it, everybody is hoping 
 that it win die; that is, the present pohtical power reflects this 
 attitude — with all due respect to the able men who are in — but they 
 were elected with this pomt in view, and the effort of the present 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 23 
 
 administration seem? to want to undo the "Wisconsin idea," as they 
 call it up there, which was estabUshed by the previous administra- 
 tion, and the "Wisconsin idea" has been strongly combated by the 
 reactionaries who are in charge at the present. 
 
 Mr. Browne. I was in the legislatm-e when that fund was es- 
 tabhshed, and I am in favor of the "Wisconsin idea"; but while that 
 insiurance was a sort of disappointment in its growth because of the 
 competition of the other companies, and now of course under another 
 administration, with the State administration against it, we do not 
 look for it to succeed. 
 
 Mr. London. And then it dealt only with life insurance ? 
 
 Mr. Potts. Only with the administration of a Hfe fund. It does 
 not insure but administers an insurance fund, but there is no way of 
 getting anybody in, because the insuring public do not take it upon 
 themselves to b]iy insurance over the counter, while there is an army 
 of agents after every fellow who is an insurable risk, and every argu- 
 ment is presented and excuse urged why he should give him the in- 
 surance and avoid the State fimd. 
 
 Mr. Browne. My point was, would not this insurance of the Gov- 
 ernment have to compete with all of these agents, like the Metro- 
 poUtan Life Insurance Co., that is going around and inguring people 
 and getting their 5-cent pieces, etc. ? 
 
 Mr. Potts. That is true, but the insurance will go to a national or 
 State fund, for the reason that it is compulsory, and the Government 
 would be able to administer it at a much less expense and is a much 
 safer institution, and grant insurance upon a mucii more advantageous 
 basis than is possible by any voluntary insurance institution. There- 
 fore, the compulsion to take out adequate insurance will drive the 
 man who takes it to the best possible bargain counter and that wiU 
 always be his government or State. 
 
 Mr. Browne. Do you think it would be constitutional to have it 
 compulsory ? 
 
 Mr. Potts. I do. A compulsory social insurance act comes clearly 
 within the "promote the general welfare" provisions of the Federal 
 Constitution. The wording of the preamble of the Constitution places 
 a duty upon Congress to "promote the general welfare" of our people, 
 and investigation shows that social insurance is the most serviceable 
 medium of carrying out this duty. 
 
 Mr. London. You have been practicing law for 25 years, as I 
 understand it ? 
 
 Mr. Potts. Yes, sir; and I wish I had continued at it instead of 
 becoming an insurance commissioner. 
 
 There is only one difficulty that occurs in any of these systems of 
 insurance that could, in my judgment, be urged against a system 
 of social insurance, and that is equally applicable to workmen's 
 compensation laws, which has been upheld by the courts of several 
 of the States; but the exact point seems not to have reached the 
 Supreme Court of the United States but has reached the Supreme 
 Court of the State of Washington, and there the law was sustained. 
 
 There are two of the amendments to our Constitution, the fifth 
 and the fourteenth, I believe, which contain provisions prohibiting 
 the taking of property without due process of law, ana when an 
 employer is compelled to insure his employee against loss resulting 
 from negligence exclusively upon the part of the employee, then the 
 
24 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 question is, when you are compelling him to pay for something for 
 which there is no legal obligation whatever upon his part, is the taking 
 of property without due process of law. When that feature of it 
 is elimmated, or finally passed upon by the Supreme Court, then all 
 questions involved will have heen disposed of. In any event a law 
 could be so drawn to leave a legal option to aU concerned, but provide 
 such severe penalties as is now done in workmen's compensation laws 
 as to make the law in fact compulsory. 
 
 Mr. Browne. New York decided that the law was unconstitutional. 
 
 Mr. Potts. The first law they did, but they afterwards reenacted 
 a law in conformity with the Constitution, leaving out those portions 
 of the original act which the court decided had contravened their 
 State constitution. 
 
 Mr. Dawson. And it has been held constitutional by the New 
 York courts, and is now before the Supreme Court of the United 
 States. 
 
 Mr. Keating. Permit the Chair to suggest that under our pro- 
 cedure these questions are supposed to be asked after the witness has 
 concluded his statement. Iiiey were permitted in the case of Mr. 
 Sumners because he had to leave and go to another committee meet- 
 ing, but I think it would be well to permit the witness to conclude his 
 formal statement, and if members wish to ask questions they should 
 make a note of them and ask them after the formal statement of the 
 witness has been completed. 
 
 Mr. Potts. Continuing further on the point in relation to the con- 
 stitutionality of this law — of course the Supreme Court of the United 
 States must decide the constitutionahty of any social insurance act 
 and our opinions are the "lawyers guess" at this time — but as here- 
 tofore stated, under the preamble of our Constitution which creates a 
 duty of promoting general welfare, and under section 8 of Article I, 
 in outlining the powers of Congress the general welfare provision is 
 again included which forcibly indicates that the Central Government 
 should do all things which are necessary to promote the general wel- 
 fare of our people and of the United States. Hence a law providing 
 for a national system of social insurance based upon an investigation 
 made by this committee, which investigation determines the neces- 
 sity for such a law, and the committee report become the basis of the 
 law, such a law could never be held unconstitutional upon fundamental 
 reasons. It is the pubhc policy that remedial legislation shall be 
 based upon some pubhc necessity, and that the public necessity for 
 such legislation should be determined by a committee of the legisla- 
 tive body. For instance, I recall one case where one of the reasons 
 assigned for holding the 2-cent passenger tariff law illegal was that 
 the Taw was passed by the legislature without having made any inves- 
 tigation to determine whether or not a 2-cent passenger fare was 
 reasonable. In other States investigations were made by proper 
 authorities and the fact determined that the 2-cent passenger fare 
 was sufficient and a reasonable compensation and made the basis of a 
 law which was upheld. 
 
 If this legislative committee carries out the resolution, preferably 
 by the committee itself or subcommittee instead of any commission, 
 and makes a thorough and complete investigation of this subject, 
 and from their investigation finds that a system of social insurance 
 will promote the general welfare of the people, and of the United 
 
SOCIAL INSIJBANCE AND UNEMPLOYMENT. 25. 
 
 States, then all constitutional objections will vanish, and this com- 
 mittee-will have obeyed the constitutional mandates of "promoting 
 pubhc welfare," and rendered a public service unequaled m the his- 
 tory of our National Congress. 
 
 There is another medium whereby national control of social insur- 
 ance institutions is possible. I would not want to give it as a legal 
 opinion, nevertheless it is worthy of consideration. While our Fed- 
 eral and State Constitutions are not exactly upon the same footing, 
 one being a grant and the other a hmitation of power, yet my point 
 is frequently upheld under State constitutions. For example, many 
 things are by statute made a nuisance that clearly does not come 
 within any reasonable definition of the word "nuisance,'- and the 
 State supreme courts invariably uphold this statutory invasion of 
 constitutional rights by making somethig an nuisance which clearly 
 is not. 
 
 Now, then, the Supreme Court of the United States many years 
 ago held insurance was not commerce, and under a most strained 
 system of reasoning, recently rendered an opinion again upholding 
 its original 'decision. But these decisions are based upon the ordi- 
 nary definition of "insurance" and "commerce." The court having 
 difficulty in separating them, in fact, the definitions overlap in many 
 ways. Now, suppose Congress should pass a law defining insurance 
 and designating it as commerce, would not the Supreme Court uphold 
 such a statute, and make insurance subject to congressional regula- 
 tions as provided by the commerce provision of the Constitution? 
 
 Before passing from the consideration of the resolution, I wish to 
 mention that unemployment is given as the prominent feature 
 therein. While unemployment is an important division of social 
 insurance, yet in our investigation we divided the diffwrent branches 
 of social insurance by their availability to obtain statistics, and 
 adaptability of administration, placing similar hazards in the same 
 division, in our report we took sickness, accidents, disablement, 
 or invahdity, unemployment, maternity, old age, and dependency, 
 discussing each separately, and have secured statistics covering the 
 divisions separately. Giving a comprehensive system of social in- 
 surance by its various divisions, believing that some branches may 
 be adopted in some States that might rebel against all in one measure. 
 I am convinced that your committee making the investigation _of 
 this subject will find it necessary to likewise divide the siibject into 
 various branches, but I do not regard it necessary to change the 
 resolution for that purpose. 
 
 The United States must compete mth every nation for commercial 
 and industrial supremacy on the globe. Our utter inefficiency and 
 lack of general preparedness from every point of view is i:ow ap- 
 parent to evtrj' student of national affiirs. In the world's crisis of 
 clashing nations, where efficiency is the test of endurance, those found 
 most efficient, most enduring, and most patriotic are those having 
 the most extensive and far-reaching systems of social insurance. In 
 a few lines of industry our country is now raging with prosperity. 
 The product of this prosperity may be the cause of a clash that will 
 test our national existence, and it will not be those who are reaping 
 the prosperity that will defend our nation when the crisis conies, if 
 it does come, but it wUl be the common people, whom we have for 
 a half century neglected. 
 
26 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 In our country of great natural resources and generally prosperous, 
 one-tenth of our population is in poverty. While statistics differ 
 materially as to the number in actual poverty, owing chiefly to the 
 definition given the word "poverty," yet 10 per cent is a conservative 
 estimate. This condition existing among our people is due to the 
 failure to properly distribute the produc ts of labor, and. when labor 
 is capitalized for the individual and for the Government, and coopera- 
 tion between the two is established, then and only then, can we have 
 a distribution of labor whereby those who produce it will receive a 
 commensurate or at least a reasonable income on the capitalization 
 of their producing power. 
 
 By establishing a national system of social insurance we can give to 
 the mdividual the nationalized life protection, the whole life protec- 
 tion. We begin with maternity insurance, by which a reasonable 
 amount of compensation is provided to insure proper care during 
 maternity, so that the child is ushered into this world under surround- 
 ings which give favorable opportunity of living, and only a system of 
 maternity insurance can reach the mothers who are now destined to 
 bear the population of our future generations. It is the common peo- 
 ple, where race suicide is unknown, to whom we must turn for a 
 sturdy and proUfic stock to upbuild and maintain our people and our 
 nation, and the duty is imperative to care for and look after mother 
 and child, and maternity insurance is the medium through which 
 this may properly be done. 
 
 There are two methods of providing old-age annuities by payment 
 of small sums in early youth. One is " ahenated-capital plan" and 
 the other "reserved-capital plan." At the age of 5 years, under the 
 alienafed-capital plan, by the parent paying for the benefit of the 
 child $200 to an old-age fimd, an annuity of 1350 wiU begin at age 65 
 and continue until death. The reserved-capital plan pays less, but 
 if the child dies the original amount is returned, while under the 
 alienated-capital plan nothing is returned in case of death of the 
 child. I give this only as an example. Similar payments in one sum 
 or small deposits can be made with commensurate benefits. A 
 young man can easily purchase an old-age annuity for himself and for 
 his wife — to be chosen later — ^^by commencing payments early and 
 dispose of the dread of old-age poverty for both before marriage. 
 
 Under systems of social insurance covering accident, sickness, un- 
 employment, and other hazards affecting the breadwinner during the 
 middle period of life, with maternity and old age disposed of, we then 
 have whole life protection, by the automatic dovetailing of social 
 insurance branches. Actuarial science will determine the exact 
 amounts necessary to be paid to produce the desired benefits, and 
 pubUshed tables wiU make this information available to all. We 
 now look for a safe and convenient depositary in which to place the 
 fund not only for safe-keeping but for proper administration, and we 
 naturally and wisely turn to our Government or our State institu-' 
 tions that will not make a profit out of the misfortunes of our people", 
 institutions that will countenance no excessive burdens, institutions; 
 that protect themselves when they protect their people. ;' '"'" 
 
 Insurance in its final analysis is but a tax. It is added to the cost 
 of production by every producer and middleman, and is ultimately 
 paid by the consumer. It is the distribution of the burden of human 
 misfortimes upon the helpless consumer, and in many lines of in- 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 27 
 
 surance the profits are very great, this is especially true with stock 
 fire insurance companies,- which maintain one of the most formidable 
 trusts in America. It is a fundamental mistake for any institution 
 to reap profits out of a business created by human misfortune, and 
 especially where the profits increase the burdens of misfortune. It 
 is likewise a fundamental mistake for any institution to profit from 
 a tax imposed by law or commercial necessity upon the whole people. 
 It is contrary to the fundamentals of our Government for any tax 
 to be burdensome and oppressive, hence an insurance tax which is 
 made burdensome and oppressive by profits, demands corrective 
 legislation. For any insurance institutions to profit out of systems 
 of social insurance would be to legalize the crime of oppression and 
 convert beneficient institutions into gainful occupations. Therefore, 
 the necessity for this resolution must be apparent to all. 
 
 When the European war is over and conservation and salvage of 
 humanity is supplanted for human wreckage, then the nations of the 
 world wiU take rank and be measured by a new standard. The rank 
 and standard wiU be determined by the nations' attitude toward its 
 wage earners — its common people — its masses. All those traditional 
 things which give a false rank and a false standard to nations must 
 now give way to the establishment of a true national hfe and higher 
 human betterment. National and industrial efficiency wiU corre- 
 spond with the degree of efficiency of the people of each nation, and 
 an efficient people can not exist in nations neglecting its wage earn- 
 ers — its common people — its masses, and social insurance is the one 
 and only method of bringing to these people that efficiency that all 
 successful and progressive nations must possess. If our Nation is to 
 maintain a ranking position with the other nations it niust base its 
 elegibility to its assumed rank, by its actual ability to meet aU other 
 nations in national, commercial, and industrial contests, and to sur- 
 vive these tests its people must be as efficient as are contesting 
 nations, and our -Nation must begin at once to grant our people such 
 opportunities and benefits as will permit them to bring self-standardi- 
 zation and the highest degree of efficiency. 
 
 Social insurance is objected to by many on account of its name, 
 and it is unfortunately named. The first time you mention "social 
 insurance" to a man who has not studied it, he imagines that it is a 
 sociahstic propaganda pure and simple, and while I regret that I 
 have not gone into the theories of sociafism sufficiently to tell how far 
 I adopt their doctrine or how far I oppose them, and can not say 
 whether any prejudice is justified or not; yet there is a pronounced 
 pubhc prejudice against the socialist, which is urged by the unin- 
 formed against this question. If the sociahsts are for social insurance 
 this shoiSd for no reason injure its chances of success. It wiU be 
 found that the real opposition to social insurance comes from greedy 
 corporate interests that will be affected thereby. 
 
 Again, the word "compulsion" to the minds of many is offensive. 
 To effectuate this insurance adequately, equitably, and permanently 
 it must be made compulsory. The word " compulsory" is much more 
 offensive than is any compulsory law. The best example of compul- 
 sory social insurance that we have in the United States to-day ia 
 compulsory education, which is social insurance in its purest form. 
 Compulsion, in fact, more or less guides us in every step we take. 
 When I leave my home I have to obey the traffic laws; my house 
 
28 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 must be constructed in accordance with the legulations prescribed by 
 a building code; I can not hunt out of season; my children must obey 
 compulsory school laws. My home is inspected under sanitatioa 
 laws; I depend on the food mspector to see that my groceries are 
 wholesome; yet all these things are for my personal good and the 
 good of the whole community. Compulsory laws are not so objec- 
 tionable as the word "compulsion" is of itself. 
 
 Workmen's compensation laws are compulsory in some States, and 
 practically compulsory in all other States, and social insurance is 
 just as practicable and necessary as is workmen's compensation. 
 We can not now possibly understand how we ever tolerated existing 
 conditions prior to the adoption of workmen's compensation, and to 
 those of us who have gone into the study of social msurance there is 
 exactly the same feeling with respect to this question. The division 
 of humanity that is now remaining unprotected, enduring oppression, 
 poi'prty. and misery makes a continuation of this condition intolerable. 
 
 The money and effort now spent in attempted charity and through 
 poor laws, and almshouses, relief funds, and prisons, from increa,sed 
 crime due to poverty, would be sufficient to maintain a comprehen- 
 sive system of social insurance and result in a hundredfold of increased 
 efiiciency a,nd human and social upbuilding. 
 
 Before leaving the question of compulsory insurance, I have in mind 
 an example I want to give you. Fire insurance is practically com- 
 pulsory, not as a matter of law, but of commercial necessity. No 
 credit will be extended where fire risk is not insured, and a vast ma- 
 jority of all property is compelled to be insured. Now, then, with a 
 compulsory insurance and no national or State fund in which pro- 
 tection can be obtained, leaves the insuring public at the mercy of the 
 fire insurance monopoly. This fire insurance monopoly is maintained 
 by a large majority of the stock fire insurance companies, making fire 
 msurance rates very oppressive and bringing great profits to the trust 
 companies. Fire insurance premiums to-day are at least twice as 
 high as they would be if insurance was granted by a national or State 
 fund. This insurance monopoly is now staggering the Nation. We 
 are unable to control it and can only bring about a slight abatement 
 in a few States where the legislators are not under the monopoly's 
 influence. The necessity of this resolution is apparent to , all who 
 have come in contact with insurance conditions. The fast approach 
 of State insurance to grant relief to an oppressed insuring public has 
 caused the insurance interests of all lines to create a Nation-wide 
 monopoly to resist every step toward State insurance, invading any 
 branch of the msurance business. The agents of each division of 
 insurance have organized State organizations in every State with an 
 added national organization. In furtherance of the plan a federation 
 of the agents of all branches has been consummated with an army of 
 insurance preparedness that will cause this Government to tremble 
 with weakness in its effort to overcome their opposition to State 
 insurance. 
 
 We seriously need a secretary of insurance — a new Cabinet posi- 
 tion. A national head of this great industry is imperative, but such 
 things can only be accomphshed through long drawn out congressional 
 fights for proper laws and then equally long court fights to sustain 
 such remedial legislation. The people of the United States par 
 annually over $1,500,000,000 in insurance premiums. This vast 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 29 
 
 sum is added each year to the great bulk before accumulated. Much 
 "of this money is available for use by the great corporate and financial 
 interest that controls and directs the money market in the United 
 States. Much of this money goes through channels which are de- 
 structive to the best interests of the United States, and especially 
 to our wage earners and the ma;sses. These things are in direct con- 
 flict with those provisions of our Constitution which require Congress 
 to promote the general welfare of our people and our Nation, and 
 only a government head, such as a Cabinet officer, with broad powers 
 over this industry, can curb the evils incident and attendant to the 
 insurance monopoly. An example of the power of this insurance 
 agency force may be seen from their activity against remedial insur- 
 ance legislation in Illinois during the last session. Illinois has approx- 
 imately 40,000 insurance agents representing aU combined forms of 
 insurance. There were 42 members of the legislature who were 
 licensed insurance agents, and when the bell wether of the insurance 
 trust announced, at the beginning of the session, that there would be 
 no reform insurance legislation, his mandate was Uterally obeyed, 
 and he was backed by the 40,000 members of the insurance agents' 
 federation, which stand as the buffer between the insurance trust 
 head and the people. 
 
 I am not. an alarmist, but the statements I have made are based 
 upon personal investigation and experience as the head of the Insur- 
 ance Department of Illinois, the second largest department in the 
 United States. I have not overstated conditions, and these condi- 
 tions must be corrected, and the remedy can more quickly and 
 effectively come through national channels. While I have extended 
 a little beyond the tenor of the resolution, yet I feel justified in doing 
 so, as aU substantial opposition to social insurance wiU start from 
 existing insurance institutions and through their many innocently 
 named channels will reach the legislative bodies. A nationalized 
 system of social insurance should be the answer to the activities of 
 this committee. It should come quickly. Relief should be given to 
 the public without waiting for independent action of the several States . 
 Unless this committee acts quickly and some recommendation made 
 and Congress urged to take action before the meeting of the legis- 
 latures of the various States next year, it will be contended by those 
 opposed to social insurance that the Federal Government has this 
 matter in charge, and will demand delay, awaiting the activities of 
 the Government in dealing with this question. 
 
 I have digressed somewhat, gentlemen, from the method in which 
 I wished to address you, and I have already taken up too much of 
 your time, so much so that I do not care to take up any more, but 
 will be glad to answer any questions that you wish to ask me. 
 
 Mr. Browne. What writers are authorities along the line that 
 you have been speaking on social insurance? I would like to get 
 ,them. , 
 
 Mr. Potts. I have in my grip a list of over 80 publications which 
 were read and investigated by our committee. 
 
 Mr. Browne. If you will just read to the reporter the names of 
 A few of the highest authorities, that will be what I want. 
 
 Mr. Potts. If the committee wishes, I will leave a list with the 
 committee. 
 
 Mr. Keating. Just leave it. 
 
30 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. Potts. And I also wish to file as a part of my testimony my 
 complete report as soon as the same is given to the national conven- 
 tion. 
 
 Mr. London. When does that convention take place? 
 
 Mr. Potts. The 17th of this month is the date of the meeting of 
 the convention. 
 
 Mr. Keating. Without objection leave will be granted to the 
 witness to file his report as a part of his remarks. 
 
 Mr. Potts. I thank you. 
 
 Mr. Keating. I would suggest that the witness insert the list of 
 pubhcations at this point in his testimony. He can prepare it and 
 file with the stenographer such hst as he may see fit. 
 
 Mr. Potts. I -will do so and it can be given instead of reading off 
 any of the names at this time. It might be unfair to many other 
 authoritative publications for me to read just a few. 
 
 Mr. Smith. I wish to ask one question. The trust that you refer 
 to as being an insurance trust. You had reference to fire, insurance ? 
 
 Mr. Potts. The National Board of Fire Underwriters is the con- 
 trolling body of the Fire Insurance Trust. This trust is the most for- 
 midable of any in the United States to-day. It consists of at least 
 100 innocently named subsidiary institutions and conunittees, through 
 which the mandates and legislative poHcies are enforced throughout 
 the entire hst of the States. The National Board is the controlhng 
 board and deals with an iron hand with public-pohw questions. All 
 branches of insurance have their defensive and offensive organiza- 
 tions, controlled by well-equipped and well-schooled committees that 
 throw-out the lif^ line to each other at the first cry of alarm; in fact, 
 they pursue the most feeble echo, and are ever ready to assist eacn 
 other in all legislative battles. But the fire-insurance monopoly is 
 the most offensive and the most defiant to all control and regulation 
 and pursues the most unscrupulous methods in resisting any attempt 
 to bring about legislative control. 
 
 The new method of all insurance branches and institutions in both 
 offensive and defensive work is through the federation of agents, 
 and their work has been quite effective and fruitful. Increase the 
 agency force is their perpetual effort and to make agents out of 
 officials is quite common. For example, it is their poUcy to appoint 
 a city clerk an agent. It is not necessary for hun to write any 
 business, but he is an insurance agent, and the general agent wiU call 
 and secure for him four or five policies so as to keep him an agent. 
 Every justice of the peace in our country is solicited to become an 
 insurance agent, and tne general agent writes a few policies and gives 
 them to him. It is the great army of agents that are closest to the 
 people, who wiU arise in unison and resist just the things that you 
 are trying to do by this resolution, and Congress wiU discover great 
 resistence in its efforts to solve this question unless it acts firmly and 
 quickly. 
 
 Mr. Smith. Are the terms of this bill broad enough to include fire 
 insurance ? 
 
 Mr. Potts. No, sir; I only mentioned fire insurance from the fact 
 that it is compulsory, although only as a matter of commercial neces- 
 sity and not as a matter of law, and a monopoly will exist following 
 compulsory insurance unless a State or national fund is at the same 
 time established. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 31 
 
 Mr. Smith. What is the purpose of that combination or organiza- 
 tion — to maintain prices ? 
 
 Mr. Potts. To fix the premium rates and to compel obedience to 
 the rates, and to penalize the agent who fails to follow the rate, and 
 if he does not comply with the rates, all of the other combine com- 
 panies withdraw from the risk; then the insured can not obtain 
 msurance. 
 
 It is also true when States pass remedial legislation, the combine 
 companies withdraw therefrom and citizens are left without insurance. 
 This is to penalize any State attempting to control them. This has 
 happened m Texas, Kentucky, Missouri, Kansas, and South Carolina. 
 
 Mr. Smith. Why does it not come within the proviso of the Sher- 
 man antitrust law then ? 
 
 Mr. Potts. It has been presented to the Federal Government and 
 an investigation is now bemg made of the Fire Insurance Trust, but 
 like many other proceedings m the Department of Justice, they move 
 slowly. 
 
 Mr. Smith. That is being inquired into 1 
 
 Mr. Potts. Yes, that is being inquired into. A Government agent 
 in Chicago by the name of Hinton Claybaugh has the matter in 
 charge. 
 
 Mr. London. You lay great stress on maternity insurance ? 
 
 Mr. Potts. Yes, sir. 
 
 Mr. London. You have in mind every other form of insurance that 
 is covered by the expression "social insurance" ? 
 
 Mr. Potts. Absolutely. 
 
 Mr. London. Disability insurance ? 
 
 Mr. Potts. Accident, sickness, disability, or invalidity, unemploy- 
 ment, old-age pensions, maternity, and dependency benefits. A com- 
 plete and comprehensive form of social insurance is the urgent neces- 
 sity of the American people to-day, and it is their salvation from 
 every point of view. 
 
 In dealing with the trust my attention is now called to the casualty 
 underwriters, which maintain similar organizations to that of the fire 
 insurance companies, and they have a workman's compensation 
 bureau through which aU public policy methods must be ground out, 
 and it is their business to carcfimy guard the interests of the com- 
 panies, so that they are not injured by any new insurance methods, 
 such as social insurance. 
 
 Mr. Keating. The committee thanks you. 
 
 (Whereupon at 1 o'clock p. m. the committee took a recess until 2 
 o'clock p. m. the same day.) 
 
32 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 • AFTER EECESS. 
 
 The committee met at 2 o'clock p. m., pursuant to the taking of 
 recess. 
 Mr. Keating. Mr. London, whom shall we caU upon first ? 
 Mr. London. Let Prof. Chamberlain proceed. 
 
 STATEMENT OF MR. JOSEPH P. CHAMBEEIAIIT, 510 KENT 
 HALI, COLUMBIA lIlflVERSITY, OF THE LEGISLATIVE 
 DRAFTING FUND AT THE UNIVERSITY. 
 
 Mr. London. What is that legislative drafting fund ? 
 
 Mr. Chamberlain. It is an organization connected with Columbia 
 University. A certain amount of money is given to the university 
 for the purpose of enabling it to employ men to give their whole time 
 to the study of legislation and the devising of means for improving 
 the drafting form of legislation, including in the form not alone the 
 words and phrases used, but the consideration of the subject of legisla- 
 tion, not with the idea of propaganda, but with the idea of cleariag 
 up doubts in the minds of the proponents of legislation, so that when 
 a project finally comes into legislative shape, in the shape of a bill, 
 it will express clearly a definite idea. It will not leave the people who 
 read the bill in doubt as to what it was intended to accompHsh, oi; 
 how to go about accomphshing that object. That is what we under- 
 stand by the drafting of legislation. It is not an attempt to dictate 
 folicies, but it is an attempt to put those policies into proper language, 
 t is the undertaldng to express what they mean and to adopt the 
 proper form of administration to carry out the pohcy. That explains 
 my present occupation, and it explains, to a certain extent, the way 
 I got into the study of social insurance. I have been working for 
 some three years maldng a study of the subject in connection with 
 the American Labor Legislative Committee and other associations to 
 prepare material to formulate a biU to establish a system of social 
 insurance. In the course of that study we have studied European 
 legislation as well as the peculiar conditions existing in this country, 
 which show that something must be done to improve health conm- 
 tions, particularly of the working people. 
 
 The study, of course, was not what it should have been. A proper 
 and thoroughly efficient study I think can only be made by a govern- 
 mental agency which can compel the various organizations to pro- 
 duce their books and show what they are doing in the way of weuare 
 work, show the percentage of sickness among the men, show the 
 relation between sickness and wages, and show whether they can 
 afford to pay a part of the cost of a sickness insurance scheme if one 
 should be decided advisable. It is quite impossible for a voluntary 
 organization to go into these matters more carefully than the com- 
 mittee with which I have been connected has gone into them. We 
 have formed the strongest kind of an opinion that there should be 
 an investigation by congressional bodies, and there are at least two 
 reasons for that. One is that the imderlying facts on which legisla- 
 tion should be founded can only be properly got at by an official 
 investigating committee. The second, of course, is that only through 
 the operation and action of an official investigating committee can 
 the matter be properly advertised. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 33 
 
 I suppose nearly everyone here is familiar with the work done by 
 the committee that investigated the workmen's compensation ques- 
 tion in New York State. They drafted a bill which was held uncon- 
 stitutional; but after they finished their work compensation was a 
 thoroughly live issue, all the points pro and con having been brought 
 to hfe, and since that time compensation legislation has gone for- 
 ward, as you know, with surprising strides. 
 
 There is another reason, perhaps, why I think there should be an 
 investigation by a commission, and that is that only in this way can 
 persons who are to be affected by the scheme to be proposed — doctors 
 are probably the most important class — be trained to the idea effec- 
 tively. If a voluntary organization takes it up, comparatively 
 little attention is paid to it, but if the State takes it up the people 
 know that there is something serious about it, and they get to thmkmg 
 about it, and then they make up their minds that it is a good thing 
 and that they want to help it along. Any scheme depends upon 
 cooperation. The trouble with the British scheme has been lack of 
 cooperation, and particularly lack of cooperation with the medical 
 profession. There was a lack of a properly thought-out medical 
 scheme in the beginning and a lack of cooperation with the members 
 of that profession before the law was thrust upon the profession. 
 Only in this way, through the influence of a properly gotten -up 
 commission, can these men be brought face to face with the situation 
 and be made to think about it seriously and to sink, to some extent 
 , at least, their personality and their desire for profit in the common 
 welfare. 
 
 I can not urge too strongly a commission such as is suggested by 
 Congressman London in his bill, for these reasons, but I can not argue 
 these reasons if I do not believe that health insurance is the next 
 step to be taken in America for the people as a whole. I advocate 
 health insurance and social insurance generally. Health insurance 
 comes first, because without proper health insurance, you should not 
 try invalidity insurance. A great part of the invalidity is caused — 
 and this is not only my own opinion, but I think that of everyone who 
 has made a study of the subject — ^by a lack of proper early treatment. 
 It is true that you can cut down invalidity one-haK by proper sick- 
 ness insurance. That, however, is the theatrical need; that is the 
 thing that will attract theatrical attention. A man who can not 
 work any more, because of sickness, is more of a theatrical figure than 
 the man who is sick but stiU able to work. The way a social advantage 
 is to be gained is by preventing that man getting into that position so 
 far as you can. You can do a great deal in this matter by prevention. 
 My first step, therefore, would be health insurance, to be followed by 
 invalidity insurance. The question of old-age pensions and old-age 
 insurance will not be discussed now, because i do not think this is 
 the place for it. 
 
 I wish to say also that there is no question as to the consensus of 
 opinion among the persons who have been thinking on the subject 
 that some kind of insurance must come. Dr. Frankel, a man whose 
 experience and work along this line has been very- comprehensive, 
 and who, perhaps, has given this subject as much thought and study 
 as any other man, in a recent speech, said that sickness insurance 
 must come and must come soon. 
 
 39501—16 3 
 
34 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Writing in a bulletin of the .department of health of New York City, 
 one of the heads of a Brooklyii charitable organization, said recently 
 that only through social insurance, particularly health- insurance, can 
 the problems of sickness and disabihty be met; that neither the 
 present methods of meeting them nor the extension of those methods, 
 which he could consider, outside of the insurance method, could cope 
 with the difficulty. 
 
 You heard testimony this morning given by the chairman of the 
 special committee of the State insurance commissioners on the subject. 
 TTiat was very illuminating. It was not only illuminating, but it was 
 most interesting to us to-day, because we had been told that it was 
 probable that the committee would report strongly against social 
 msurance, except as an extension of the existing system. 
 
 At a recent hearing in Boston before the Joint Committee of the 
 Massachusetts Legislature, Dr. Cabot, Mr. Baird, head of the District 
 Visiting Nurses in Boston, and Dr. Davis, head of the Boston Dis- 
 pensary, expressed their views on this subject. 
 
 Dr. Cabot has one of the largest practices in Boston among the 
 poor people. All testified most strongly that the people — the work- 
 mg people — in Boston were not getting proper medical attendance. 
 
 Kecently in Albany, Dr. Lambert, of the American Medical Asso- 
 ciation, said practically the same thing. Dr. Frankel made a state- 
 ment at a recent meeting in Washington that as the result of an 
 investigation of the situation in Kochester and Trenton, N. J., he 
 was satisfied that at least 40 per cent of the people — the sick people — 
 of those cities were getting no medical attendance at all. Almost a 
 similar situation was shown to exist in Dutchess County, comprising 
 the city of Poughkeepsie. 
 
 I might say mat the question of health insurance is not at all an 
 urbaii question. It is probable that an investigation of the country 
 districts wiU show that the farmer is in fuUy as great need— perhaps 
 a greater need — of some kind of cooperative health movement than 
 are the citizens of the various towns. If you wish cumulative evi- 
 dence of the necessity for some sort of care, you have it in the fact 
 that there were 4,000,000 visits made in 1914 to the dispensary in 
 New York City alone. 
 
 That simply meatus that the persons who went there were treated. 
 There is no provision at all made for them. It shows that most of 
 these people were too poor to pay a physician, and no provision was 
 made for medicine, and none at aU for the kind of food that they 
 needed. There is no provision at all for paying sick persons enough 
 to enable their families to exist while they are laid off from work a 
 short time. A rest of a day or two, or, perhaps, even a week's rest, 
 very frequently plays a most important part in the cure or the pre- 
 vention of a serious illness of the wage earner. There is no provi- 
 sion made for the extension of the service in the hospitals and m the 
 dispensaries. 
 
 Therefore I say to this committee of Congress that in some way 
 congressional investigation should be made of the whole question, 
 because it is admitted by persons of authority, speaking in regard to 
 this matter, that it is sure to come. It wiU not be time to make the 
 investigations after it has come. Congress should not lag far behind. 
 Congress is chosen to lead the people, to a certain extent, and not to 
 be pushed into action. Congress should be informed through its own 
 
SOCIAL INSTJEANCE AND UNEMPLOYMENT. 35 
 
 official commission as to what the need is, and should have its mind 
 made up, to a certain extent, how to meet it. 
 
 There is a terrific need of better health protection and of better 
 medical attendance. There should be some way of assuring the sick 
 wage earner that he can take a few days off when he first begins to 
 feel sick. There are thousands of cases where laying off a few days 
 wOl mean starvation for the wage earner's family. That is a need 
 that I think no one will question. There may be other ways of meet- 
 ing that situation, although none have been brought out. 
 
 Furthermore, Congress can see from the experience of the Euro- 
 pean countries whether these methods of fighting disease and destitu- 
 tion have been successful, and with all these views placed before 
 you I do not see how you can claim that you should not make this 
 study. 
 
 Perhaps I should say one thing more. The insurance of a sick 
 workman or sick person should include several things, among which 
 are these: Prompt medical care, so that there will not be any danger 
 of a long illness, because he was taken care of at the beginmng; and 
 it should include proper medicines. Dr. Cabot has said very truly 
 that there is nothing much more discouraging than to tell a man who 
 comes to you in need of proper medicine, proper food and rest, that 
 he should lay off and buy eggs, milk, etc., when you know perfectly 
 well that if he quits work for three or four days his family will prob- 
 ably be close to the starvation point. 
 
 Another thing to be accomphshed is assuring the family of a suffi- 
 cient hving during the time the man himself is taken away from his 
 work in order that he may be cured. A man should not be afraid of 
 miming directly into the poor house because he has to qmt his work. 
 I think this can be accomphshed by the insurance method. It has 
 not been accomphshed by any existing method. 
 
 It might be interesting also to call attention to the fact that in the 
 mines of America there is what is known as the doctors' fund. In a 
 conversation with coal miners in Pennsylvania some time ago, the 
 strongest dissatisfaction was expressed with that. It is entirely 
 oHgarchical. It is managed entirely by the mine owners, the men 
 having nothing to do with it. However, they reahze that it is better 
 to have that kind of a fund than none at ah, and they accept it. The 
 men have nothing to say about the choice of the doctor, and there is 
 no provision for a man who lays off from work. In spite of these 
 defects the doctors' funds exist, and are certain not to go out of 
 existence so far as these mines are concerned. 
 
 Then, there is the question of the interstate railroads. Conductors 
 and engineers are probably among the highest paid workmen in the 
 country, and in probably no other industry are there so many insur- 
 ance funds. These insurance funds, in some cases, are absolutely 
 compulsory. It is perfectly idle in this country to say that compul- 
 sion is a new and not a well-known thing. It is well irnown, and it 
 has been iu existence a long while. It is compulsion at the hands of 
 the employer; it is not compulsion at the hands of the State. It is 
 somethmg which the employee provides for, but with which he has 
 nothing to do. These funds have existed in the various railroads, 
 and I have not heard any complaint agaiast them. I know that the 
 Baltimore & Ohio requires them, and I believe that a great many 
 
36 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 other roads do. It shows an acknowledgment on the part of the men 
 that this kind of insurance is a good thmg for them. 
 
 It is a difficult thing for the State to deal with the question, for the 
 raiboad may run across a number of different States; and it may be 
 better to keep on under the existing organizations with some few 
 changes than to allow it to be cut up into half a dozen different or- 
 ganizations. 
 
 This is an important question for Congress to take up, and I should 
 like to see congressional action whether the States take action or not. 
 
 I do not thmk I have anything more to say with which I should 
 take up the time of the committee at present. I came down here to 
 support the idea that there should be a congressional investigation, 
 ana I can not see any excuse for Congress refusing to make one. 
 
 Mr. London. You have limited your study to health insurance? 
 
 Mr. Chamberlain. I have studied health insurance. It includes 
 a study of old-age insurance and old-age pensions. I have made only 
 a slight study of insurance against unemployment. While I do not 
 think it is necessary to say that that matter should be also investi- 
 gated, I have made sufficient study to be completely in accord with 
 an investigation on that subject. I do not feel, however, that I have 
 any definite suggestions along that line. I could, of course, make 
 much more detaued suggestions along the line of sickness insurance 
 than I have done. I do not understand, however, that that is the 
 desire at the present time. 
 
 STATEMENT OF MR. I. M. RTJBINOW, 131 EAST TWENTY- 
 THIRD STREET, NEW YORK, N. Y., EXECUTIVE SECRE- 
 TARY OF THE SOCIAL INSURANCE COMMITTEE OF THE 
 AMERICAN MEDICAL ASSOCIATION. 
 
 Mr. RuBiNOW. I appear here at this hearing to urge favorable con- 
 sideration of Mr. London's resolution at the request of the national' 
 office of the Socialist Party of America, of which I have been a mem- 
 ber for nearlv 20 years. I want to add, however, that I would have 
 probably end.eavored to appear here on my own initiative, even if it 
 had not been for this important and flattering commission, because 
 ©f personal interest in the social insurance movement for the last 13 
 yearfe. 
 
 It is entirely possible to be an enthusiastic supporter of the social 
 insurance movement without necessarily adopting the socialist pro- 
 gram in its entirety. And yet I will ask you to remember that the 
 Socialist party of America was the first national political organiza- 
 tion to include a comprehensive program of social insurance in its 
 platform, and has had it there for the last 12 years. The reason for 
 this is not difficult to understand. 
 
 I have no intention of encroaching upon my limited time for the 
 purpose of developing at this opportimity the general philosophy of the 
 sociahst movement. I feel that Mr. Meyer London may be trusted 
 to perform this function to our entire satisfaction. I will only say 
 that a Sociahst criticism of present-day organization of inudstry 
 includes a protest against the persistence of the problem of poverty 
 and _ destitution amidst conditions of plentiful production, made 
 
 Sossible by modem industrial development. Social insm-ance is 
 emanded by the sociahst movement because it presents at present 
 
SOCIAL INSUBANCE AND UlSrEMPLOYMENT. 37 
 
 the most effective, perhaps the only effective way of solving the 
 problem of destitution in present-day society without waiting for 
 the more radical changes which we are certain must eventually 
 come. 
 
 Gentlemen, some of you may be in the habit of reading the New 
 York Times, and perhaps you have noticed the pathetic appeals 
 which are made every year in the Yuletide season for charitable 
 relief for the 100 most worthy cases. Statements are still current 
 that the cause of destitution may be looked for in the moral delin- 
 quency of the destitute. 
 
 For the purpose of ascertaining the facts I undertook, two years 
 ago, to make a statistical analysis of these 100 cases, to determine 
 \mat were the causes which drove those 100 families below the line 
 of economic independence. The analysis was published in The 
 Survey for January 3, 1914, was reprinted in the report of the New 
 York Commission on Relief for Widowed Mothers, and at that time 
 caused considerable discussion among social workers and other 
 persons coming in direct contact with poverty and destitution. 
 
 While 100 cases do not offer sufficient material for any broad 
 deductions, the following results of the investigation are nevertheless 
 extremely significant. 
 
 Altogether, in these 100 cases, 182 causes were described, as fol- 
 lows: Lidustrial accidents in 7 cases, nonindustrial accidents in 2 
 cases, sickness in 24 cases, incapacity due to old age* in 6 cases, 
 incapacity due to tuberculosis in 20 cases, other cases of invalidity 
 in 2 cases, widowhood in 45 cases, orphanage in 52 cases, desertion 
 in 13 cases, so-called vice, of which, however, the destitute were rather 
 the victims, mainly girls, in 11 cases. 
 
 You may notice the absence of the very important factor of 
 unemployment, not that Unemployment was not responsible for a 
 very large amount of destitution in New York in the winter of 1913, 
 but evidently because these cases did not get into the category of 
 most deserving cases. 
 
 My reason for asking your attention to these dry figures is just 
 this, that almost every one of those conditions is what I, as an insur- 
 ance actuary, would call an insurable proposition — either an acci- 
 dental injury, or sickness, or old age, or invalidity, or widowhood, 
 or orphanage due to premature death of the breadwinner. They are 
 individually misfortunes, to be sure, but they are misfortimes of the 
 kind against which a social remedy may be developed, against which 
 a social remedy has been developed and is in actual operation, to 
 some extent, in aU industrial countries, and since the last five or six 
 years even in this country. It can not be said any more that the 
 problem of destitution is insoluble, that because we always have had" 
 the poor with us we must continue to have them with us; nor can it 
 be said even by the consistent Socialists that nothing less than the 
 aboUtion of the capitahst sjstem can solve even this problem of 
 actual destitution. The Socialist ideal does not depend entirely upon 
 the plea that without it people must be hungry and cold; and 
 whether you are ready to accept the ideal or not, the principles of 
 humanity, of justice, of religion, must rebel against the continuance 
 of destitution and the failure to adopt a remedy that has been tried, 
 and which, within the field in which it has been tried, has on the 
 whole been found successful. 
 
38 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 This, of course, is only a bold statement of principle. One can not 
 expect its adoption without further investigation and study. The 
 resolution before you, as I take it, does not commit you to any par- 
 ticular system of social insurance, or even to its adoption. It simply 
 calls for a commission to investigate the subject. With the existence 
 of one or more of the branches of social insurance in practically 
 every civilized country of Europe, the Government of the United 
 States can not close its eyes to the possibility of a remedy against 
 destitution. The least it can do is to imdertake a comprehensive 
 study of the entire subject, so as to help the American people to 
 arrive at a conclusion as to whether the remedy developed by Euro- 
 pean labor and European scientific thought is or is not applicable 
 to conditions in this country. 
 
 Let us subject the problem, of destitution of the individual family, 
 the standard consumption unit of this country, to a careful study. 
 
 As Prof. Nearing has pointed out in his book on Income, all 
 incomes may be broadly classified into those depending upon service 
 or effort and those depending upon property. We all Know that for 
 announcing this doctrme Prof. Nearing has forfeited his position at 
 the Pennsylvania University, but without trying to raise this contro- 
 versy here, the situation would appear rather as a good joke at the 
 expense of the gentlemen who seemed to have discovered in Dr. 
 Nearing's statement as great a new truth as the famous gentleman 
 of Moliere's' comedy who did not know that he had been speaking 
 prose for 40 years — ^because the distinction between labor iucome 
 and property income is something that even a child almost instinc- 
 tivly will appreciate. 
 
 It is not at aU necessary to deny the fact that there may be a very 
 large proportion of people who combine both sources of income, but 
 it is nevertheless true that perhaps two-thirds of the population of 
 this country are wageworkers whose chief and practically only 
 source of revenue is derived from the weekly wage they receive for 
 their effort. I know that it is quite customary to point to the large 
 accumulations in our savings banks as an indication of the property 
 that belongs to our working class. What basis there is for the 
 assumption that all this four thousand million dollars belongs to the 
 working class I have never been able to discover. As I pointed out 
 in my book on Social Insurance, only for the one State of Con- 
 necticut some interesting statistical data are available, and from 
 those we learn that nearly 40 per cent of the savings in that State 
 belong to people holding over $2,000, and surely very few wage 
 workers are in that class of depositors; that, moreover, the propor- 
 tion claimed by these large depositors of the middle class has in- 
 creased from 20 per cent in 1880 to nearly 40 per cent in 1910; that 
 85 per cent of the depositors have less than $500, and that the aver- 
 age deposit of those is a little over $200. This $200, with a legal in- 
 come of some $7 a year, represents the average share of the average 
 workingman in the property income of this country. 
 
 Now, then, any cause, any factor that either deprives a family of 
 its wage income or reduces it below the necessary minimum for 
 existence throws that family into the class of destitutes. These 
 causes evidently may be: 
 
 1. An insufficient wage level; 
 
 2. Absence of able-bodied breadwinner in the family; 
 
SOCIAL IHrSUEANCE AND UNEMPLOYMENT. 39 
 
 3. Physical disability due to whatever cause it may be, whicli 
 altogether destroys the earning capacity of the breadwinner or 
 reduces it below the normal level sufficient to support a family; 
 
 4. Inability of an able-bodied breadwinner to find employment 
 because of disorganization of the labor market; and 
 
 5. Unwillingness to perform regular remunerative labor because 
 of some fault of character. 
 
 I believe it may be quite definitely stated that any case of destitu- 
 tion with which you are personally familiar should come under one 
 of these few classification's. The question remains as to the com- 
 parative importance of these five factors. It is customary for those 
 who want to close their eyes to the social problem involved and who 
 resent any social policy that might interfere with their profits to 
 emphasize the fifth class to the exclusion of all others; but it would 
 seem to me to assume the entire condemnation of industrial and moral 
 civilization, or religion, or science and culture to insist that all the 
 enormous amount of poverty present even in this the richest country 
 in the world is due entirely to faults of character. Surely those who 
 insist upon this explanation are in duty bound to explain why those 
 faults of character become more numerous in winter than in summer, 
 why they suddenly seem to extend to millions of wage earners during 
 years of economic crises. Having set aside this explanation as pre- 
 posterous, though recognizing that there is a certain residuum of 
 moral delinquency which presents a social problem of its own, we 
 must all admit that the bulk of destitution may be found due to any 
 one or more of the first four cases. The importance of a sufficient 
 wage level must not be disregarded. The organized labor movement 
 on one hand and labor legislation on the other, aiming at minimum 
 wage standards and reduction of hours and improvement of working 
 conditions, are slowly combating this evil. 
 
 Serious as it is, after all the worst cases are not those which are due 
 to insufficient wages, but those where the wage-earning power is 
 either temporarily or permanently absent; and with all these cases 
 coming under groups 2, 3, and 4, social insurance methods endeavor 
 to cope. 
 
 Let us examine those causes, or the groups, 2, 3, and 4 with some- 
 what greater care. Absence of a breadwinner in the family in a 
 few cases miay be due to abandonment, but in the vast majority of 
 cases we are dealing with the problem of widow and orphan due to 
 premature death of the breadwinner, either through accident, in- 
 dustrial or nonindustrial, or in the ordinary course of events, through 
 some illness. For the purpose of dealing with the results of indus- 
 trial accidents the method of compensation has been developed, but 
 we in this country should be especially mindful of the fact that acci- 
 dents occurring outside of the shop and factory are, on the whole, 
 perhaps as numerous and as destructive in their economic results as 
 industrial accidents. All of us know that the hazard of premature 
 death is an insurable proposition, that protection against economic 
 loss sustained may be obtained through ordinary insurance channels, 
 but we should also know that notwithstanding the tens of millions of 
 policies written on lives of injured workingmen, the average amount 
 of insurance is so pitifully small that it offers no solution of the eco- 
 nomic problems created by death. We have advanced far enough 
 not to depend upon the workingman's industrial life insurance policy 
 
40 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 to meet the problem created hj death through industrial accidents, 
 but, after all, as far as the widows and orphans are concerned, it 
 makes very little difference whether the death has been caused by 
 some piece of complicated machinery in an industrial accident or by 
 a street car or automobile in the street in a nonindus trial accident 
 or through typhoid or pneumonia germs. The problem of destitute 
 widows and orphans is still before us. Some efforts to meet it have 
 been made through the numerous mothers' pension acts adopted in 
 this country within the last three or four years, but even these reme- 
 dies are as yet altogether inadeqiiate and the problem of some com- 
 prehensive form of widows' and orphans' iiisurance is still before us. 
 
 A man without an arm or leg, a man with substantial paralysis or 
 weakening of the muscles, a man all bent down through chronic rheu- 
 matism, or suffering from tuberculosis, represents a very much graver 
 problem. Again, we are dealing with the problem of accident and dis- 
 ease, for which well-known methods of insurance protection exist. 
 Those two causes, accident and disease, may be spoken of as hazards, 
 but the workingman who avoids both and who does not succumb to 
 some premature death must meet another emergency almost as cer- 
 tain, that of old age, the grave problem which has caused so much 
 concern to the countries of Europe, and which imtil now has been 
 woefully neglected in this coimtry. The economic problem of old age 
 is primarily a problem of modem civilization. Moreover, it is a prob- 
 lem essentially of the working class. Commerce, professions, and 
 politics, especially politics, have furnished numerous examples of the 
 admirable vigor and useful activity of men past 60 and 70. We look 
 askance at the man who dares to aspire to the highest and most trying 
 political office of the land- before having reached his fiftieth birthday. 
 But side by side with the achievements of old age in arts, Uterature, 
 business, professions, science, and statesmanship, modem civilization 
 has created the very grave problem of superannuation, the problem 
 of the jobless, incomeless, propertyless old men of 50. 
 
 Of course, under normal conditions old age should lead to a gradual 
 failing of productive powers, and yet, in a normal community the 
 usefulness of an old man or woman should not cease until actual 
 senility is established; but under a wage system economic old age 
 arises suddenly when the worker is stiU fit for a productive activity. 
 He finds himseff below the minimum level of productivity set by the 
 employer for reasons of commercial gain. Moreover, there are good 
 reasons why the wage worker actually does age much earlier than men 
 in higher walks of Efe. The constant speeding up of industrial pro- 
 cesses, the almost inhuman intensity of effort known as industrial 
 efficiency, the work under conditions injurious to health or dangerous 
 to life ; all these factors in modern industry work together to aggravate 
 this situation. 
 
 A study of American statistics demonstrates that there is a gradual 
 ehmination of older men from industrial activity, though at the 
 same time the span of life increases, due, perhaps, to general im- 
 provement in sanitation and medicine. AU industrial countries 
 nave therefore found that the problem of old age is rapidly increasing 
 in intensity. Either through a system of old-age pensions or through 
 some complex system of old-age insurance, the problem can be met, 
 is being met, in other countries. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 41 
 
 And, finally, there is the tragic problem of the man able to work, 
 anxious to work, but unable to find employment. 1 do not intend 
 to take your time in discussing this problem at any length, because 
 other speakers — Miss Poyntz and Dr. Stone — are here to devote their 
 special attention to it. It is a big, broad problem, requiring various 
 measures of statesmanship. The rehef of destitution caused by it is 
 not the only aspect. Recognizing, as Socialists do, that the prob- 
 lem of unemployment lies at the very foundation of modern capitalist 
 organization of society, it is nevertheless certain that a good deal 
 can be done to reduce this amount of unemployment to a minimum, 
 and the waste of human energy which results from keeping millions 
 of people idle is as serious an economic problem as the suffering of 
 individuals which it involves. But hmiting ourselves for a moment 
 to the latter aspect of the question, imemployment is a hazard 
 against which insurance methods of protection may be effectively 
 applied. All these possibilities of insurance methods in overcoming 
 human suffering resulting from destitution are not the invention of 
 a fertile imagination. 
 
 Against almost every one of these, except possibly that of unem- 
 ployment, insurance protection can be purchased even to-day in the 
 open market at commercial rates. It is possible to imagine a working- 
 man protected by policies against industrial accidents, disease, 
 invalidity, old age, and the results of death. The only trouble is that 
 his wages may not be sufficient to purchase all these various forms of 
 poUcies even if he needed no fund for current expenditures, and there 
 is the situation in a nutshell. The middle classes who need the pro- 
 tection a good deal less, because they are not exposed to the same 
 degree of hazard, are in a position to acquire this insurance protection 
 at rates which, though extremely high, are not necessarily prohibitive 
 to them; but the wageworker, who needs it most, can not afford to 
 buy it. We have recognized that for the last four or five years, as 
 regards the problem of industrial accidents, 33 States and Territories 
 have established compensation systems, but after all, the problem of 
 industrial accidents is only a very small part of the economic dangers 
 threatening the well-being of a wageworker's family. 
 
 Now, Europe has been facing and studying these problems for over 
 30 years, ana there is not a single form of social insurance here sug- 
 gested that is not in actual operation in some or all countries and is not 
 meeting with considerable success in alleviating the problems for the 
 solution of which nothing has yet been done by the organized social 
 powers in this country. Compensation for industrial accidents ex- 
 isted almost throughout Europe, with the probable exception of 
 Turkey, before the first compensation act in this country was passed. 
 
 Compulsory social insurance against sickness exists in Germany, 
 Austria-Hungary, Norway, Great Britain, Russia, Holland, and 
 even Roumania, and to some extent also in Belgium, Italy, and 
 France. Compulsory social insurance against invalidity and old 
 age is found m Germany and France, and a few minor countries 
 of Europe, and is being agitated in a great many others, and would 
 have been established by this time in several countries had it not 
 been for the unfortimate war. On the other hand, Denmark and 
 Great Britain met the problem in a different way by establishing 
 
42 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 State old age pensions. It was thouglit for a long time that unem- 
 ployment msurance presented extreme difficulties; yet state- 
 subsidized voluntary unemployment insurance has been successful 
 in Belgium and Denmark, Norway, and other countries; and 
 Great Britain, breaking away from all traditions, launched upon a 
 system of compulsory imemployment insurance which proved to be 
 extremely successful. 
 
 I am not here to advocate definitely this or that particular action 
 that must be taken, but, gentlemen, in view of this enormous activity 
 throughout several lands for some systematic way of meeting the 
 problems of destitution, in view of the great success that accom- 
 panied this or that experiment in various countries, it is high time 
 that the American people made a careful investigation to determiae 
 how much of this policy is applicable to us; and that, as I understand, 
 is practically all that the resolution calls for. 
 
 The Socialist Party believes that social insurance is a practical 
 and effective method of coprag 'with problems of destitution in 
 present-day society. We recognize that it is a belief in which we 
 nave no monopoly, and we insist that at least a careful investigation 
 be made so as to determine the course of immediate action. 
 
 What is the basis of this social insurance method ? In what respects 
 does it differ from ordinary insurance protection which you and I caii 
 pur chase, from commercial insurance companies? There is a great 
 deal of unnecessary mystery about the movement of social insurance. 
 The technical aspects may be extremely complex, but the underlying 
 philosophy is extremely simple. 
 
 First, it is evident that the business of meeting the destitution of 
 millions of people is one out of which no profits should be made; 
 and social insurance differs from commercial insurance in eliminating 
 the element of profit. 
 
 Second, while you and I, in insuring our lives and our property, 
 should properly pay the full cost of insurance, we recognize that the 
 Wage worker is unable to do so. His income in the vast majority of 
 cases is barely sufficient to provide a decent standard of living, and in 
 miQions of families is below that standard. The causes of hazard are 
 largely ones for which he is not responsible. The workingman does 
 not administer industry, and can not be held responsible either for 
 its disorganized state, which causes unemployment, nor for the 
 machinery which causes industrial accidents or undermines his 
 health. The working man has comparatively little to say about 
 
 feneral health conditions in the commimity, and he should not be 
 eld individually responsible for bad housing conditions, unhealthy 
 food supply, bad water or mUk, which causes illness ; and because the 
 causation of hazards falls back partly upon society at large, and partly 
 upon industry as organized at present, and only partly upon the 
 Workingman himself, we insist that the wage worker must be relieved 
 of a substantial part, if not the entire cost of bearing the insurance. 
 There are those who insist that no contributions to the cost should 
 be borne by the wage worker himself. For various reasons I, per- 
 F.onaUy, am not willing to go so far, but the share of the cost borne 
 by the employer as well as society at large is an essential aspect of 
 social insurance. 
 
 And, finally, there is the element of compulsion. We recognize 
 that to a good many Americans this may appear as a somewhat novel 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 43 
 
 conception, and yet we freely employ compulsion in a great many 
 other cases, where the whim of the individual must yield to consid.- 
 eration of public good. Even compulsory insurance is no more a 
 doctrine without precedent in this country, because compulsory 
 insurance by the employer against industrial accidents is already 
 practiced in many States and has been declared constitutional. 
 
 The socal insurance movement is perhaps the most important 
 movement in social legislation that is facing the American people at 
 the present moment. Just because we were 30 years behind civil- 
 ized Europe in beginning to apply this method for improving the 
 social conditions is no argument against the theory. The very 
 rapidity with which one branch of social insurance — ^namely, work- 
 men's compensation — ^has spread throughout the country within the 
 last five years is an indication that the conditions are ripe. We can 
 not blind our eyes to the problems of poverty by insistmg upon the 
 difference in wage conditions in this country and Europe, because 
 one investigator after the other has demonstrated the existence of 
 minions of wageworkers whose earnings are below the necessary level 
 for preserving a decent standard of life. We can not complacently 
 assume that conditions are righting themselves automatically with- 
 out our making any conscious effort. 
 
 The increase in the cost of living within the last five or six years 
 has made all the economic problems very much more acute than they 
 ever have been in the past. In a study on "The recent trend of real 
 wages," published in the American Economic Keview about a year 
 and a half ago, of which I shall be glad to submit a copy for the con- 
 sideration of the committee, I have succeeded in proving that the 
 real wages, as expressed in the purchasing value of money wages, 
 have been reduced nearly 15 per cent from 1900 to 1912, and there 
 has been no improvement since then, so much faster has been the 
 rise in prices than the rise in wages. Only through reduction in the 
 size of families, and through the influx of women, both married an 
 unmarried, into industry has the American wage-working class suc- 
 ceeded in at least partly preserving its economic status ; but for the 
 optimistic statement of the man on the street that the American 
 wageworker is improving his conditions and standard of living all 
 the time, there is very little basis in fact. In a recent article in the 
 American Economic "Review, published only two weeks ago, Prof. 
 Henry Fairchild, of Yale University, raises the question "The stand- 
 ard of living — ^up or down?" and he says, "We easily jump to the 
 conclusion that while the rate of gain of the poorer classes may not 
 be so rapid as that of the wealthier classes, yet it is positive, so that 
 everyone has grounds for complacency and none grounds for coni- 
 plaint." "But," he proceeds to state, "it is significant that no reli- 
 able proofs have been presented in support of either view." And 
 after 20 pages of comprehensive statistical study, he arrives at the 
 conclusion: "The foregoing data disproves the right of anybody to 
 assert with serene confidence that the standard of living of the Ameri- 
 can laborer has improved in the past 30 years. The burden of proof 
 is laid on the optimists to bring forward some positive verification 
 of their assumptions." I may add that as yet this has not been 
 done. 
 
44 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 May I be excused for quoting the concluding sentence of my own 
 book on social insurance, which was published some three years ago? 
 
 There can be no peaceful advance as long as the present problems of human desti- 
 tution remain unsolved, and nothing short of a comprehensive national system of 
 social insurance against all the factors of poverty, such as death, sickness, accidents, 
 invalidity, old age, or unemployment, offers even a semblance of immediate solution. 
 
 Gentlemen, I have been insisting upon this immediate program 
 since 1903, and there was very little enthusiastic hearing that I could 
 gain in the early days. Invariably those ideas were dismissed as 
 visionary and un-American, sometimes by the very same people who 
 are now found in the ranks of enthusiastic supporters of the social- 
 insurance program. The movement has made considerable headway 
 within the last few years. Old-age pensions have been agitated in 
 Massachusetts, Wisconsin, and in the United States Congress. 
 Mothers' pensions, though often extremely limited in extent, nave 
 been adopted in some 22 States. Sickness-insurance bills are being 
 pushed with vigor in Massachusetts, New York, and Ohio. An unem- 
 ployment committee has prepared an unemployment-insurance biU in 
 Massachusetts, and the whole topic of unemployment insurance has 
 been made the subject of wide agitation since the critical conditions 
 of the winter of 1913. There is a social-insurance commission to 
 study the subject in California, and there may be similar ones in 
 Massachusetts and New York. 
 
 You might well ask, "Why insist upon a Federal commission?" 
 There are, however, very substantial reasons for demanding one. 
 
 First, the subject is extremely large and complex, and it seldom 
 receives a comprehensive investigation from a State commission. 
 
 But more important is the consideration that State commissions 
 can only result in State action, and yet the very momentous ques- 
 tion must necessarily face us whether State action can remain satis- 
 factory. State action was extremely productive in bringing the 
 movement to a head. Not for a moment would I suggest that such 
 State action be interf erred with. But not only does it remain limited 
 in extent, but it creates difficulties of its own, and it is high time to 
 determine whether the constitution of difficulties usually referred to as 
 an objection to national action are not a figment of imagination only. 
 
 State action is necessarily slow. The first State compensation 
 act was passed in Montana in 1909. Though seven years have 
 elapsed, 17 States stiU remain without compensation sjrstems. 
 
 State action results in discrimination, which on social grounds is 
 hard to explain. Again taking illustrations from the experience in 
 compensation, it makes a great deal of difference to the injured or 
 his dependents whether a man has been hurt or killed on the left 
 or right side of the Hudson Eiver. If a man with weekly earnings 
 of S24 has been killed in New York City, his widow will get $16 a 
 week, while she would get only $12 if her husband had the misfortune 
 to live in Hoboken. She would get it for life in New York, and 
 only for six years in New Jersey. 
 
 The threat of interstate competition is always made against any 
 act of progressive State legislation, and the fear that the next-door 
 neighbor may not do as well makes every State action timid and 
 stingy. More9ver, with modern interrelationship between one State 
 and the other in economic activity, complicated questions must arise 
 when labor or capital flows from one State to the other as to what the 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 45 
 
 rights of the injured person are, and under what law he must seek 
 
 f)rotection. If a New York corporation employs a teamster who 
 ives in Hoboken, and should send him with a load of goods to Con- 
 necticut, where he is injured, the supreme courts of three States may 
 be called upon to decide what the rights of the man are in the 
 premises; and as was to be expected, no two courts agree on the 
 question of extraterritoriality, a new legal problem that has arisen 
 since compensation went into effect. And yet the problems in con- 
 nection with compensation are comparatively simple. How to or- 
 ganize a system of old-age insurance or unemployment insurance 
 within the limits of one State without putting any handicaps upon 
 the free mobility of labor, which is so very important to reduce the 
 amount of unemployment, is a grave economic problem. It is time 
 that the whole matter be subjected to a very careful consideration 
 with a view that the possibility of national action on those lines 
 shall be considered. 
 
 I "have taken perhaps a great deal more time than I intended, and 
 there are other speakers who will bring various aspects of the prob- 
 lem of social insurance to your attention. I will, therefore, conclude 
 by summing up the whole situation in as few words as possible. The 
 problem of the destitution of millions is the gravest problem that 
 confronts this as well as any other civilized society to-day. The 
 method of social insurance is the only one which in the experience of 
 modern Europe has succeeded at least in mitigating the sea of human 
 destitution, and promises to abolish it almost altogether. Congfess 
 has no moral right to refuse to the American people at least all the 
 information on the subject. 
 
 STATEMENT OF MISS JULIET STUART POYWTZ, DIEECTOR OF 
 DEPARTMENT OF LABOR RESEARCH, RAND SCHOOL OF 
 SOCIAL SCIENCE. 
 
 Miss PoTNTZ. I have come here, Mr. Chairman, and gentlemen, to 
 speak this afternoon on the subject of unemployment, not merely of 
 unemploynaent insurance as a part of the subject of social insurance, 
 but also of a general program to deal with unemployment in general, 
 because it is impossible to conceive any project for unemployment 
 insurance separately from a program for the solution of the unem- 
 ployment problem in general. It is very important at the present 
 time to consider the problem of unemployment in general and evolve 
 some large program for dealing with it. This subject is vastly more 
 complicated and more extensive than any of those you have been 
 hearing about, I believe. It is a problem that is as large and com- 
 plicated as the whole field of industry. I am very sensible of the 
 difificulties of dealing with the subject in the short space of time that I 
 have at my command this afternoon, and all I shall attempt to do is 
 to try to indicate the general character of the problem we have before 
 us and the consequent desirability of a closer examination into it. by 
 such a commission as is recommended in Mr. London's bill. 
 
 I have been studying and observing the phenonaenon of unemploy- 
 ment for the past eight years. I was for two years in charge of investi- 
 gations in various industrial centers for the United States Immigration 
 Commission, during the period of the terrible crisis that swept over 
 the country in 1907 and 1908. I came very closely in contact with 
 
46 SOCIAL INSUKANOE AND UNEMPLOYMENT. 
 
 the people affected at that time and examined into the unemployment 
 and living conditions at that particularly serious period. After that I 
 was sent to England as a representative of the National Federation 
 of Women's Clubs, and there devoted a large part of my time to the 
 study of unemployment in Europe, and published the introduction to 
 the volume on "Seasonal Trades" edited by Mr. Sidney Webb. I 
 happened to be in England at the time the bill for social insurance 
 passed through Parliament, and followed the discussions in the press 
 and elsewhere, in England. 
 
 Since my return to this country I have made a study of the question 
 in cooperation with the Boston Chamber of Commerce; so what I have 
 to say is based, to a great extent, on personal experience, and on a 
 comparatively wide personal study of the actual conditions. 
 
 We have been face to face very recently, within a year, with a 
 problem that confronts all societies at the present day. Every few 
 years the problem of a great industrial crisis comes to us, with tens 
 of thousands of men thrown out of work for longer or shorter periods 
 of time. When we meet such a situation, we are quite at a loss. 
 We do not know how to deal with it. 
 
 In such times you will find in all our communities vice and misery 
 and destitution. Charity is bestowed upon them in vain, for ail 
 the funds that can be given through the work of charity are far 
 inadequate to meet the problem, nor do they prevent its recurrence. 
 The problem can not be met that way. That public works, espe- 
 cially as administered at the present time, do not meet the needs of 
 the many who are imemployed is recognized. I speak especially of 
 public works, because that is the line of activity we have most fre^ 
 quently adopted, especally in our recent crisis. Just at this moment 
 a committee of this sort must feel the necessity and desirability Of 
 examining the whole situation in regard to unemployment in this 
 country with the idea of seeing whether there is not some more vital 
 and far-reaching method for handling this problem than those which 
 have been tried and have failed. 
 
 In approaching this subject, we must understand that we are 
 dealing with the entire field of industry and of the labor market;. 
 Any remedies advocated must, therefore, go rather deep into the 
 structure of our society — must deal fimdamentally with the causes of 
 this great evil. There was a time, comparatively recent, when un- 
 employment was still thought of by comparatively intelligent people 
 as a personal problem. It was supposed that any man who wanted 
 a job could get it. Opinions has, however, changed upon this point. 
 
 The time is past when the problem of unemployment comd be 
 disposed of either by ignoring it, as was the practice until recent 
 years in America, or by attributing it to mere laziness and LneflB.- 
 ciency. We are beginning to recognize that the causes of unem- 
 ployment are social and inherent in the present method of industrial 
 organization, rather than individual and due to the shiftlessness of 
 "won't works." We have come to realize that unemployment is an 
 industrial phenomena, and not a personal one, and tnat any reme- 
 dies that are to be of value must be industrial and not personal 
 remedies. The unemployed should be carefully distinguished from 
 the unemployable, for they are far more important in numbers and 
 they form the material from which the unemployable are in time 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT. 47 
 
 produced. Every step toward caring for the unemployed -will thus 
 lessen the number who become unemployable. 
 
 I want first to point out a few preliminary considerations as to the 
 nature of this problem. We must consider these facts before we can 
 evolve any really thorough method of deahng with the problem. 
 We are coming more and more to realize in this coimtry that, in all 
 our social problems, we must study the cause and not merely apply 
 superficial palliatives which have no more effect than the application 
 of aplaster in the case'of a serious blood disease. 
 
 What is unemployment? It has been suggested to me that it 
 might better be called "mal-employment" or "disemployment." 
 Doubtless either one of those terms would be better than "unem- 
 ployment." For unemployment is not a question of the idleness of 
 wage earners for several years at a time. We do not have a separate 
 group of people to whom we may point and say, " They are the unem- 
 ployed." If that were so we could deal with that particular group and 
 c\rre or eliminate it. 
 
 As a matter of fact, the unemployed are the working class, the 
 whole industrial army. The essential characteristic of the modern 
 workingman's life is insecurity. Modern factory production is subject 
 to constant fluctuations often incalculable, often severe, always pro- 
 ductive of unemployment for the workers. The workingman is the 
 victim of the situation. When the factory shuts down the manufac- 
 turer takes care of his machinery, keeps it under shelter, oils.it, and 
 covers it up, so that it will not deteriorate. With his living machinery 
 he does not do this. He can only turn his workers out into the street 
 to swell the army of unemployed labor. In the case of a crisis there 
 are no openings in other factories and in other industries, because a 
 crisis means a general depression in industry. So we have the situation' 
 of having in New York, Boston, Chicago, and other big cities, large 
 bodies of men, willing and anxious to work, with families dependent 
 upon them, and without any opportunity to earn the simplest neces- 
 sities of life — ^men of the very best character and the greatest deter- 
 mination to earn a Mving. 
 
 Unemployment is due to the incapacity of industry to absorb the 
 whole supply of labor at any given time, or indeed at any time, for 
 there is always even in most prosperous times some unemployment, 
 an "irreducible minimum " which rises in bad years to appalling 
 proportions. 
 
 This permanent excess of supply over demand in the labor market 
 is caused largely by the constant fluctuations of industry which make 
 it necessary to have reserves always waiting ready to answer the calls 
 when they come. Hundreds of thousands more of workers are 
 needed in good years than in bad years to operate our industries, and 
 in each industry many more are needed in the busy season than in the 
 slack season. Furthermore in almost any business therfe will be 
 special calls for more workers to be taken on for a few days, a few 
 hours, or a few weeks, and large reserves must be ready to fill these 
 casual demands. To the reserves required for these three types of 
 fluctuations in industry, periodic or cyclical, seasonal, and casual, 
 must be added the surplus produced because of (1) the inefficient 
 handling of these reserves and the lack of means of transferring 
 workers smoothly and rapidly from job to job; (2) the temporary 
 
48 SOCIAL INSXJKANOE AND UNEMPLOYMENT. 
 
 displacement of workers by new machinery; (3) the lack of adapts 
 ability due to old age or to mental or physical weakness, and (4) the 
 lack of industrial training either in youth or in adult life; (5) over- 
 specialization which confines the chances of employment of the 
 worker to small subdivisions of industry and particular operations. 
 
 There is thus at all times and all seasons a fringe of workers in 
 reserve standing around each industry, and often each separate 
 business in wait for the chance of a demand for their particular kind 
 of labor. 
 
 I want to illustrate the nature of this with one or two charts, which 
 I prepared last year in connection with a general investigation into 
 the subject made for the Boston Chamber of Commerce. This will 
 Ulustrate better than I could describe it the actual character of the 
 problem of unemployment. It is a problem of irregular employ- 
 ment. Employment varies from one part of the year to another. 
 In every industry we have a seasonal fluctuation. We usually think 
 of farming or tailoring as seasonal. As a matter of fact, every indus- 
 try is seasonal. Every factory has a period of depression and a 
 period of excessive output within the year. It is a very extensive 
 seasonal ulnemployment, and this is responsible for a gi'eat deal of the 
 evil that exists, lor the general lowering of the standard of living, 
 and for the uncertainty in the tenure in the workingman's job. 
 
 CAUSES. 
 
 In any attempt to remedy seasonal irregularity, a thorough analy^ 
 sis of causes is essential. The forces tnat produce the peculiar 
 rhythm of industrial activity described above lie deep in the organi- 
 zation of industry, in social habits and individual tastes, and ulti- 
 mately, but often only indirectly, rest upon the alternation of the 
 climatic seasons. The weather, while perhaps the- fundamental 
 factor, interacts with the economic and social environment to such 
 an extent that in many industries the causes of irregularity seem 
 almost purely economic or social. In others the weather plays the 
 predominant r61e, and affects production directly, especially in fhe 
 open-air industries, building, shipbuilding, agriculture, brickmakingj 
 
 Suarrying, and stone cutting and outdoor unskilled work of all kinds, 
 n other cases it is consumption rather than production that is 
 affected and the demand becomes seasonal. The muddy weather of 
 winter and early spring means a spurt to the rubber shoe industry, 
 though the influence of fashion is coming to be an important factor 
 here since each new style in shoes must have its rubber shoes to fit. 
 
 The sale of both rubber clothing and rubber shoes is dependent to 
 such an extent upon the weather, however, that a variation of a few 
 inches in the rainfall of a season will materially affect sales. One 
 company manufacturing rubber cloth states that continuous rain 
 during one autumn season caused such a pressure of orders that it 
 was impossible to fill them. Heavy snow increases the demand for 
 rubber shoes because the workingman, who is a large coasumer, but 
 buys only on necessity, is then forced to buy. A "close" winter and 
 "rainy" spring and autumn are desirable from the point of view of 
 the rubber industry. An unusually cool summer in one recent year 
 spoiled the market for low shoes and brought about enormous sales at 
 ruinous prices. Delay in the change of weather at the beginning of 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 49 
 
 seasons often causes considerable dislocation in the plans of manu- 
 facturer and retailer. The double season, spring and^fall, for heavy 
 and light weight clothing is characteristic of all the garment trades 
 and of the boot and shoe industry, though in both the influence of 
 style intensifies the seasonal curve. The woolen industry has its 
 "tight weight" and "heavy weight" season in preparation for sum- 
 mer and winter wear, and the cotton trade suffers a regular summer 
 depression after the stocks have been laid in, in spring. Brick and 
 tile making is done exclusively in the warm, dry days of summer 
 except where kilns for artificial drying makes possible all-year pro- 
 duction. The manufacture of confectionery and chocolates and of 
 rubber goods is more difficult and expensive in summer on account of 
 the effect of the warm weather on the material. More cigars are sold 
 when the season of open cars and out-door life replaces the seclusion 
 of winter. The summer season causes a demand for tents, sails, 
 boats, bathing suits, tennis racquets, trunks and valises, and other 
 vacation paraphernalia. The manufacture of carriages, wagons, 
 and automobiles rises gradually through the spring as the roads 
 improve and reaches its height in early summer. 
 
 Hot weather causes a marked diminution of demand in many food 
 industries. The taste for rich and heavy food, chocolate, cocoa, con- 
 fectionery and meat is replaced by thirst and a desire for light fruit 
 .•and vegetable food. The manufacture of chocolate, cocoa, confec- 
 '"tionery, sausage making, slaughtering, and meat packing decline, 
 while the demand for beer, liquors, and mineral and soda waters is 
 greatly increased. 
 
 The cold weather of winter causes a rush to turn out heavy-weight 
 clothing in the clothing trades lasting from September to December, 
 and reaching its height in October. The fur season begins in August 
 and increases gradually until it reaches its climax in November and 
 after lingering into January declines suddenly in February. The 
 hosiery and knit goods industry for similar reasons has a marked fall 
 season from September to December, with October and November as 
 high points. The deliveries of winter shoes for the replenishing of 
 the stocks of the retailers are made in September and the factories 
 run thereafter mostly on "repeat orders" until November, when they 
 begin manufacturing for the spring and summer market, for which 
 deliveries are usually made to the retailers about March 1. Felt 
 hat making, after a severe depression starting in April, revives in 
 August with the beginning of manufacture for the winter market. 
 The season is a short one, lasting till November, and is succeeded by a 
 depression in November and December, with a revival in January 
 when work on spring hats is begun to last till the end of March. 
 Straw hats on the other hand have only one season of about five 
 months, extending from the beginning of December to the end of 
 April in preparation for the spring selling. 
 
 The "social" season is no less important than the weather in its 
 influence upon industry. Christmas, Easter and the summer vaca- 
 tion are as conspicuous milestones in industrial as in social life. 
 They affect profoundly the buying habits of the consumer which in 
 turn determine the current of industry and employment. The 
 Christmass season calls out the consuming energy of the pubHc. 
 The general curve of fliiployment iStendsl h^testR^'t t^iis point. The 
 39.501—16 4 
 
50 SOCIAL INSUBANOE AND UNEMPLOYMENT. 
 
 department stores take on thousands of hands often as long as six 
 weeks in advance to be sure of having enough to meet the Christmas 
 rush. The smaller shops, glove shops, piano retailers, Imen shops, 
 oriental importers, confectionery stores, bookstores, stationery- 
 stores, lay in large stocks in the autumn in anticipation of the Christ^ 
 mas season. Some publishers estimate that the average bookseller 
 does 70 per cent of his year's business in the last two months of the 
 year. In the department stores the same tendency is visible, espe- 
 cially in certain departments such as handkerchiefs, where the bulk 
 of the annual sales are made at Christmas. The manufacture of all 
 articles in demand for presents receives an impetus. Several candy 
 manufacturers estimate that their production for the^last four months 
 of the year is twice as great as for the preceding eight months. 
 For watches and jewelry the Christmas demand far exceeds that of 
 any other time of the year, the graduation period in May and Jime 
 not excepted. From September to January the jewelry industry runs 
 10 to 15 per cent fuller than during the rest of the year.' The pro- 
 duction of pianos, leather goods, fancy articles, mirrors, picture 
 frames, men's furnishing goods, furs and other articles suitable for 
 
 S resents is increased whde fancy and paper boxes for packing are in 
 emand. 
 
 Christmas too, marks the climax of the winter social season. The 
 college vacations give an extra impulse to the geheral activity. 
 Dances, dinners, theater parties, the opera, charity fetes, create a 
 large demand for dressmaking, jewelry, hairdressing, florists goods, 
 silks, theatrical and operatic talent, restaurant and hotel service, 
 etc., and thus the general volume of winter business is swoUen. 
 
 Easter in turn marks the climax of the spring season. The season 
 in the women's clothing trades extends from November to April aad 
 reaches its high point in March. Manufacturing for the sprmg boot 
 and shoe trade is started in November and reaches its high-water 
 mark in February. Straw-hat making works up to a cEmax in 
 February and March and the same months are the high points in the 
 felt-hat manufacture for spring. The miUinery trade is very active 
 from February to April and especially so in March. 
 
 The summer holiday period creates a considerable dislocation of 
 industrial activity. Demand is transferred from certain branches 
 of industry and certain places to others. The city hotels, lodging 
 and boarding houses, restaurants, and clubs languish, while their 
 country cousins are flourishing. Waiters, cooks, servants, and help 
 of aU kinds are turned off in the city and others taken on in the 
 country, and the same diversion of consumption operates in many 
 other lines. The shops become almost empty. Summer clothing 
 and shoes have usually been bought in the late spring. The same 
 applies to house furnishings. Few pianos are soW in the summer 
 time. Thousands of workers in these trades are turned off tempo- 
 rarily; some, especially hotel and restaurant workers, to find jobs 
 in the country, others to take vacations, often unpaid. The absence 
 of these workers and of the middle classes on holiday creates a 
 general depression of business which is clearly reflected in the curve 
 for aU industries shown on page — . 
 
 1 Table not published. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 51 
 
 Business and social habits purely customary in nature are often 
 responsible for seasonal irregularity. The publishers of school books, 
 and with them printing and bookbinding firms, are subject to a severe 
 suro.mer rush in July and August, in the attempt to get out their fall 
 ssues in time for the opening of the schools because of the dilatori- 
 ness of boards of education in postponing the making of "adoptions'" 
 until the end of the school year. The adoptions are made only in 
 June and deliveries have to made by August 15. Sometimes only 
 two or three weeks are given for filling orders. The competition be- 
 tween the different pubfishing companies is so keen that they do not 
 dare to make a stand against this system. Where the custom prevails 
 of making adoptions for a period of several years rather than annually, 
 the publisher is able to forecast his business and is not forced to make 
 such spasmodic demands upon his printer. 
 
 Similarly in pubhc work the period of adopting the budget is a 
 factor of some importance, for a hiatus may occur between the ex- 
 
 Eiration of the previous appropriations andf the voting of the new 
 udget with consequent unemployment of workers during the mean- 
 time. 
 
 The habit of laying in stock at certain, times of the year creates 
 special demands in the autumn, at the opening of the year, or other 
 definite points. September 1 and March 1 have come to be the definite 
 dates in the shoe trade for stocking up on the part of the retailers, 
 and production is carried on with these points in view. Rural dealers 
 often make a practice of stocking up with certain nonperishable 
 goods in the fall. The new year is the point at which many busi- 
 nesses take account of stock and send in large orders for fresh sup- 
 plies. In many manufacturing establishments stock taking means 
 an annual lay off for the help of one to three weeks. In the shoe in- 
 dustry a week and a half off for this purpose in January and July is 
 a fairly general custom and helps to bridge over the slack season. In 
 any other industries, such as confectionery, watches, department 
 stores, piano inanufacturers, vacations for the help serve a similar 
 purpose although as these are usuady unpaid they are equivalent in 
 practice to lay offs. 
 
 Irregular buying habits, not only on the part of the general public, 
 but among business men themselves, are a fruitful source of irregu- 
 larity. These are partly due to a natural economic demand at cer- 
 tain times and seasons, but often to a lack of understanding of the 
 disorganization of production and employment caused by spasmodic 
 orders. Too little effort is made on the part of buyers to foresee a 
 demand and allow the producer some time in which to adapt it to 
 the rest of his business. Few housewives think of investigating their 
 heating apparatus, furnaces, and chimneys until the first freezing 
 day forces them to send in hurry calls for repairs. The customer of 
 the made-to-order shoemaker may know when his next pair of shoes 
 will be needed, but urgent appeals fail to induce him to impart that 
 knowledge to his shoemaker, and when the need comes he wants the 
 shoes at once regardless of what other business is on hand. The 
 milliners and dressmakers suffer much from similar careless, unrea- 
 sonable demands. 
 
 Ainong business men the indifference that is displayed is more seri- 
 ous, because of the greater size of the orders. One manufacturer tells 
 of a regular and important customer whom he had been supplying 
 
52 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 for a long period with a large order weekly. The customer suddenly 
 quadrupled his order for the following week and thereafter, with no 
 consideration for others that might be outstanding or for the capacity 
 of the plant, and the manufacturer was compelled to yield without 
 protest for fear of losing his customer to a competitor. Every manu- 
 facturer can relate similar experiences. In the rare cases where fore- 
 sight and consideration are exercised in giving orders, the manufac- 
 turer has usually been able to exert pressure of a more than sentimental 
 character on the buyer. 
 
 Unemployment has a very depressing effect upon men's wages. I 
 want to call attention to the fact that in all our American industries, 
 at the present time, industrial fluctuations inean great reduction in 
 the workingman's wage. In the accompanying table the month of 
 least employment in all American industries is compared with the 
 month of greatest employment. The resultant percentages present a 
 very conservative idea of the loss of time and, consequently, wages. 
 From a study of such statistics I should say that the actual average 
 loss was at least twice as great as here indicated, not 12 per ceiit (100 
 per cent minus general average per centage 88 per cent) but 24 per 
 cent and more. The average American workingman probably loses 
 one-quarter of his yearly wages through unemplo3nnent. 
 
 Wage earners: Number employed in manufactures, 1909. 
 
 s, page 237, No. 159. (Source: : 
 department of Commerce.)] 
 
 .Statistical Abstract of the United States, page 237, No. 159. (Source: Reports cf the Bureau of the Census, 
 
 Per cent. 
 
 Agricultural implements 81. 
 
 Artificial flowers and feather plumes 76. 9 
 
 Artificial stone 37. 7 
 
 Artists' materials 81. 4 
 
 Automobiles, including bodies and parts -. 69. 8 
 
 Awnings, tents, and sails 57. 8 
 
 Axle grease 88.7 
 
 Babbitt metal and solder ; 76. 1 
 
 Bags, other than paper 85. 3 
 
 Bags, paper 93. 4 
 
 Baking powders and yeast 90. 
 
 Baskets and rattan and willow ware 75. 2 
 
 Beet sugar 13. 1 
 
 Belting and hose, leather 89. 2 
 
 Belting and hose, woven and rubber 89. 8 
 
 Bicycles, motorcycles, and parts 79.9 
 
 Billiard tables and materials 90. 1 
 
 Blacking and cleansing and polishing preparations 85. 8 
 
 Bluing 87. 3 
 
 Bone, carbon, and lampblack .- 88. 5 
 
 Boots and shoes, including cut stock and findings 91. 8 
 
 Boots and shoes, rubber 89. 3 
 
 Boxes, cigar 91. 4 
 
 Boxes, fancy and paper 87. 8 
 
 Brass and bronze products. . . ; 83. 2 
 
 Bread and other bakery products 94. 
 
 Brick and tile 36. 5 
 
 Brooms 87. 6 
 
 Brushes 88. 5 
 
 Butter, cheese, and condensed milk 70. 7 
 
 Butter, reworking 84. 8 
 
 Buttons ..[[.[[. \\ 87. 1 
 
 Calcium lights 76. 5 
 
 Candles 76.0 
 
 Canning and preserving 12. 9 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 53 
 
 Per cent. 
 
 Card cutting and designing 93. 2 
 
 Carpets and rugs, other than rag 96. 
 
 Carpets, rag 75. 3 
 
 Carriages and sleds, children's 76. 3 
 
 Carriages and wagons, and materials 90. 9 
 
 Cars and general shop construction and repairs by steam-railroad companies. . . 89. J 
 
 Cars and general shop construction and repairs by street-railroad companies. . . 95. 7 
 
 Cars, steam-railroad, not including operations of railroad companies 59. 2 
 
 Cars, street-railroad, not including operations of raihoad companies 77. 1 
 
 Cash registers and calculating machines 82. 4 
 
 Cement 70. 6 
 
 Charcoal 65. 6 
 
 Chemicals 90. 2 
 
 China decorating ^ 86. 4 
 
 Chocolate and cocoa products 72. 4 
 
 Clocks and watches, including cases and materials 71. 6 
 
 Cloth, sponging and refinishing 91. 3 
 
 Clothing, horse 84. 6 
 
 Clothing, men's buttonholes 91. 5 
 
 Clothing, men's, including shirts 91, 8 
 
 Clothing, women's 80. 6 
 
 Coffee and spice, roasting and grinding 93. 7 
 
 Coffins, burial cases, and undertakers' goods 93. 1 
 
 Coke 80.0 
 
 Confectionery 74. 2 
 
 Cooperage and wooden goods not elsewhere specified 90. 3 
 
 Copper, tin, and sheet-iron products 81. 
 
 Cordage and twine and jute and linen goods 91. 1 
 
 Cordials and sirups 55. 4 
 
 Cork, cutting 81. 3 
 
 Corsets .■ 92. 3 
 
 Cotton goods, including cotton small wares 97. 6 
 
 Crucibles - 86. 1 
 
 Cutlery and tools, not elsewhere specified. 89. 
 
 Dairymen's, poulterers', and apiarists' supplies 72. 8 
 
 Dentists' materials 93. 8 
 
 Drug grinding 81. 4 
 
 Dyemg and finishing textiles 96. 3 
 
 Dyestuffs and extracts 92. 5 
 
 Electrical machinery, apparatus, and supplies 78. 
 
 Electroplating 89. 1 
 
 Emery and other abrasive wheels 76. 1 
 
 Enameling and japanning 77. 5 
 
 Engravers' materials 78. 3 
 
 Engraving and diesinldng 89. 4 
 
 Engraving, wood 93. 6 
 
 Explosives -.- - - 77. 5 
 
 Fancy articles, not elsewhere specified 79. 7 
 
 Fertilizers - 48. 7 
 
 Files ,.. 94.0 
 
 Firearms and ammunition "6. 3 
 
 Fire extinguishers, chemical 85. 5 
 
 Fireworks - • ■ ^4. 
 
 Flags, banners, regalia, society badges, and emblems 86. 3 
 
 Flavoring extracts » 87. 
 
 Flax and hemp, dressed ^^- o 
 
 Flour mill and gristmill products 88. 1 
 
 Food preparations -- 78. 5 
 
 Foundry and machine-shop products - 80. 7 
 
 Foundry supplies ^4. 
 
 Fuel, manufactured 44. 7 
 
 Fur goods li;^ 
 
 Fumiflhing goods, men's °^- ° 
 
 Furniture and refrigerators °°- ^ 
 
 Furs, dressed ^*- ° 
 
 Galvanizing ' **• ' 
 
54 SOCIAL INSUBAKCE AND UNEMPLOYMENT. 
 
 Per cent. 
 
 Gas and electric fixtures and lamps and reflectors i ,- - 83. 5 
 
 Gas, illuminating and heating • 80,6 
 
 Glass 49.3 
 
 Glass, cutting, staining, and ornamenting 86. 1 
 
 Gloves and mittens, leather 88. 8 
 
 Glucose and starch 75. 4 
 
 Glue 77. 6 
 
 Gold and silver, leaf and foil. . ., '- - - 91. 9 
 
 Gold and silver, reducing and refining, not from the ore 94. 5 
 
 Graphite and graphite refining 73. 1 
 
 Grease and tallow 89. 
 
 Grindstones 47. 7 
 
 Haircloth 91. 3 
 
 Hair work : 84. 5 
 
 Hammocks 58. 1 
 
 Hand stamps and stencils and brands , 90. 
 
 Hat and cap materials 87. 4 
 
 Hats and caps, other than felt and wool 90. 8 
 
 Hats, fur-felt 66. 7 
 
 Hats, straw. 40. 9 
 
 Hones and whetstones 56. 2 
 
 Horseshoes, not made in steel works or rolling mills .' 71. 2 
 
 .Hosiery and knit goods 91. 7 
 
 House-furnisliing goods not elsewhere specified 84. 8 
 
 Ice, manufactured. ...» 43. 1 
 
 Ink, printing. 96. 
 
 Ink, writing 66. 
 
 Instruments, professional and scientific 87. 1 
 
 Iron and steel, blast furnaces 71. 6 
 
 Iron and steel, steel works and rolling mills 75. 8 
 
 Iron and steel, bolts, nuts, washers, and rivets, not made in steel works or 
 
 rolling mills. ■. 82. 
 
 Iron and steel, doors and shutters 70. 7 
 
 Iron and steel forgings 73.0 
 
 Iron and steel, nails and spikes, cut and wrought, including wire nails, not 
 
 made in steel works or rolling mills 96. 
 
 Iron and steel pipe, wrought 71. 1 
 
 Jewebry 83. 2 
 
 Jewelry and instrument cases 82. 4 
 
 EaoUn and ground earths 86. 7 
 
 Labels and tags , 92. 2 
 
 Lapidary work 87.6 
 
 Lard, refined, not made in slaughtering and meat-packing estabUahments 85. 2 
 
 Lasta 90.8 
 
 Lead, bar, pipe, and sheet 88. 7 
 
 leather goods 91. 
 
 Leather, tanned, curried, and finished '. 90.1 
 
 Lime 68. 6 
 
 Liquors, distilled 69. 3 
 
 Liquors, malt. 87. 9 
 
 Liquors, vinous , 36. 6 
 
 Locomotives, not made by railroad companies 71. 6 
 
 Looking-glass and picture frames 83.7 
 
 Lumber and timber products 87. 8 
 
 Malt .' 60. 7 
 
 Marble and stone work. 74. 4 
 
 Matches 54. 7 
 
 Mats and matting 85, 4 
 
 Mattresses and spring beds ; 82. 6 
 
 Millenery and lace goods ; 71. 8 
 
 Mineral and soda waters 64. 4 
 
 Mirrors 87.6 
 
 -Models and patterns, not including paper patterns 85. 6 
 
 Moving pictures 75,2 
 
 Mucilage and paste '..-..... 91. 4 
 
 Musical instruments and materials, not elsewhere specified 98. 4 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 55 
 
 Per cent. 
 
 Musical instruments, pianos and organs and materials 90. 6 
 
 Needles, pins, and hooks and eyes 88. 8 
 
 Oakum 75/4 
 
 Oil, castor ^.... 79! 7 
 
 Oil, cottonseed, and cake 17. 6 
 
 Oil, essential 52. 2 
 
 Oil, linseed 54. 4 
 
 Oil, not elsewhere specified 93. 3 
 
 Oilcloth and linoleum 93. 
 
 Oleomargarine 77. 7 
 
 Optical goods 92. 4 
 
 Paint and varnish 90. 
 
 Paper and wood pulp 96. 2 
 
 Paper goods, not elsewhere specified 91. 4 
 
 ■ Paper patterns .- §1.8 
 
 Patent medicines and compounds and druggists ' preparations 87. 9 
 
 Paving materials 50. 6 
 
 Peanuts, grading, roasting, cleaning, and shelling 60. 9 
 
 Pencils, lead 85.8 
 
 Pens, fountain, stylographic and gold 90. 5 
 
 Pens, steel 93. 7 
 
 Petroleum, refining 84. 9 
 
 Phonographs and graphophones 67. 6 
 
 Photographic apparatus and materials 86. 2 
 
 Photo-engraving 90. 8 
 
 Pipes, tobacco 89. 4 
 
 Pottery, terra-cotta, and fire-clay products 84. 9 
 
 Printing and publishing 93. 3 
 
 Pulp goods ; 83. 6 
 
 Pumps, not including steam pumps 86. 7 
 
 Rice, cleaning and polishing 21. 6 
 
 Roofing materials 79. 1 
 
 Rubber goods, not elsewhere specified ' 82.6 
 
 Rules, ivory and wood 87. 
 
 Safes and vaults 90.7 
 
 Salt 83. 
 
 .Sand and emery paper and cloth 71. 2 
 
 Saws 91.9 
 
 Scales and balances 87. 8 
 
 Screws, machine 71. 9 
 
 Screws, wood 82. 9 
 
 Sewing machines, cases and attachments 86. 4 
 
 Shipbuilding, including boat building 88. 9 
 
 Shoddy 91. '9 
 
 Show cases 89. 9 
 
 Signs and advertiaiB^ novelties 83. 1 
 
 Silk and silk goods, including throwsters 95. 8 
 
 Silverware and plated ware 48. 5 
 
 Slaughtering and meat packing 87. 9 
 
 Smelting and refining, copper 92, 9 
 
 Smelting and refining, lead 89. 2 
 
 ' Smelting and refining, zinc 86. 8 
 
 Smelting and refining, not from the ore 78. 
 
 Soap 90.4 
 
 Soda-water apparatus 72. 4 
 
 Sporting and athletic goods 1 83.8 
 
 Springs, steel, car and carriage _. , 79. 9 
 
 Stationery goods, not elsewhere specified 87. 4 
 
 Statuary and art goods 83. 9 
 
 Steam packing ". 77. 3 
 
 Stereotyping and electrotyping 95.4 
 
 Stoves and furnaces, including gas and oil stoves 72. 6 
 
 Sugar and molasses 3.5 
 
 Sugar refining, not including beet sugar 79. 7 
 
 Sulphuric, nitric, and mixed acids 91.5 
 
 Surgical appliances and artificial limbs 90. 2 
 
56 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Per cent. 
 
 Tinplate and terneplate „?■ ? 
 
 Tinfoil ^-1 
 
 Tobacco manufacturers ^j--" 
 
 Toys and games °^-^ 
 
 Turpentine and rosin °1- 3 
 
 Type-founding and printing materials °* 2 
 
 Typewriters and supplies 74. 8 
 
 Umbrellas and canes 84. 4 
 
 Upholstering materials 90-1 
 
 Vault lights and ventilators. 67. 
 
 Vinegar and cider 25. 6 
 
 Wallpaper 60.7 
 
 Wall plaster 84.3 
 
 Washing machines and clothes wringers '. 87. 4 
 
 Waste 94. 1 
 
 Wheelbarrows 75. 1 
 
 Whips 93. 4 
 
 Windmills 79. 2 
 
 Window shades and fixtures 89. 
 
 Wire 87. 2 
 
 Wirework, including wire rope and cable 87. 5 
 
 Wood carpjet. 79. 8 
 
 Wood distillation, not including turpentine and rosin 81. 2 
 
 Wood preserving 77. 
 
 Wood, turned and carved 89. 4 
 
 Wool pulling 71. 8 
 
 Wool scouring 64. 3 
 
 Woolen, worsted, and felt goods, and wool hats ' 91. 
 
 All other industries 58. 6 
 
 Total 88.6 
 
 Average number employed during year, 6,615,046. 
 
 Miss PoYNTZ. I would like to remind you, too, that probably a 
 great deal of oub industrial unrest is due to this irregular employment 
 as much, certainly, as it is to low wages. 
 
 If we look into the history of working-elass revolutions within the 
 last century, we find these have coincided with periods or crises of 
 insufficient employment, which have very seriously affected the 
 welfare of the country. The revolution of 1848 followed a period of 
 great depression and extreme unemployment, and the problem at 
 that time was to provide work for the workless. Unemployment is a 
 very serious danger to the social structure. It is a matter of vital 
 importance for the social system to provide some method of miti- 
 gating the intensity of the misery that is due to unemployment. 
 
 An investigation was made recently under my directions into the 
 dress and waist industry in New York City, in which 50,000 girk are 
 employed, and it was shown that the percentage of actual employ- 
 ment throughout the year, as compared with fuU employment, was 
 only 55 per cent. Therefore, if the wage was $10 a week, it was 
 reafly only $5.50. When labor has no work, labor has no wages, and 
 therefore no means of living whatsoever. This works a great hard- 
 ship, particularly in view of the fact that in some cases the same 
 families are engaged in the same industries. 
 
 Now, in addition to these seasonal fluctuations which have such an 
 important bearing upon the standard of living, because we discover 
 that the great turnover of labor in our factories at the present time 
 is merely due to the fact that workingmen have been used as irregular 
 labor in seasonal industries— I say, in addition to these seasonal 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 57 
 
 fluctuations, there is a long fluctuation in industrial activity over a 
 period of seven or eight years. During these periodic depressions, 
 the factories are standing idle, the people want to work but can not; 
 other people need things which are not being manufactured, and we 
 are faced with the absurdity that the factories must suspend work 
 while there are, on the one hand, people who want to work to produce 
 articles of commerce, and on the other hand, people who need these 
 articles, but the former can not work and the latter can not buy. The 
 people need mgre clothes, and the garment svorkers want to make 
 them; the farmers want to sell" their produce, and yet people in the 
 large cities are starving for the want of food. The shoe factories are 
 standing idle while shoe workers are unemployed and children are 
 going barefoot. 
 
 -I would like to illustrate the problem of unemployment with a few 
 charts which I have prepared. I have endeavored to show you the 
 fluctuations in the labor market, how truly the problem of unemploy- 
 ment is a problem of fluctuation. 
 
 From official figures provided by the Massachusetts Bureau of 
 Labor Statistics, I nave prepared these charts, which show the varia- 
 tions in the numbers employed in Massachusetts industries from 1908 
 to 1913. In every industry, cotton, boots and shoes, woolen goods, 
 foimdry and machine-shop products, electrical machinery, paper, 
 leather, etc., very irregular fluctuations are seen in the number of 
 workers employed, not only over the whole period, but within each 
 year from one month to another. 
 
 The following table of percentages is computed from the ofiicial 
 figures of the Massachusetts Bureau of Statistics of numbers em- 
 
 Sloyed in certain industries month by month from 1908 to 1913 in 
 [assachusetts for the principal industries of that State.^ Both sea- 
 sonal and cyclical fluctuations in numbers employed are visible as 
 variations about the monthly average of the whole period, which is 
 considered 100 per cent: 
 
 Table IV. — Numbers employed in principal industries, month by month, 1908-1913, 
 for Massachusetts; as percentages of monthly average for whole period, by industries. 
 
 ALL INDUSTRIES. 
 (Average number employed, 676,103 (100 per cent).] 
 
 Year. 
 
 Jan. 
 
 Feb. 
 
 Mar. 
 
 Apr. 
 
 May. 
 
 June. 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Deo. 
 
 Aver, 
 ages. 
 
 1908 
 
 83.6 
 98.4 
 101.5 
 101.4 
 103.0 
 109.1 
 
 82.7 
 99.5 
 102.6 
 104.0 
 102.6 
 109.6 
 
 81.9 
 103.3 
 102.6 
 102.9 
 104.7 
 109.7 
 
 80.6 
 100.0 
 1C1.8 
 K2.0 
 104.1 
 108.0 
 
 80.0 
 100.0 
 100.9 
 100.2 
 104.9 
 106.0 
 
 80.5 
 100.0 
 98.6 
 98.8 
 105.2 
 105.0 
 
 80.0 
 99.6 
 96.6 
 98.0 
 103.9 
 102.8 
 
 81.3 
 101.0 
 97.8 
 99.3 
 104.1 
 104.6 
 
 85.4 
 103.2 
 
 98.5 
 101.3 
 106.5 
 106.5 
 
 88.1 
 104.6 
 100.0 
 103.0 
 108.3 
 107.6 
 
 88.4 
 105.0 
 101.4 
 104.0 
 109.8 
 108.1 
 
 87.9 
 106.3 
 101.6 
 104.1 
 110.0 
 108.0 
 
 83. S 
 
 1909 
 
 101.1 
 
 1910 
 
 100. a 
 
 1911 
 
 101.3 
 
 1912 
 
 105.6 
 
 1913 
 
 107.1 
 
 
 
 Average 
 
 99.5 
 
 99.6 
 
 100.8 
 
 99.4 
 
 98.6 
 
 07.9 
 
 96.9 
 
 98.'0 
 
 100.3 
 
 102.0 
 
 103.8 
 
 103.0 
 
 100. a 
 
 1 It is from this table for tbe most part that the charts presented were prepared. 
 
58 
 
 SOCIAL IKSUKANCE AND tTlSrEMPLOYMENT. 
 
 Tablb IV. — Numbers employed in principal industries, month by month, 1908-19 IS, for 
 - Massachusetts; as percentages of monmly average for whole period, by industries — 
 Continued. 
 
 BOOTS AND SHOES. 
 
 [Average number employed, 77,126 (100 per cent.) 
 
 Year. 
 
 Jan. 
 
 Feb. 
 
 Mar. 
 
 Apr. 
 
 May. 
 
 June. 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Dec. 
 
 Aver- 
 ages. 
 
 1908 
 
 92.3 
 97.9 
 104.9 
 104.2 
 110.0 
 109.5 
 
 92.3 
 98.9 
 107.3 
 105.2 
 111.0 
 110.5 
 
 ' 92.0 
 98.1 
 105.8 
 104.3 
 109.0 
 109.2 
 
 90.3 
 94.9 
 100.2 
 100.3 
 104.1 
 103.8 
 
 86.7 
 91.2 
 97.9 
 96.9 
 102.9 
 100.0 
 
 80.5 
 91.3 
 92.0 
 98.2 
 102.7 
 101.0 
 
 86.4 
 95.1 
 97.5 
 100.7 
 102.2 
 102.2 
 
 91.8 
 
 98.0 
 
 99.9 
 
 104.8 
 
 105.9 
 
 105.3 
 
 93.0 
 98.3 
 93.5 
 105.3 
 103.4 
 103.6 
 
 •91.8 
 98.3 
 87.4 
 103.9 
 104.0 
 103.6 
 
 89.8 
 98.6 
 97.4 
 105.8 
 106.8 
 106.5 
 
 90.3 
 102. S 
 101.2 
 108.0 
 110.0 
 108.3 
 
 89.8 
 
 1909 
 
 96.^9 
 
 1910 
 
 98.,4 
 
 1911 
 
 losJo 
 
 1912 
 
 106.0 
 
 1913 
 
 105.12 
 
 
 
 Average 
 
 103.0 
 
 104.0 
 
 100.8 
 
 98.7 
 
 95.6 
 
 94.9 
 
 97.3 
 
 100.8 
 
 99.5 
 
 98.1 
 
 100.7 
 
 103.2 
 
 IDO.O 
 
 BOOTS AND SHOES, RUBBER. 
 [Average number employed, 7,753 (100 per cent).] 
 
 1908 
 
 68.6 
 80.3 
 106.8 
 102.3 
 108.0 
 106.9 
 
 70.1 
 88.0 
 109.0 
 102.1 
 108.0 
 107.3 
 
 81.0 
 82.8 
 111.1 
 104.0 
 110.9 
 110.0 
 
 88.1 
 88.3 
 105.8 
 107.5 
 108.8 
 108.9 
 
 92.2 
 88.8 
 105.8 
 107.3 
 110.3 
 106.8 
 
 94.5 
 90.3 
 105.0 
 105.8 
 116.5 
 105.1 
 
 96.3 
 91.3 
 103.8 
 103.2 
 114.0 
 96.3 
 
 9S.0 
 
 9a. R 
 
 97.8 
 
 99.4 
 
 79.0 
 92.8 
 104.0 
 101.3 
 115.0 
 108.5 
 
 88.1 
 
 1909 
 
 87.0 91.9 
 
 94.3' 96.3 
 103.0 105.1 
 102.8, 104.0 
 118.8 111.0 
 
 97.0 101.7 
 
 89.3 
 
 1910 . . 
 
 101.8 
 102.0 
 95.1 
 91.7 
 
 101.1 
 102.0 
 
 117.8 
 96.9 
 
 106.1 
 
 1911 
 
 103.8 
 
 1912 
 
 111.0 
 
 1913 
 
 102.7 
 
 
 
 Average 
 
 95.3 
 
 97.5 
 
 100.0 
 
 101.1 
 
 102.0 
 
 104.0 
 
 101.9 
 
 96.3 
 
 101.2 
 
 102.4 
 
 103.0 
 
 99.0 
 
 100.0 
 
 CARPETS AND RUGS. 
 [Average number employed, 5,656 (100 per cent).) 
 
 1908 
 
 73.6 
 106.6 
 108.0 
 109.2 
 103.0 
 109.0 
 
 66.6 
 107.8 
 108.8 
 110.1 
 103.0 
 110.2 
 
 65.2 
 105.3 
 
 96.9 
 111.0 
 104.5 
 108.3 
 
 62.8 
 103.5 
 
 95.6 
 106.9 
 105.7 
 104.9 
 
 72.0 
 104.8 
 104.8 
 103.9 
 100.9 
 101.2 
 
 77.3 
 103.9 
 105.0 
 104.9 
 102.0 
 
 99.5 
 
 77.3 
 106.8 
 105.1 
 101.8 
 102.0 
 
 99.5 
 
 89.5 
 104.0 
 104.0 
 103.8 
 101.0 
 
 97.5 
 
 90.4 
 104 8 
 104.9 
 
 97.0 
 101.9 
 
 95.8 
 
 98.9 
 104.3 
 106.0 
 100.8 
 100.6 
 
 95.0 
 
 99.4 
 104.3 
 108.1 
 101.6 
 103.1 
 
 94.9 
 
 98.9 
 107.6 
 108.2 
 103.0 
 106.0 
 
 99.0 
 
 78.0 
 
 1909 
 
 105.2 
 
 1910 
 
 104.8 
 
 1911 
 
 1912 
 
 103.1 
 103.0 
 
 1913 
 
 101.1 
 
 
 
 Average 
 
 101.3 
 
 101.2 
 
 98.5 
 
 95.7 
 
 97.9 
 
 98.7 
 
 98.3 
 
 100.1 
 
 98.9 
 
 101.2 
 
 102.1 
 
 104.0 
 
 100.0 
 
 COTTON. 
 (Average number employed, 107,032 (100 per cent).) 
 
 1908 
 
 86.2 
 98.6 
 102.4 
 104.1 
 103.4 
 109.3 
 
 84.3 
 99.4 
 102.4 
 103.3 
 102.9 
 109.2 
 
 82.6 
 100.5 
 101.7 
 104.3 
 104.4 
 109.9 
 
 76.2 
 100.5 
 101. 3 
 104.2 
 100.0 
 109:0 
 
 76.3 
 100.9 
 101.6 
 102.3 
 105.4 
 106.3 
 
 84.3 
 100.4 
 99. 1 
 99.3 
 105.8 
 104.2 
 
 81.0 
 101.2 
 96.4 
 98.7 
 102.5 
 103.8 
 
 81.5 
 101.0 
 07.1 
 95.9 
 98.3 
 101.9 
 
 86.0 
 102.1 
 98.3 
 96.8 
 104.1 
 107.0 
 
 91.7 
 101.6 
 102.2 
 103.0 
 106.9 
 108.5 
 
 93.5 
 101.5 
 103.0 
 104.2 
 108.0 
 109.4 
 
 93.9 
 102.5 
 103.4 
 105.0 
 108.3 
 109.4 
 
 84.8 
 
 1909 
 
 101.0 
 
 1910 
 
 100.9 
 
 1911 
 
 101.6 
 
 1912... 
 
 1913 
 
 104.3 
 108.2 
 
 
 
 Average 
 
 100.7 
 
 100.3 
 
 100.4 
 
 98.0 
 
 98.9 
 
 98.7 
 
 97.1 
 
 96.5 
 
 98.9 
 
 102.0 
 
 .103.0 
 
 103.6 
 
 100.0 
 
 DYEING AND FINISHING TEXTILES. 
 ■[Average number employed, 19,562 (100 per cent).] 
 
 1908 
 
 70.9 
 93.3 
 97.5 
 103.2 
 106.0 
 117.1 
 
 68.5 
 93.8 
 95.8 
 103.0 
 105.8 
 117.6 
 
 65.0 
 96.3 
 96.7 
 110.9 
 112.7 
 119.7 
 
 63.0 
 94.5 
 94.7 
 104.3 
 112.7 
 124.7 
 
 67.7 
 94.3 
 91.7 
 103.0 
 113.7 
 123.0 
 
 76.2 
 95.3 
 86.0 
 102.0 
 114.4 
 123.0 
 
 73.8 
 95.7 
 78.8 
 102.7 
 113.3 
 118.5 
 
 73.6 
 95.3 
 80.8 
 102.4 
 113.5 
 111.9 
 
 80.3 
 97.0 
 34.6 
 104.6 
 110.8 
 121.0 
 
 80.0 
 91.8 
 96.7 
 108.2 
 112.1 
 125.9 
 
 80.3 
 96.5 
 100.8 
 111.4 
 114.0 
 128.3 
 
 75.6 
 96.6 
 103.0 
 108.2 
 114.8 
 128.3 
 
 .73.9 
 
 1909 
 
 94.9 
 
 1910 
 
 92.3 
 
 1911 
 
 104.9 
 
 1912 
 
 112.1 
 
 1913 
 
 122.0 
 
 
 
 Average 
 
 98.0 
 
 97.4 
 
 99.2 
 
 99.0 
 
 99.0 
 
 99.0 
 
 97.0 
 
 97.5 
 
 99.6 
 
 102.3 
 
 106.5 
 
 106.7 
 
 100.0 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 59 
 
 Table IV. — Numbers employed in principal industries, month by month. 1908-1913, for 
 Massachusetts; as percentages of monmly average for whole period, by industries — 
 Continued. 
 
 ELECTRICAL MACHINERY. 
 [Average number employed, 17,170 (100 per cent).) 
 
 Year. 
 
 Jan. 
 
 Feb. 
 
 Mar. 
 
 Apr. 
 
 May. 
 
 June. 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Deo. 
 
 Aver- 
 ages. 
 
 1908 
 
 66.0 
 71.2 
 
 59.8 
 73.5 
 99.1 
 101.8 
 111.5 
 131.0 
 
 59.0 
 75.7 
 101.4 
 101.8 
 112.7 
 132.5 
 
 58.8 
 78.3 
 101.4 
 100.8 
 114.1 
 135.1 
 
 58.8 
 80.7 
 102.2 
 101.8 
 116.0 
 136.8 
 
 58.8 
 83.7 
 101.4 
 103.8 
 118.0 
 136.0 
 
 59.7 
 86.8 
 101.4 
 105.1 
 117.0 
 134.9 
 
 60.5 
 88.7 
 102.2 
 106.0 
 120.0 
 132.4 
 
 61.6 
 89.6 
 101.2 
 105.8 
 12L6 
 131.0 
 
 62,7 
 9L8 
 101.6 
 106.2 
 123.4 
 127.6 
 
 64.3 
 95.1 
 103.3 
 106.1 
 126.1 
 124.0 
 
 67.1 
 98.6 
 101.8 
 107.8 
 127.0 
 118.2 
 
 61.3 
 
 1909 
 
 84 5 
 
 1910 
 
 1911 
 
 1912 
 
 97.0 
 102.1 
 111.0 
 
 101.1 
 104.0 
 118.1 
 
 1913 
 
 129.3 
 
 131.0 
 
 
 
 Average.....^. 
 
 96.5 
 
 96.3 
 
 97.0 
 
 98.0 
 
 99.3 
 
 100.1 
 
 101.0 
 
 101.5 
 
 101.6 
 
 102.2 
 
 103.2 
 
 103.5 
 
 100.0 
 
 FOUNDRY AND MACHINE SHOP PRODUCTS. 
 [Average number employed, 37,170 (100 per cent).] 
 
 1908 
 
 89.2 
 90.5 
 113.6 
 102.7 
 97.3 
 107.2 
 
 85.3 
 92.8 
 113.6 
 103.2 
 97.0 
 107.0 
 
 83.9 
 94.6 
 113.6 
 103.5 
 97.8 
 107.0 
 
 81.2 
 95.1 
 113.6 
 103.4 
 97.8 
 105.0 
 
 79.4 
 96.8 
 114.9 
 101.8 
 98.4 
 101.6 
 
 79.0 
 99.8 
 114.0 
 100.3 
 99.4 
 97.8 
 
 80.6 
 101.8 
 113.7 
 98.4 
 99.9 
 97.0 
 
 81.3 
 104.2 
 112.0 
 
 98.9 
 101.1 
 
 98.4 
 
 83.2 
 106.5 
 111.0 
 
 98.9 
 102.8 
 
 98.9 
 
 87.0 
 106.0 
 111.2 
 101.6 
 104.9 
 
 99.9 
 
 87.7 
 108.6 
 111.0 
 101.6 
 107.9 
 
 99.4 
 
 87.2 
 111.0 
 109.1 
 100.1 
 108.4 
 
 98.6 
 
 83.9 
 
 1909 
 
 100.5 
 
 1910 
 
 112.4 
 
 1911 
 
 102.4 
 
 1912 
 
 102.1 
 
 1913 
 
 102.8 
 
 
 
 Average 
 
 100.6 
 
 99.8 
 
 99.9 
 
 99.3 
 
 98.8 
 
 98.3 
 
 98.4 
 
 99.3 
 
 99.9 
 
 101.9 
 
 102.3 
 
 102.3 
 
 100.0 
 
 HOSIERY AND KNIT GOODS. 
 [Average number- employed, 9,864 (100 per cent).] 
 
 J908 
 
 96.0 
 97.6 
 ■96.3 
 95.4 
 100.9 
 108.7 
 
 95.1 
 98.1 
 98.5 
 95.9 
 102.8 
 109.1 
 
 95.1 
 99.5 
 100.0 
 96.0 
 103.9 
 110.2 
 
 93.9 
 100.1 
 99.6 
 95.8 
 104.8 
 109.9 
 
 92.2 
 101.8 
 
 99.3 
 100.1 
 103.0 
 101.0 
 
 91.3 
 100.6 
 98.0 
 98.9 
 102.0 
 105.2 
 
 88.0 
 99.0 
 95.5 
 97.0 
 100.0 
 103.0 
 
 83.4 
 99.0 
 90.3 
 94.4 
 96.4 
 109.6 
 
 90.7 
 100.8 
 
 95.6 
 102.0 
 102.1 
 110.4 
 
 95.0 
 104.0 
 
 99.0 
 100.3 
 105.9 
 113.3 
 
 95.6 
 105.3 
 99.0 
 98.8 
 105.8 
 113.2 
 
 95.5 
 103.8 
 98.1 
 97.6 
 104.9 
 110.2 
 
 92.5 
 
 1909 
 
 100.8 
 
 1910 
 
 1911 
 
 1912 
 
 97.4 
 97.6 
 102.8 
 
 1913..-. 
 
 109.0 
 
 Average 
 
 99.0 
 
 100.0 
 
 101.0 
 
 100.8 
 
 99.4 
 
 99.4 
 
 97.1 
 
 95.4 
 
 100.5 
 
 103.0 
 
 103.0 
 
 102.0 
 
 100.0 
 
 LEATHER, TANNED, CURRIED, AND FINISHED. 
 [Average number employed, 10,290 (100 per cent).] 
 
 1908 
 
 1909 
 
 87.3 
 101.2 
 110.0 
 
 99.3 
 109.0 
 109.6 
 
 88.6 
 100.7 
 111.2 
 
 98.8 
 107.7 
 107.8 
 
 87.4 
 99.7 
 110.6 
 96.0 
 109.7 
 105.2 
 
 84.9 
 
 94.5 
 108.6 
 
 92.2 
 107.7 
 
 98.8 
 
 84.0 
 
 95.5 
 106.8 
 
 90.4 
 107.2 
 
 94.7 
 
 84.9 
 
 96.6 
 101.7 
 
 92.0 
 108.4 
 
 93.1 
 
 .85.9 
 95.6 
 
 100.7 
 92.6 
 
 109.7 
 92.2 
 
 91.1 
 95.1 
 97.9 
 93.5 
 110.3 
 94.7 
 
 93.3 
 97.0 
 96.8 
 95.3 
 110.1 
 96.6 
 
 95.2 
 101.8 
 97.6 
 96.1 
 112.5 
 100.7 
 
 96.5 
 106.8 
 100.7 
 101.4 
 115.6 
 103.8 
 
 97.6 
 112.3 
 105.2 
 106.3 
 116.2 
 106.3 
 
 89.8 
 99.7 
 
 1910 
 
 1911 
 
 1912 
 
 103.8 
 87.3 
 110.4 
 
 1913 
 
 100.3 
 
 
 
 Average 
 
 102.8 
 
 102.6 
 
 101.5 
 
 97.9 
 
 96.5 
 
 96.0 
 
 96.2 
 
 97.1 
 
 98.0 
 
 100.7 
 
 104.2 
 
 107.3 
 
 100.0 
 
 PAPER AND WOOD PULP. 
 [Average number employed, 13,310 (100 ner cent).] 
 
 1908 
 
 86.8 
 94.8 
 99.6 
 102.5 
 102.5 
 107.5 
 
 87.6 
 95.6 
 100.2 
 104.0 
 103.8 
 107.4 
 
 86.9 
 96.8 
 100.3 
 104.7 
 105.0 
 .108.2 
 
 86.3 
 95.1 
 101.0 
 104.4 
 104.7 
 .109.6 
 
 85.2 
 96.3 
 101.2 
 104.8 
 104.9 
 .109.2 
 
 83.8 
 96.6 
 101.2 
 103.9 
 107.7 
 109.1 
 
 80.0 
 94,8 
 98.9 
 102.5 
 107.1 
 104.9 
 
 82.3 
 96.0 
 96.8 
 102.1 
 105.0 
 106.2 
 
 81.6 
 96.9 
 100.0 
 103.1 
 106.2 
 106.3 
 
 87.3 
 98.2 
 100.7 
 104.0 
 107.7 
 107.2 
 
 88.3 
 98.3 
 102.2 
 104.9 
 107.1 
 108.5 
 
 90.8 
 99.4 
 102.8 
 104.1 
 107.8 
 108.4 
 
 86.4 
 
 1909 
 
 96.5 
 
 1910 
 
 1911 
 
 100.2 
 103.9 
 
 1912 
 
 1913 
 
 105.8 
 107.8 
 
 Average 
 
 98.9 
 
 99.8 
 
 100.2 
 
 100.0 
 
 100.1 
 
 100.2 
 
 98.0 
 
 98.1 
 
 99.0 
 
 101.0 
 
 101.8 
 
 102.2 
 
 100.0 
 
60 
 
 SOCIAL IISrSXJEAjSrCE AND UNEMPLOYMENT. 
 
 Table IV. — Numbers employed in principal industries, month by month, 1908-1913 , foi- 
 Massachusetts; as percentages of monthly average for whole period, by industries — 
 Continued. 
 
 WOOLEN GOODS. 
 [Average number employed, 49,169 (100 per cent).] 
 
 Year. 
 
 Jan. 
 
 Feb. 
 
 Mar. 
 
 Apr. 
 
 May. 
 
 June. 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Dec. 
 
 Aver- 
 ages. 
 
 1908 
 
 82.0 
 98.9 
 
 106.3 
 98.3 
 97.3 
 
 111.6 
 
 81.8 
 101.2 
 106.0 
 99.0 
 85.0 
 111.0 
 
 82. S 
 104.9 
 104.2 
 102.0 
 
 99.0 
 107.0 
 
 82.4 
 105.6 
 104.1 
 101.2 
 113.0 
 102,4 
 
 81.8 
 106.2 
 101.8 
 
 96.7 
 113.8 
 
 96.8 
 
 83.3 
 108.5 
 
 95.3 
 
 93.2 
 113.9 
 
 92.9 
 
 82.4 
 109.0 
 
 84.1 
 
 91.8 
 113.0 
 
 82.1 
 
 83.5 
 108.5 
 
 95.5 
 
 94.9 
 113.5 
 
 97.4 
 
 87.3 
 109.5 
 96.3 
 99.6 
 115.2 
 103.1 
 
 90.7 
 110.5 
 
 99.4 
 101.9 
 116.0 
 102.5 
 
 92.9 
 111.0 
 
 98.0 
 102.5 
 117.6 
 102.5 
 
 93.0 
 109.3 
 
 99.3 
 104.4 
 113.1 
 104.0 
 
 85.3 
 
 1909 
 
 107.0 
 
 1910 
 
 98.8 
 
 1911 
 
 98.8 
 
 1912 
 
 109.1 
 
 1913 
 
 101.2 
 
 
 
 Average 
 
 99.1 
 
 97.2 
 
 99.9 
 
 101.2 
 
 99.2 
 
 97.9 
 
 93.6 
 
 98.2 
 
 101.7 
 
 103^ 
 
 104.0 
 
 103.7 
 
 100.0 
 
 This black line [indicating on chart] represents the average, show- 
 ing how greatly the employment fluctuates above the line and below 
 the line. 
 
 Mr. London. What is the average ? 
 
 Miss PoYNTz. 100 per cent. 
 
 Mr. London. That is for 52 weeks in the year? 
 
 Miss PoYNTZ. That is the average employment for the whole period. 
 I just want to emphasize to you the ups and downs there. The 
 labor market is just as fluctuating as the other markets. But when 
 labor is not sold, labor has nothing to Uve on. The periods when the 
 demand for labor is low are represented here [indicating on chart]. 
 Notice how deep the depression falls in 1908, the period of great 
 misery and great crisis. It often falls again, as we see here [inmcat- 
 ing on chart]. In every industry employment is extremely, fluc- 
 tuating. 
 
 In the next column I show the seasonal fluctuations in the- chief 
 industries. None is regvdar from one end of the year to the other. 
 They are aE fluctuating. Some are more fluctuating than others. 
 The risk of unemployment is greater in some industries than in 
 others. 
 
 There is another variation over a number of years. From 1908 
 to 1913 — the beginning of 1908 to the end of 1913 — you will, notice 
 how greatly these industries fluctuate. They are up-grade here 
 [indicating on chart], because they happen to be on the up-grade 
 side of the period of fluctuation. There was another distinct down- 
 grade in 1914-15. This uncertainty and variation is typical of the 
 whole industrial situation of this country and of other countries. 
 It is the phenomenon that is world-wide, and certainly it is as wide 
 as our American country. 
 
 I would like also to* say that the problem in America is more 
 serious than in Europe. Not more than 10 or 15 years ago it was the 
 general belief that there was no problem of unemployment in America 
 such as there was in Europe. As a matter of fact, it is a much greater 
 problem here than in Europe. The percentages of trade-union 
 unemployment in New York and Massachusetts indicate that Ameri- 
 can unemployment rises to heights that are unknown in Europe; 
 that if unemployment is an evil in Europe it is a much vaster and 
 more serious evil in America. It might be pointed out that specula- 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 61 
 
 tion makes industrial changes much more rapid in this country 
 and that transitions in our mdustries result in greater fluctuations. 
 There are great fluctuations in aU. the industries affected by style, 
 as, for instance, in the garment and boot and shoe industries, which 
 are developed in this country to a much greater extent than in 
 Europe. tJnemployment is pecuharly our problem. If all the 
 countries of Europe have been interested in this problem, America 
 should be, certainly. During the great crises which have swept over 
 the countries of Europe within the last two decades the trade-union 
 unemployment percentages have rarely risen above 10 per cent, 
 whereas in the United States the general percentage of unemploy- 
 ment has risen above 20 and even 30 per cent. 
 
 It is being generally suggested that the remedy might be the dove- 
 tailing of one industry with another, that is the transference of labor 
 from one industry to another. When labor is not required during 
 the slack season in one industry, it could be transferred to another. 
 That is the suggestion advanced by some. The feasibility of such a 
 project has probably been much exaggerated. The highly specialized 
 workers of to-day can not easily be transferred from one industry to 
 another. I think Mr. Gompers will corroborate me when I say that 
 the trade unions do not approve generally of this sort of transference, 
 and favor a definite demarcation of the trades mainly because they 
 feel that any wholesale transference of this kind would be very danger- 
 ous to trade union organization. So that any dovetaUing of occu- 
 pations is difficult, although in many cases its practice could be 
 extended with benefit, especially between different departments of the 
 same factory. 
 
 Various famihes of industries fluctuate together. For instance, 
 fluctuations in the textile industry are apt to cause variations in 
 allied industries. If there is an irregular demand for cotton cloth, aU 
 the allied industries fluctuate in the same way. Again, in the boot 
 industry we find a fluctuation which extends to leather tanning, to 
 the manufacture of wooden lasts, to the patterns from which the 
 leather is cut, etc. In each group of industries the impulse to irregu- 
 larity is carried from one group to another. I have other charts here 
 which I will show you now, to illustrate the fluctuation in the boot 
 and shoe industry. This chart [indicating] illustrates various kinds 
 of industries — the boot and shoe industry, the rubber boot and shoe 
 industry, the tanning of leather, rubber goods, and the manufacture of 
 laces. Those are related or allied industries. The general tendency 
 to fluctuation is the same in aU of them. The same tendency is 
 illustrated also in the textile industries. The fluctuation runs all 
 through these, for instance, silk hosiery, carpets and rugs, dyeing and 
 finishing, and so on. 
 
 There is, in addition to that, the very serious problem of casual 
 labor. In the case of building labor, for instance, the hungry line of 
 workingmen waiting opposite some piece of construction work is a 
 familiar sight, waiting to get a job which may last a week, a few days, 
 or only a few hours. 
 
 Then there are the great armies of casual workers that travel from 
 one part of the country to another, without homes, without family 
 ties, or anything that would be, in the estimation of most people, 
 worthy of living for. They work in lumber camps, in the fields, and 
 travel about, picking up a job here and there, and drifting back to the 
 
62 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 cities in the winter unemployed. Casual labor of men, with its 
 accompanying phenomena, underpayment, pauperism, woman labor, 
 child labor, is the result of a completely disorganized and mediseval sys- 
 tem of marketing labor. While labor is peddled about in a haphazard 
 way, without systematic information as to the demand or supply of 
 labor, without any centralized organization for bringing these two 
 factors into contact, the elimination of casual labor and the economic 
 distribution of labor will be impossible. 
 
 The public organization of the labor market, through a clearing 
 house of labor and a system of labor exchanges, and information on 
 the labor market covering the whole field of mdustry, is a necessary 
 preliminary to any other attempts to attack the problem of imem- 
 ployment. 
 
 I have some information on this point that I would like permission 
 to submit to you later. 
 
 Mr. Keating. Without objection, the tables will be inserted in the 
 record at the point where you may see fit. The chair might suggest, 
 I think, that it would be well for the committee to consider the ad- 
 visabihty of submitting some of the charts for reproduction. It seems 
 to me the witness's testimony will not be very clear unless the charts 
 are in the hearings to illustrate the point which she has made. 
 
 Miss PoYNTz. Yes. 
 
 Mr. GoMPEBs. Mi^ht I suggest that Miss Poyntz give to the com- 
 mittee, for the beneht of the committee, the sources of and the bases 
 upon which these charts have been prepared. 
 
 Mr. Keating. The Chair was about to make that suggestion. 
 
 Mr. Gompers. May I say, then 
 
 Mr. Keating. Go ahead. 
 
 Mr. Gompers. If it is not iaterfering with the course of the com- 
 mittee and Ml'. London care to pursue, I would like to s^ that for 
 many yfears, as president of the American Federation of Labor and 
 editor of the official magazine of that organization, I have endeavored 
 to secure data of fairly reliable character in order to print a monthly 
 chart in the American Federationist, giving the state of imemploy- 
 ment, and, because of the fact of the difficulty in securing accurate 
 data of the state of unemployment I felt bound to discontinue the 
 publication of the charts. Further, I would like to say that with Mr. 
 Royal Meeker, Commissioner of the Bureau of Labor Statistics, I have 
 endeavored to cooperate with his bureau and have had many con- 
 ferences upon the subject of trying to ascertain something near the 
 actual state of unemployment. I think it was the commissioner who 
 was finally compeUed to resort to effort to concentrate attention to a 
 survey of unemployment in one State of the. Union. Because of my 
 own experience with the data, so far as trade-unions were concerned, 
 and with mij observation elsewhere from other sources, I should be 
 glad if the committee, and incidentally those who are interested in 
 this discussion, could have the sources of information upon which 
 those charts have besn prepared. 
 
 Mr. Keating. I presume the witness will be very glad to furnish 
 such iriformation as she has upon that. 
 
 Miss Poyntz. I will, sir. 
 
 Mr. London. I undei^tand you have made a personal study of the 
 subject. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 63 
 
 Miss PoYNTZ. Yes, sir. These are based upon figures from the 
 State of Massachusetts. 
 
 Mr. London. Obtained by whom ? , 
 
 Miss PoYNTZ. They are the official figures of the Bureau of Statis- 
 tics, and also some obtained privately from various factories and 
 manufacturers' associations. 
 
 Mr. London. Of Massachusetts ? 
 
 Miss PoYNTZ. Yes. There are no national figures available. I 
 should like to make this remark in connection with the census figures, 
 that the figures showing the variation in employment do not show 
 the actual degree of unemployment. The actual degree of unem- 
 ployment is probably much greater. This is due to the method of 
 averaging the figures. 
 
 Mr. Keating. Your figures do not extend beyond the State of 
 Massachusetts ? 
 
 Miss PoYNTZ. Not these figures. 
 
 Mr. London. The State Industrial Commission of New York has 
 issued several bulletins dealing with the problem of unemployment 
 and giving exact data as to idleness of organized labor. Do you 
 know of these bulletins ? 
 
 Miss PoYNTZ. Yes. 
 
 Mr. London. The most recent bulletin with reference to the con- 
 dition of idleness during the first six months of the year 1915 con- 
 tains a table of the percentage of members of unions unemployed at 
 the end of the months of January and June, between 1904 and 1915. 
 
 Miss PoYNTZ. These figures are simply typical. In the study I 
 made in England I found similar figures. I simply brought them 
 forward to illustrate the fluctuating character of employment, which 
 is a universal phenomenon. We know, of course, that there is in 
 every country a body of workers who are unemployed — those who 
 won't work — the "won't works," as we might term them. That 
 body, however, is comparatively smaU. When we include them in 
 the general problem of unemployment, we confuse the unemployable 
 with the unemployed. It is this confusion that has produced our 
 inactivity with regard to a constructive program dealing with unem? 
 
 Eloyment, and I think one of the first duties of the commission would 
 e to study these problems separately — to devise distinct means of 
 dealing with the "won't works" and with the great body of men 
 who want to work but can not find the work to do, those whom we 
 might call the "can't find works," if I may so express myself. The 
 people who will not work are often the product of a condition of 
 being unable to find work in the first place. That is the testimony 
 of every one who has any real knowledge of this problem. 
 
 There are no adequate national figures in regard to unemployment. 
 What I regard as even more important than figures is an accurate analr 
 ysis of the problem, a qualitative analysis as well as a quantitative 
 analysis. We want to find out the nature of the problem as well as its 
 extent. That kind of an analysis has been made in a masterful way 
 by the poor law commission appointed a few years ago in England, 
 which brought forth a really constructive program cased on the 
 causes of poverty. That program in its most progressive form is set 
 forth very well in a book entitled "The Prevention of Destitution," 
 by Beatrice and Sidney Webb, which is the inspiration of all those 
 who are working at this problem in any effective way. 
 
64 SOCIAL • INSURANCE AND UNEMPLOYMENT. 
 
 If I may, I should like to suggest to the committee the results of 
 deterioration, mental and moral and physical, which come from 
 neglect of this problem of unemployment. In traveling in Englisind 
 I saw the results of neglect and the vast indifference of legislators of 
 the nineteenth century. I urge upon the committee that they take 
 action without waiting until 10 or 15 years have passed and the 
 same situation confronts this country. These older countries have 
 seen the evil effects of their neglect of social needs and are now 
 exerting their energies to counteract these results. 
 
 I do not advocate here any special policy, but I do think that a 
 commission ought to be appointed with power to make a thorough 
 investigation of the matter. We merely want to show you the mag- 
 nitude of the problem and the necessity for having some sort of a 
 policy of dealing with it. What the general character of such a 
 pohcy might be I will indicate very roughly and briefly. 
 
 There has been a great deal of talk in recent years of the possi- 
 bility of regularizing labor inside the factories. I think these possi- 
 bihties are being exaggerated. The people who are interested in 
 efl&cient organization are much interested in this problem, and I 
 think the business men are ready to cooperate in it. 
 
 In so far as the establishment of employment departments can 
 produce results, I think we ought to support them. We must realize 
 that unemployment is a problem of the labor market as a whole, and 
 not of any individual establishment. We must realize that produc- 
 tion is irregular, and, that being the case, employment must be irreg- 
 ular. We must realize that the very best efforts of business men, 
 driven by every motive of profit to regularize their business, has 
 proven unavailing, and that the efforts to regularize the employment 
 t)f men will probably prove equally unavailing. 
 
 LABOR EXCHANGES. 
 
 Just as we have regularization in other markets we need organiza- 
 tion and pubhc control of the labor market. We want a central 
 clearing house where every opportunity may be rapidly brought to 
 men who want employment. That should be developed democrat- 
 ically. The experience in Europe has shown that it is only through 
 cooperation with the trade-unions that a really adequate system of 
 labor exchanges can be developed. Without labor exchanges we 
 can never have any remedies that will cure the problem of unem- 
 ployment. 
 
 Until we have some actual information as to the demand for labor 
 and the supply, we can not take any constructive action. The De- 
 partment of Labor and other agencies are moving very actively 
 along these lines. But a national system of labor exchanges must be 
 organized upon a much larger scale than at the present time. It 
 should be understood that isolated employment bureaus are very 
 different from a centralized system of labor exchanges; and that 
 without such system the whole labor market can not be organized 
 and regulated. 
 
 LABOR EXCHANGES IN ENGLAND. 
 
 The royal commiesion on the poor laws and relief of distress, 1905-1909, unani- 
 mously recommended as an essential part of any scheme for dealing with the problem 
 of unemployment the establishment of a national system of labor exchanges, and in 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 65 
 
 September, 1909, power was conferred on the board of trade by the labor-exchanges 
 act, 1909, to set up such a system. 
 
 Certain labor exchanges or bureaus were already in existence, established as a 
 general rule under the unemployed workmen act, 1905, but these exchanges were few 
 in number and were almost entirely local in character, the most important being the 
 system of exchanges maintained in the metropolis by the central (unemployed) body 
 for London. The labor-exchanges act gave the board of trade power to take over such 
 exchanges, while it was further provided that the exercise of the authority to establish 
 or maintain labor exchanges given by the unemployed workmen act, 1905, should, 
 after the lapse of one year, be subject to the sanction of the local government board for 
 England, Scotland, or Ireland, as the case might be, in consultation with the board of 
 trade. These provisions were intended to secure the absorption into the board of 
 trade system of all the exchanges established under the unemploved workmen act. 
 1905. i^ J , 
 
 The first labor exchanges under the control of the board of trade were opened on the 
 1st of February, 1910, on which date some 60 exchanges commenced operations. By 
 the 1st of May, 1911, the number working had risen to about 200, and after the passing 
 of the national insurance act, 1911, the number rose, mainly in consequence ofunem- 
 ployinent insurance, to over 400. There is, in addition, a large number of local 
 agencies for labor exchanges and unemployment insurance which have been estab- 
 lished in districts where the opening of a labor exchange would not be justified, and 
 which are concerned with labor-exchange business mainly only in so far as it is affected 
 by xmemployment insurance. The cost of administration of the labor exchanges is 
 borne by the national exchequer. 
 
 _ For purposes of administration and control the United Kingdom is divided into 
 eight divisions, viz, London and southeastern, southwestern, Yorkshire and East 
 Midlands, West Midlands, Wales, northwestern, Scotland and northern, and Ireland. 
 Each of these divisions has a divisional oflice, which forms the controlling center 
 for the exchanges within its area, and as a coordinating administrative authority over 
 the whole there is a central office in London. The exchanges are linked up with one 
 another, both divisionally and interdivisionally, by means of the telephone service, 
 and are thus enabled to keep in constant touch with each other both directly and 
 through the divisional offices. 
 
 A "labor exchange" is defined by the act as "any office or place used for the 
 purpose of collecting and furnishing information, either by the keeping of registers 
 or otherwise, respecting employers who desire to engage workpeople and workpeople 
 who seek engagements of employment." 
 
 The exchanges deal with both male and female applicants, and their work is con- 
 ducted under general regulations made by the board of trade under the authority 
 of section 2 of the labor-exchanges act. The work of the exchanges is also affected 
 by the national insurance act, 1911, and the r^ulations made thereunder. 
 
 Under regulation 3 a statement as to the existence of a strike or lockout affecting 
 their trade may be filed at a labor exchange by any association of employers or 
 workmen, and in notifying vacancies the exchange is required to call attention to 
 the statements that have been received. 
 
 Advisory trade committees. — The board of trade are required in such areas of the 
 United Kingdom as they think fit, to set up advisory trade committees consisting of 
 equal numbers of representatives of employers and workmen, with a chairman agreed 
 upon by a majority both of the employers' and the workmen's representatives, or in 
 default of such agreement appointed by the board of trade. The tenure of office is in 
 all cases three years. 
 
 The duty of the advisory trade committees is to advise and assist the board of trade 
 in regard to any matters referred to them in connection with the management of 
 labor exchanges. 
 
 I. Summary of work done by labor exchanges in 1911, 1912, 1913, and 1914. 
 
 1912 
 
 1913 
 
 1914 
 
 Exchanges open at end of year 
 
 Registrations 
 
 Individuals registered 
 
 Vatiancies notified 
 
 Vacancies filled 
 
 Individuals given work 
 
 261 
 
 2,040,447 
 
 1,513,369 
 
 788,609 
 
 621,410 
 
 469,210 
 
 413 
 
 2,465,304 
 
 1,643,687 
 
 1,062,574 
 
 828,230 
 
 573,709 
 
 422 
 
 2,965,893 
 
 1,871,671 
 
 1,222,828 
 
 921,863 
 
 652,306 
 
 400 
 3,442,452 
 2,164,023 
 1,479,024 
 1,116,909 
 814,071 
 
 39501—16- 
 
66 SOCLAL INSUEAKCE AKD T! NRMPLOYMENT . 
 
 II. Proportion of individuals given work and of vacancies filled. 
 
 1912 
 
 1913 
 
 1914 
 
 Proportion of individuals given work to individuals 
 
 registered 
 
 Proportion of vacancies filled to vacancies notified 
 
 Per cent. 
 31.0 
 78.8 
 
 Per cent. 
 34.9 
 77.9 
 
 Per cent. 
 34.9 
 75.4 
 
 Per cent. 
 37. ft 
 75.6 
 
 III. Summary of work done in 1914 distinguishing men, women, boys, and girls. 
 
 Registrations 
 
 Individuals registered. . 
 
 Vacancies notified 
 
 Vacancies filled 
 
 Individuals given work 
 
 Men. 
 
 Women. 
 
 2,316,042 
 
 1,381,694 
 
 909,383 
 
 706,458 
 
 607,538 
 
 707,071 
 476,936 
 312,344 
 232,935 
 160, 145 
 
 Boys. 
 
 211,898 
 157,093 
 157,278 
 103,280 
 85,068 
 
 Girls. 
 
 207,441 
 148,310 
 100,019 
 74,236 
 61,320 
 
 Miss PoYNTZ. I have arranged in the following tables information 
 regarding the fluctuations of employment during the year just past 
 in the two American States which collect such data, New York and 
 Massachusetts, and in several foreign countries for which information 
 is available. 
 
 The labor market in September-December, 1915 — Percentage of idleness in representa- 
 tive trade-unions in New York. 
 
 [New York State Department of Labor. The Industrial Commission.) 
 
 Industries or groups of trade. 
 
 Manufacturing 
 
 Clothing and textiles 
 
 Metals, machinery, and shipbuilding 
 
 Printing, binding, etc 
 
 Woodworking and furnitui-e 
 
 Food and liquors 
 
 Tobacco 
 
 Paper and paper goods 
 
 I.eatlier and leather goods 
 
 Glass and glassware 
 
 Building 
 
 Stone working 
 
 Building and paving trades 
 
 Building and street labor 
 
 Transportation 
 
 Railways 
 
 Navigation 
 
 Teaming and cab driving 
 
 Freight handling 
 
 Telegraphs 
 
 Miscellaneous 
 
 Theaters and music 
 
 Restaurants, trade, etc 
 
 Public employment 
 
 Stationary engine tending 
 
 Other 
 
 Total 
 
 Percentage idle. 
 
 July. 
 
 28.2 
 
 38.3 
 
 11.9 
 
 10.9 
 
 25.4 
 
 12.6 
 
 6.9 
 
 3.3 
 
 9.1 
 
 63. S 
 
 35.3 
 
 55.5 
 
 34.9 
 
 28.3 
 
 12.0 
 
 6.7 
 
 4.4 
 
 19.1 
 
 38.1 
 
 6.7 
 
 14.4 
 
 83.5 
 
 12.2 
 
 .5 
 
 4.2 
 
 22.6 
 
 26.0 
 
 ,.^ugust. 
 
 16.8 
 
 20.1 
 
 S.I 
 
 11.0 
 
 23.7 
 
 13.3 
 
 7.0 
 
 3.7 
 
 1.0 
 
 42.4 
 
 33.6 
 
 no. n 
 
 33.4 
 23.2 
 11.4 
 6.3 
 2.8 
 20.1 
 37.0 
 1.3 
 9.3 
 J6. 5 
 9.2 
 
 4.2 
 17.6 
 
 19.3 
 
 Septcm- 
 
 11.6 
 
 12.6 
 
 6.6 
 
 10.0 
 
 16.4 
 
 12.3 
 
 9.7 
 
 10. 6 
 
 .5 
 
 17.2 
 
 28.9 
 
 44.6 
 
 29.3 
 
 4.9 
 
 10.1 
 
 5.8 
 
 4.0 
 
 15.9 
 
 33.6 
 
 1.0 
 
 6.2 
 
 2.3 
 
 10.1 
 
 3.9 
 19.8 
 
 14.9 
 
 October. 
 
 10.6 
 
 9.1 
 
 18.6 
 
 9.3 
 
 14.1 
 
 12.9 
 
 8.9 
 
 7.4 
 
 .2 
 
 17.9 
 
 23.9 
 
 61.5 
 
 23.7 
 
 3.0 
 
 8.2 
 
 4.3 
 
 4.4 
 
 13.9 
 
 22.2 
 
 .3 
 
 ,i. 1 
 
 .9 
 
 10.7 
 
 4.5 
 11.3 
 
 12.7 
 
 Novem- 
 ber. 
 
 19.3 
 
 24.0 
 
 5.0 
 
 S.4 
 
 13.8 
 
 11.9 
 
 4.2 
 
 3.6 
 
 6.6 
 
 27.7 
 
 23.9 
 
 67.0 
 
 23.3 
 
 8.9 
 
 8.4 
 
 3.4 
 
 4.7 
 
 14.5 
 
 25.3 
 
 .2 
 
 5.3 
 
 .9 
 
 12.0 
 
 1.3 
 
 3.2 
 
 3.0 
 
 17.6 
 
 Decem- 
 ber. 
 
 24.0 
 31.5 
 4.0 
 7.4 
 13.0 
 11.4 
 3.0 
 4.1 
 44.5 
 17.8 
 30.9 
 69.1 
 30.4 
 12.1 
 8.9 
 2.6 
 13.1 
 10.2 
 23; 3. 
 .1 
 ,5.9 
 3.8 
 11.4 
 2.6 
 3.7 
 2.7 
 
 21.9 
 
SOCIAL INSUHANCE AND UNEMPLOYMENT. 
 
 67 
 
 Idleness of organized wage earners until first half of 1915— Percentage of unemployed 
 members of representative trade unions, January to June, 1915. 
 
 [State of New York, department of labor, Bulletin 73.) 
 
 Industries or f,'roupM of trades. 
 
 Bnlldiiig, stone working, e(c 
 
 Stone workmg 
 
 Building and paving trades. 
 
 Building and street labor . . . 
 Transportation 
 
 Railways 
 
 Navigation 
 
 Teaming and cab driving . . . 
 
 Freight handling 
 
 Telegraphs 
 
 Clothing and textiles 
 
 Garments 
 
 Shirts, collars, and laundry . 
 
 Hats, caps, and furs. 
 Boots, siloes, and gloves.. 
 
 Textiles. 
 
 4. Metal, macbinerv, and shipbuilding. 
 
 Iron and steel 
 
 Other metals 
 
 Shipbuilding 
 
 5. Printing, building, etc 
 
 6. Wood working ana furniture 
 
 7. Food and liquors 
 
 Food products 
 
 Beverages 
 
 8. Theaters and music 
 
 9. Tobacco : 
 
 10. Restaurants, trade, etc 
 
 Hotels and restaurants 
 
 Barbering 
 
 Retail trade 
 
 11. Public employment 
 
 12. Stationary engine tending 
 
 13. Miscellaneous 
 
 Paper and paper goods 
 
 Leather and leather goods 
 
 Glass and glassware 
 
 Other distinct trades 
 
 Mixed employment 
 
 January. 
 
 51.8 
 76.9 
 50.9 
 68.5 
 20.0 
 
 7.1 
 25.8 
 25.3 
 53.8 
 
 7.0 
 64.4 
 03.5 
 33.3 
 79.3 
 27.0 
 25.9 
 28.8 
 29.8 
 21.7 
 14.3 
 
 9.3 
 36.1 
 14.6 
 25.8 
 
 6.0 
 
 5.6 
 21.2 
 16.5 
 18.7 
 11.9 
 
 5.6 
 
 4.8 
 30.1 
 
 4.3 
 41.6 
 26.5 
 84.6 
 
 Total. 
 
 40.1 
 
 Percentage idle. 
 
 Feb- 
 ruary. 
 
 52.8 
 96.5 
 51.3 
 62.4 
 19.8 
 
 7.6 
 26.4 
 2L9 
 61.3 
 • 6.7 
 38.1 
 30.0 
 33.3 
 67.4 
 21.7 
 28.4 
 24.9 
 25.6 
 23.1 
 14.3 
 
 8.6 
 .38.1 
 14.0 
 24.5 
 
 6.0 
 
 7.0 
 26.0 
 16.2 
 18.1 
 13.9 
 
 3.5 
 .4 
 
 4.1 
 28.2 
 
 8.0 
 42.1 
 31.6 
 69.3 
 
 2.2 
 
 March. 
 
 46.0 
 67.6 
 46.2 
 52.0 
 18.1 
 
 8.5 
 27.6 
 17.3 
 59.1 
 
 6.6 
 27.2 
 17.9 
 30.0 
 68.8 
 19.6 
 12.3 
 26.8 
 27.8 
 18.0 
 14.3 
 10.0 
 .38.2 
 16.8 
 26.3 
 
 9.6 
 11.7 
 27.5 
 15.7 
 18.1 
 13.2 
 .9 
 .6 
 
 3.9 
 19.7 
 
 2.9 
 40.4 
 33.6 
 16.9 
 
 A pril. 
 
 41.2 
 69.6 
 40.6 
 44.1 
 14.8 
 
 7.7 
 10.8 
 20.0 
 17.7 
 
 6.2 
 31.2 
 30.6 
 10.0 
 39.4 
 10.5 
 99.5 
 21.8 
 22.3 
 19.8 
 14.3 
 
 9.7 
 29.0 
 15.0 
 24.4 
 
 7.8 
 37.1 
 22.9 
 14.0 
 16.8 
 
 7.1 
 .9 
 
 1.0 
 
 4.1 
 19.9 
 
 3.9 
 40.6 
 32.6 
 17.4 
 
 May. 
 
 27.4 
 
 61.9 
 
 35.4 
 
 37.6 
 
 13.8 
 
 6.8 
 
 8.4 
 
 21.2 
 
 43.8 
 
 6.9 
 
 56.6 
 
 68.4 
 
 11.1 
 
 .32.8 
 
 7.8 
 
 12.9 
 
 13.8 
 
 13.5 
 
 17.9 
 
 14.3 
 
 9.9 
 
 24.4 
 
 14.2 
 
 21.4 
 
 g.8 
 
 46.3 
 
 9.9 
 
 16.8 
 
 18.8 
 
 8.1 
 
 1.8 
 
 1.0 
 
 4.3 
 
 22.6 
 
 10.0 
 
 40.4 
 
 28.9 
 
 23.3 
 
 3.1 
 
 31.8 
 
 June. 
 
 38.2 
 52.7 
 38.0 
 33.6 
 11.2 
 
 7.0 
 
 5.0 
 16.9 
 34.6 
 
 6.8 
 36.3 
 46.6 
 37.5 
 1,6.7 
 
 5.5 
 13.6 
 
 28.3 
 14.3 
 
 9.6 
 23.2 
 13.6 
 2L9 
 
 7.3 
 .55.6 
 
 9.6 
 12.0 
 13.7 
 
 7.4 
 
 3.5 
 .7 
 
 4.0 
 21.9 
 13.3 
 25.9 
 23.9 
 35.6 
 
68 
 
 SOCIAL INStTBANCE AND UNEMPLOTWENT. 
 Unemployment in Massachttsetts in 1915. 
 
 TA Quarterly report ot unemployment, Bureau of Labor Statistics, ending June 30, 191S, p. 11, ana 
 Table 'i.— Unemployment in the principal occupations. 
 
 All oooupatlons. 
 
 All occupations 
 
 Bakers and confectioners. 
 Barbers . 
 
 Bartenders 
 
 Blacksmiths and horseshoers — 
 
 Boilermakers -,- 
 
 Bookbinders 
 
 Boot and shoe workers 
 
 Boot and shoe workers (mixed) . 
 
 Cutters 
 
 Edgemakers 
 
 Lasters. 
 
 Stitchers , 
 
 Treers, dressers, and packers. 
 Others. 
 
 Bottlers and drivers 
 
 Brewery workmen 
 
 Bricklayers, masons, and plasterers 
 
 Car wcrifers and inspectors 
 
 Carpenters 
 
 Cigarmakers 
 
 Clerks, railway 
 
 Clerks, retail and wholesale 
 
 Compositors 
 
 Conductors, railway 
 
 Cooks and waiters 
 
 Electrical workers 
 
 Engineers (hoisting and portable) 
 
 Engineers (locomotive) 
 
 Engineers (stationary) 
 
 Firemen and enginemen (1 occmotive) . . . 
 
 Fireman (stationary) 
 
 Freight handlers and clerks 
 
 Garment workers 
 
 Grani te cutters 
 
 Hod carriers and bull ding laborers 
 
 Lathers (wood, wire, and metal) 
 
 Ifechinists 
 
 Maintenance-of-way emoloyees 
 
 Metal polishers, bullers, and platers 
 
 Holders, coremakers (iron and brass) . . . 
 
 Municipal employees 
 
 Painters, decorators, and paperhangers. . 
 
 Paper and pulp makers 
 
 Plumbers, gas fltters, and steam fitters . . 
 
 Printing pressmen ■ 
 
 Quarry workers 
 
 Sheet-metal workers 
 
 Railroad workers 
 
 Station asents and employees 
 
 Steam-railroad employees n. e. s 
 
 Street and electric railway employees... 
 
 Tailors and dressmakers 
 
 Teamsters, chauffeurs, etc 
 
 Telegraphers, railroad 
 
 Telephone operators 
 
 Textile operatives 
 
 Loom fixers 
 
 Mule spumers 
 
 Weavers 
 
 Others. 
 
 Theatrical-stage employees. 
 
 Trainmen, railroad 
 
 All other occupations 
 
 Percentages. 
 
 Mar. 31. 
 
 22.' 
 23.: 
 
 26.) 
 14.1 
 
 5.1 
 10. 
 
 7. 
 U. 
 10. 
 24. 
 16. 
 
 1. 
 
 6. 
 13. 
 
 3. 
 15. 
 15. 
 24. 
 
 9. 
 
 2, 
 14. 
 
 2. 
 16. 
 88. 
 
 9. 
 IS. 
 49. 
 11. 
 
 0. 
 18. 
 14. 
 11. 
 29. 
 28. 
 27. 
 
 5. 
 29, 
 17, 
 
 June 30. 
 
 10. 
 12. 
 
 9. 
 13. 
 15. 
 
 1. 
 
 1. 
 10. 
 
 8. 
 12. 
 
 2. 
 18.9 
 
 20. 
 
 e 
 
 P) 
 
 10.6 
 9.5 
 3.6 
 
 16.3 
 2.8 
 
 10.9 
 
 10.8 
 
 9.S 
 
 9.8 
 
 27.4 
 
 5.6 
 
 13.2 
 
 13.1 
 
 1.2 
 
 B.4 
 
 20.3 
 
 2.1 
 
 12.3 
 
 12.2 
 
 0.9 
 
 7.4 
 
 11.9 
 
 4.2 
 
 7.7 
 
 6.5 
 
 14.3 
 
 9.3 
 
 3.2 
 
 12.6 
 
 3.1 
 
 14.9 
 
 22.7 
 
 17.2 
 
 14.1 
 
 41.5 
 
 11.3 
 
 0.3 
 
 7.2 
 
 12.7 
 
 8.3 
 
 13.4 
 
 34.2 
 
 13.0 
 
 5.1 
 
 40.3 
 
 17.6 
 
 Sept. 30. 
 
 2.1 
 
 1.9 
 
 1.8 
 
 15.2 
 
 11.0 
 
 0.9 
 
 ■ 1.3 
 
 6.9 
 
 8.9 
 
 7.6 
 
 4.7 
 
 7.1 
 
 44.5 
 
 3.1 
 
 P) 
 
 7.0 
 
 n.3 
 
 4.9 
 
 12.8 
 2.9 
 
 11.9 
 3.1 
 5.5 
 3.0 
 6.0 
 3.8 
 
 23.5 
 3.7 
 4.4 
 2-6 
 3.3 
 6.1 
 
 11.3 
 
 6.4 
 4.4 
 0.3 
 2.2 
 7.0 
 4.8 
 5.1 
 3.7 
 6.7 
 9.7 
 2.0 
 6.8 
 2.6 
 33.2 
 7.8 
 .5.9 
 44.2 
 13.0 
 20.0 
 
 2.1 
 
 5.1 
 
 15.1 
 
 13.2 
 
 32.1 
 
 14.8 
 
 2.5 
 
 23.0 
 
 7.5 
 
 2.6 
 
 2.0 
 
 1.0 
 
 3.4 
 
 4.4 
 
 2.5 
 
 0.7 
 
 0.9 
 
 3.6 
 
 2.0 
 
 3.0 
 
 1.7 
 
 8.4 
 
 16.6 
 
 2.0 
 
 P) 
 
 1 Exclusive ot persons on strike, the percentage unemployed for freight handlers and clerks was 4.5 
 per cent, and for machinists 1. 
 » Omitted, not being strictly comparable with the group similarly designated Deo. 31, 1915. 
 
 Note.— Caution should be exercised in drawing conclusions with reference to those occupations which 
 are represented only by a small membership reporting. 
 
SOCIAL INSURANCE AND UNEMPLOYMENX. 
 
 69 
 
 GREAT BRITAIN. 
 
 The Board of Trade Labor Gazette reports that the high level of employment of 
 recent mohths was fully maintained in December and a general shortage of labor 
 was reported. Compared with the corresponding month of 1914, there is consider- 
 able improvement noted. 
 
 Great scarcity of labor is reported in the mechanical industries and the shipbuild- 
 ing trades, in the cotton trade, and in the textile trades. Tinplate works, building 
 trades, and brick works showed a decline in activity, the cause being seasonal in the 
 latter two.' The following table shows the per cent of unemployment in trade-unions 
 during each month of 1914 and 1915: 
 
 Per cent of unemployment in trade-unions during each month, 1914 and 1915. 
 
 Year. 
 
 Jan. 
 
 Feb. 
 
 Mar. 
 
 Apr. 
 
 May. 
 
 June. 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Dec. 
 
 1914 
 
 2.6 
 1.9 
 
 2.3 
 1.6 
 
 2.2 
 1.3 
 
 2.1 
 1.2 
 
 2.3 
 1.2 
 
 2.4 
 1.0 
 
 2.8 
 .9 
 
 7.1 
 1.0 
 
 5.9 
 .9 
 
 4.4 
 .8 
 
 2.9 
 .6 
 
 2.5 
 
 1916 
 
 .6 
 
 
 
 The mean annual percentage for unemployment for the year 1915 in British trade 
 unions was 1.1 as compared with 3.3 in 1914, 2.1 in 1913, 2.4 in 1912, 3 in 1911, and 
 4.7 in 1910. 
 
 Employment conditions in certain industries are reflected in the following tables, 
 which show the total number of establishments, number of employees, and total 
 amount of wages paid during a representative week in December, 1915, and the per 
 cent of increase or decrease in numbers employed and wages paid over in the corre- 
 sponding week of November, 1915, and December, 1914. These data, of course, 
 relate to the same establishments in each period of time indicated; otherwise the com- 
 parison would be valueless. According to this table the number employed in this 
 week of December, 1915, as compared with the corresponding week of December, 
 1914, was 0.3 per cent less, while the amount of wages paid to the same number of 
 employees was 13.8 per cent greater. 
 
 Table follows ,s;iving number of persons employed by establishments reporting 
 and wages paid such employees for the week ending December 18, 1915, .compared 
 with data for the corresponding week of November, 1915, and of December, 1914. 
 
 GERMANY. 
 
 The Reichs-Arbeitsblatt reports that since German industry has adjusted itself 
 to the conditions arising from the war ecomonic development ha,s taken an even course, 
 with insignificant changes from month to month. During September and October 
 conditions in German industry were essentially the same as duriag the preceding 
 months, with a slight improvement in November. General industrial: conditions 
 were reported as satisfactory, exception being made of conditions in the textile and 
 building industries. Mining and war-supplying industries continue active. Im- 
 provement is reported in shipping activity on the Rhine. 
 
 Returns from employers for September show an increase of 18 percentin the number 
 of workmen employed, as compared with September of the preceding year, and 
 returns for October and November, 1915, show an increase of 1 and 14 per cent, 
 respectively, in the number employed as compared with the same months in 1914. 
 In September male workers formed "the larger part of the increase noted, while in 
 October and November the larger part was due to the influx of female workers. If 
 employment during the above three months of 1915 is compared with employment 
 in the same months of 1913, there is indicated a decrease in the number of workmen 
 employed of 9, 14, and 18.5 per cent, respectively. 
 
 Practically no change of significance as to the percentage of unemployment m 
 trade-unions, as compared with the preceding months, July and August, is noted. 
 The per cent of unemployment in August and September, 1915, was 2 .6, and in October 
 and November 2.5. , ,. . , , , ,■ ^ - 
 
 Reports from the labor exchanges show a decline in the number of applicants tor 
 positwns in all three months of 1915 under review, as compared with these months in 
 1914 For every 100 situations registered as vacant in September, October, and 
 November, 1915, the number of male applicants was 89, as compared with 200, 154, 
 and 140 respectively, for the same months of 1914, and the number of female applicants 
 was 170'in September, 182 in October, and 179 in November, 1915, as compared with 
 183, 191, and 189, respectively, for the same months m 1914. 
 
70 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 The Labor Gazette of the Canadian department of labor summarizes employment 
 conditions throughout the Dominion in 1915 in these words: 
 
 "The opening of the year 1915 sho-sred a marked change from the conditions existing 
 at the commencement of 1914. At the beginning of the yea,r the depressed conditions 
 of the previous year were still apparent, but in 1915 the improvement which became 
 noticeable from month to month during the latter part of the previous year had become 
 fairly well pronounced and the close of 1915 witnessed a return to almost normal 
 conditions in many respects. While at the close of 1914 there was still considerable 
 unemployment, and in some localities this condition existed during the early months 
 of 1915, the gradual enlistment of men for over-seas service, the employment of others 
 in the manufacture of munitions and other military supplies, in agriculture and lumber- 
 ing operations, and the heavy falling off in immigration, all combined to bring condi- 
 tions m many parts of the Dominion back to almost a normal basis so far as employment 
 was concerned. Manufacturing in many lines outside of special activity in the manu- 
 facture of munitions of war was impro^'ed; lumbering showed activity practically 
 throughout the year; fishing on the -whole was good; miring, both coal and metal, 
 showed great improvement, and toward the latter part of the year, was back to, if 
 not above, the normal activity of previous good years. Outside of building operations 
 which continued to be dull, practically all the Domirion's industries showed great 
 improvement. 
 
 "As the department has but recently commenced the publication of the activities of 
 employment bureaus throughout the Dominion, only a limited amount of statistical 
 data is available. Eleven employment bureaus of the Young Women's Christian 
 Association reported 1,217 vacancies notified and 253 women and girls placed during 
 November, 1915. Twelve bureaus of the Salvation Army reported the distribution of 
 1,402 casual jobs to 870 persons. The nine public employment offices cooperating 
 with the department reported 4,668 vacancies and 3,782 individuals placed." 
 
 Miss PoYNTZ. The results of the special inquiries into unemploy- 
 ment in New York City made by the Metropolitan Life Insurance 
 Co. and the United States Bureau of Labor Statistics offer interesting 
 data on the extent of unemployment during a period of industrial 
 depressipn such as characterized the early part of 1915. 
 
 ONEMPLOYMBNT IN NEW YORK CITY. 
 
 The Bureau of Labor Statistics has just completed the tabulation of the results o 
 unemployment in New York City during September, 1915. The results of an earlier 
 investigation of the subject, made in January and Februaiy, 1915, were published 
 in April aa Bulletin 172 of the bureau. The earlier report presented the Conditions 
 of employment at a season of the year when probably the maximum number of wage 
 earners were out of work. While it was believed that the extent of unemployment 
 at that period was considerably above the normal there was no way of determining 
 tlds, as no trustworthy statistics existed as to unemployment in New York City in 
 previous years which could be used as a basis of comparison. In order to determine 
 the falling off in unemployment between the winter season, when the number of 
 wage earners out of work probably reached the highest point, and the summer season, 
 when the number of unemployed under normal conditions would probably be 
 the smallest of the year, the bureau undertook the second survey. The panvas was 
 made in August and September, 1915. The same 104 city blocks were covered as 
 in the earlier investigation, but reports were secured from somewhat larger number 
 of families. The summary results of the two investigations showing unemployment 
 in February and September, 1915, are shown in comparison in the following table: 
 
 Summary of unemployment in February and September, 1915. 
 
 Items. 
 
 Febru- 
 ary. 
 
 Number of families scheduled 
 
 Number of families having unemployed wage earners. 
 
 Number of persons in families 
 
 Number of wage earners in families 
 
 ■Number of unemployed wage earners 
 
 Per cent of unemployed wage earners 
 
 64,849 
 11,723 
 229,428 
 95,443 
 15,417 
 16.2 
 
 56,539 
 
 5,480 
 
 235,628 
 
 97,741 
 
 6,529 
 
 6.7 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 71 
 
 A comparison of figures shows that only 6.7 per cent of the wage earners in the 
 families canvassed in September were unemployed, as against 16.2 per cent of those in 
 the February canvass. 
 
 On the basis of the figures secured in the former study, it was estimated that the 
 number of wage earners out of employment in the city in February was approximately 
 398,000, while the number out of work in September, estimated on the same basis, 
 was only about 164,500. 
 
 It should be estimated in this connection that while there was only 6.7 per cent of the 
 wage earners wholly unemployed in September, there were in addition 8.4 per cent of 
 all wage earners working part time only. 
 
 In October, 1915, the Metropolitan Life Insurance Co. also completed a second 
 survey of families in New York City holding industrial policies in that company. 
 Their investigation was made by agents of the company and conducted in the same 
 manner as a survey made by the company in January, and while the same districts 
 were covered as in the preceding census, reports were secui'ed for a much smaller 
 number of families. 
 
 The results of the earlier survey of the Metropolitan Co. were published in Bulle- 
 tin 172 of the bureau, already referred to. A summary of the figiues secured in the 
 two surveys of the Metropolitan Co. is presented in comparative form in the following 
 table: 
 
 Unemployment among wage earners in New York City, as shown by a canvass of indus- 
 trial policy holders of the Metropolitan Life Insurance Co., made by its agents January 
 and October, 1915. 
 
 Items. 
 
 January. October. 
 
 Number of families scheduled 
 
 Number of families having unemployed wage earners. 
 
 Number of wage earners in families 
 
 Number of unemployed wage earners 
 
 Per cent of wage earners unemployed 
 
 165,960 
 37,064 
 
 262,912 
 
 45, 121 
 
 18.0 
 
 100.961 
 11, 608 
 
 141,616 
 
 12,865 
 
 9.1 
 
 It will be seen from this table that the per cent of unemployment found in October 
 was 9.1, as against 18 reported in January. The figures for the later date, however, 
 covered less than two-thirds of the families and wage earners included in the earlier 
 investigation. The results of the Metropolitan company's surveys differ somewhat 
 from the siu'veys of the bureau. It is not possible to state the exact cause of these dif- 
 ferences. It is possible that the explanation is in the different periods covered or in 
 the sslection of families, due to the fact that in one case all the families having mem- 
 bers who were industrial policyholders were taken, while in the other case all of the 
 families of certain districts were taken. The differences, however, in the percentages 
 of unemployment are so slight as practically to confirm the substantial accuracy of 
 the investigations. 
 
 UNEMPLOYMENT IN NEW YORK CITY. 
 (Study of Bureau of Labor Statistics (Bull. No. 172), pp. 7-8.) 
 
 The investigation included a complete census of 104 representative city blocks 
 located in various sections of the city, the less populated as well as the more congested 
 sections. The blocks were carefully selected with the purpose of including a repre- 
 sentative number of families of the various nationalities and all classes of workers. 
 
 This study was supplemented by a further census of the families living in 3,703 
 individual tenement houses and residences covering a still wider range of distribu- 
 tion. 
 
 For the purposes of the study all persons who had any employment whatever, regular 
 or irregular, full time or part time, at the time of the agent'^s ™it were recorded as 
 employed. 
 
 This enumeration was begun January 30,1915, and was finished February 17, 1915, 
 a schedule being secured for each family visited. 
 
 The results of the investigation were as follows: 
 
 Number of families scheduled -^4, 849 
 
 Number of families having unemployed wag^ earners 11, 723 
 
 Per cent of families having unemployed wage earners 21. 4 
 
 Number of persons in families. . . - 229, 428 
 
 Number of wage earners in families " 95, 443 
 
 Number of unemployed wage earners 15, 417 
 
 Per cent of unemployed wage earners 16. 2 
 
72 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Assuming that the number of wage earners is now 2,455,000, as before stated, and 
 using this figure as the basis of our estimate and applying to it the rate of unemploy- 
 ment derived from the study, as shown above, the total number unemployed would 
 be about 398,000. It will be seen that the general results of this study approximate 
 the results of the investigation made by the Metropolitan Life Insmance Co. The 
 difference between the two may to some extent be accounted for by the fact that the 
 investigation by the bureau was made later in the season than that made by the Met- 
 ropolitan Life Insurance Co., and the conditions of unemployment may have changed 
 to some extent. 
 
 The above figure, however, does not fully measure the hardships resulting from 
 the lack of employment. In practically all industries the distress due to complete 
 unemployment is made much more serious because of the large amount of part-time 
 employment or irregular employment. On account of the difficulty of getting infor- 
 mation in regard to irregular or part-time employment, and finding out just what such 
 reports meant, all persons who had any employment whatever, regular or irregular, 
 full time or part time, at the time of the agent's visit have been tabulated as em- 
 ployed. 
 
 UNEMPLOYMENT IN NEW YORK CITY AND NORTHEASTERN NEW JERSEY. 
 
 [Study o£ Metropolitan Life Insurance Co. (Bull. No. 172), pp. 15, 18-19.] 
 
 As stated in the introduction, the Metropolitan Life Insurance Co., in order to 
 secure information regarding unemployment, made a census of all the families in 
 which industrial policies were held in that company in Greater New York. The 
 investigation was made by the agents of the company who were furnished with in- 
 quiry blanks and who secured the facts of unemployment from each family visited. 
 The following is a summary of that canvass: 
 
 Total number of families 155, 960 
 
 Number of families with unemployment 37, 064 
 
 Total number of wage earners in families 252, 912 
 
 Number of unemployed wage eahiers 45, 421 
 
 Per cent of wage earners unemployed 18 
 
 Supplementary to its investigation made in Greater New York, the Metropolitan 
 
 Life Insurance Co. made a canvass of the families of its policyholders in northeastern 
 
 • New Jersey, including the several districts, in which the following- named cities are 
 
 located: Bayonne, Bloomfield, Newark, Hoboken, Irvington, Jersey City, Grange, and 
 
 Union Hill. 
 
 The canvass was made because of the fact that a great many of the residents of these 
 cities are normally employed in New York C ity, and it was believed that the con- 
 ditions of unemployment in this section would have an important bearing upon the 
 conditions in New York. The results of this canvass were as follows: 
 
 Total number of families 61, 201 
 
 Number of families with unemployment 11, 821 
 
 Total number of wage earners in families 97, 026 
 
 Number of unemployed wage earners 14, 314 
 
 Per cent of wage earners unemployed 14. 8 
 
 It will be noted that the percentage of unemployment in families in this locality 
 is shown to be about 3.2 per cent less than is shown by the study made in Greater New 
 York. These cities, although located in New Jersey, are sometimes included in the 
 so-called metropolitan district of New York, and if we combine these data with those 
 secured for New York we have the following showing: 
 
 Total number of families 217, 161 
 
 Number of families with unemployment 48, 885 
 
 Total number of wage earners in families 349, 938 
 
 Number of unemployed wage earners 59, 735 
 
 Per cent of wage earners unemployed 17. 4 
 
 When we know that the demand is so much greater at one time 
 than it is at another, when we realize that this great army of workers 
 is necessary to us — unemployed ut one time, but which is needed just 
 as soon as industry is revived — we see that this army must be sup- 
 ported, for if it is not supported, and supported properly, it will de- 
 teriorate mentally, morally, and physically. What country can long 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 73 
 
 remain gi-eat with an inefficient, underfed, and demoralized popu- 
 lation ? 
 
 We must admit now that the responsibility for xmemployment lies 
 more with industry, with the consumer, with the pubhc than with the 
 worker himseM. It is the irregular buying habits of the consumer, 
 the fluctuating production in industry, and the disorganization of the 
 labor market which are the main causes of unemployment, and the 
 huge burden of imemployment should not be thrown entirely on the 
 backs of the workers, whose income is only sufficient for the periods 
 when they are working. It is only in a few industries or trades — as, 
 for instance, the building trades — that there is any attempt to raise 
 the wage to compensate for the slack season. In other iadustries, in 
 a number of them, that is absolutely impossible, because there are 
 always a large number of workers standing around wUling to woik at 
 an ordinary wage, and thus it is made impossible to make the wage 
 sufficient to. tide over the slack season. There must be some pro- 
 vision made for this season. 
 
 Whatever may be said against the Government or State cooperat- 
 ing in sickness or in accident insurance, there is nothing that can be 
 urged against the suggestion of cooperation in the matter of unem- 
 
 Eloyment insurance. In England it has been a matter of division 
 etween the workers, the employer, and the State. 
 Lloyd George put through his bill for social insurance as a 
 part, an essential part, of his preparedness program. England was 
 preparing then to meet Germany — not only in a military way, but 
 also industrially. It was far-sighted administrators, and not the 
 welfare workers or the trade-unions, that were responsible for the 
 introduction of that legislation in England. The trade-unions looked 
 at it at first rather suspiciously. They had abeady distributed 
 $20,000,000 in 10 years m unemployment benefits. The system, 
 when introduced in England, followed the same poUcy as has been 
 followed everywhere else in cooperating with the trade-unions. In 
 connection with the difficulty ol 'determining whether a worker was 
 genuinely employed or not, it was necessary to have such a system 
 developed in connection with the benefits akeady given by the trade- 
 imions, and thus have the cooperation of the unions. The contribu- 
 tions to this system were made equally by the employer and the 
 worker, 2^ pence from each, and the State paid one-third of their 
 combined contribution. 
 
 That legislation has followed a system that has proved successful 
 in Ghent and other cities on the Continent and gave to the trades- 
 unions — to the larger trades-unions — an opportunity to take a part 
 in it. This compulsory system was extended and the Government 
 added one-sixth of the benefit paid. Money expended in this way is 
 wisely expended. The result is rather to put a stimulus to regularize 
 labor, because the expense is an inducement .to aU parties concerned 
 to reduce the rate of unemployed because the employee has a bonus 
 returned to him, a rebate, including his contributions on all workers 
 regularly employed throughout the year. So the whole aim and 
 eflect of unemployment insurance is to make employment more 
 regular. In addition, a national system of unemplo3anent insurance, 
 when effectively developed, may be expected to have an important 
 effect in mitigating indilstrial causes, since it increases the consuming 
 power of the workers and consequently the demand for goods. The 
 
74 .SOCIAL, INHURAKCE AND UNEMPLOYMENT. 
 
 retail and wholesale distribution, the factory production, are all 
 stimulated by the increased demand, and unemployment insurance 
 during industrial depressions appears therefore in the light of a 
 subsidy to all classes for the improvement of trade raider than 
 merely as a measure of justice and relief for the workers. 
 
 The cost of such a system as is now in vogue is a constant pressure 
 for some other method of dealing with the matter. The commission 
 under discussion should consider whether much might not be done 
 in opening land to workers and in developing a more farsighted 
 agricultural pohcy. In doing "this the commission would have to 
 consider the whole question of immigration in the light of the labor 
 problem. Immigration is an industrial problem and a question of 
 the labor market primarily. There would be little objection to 
 immigration if it were regulated according to the state of the labor 
 market. It will be seen, therefore, that there is a very close con- 
 nection between this problem and that I mentioned a few moments 
 ago, of getting and maintaining a proper view of the state of the 
 labor market of this country through the medium of adequate labor 
 exchanges. Therefore, a constructive policy on immigration is part 
 of a general pi'ogram in regard to dealing with unemployment. 
 
 Further regidarization may be applied to the labor market by the 
 systematic distribution of public work. Public employment can b^ 
 made to a considerable extent supplementary to private employ- 
 ment. Public work should be made as far as possible to act as a 
 sponge absorbing the reserves of labor in bad years and slack seasons 
 and setting them free again when the demand for them increases in 
 private business. Even at slightly additional cost, when necessary, 
 public work shoidd be conducted m yed.rs of depression and seasons 
 of depression. A program of the amount of public work contemplated 
 or contracted for for several years ahead should be laid out and then 
 carefully planned to fall in the lean years which experience has shown 
 to recur peiiodically. Similarly the work should be done in the 
 months where private employment "is at a low ebb. This is the least 
 expensive and troublesome way of maintaining the reserves which 
 private industry demands and preserves the independence and self- 
 respect of the workers while accomplishing necessary and productive 
 work for the community. The rate of wa^es and the conditions of 
 labor should be up to the standard of the district. 
 
 During special emergencies or a crisis a special effort should be 
 made to put through large projects for public works, rather thaa 
 support the unemployed by charity or public relief. This should not 
 be "relief work" or "made work" simply to keep idle hands busy, 
 but should be real necessary pubhc work which would have been 
 undertaken normally in the course of time but which can be con- 
 centrated in the time of emergency. Such work would be the con- 
 struction of additional buildings for schools or colleges, of roads, 
 bridges, electric and steam railways, footpaths, parks, the making 
 of improvements, such as paving and drainage, the building of hos- 
 pitals, sanatoria, laboratories, and pubMc buildings, the improvement 
 of harbors, the development of canals and means of inland navigation, 
 the making of supphes for public institutions, such as clothing, uni- 
 forms, and furniture. Each community will be able to thmk of 
 special kinds of pubhc work which need to be carried out for the 
 development of the district. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 75 
 
 The systematic use of public works to relieve unemployment has been very suc- 
 cessful where it has been used in European countries and many communities in the 
 United States have under way similar plans. In Oregon cooperative groups of men 
 have been set to work cleaning off waste forest lands, and similar work is on foot in 
 Washington. 
 
 In New Zealand great success has been achieved in relieving unemployment by 
 letting out public work directly to cooperative groups of workers under the direction 
 of the pubhc engineer without the taking over of the work by contractors. These 
 cooperative workers have been successful not only in rough development work but 
 in building bridges and even public buildings, in some cases far more cheaply than 
 the lowest price bidden by the contractors. Furthermore, wherever possible these 
 public works are made part of a general policy of reestablishing the workers on the 
 land. They are set to building roads and railways to hitherto inaccessible land, upon 
 which they are then encouraged to settle with Government assistance. 
 
 Alongside the public works small rural settlements are developed on which the 
 workers live and grow accustomed to rural life, these settlements being planned 
 in the beginning to be near some industrial or farming center, which will provide the 
 men with some work to supplement the produce of their small plots when the public 
 works have been completed. By such a far-sighted policy the number of the unem- 
 ployed in the cities has been greatly .reduced, and hitherto undeveloped country is 
 being rapidly transferred into a populous and prosperous * farming and grazing 
 community. 
 
 Extraordinary opportunities for the use of public works for pur- 
 poses of regularization are offered here in America, where there are 
 such enormous undeveloped tracts of agricultural, swamp, and forest 
 land to be reclaimed and improved through irrigation, drainage, and 
 afforestation. It is estimated that there are at least 45,000,000 acres 
 of land which can be irrigated and won for cidtivation. The recla- 
 mation act of 1902 provided that money received from sales of 
 pubhc lands should be used for irrigation purposes in the West. 
 Up to 1909 about $46,000,000 were spent in reclamation work. In 
 1908 there were 30 projects, which, if completed, will irrigate over 
 3,000,000 acres of land. 
 
 There are 77,000,000 acres of wet land which can be drained, and 
 the value of which wiU average $60 per acre; the present average 
 value of the land is $8 per acre and the average cost of drainage is 
 about $5 per acre. Lands before drainage are worthless, being avail- 
 able only for marsh hay or grazing; after drainage they are available 
 for valuable crops. By drainage of wet lands the health of the com- 
 munity win be improved. The prevalence of malaria in the South 
 and in certain parts in the East is due to swamps. Drainage of 
 swamps and marshlands will furnish food for at least 10,000,000 
 people. 
 
 It is estimated that there are 80,000,000 acres of forest land which 
 need to be stocked to make the forest more productive. 
 
 The regularization of the public demand for labor so as to counter- 
 act the industrial fluctuation has been discussed for some time in 
 England. Prof. Bowley suggested before the poor-law commission 
 that the Government may set aside a fund for a 10-year program for 
 goods and services at the most appropriate time. When trade is 
 normal expenditures are postponed and when it is bad more is 
 expended. By this method when private purchases are diminished, 
 as they are during "bad" times, the pubhc expenditures would be 
 increased under the scheme of "regularization," and the percentage 
 of unemployment will be greatly diminished. 
 
 It is assumed under this scheme that these expenditures can be 
 postponed or increased without affecting the efficiency of the public 
 
76 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 service. The scheme of "regularization" can only be carried out 
 by coordiaation of all departments of the Government. 
 
 The British development act sets aside certain sums of money 
 which may be advanced by grants or loans to associations not trading 
 for profit for the following purposes: 
 
 (a) Aiding and developing agriculture and rural industries. 
 
 (6) Forestry. 
 
 (c) The reclamation and drainage of land. 
 
 (d) The general improvement of rural transport. 
 
 (e) The construction and improvement of harbors. 
 
 if) The construction and improvement of inland navigation. 
 (g) The development and improvement of fisheries. 
 
 The act also provides that in the employment of labor on a con- 
 siderable scale under the provisions of the act "regard shall be had 
 so far as it is reasonably practicable to the general state and prospects 
 of employment." 
 
 The purpose of the act is not to assist the unemployed at times of 
 distress, but rather to minimize the fiuctuations of unemployment and 
 to act as an equalizing factor in the labor market. 
 
 It is admitted that the provisions of the development act will bene- 
 fit largely the workers in the rural districts rather than those in the 
 cities, except ia cases of the unskilled, which could be employed on all 
 the enumerated projects. 
 
 Seasonal fluctuations between winter and summer: Rural and semi- 
 rural industries are subject to loss of employment during winter. 
 These intervals force men into towns to look for casual labor. To 
 meet this condition, an alternative occupation for the rural laborer 
 would be forestry, which industry is especially adpated for the winter 
 months. 
 
 The argument that forestry doesn't require as great numbers of 
 workers as agriculture is met by the answer that forestry, plus the by- 
 industries it creates, can employ great numbers of unemployed agri- 
 cultural laborers. 
 
 Another field where rural workers and unskilled can be used during 
 times of unemployment is reclamation work. 
 
 The unemployment advisory board of New South Wales, consisting 
 of representatives of the Crown, labor organizations, and the unem- 
 ployed, recommended in September, 1899, the following program: 
 
 First it proposed an extensive program of what it called "repro- 
 ductive public work," including such enterprises as planting public 
 lands with trees, clearing and draining them for settlement, the 
 storage and supply of water for mining, building bridges, making 
 railroads, highways, which in New South Wales are owned by the 
 National Government. The board also recommended: 
 
 1. A national intelligence department for men and women. 
 
 2. Labor depots, where the unemployed can be temporarily shel- 
 tered and employed. 
 
 3. Industrial farm settlements — an expansion of the labor depot, 
 where the men are given work and technical instruction. 
 
 4. Assisted settlement blocks, where the men who graduate from 
 the industrial farm settlements are given farms of their own. 
 
 5. Compulsory labor farms for the vagrants. 
 
 6. Subsidies to mineral prospectors, advances to settlers, allot- 
 ment of land to societies formed to settle cooperatively, treasury 
 
SOCIAI. INStrEANCE AND UNEMPLOYMENT. 77 
 
 advances for the establishment of cooperative industries in the assisted 
 settlement blocks,^ and instructions in agriculture in the primary- 
 schools. 
 
 The building trades peculiarly lend themselves for consideration 
 in regard to regularization of the public demand. Mr. N. B. Dearie, 
 in a paper before the conference on prevention of destitution of 
 Great Britain (Proceedings, 1911, pp. 534-541), discussed the matter 
 at length showing the part the Government can play in organizing 
 its demand as far as the building trades are concerned. He divides 
 the work carried on by public authorities into three classes, con- 
 struction, reconstruction, and maintenance: 
 
 The first may be defined as the putting up of fresh buildings where such did not 
 exist before, and the second as operations of a structural character upon existing 
 buildings, varying from complete rebuilding to renovation of an old fabric, and 
 includes larger additions and extensions, finally maintenance consists of such 
 work a,s is required to keep buildings in good order, such as any variety of repairs, 
 periodical cleaning and redecoration, and smaller alterations. 
 
 New construction consists of two classes of work, namely, those which go on pretty 
 regularly from one year to another, like schools, post offices, and the stations, and 
 special buildings of which only a limited number is required. 
 
 Such works as a whole do not lend themselves to regulation to meet variations 
 between different parts of the year, but we must distinguish whether they last a year 
 or over, or not more than, say, nine months, since a certain limited number of the 
 latter could not be utilized to meet seasonal differences. Contracts above a certain 
 size usually have to be carried on tlu-oughout the year, and though those of moderate 
 size can not be begun just before the winter, it is a question whether, when the period 
 of great briskness comes comparatively early in the summer, it might not be possible 
 to start them soon alter midsummer in order to carry them well into the winter. 
 
 Speaking of reconstruction work, Mr. Dearie beheves that that 
 class of work "offers the most favorable field for operations, since 
 the need of commencing work of reconstruction at a particular time 
 is far less great, and a smaller proportion of the work will be in- 
 capable of manipulation in this way, and postponement or accellera- 
 tion will be quite possible. Moreover, the work is often capable of 
 arrangement for some years ahead in a definite programme." 
 
 Mr. Dearie suggests two lines of policy in regard to work on public 
 buildings : 
 
 First, though much public work is more regular than private work, postponement 
 till the last moment often leads to much irregularity from year to year. To do a 
 regular amount yearly, therefore, is a first step, by increasing regular at the expense 
 of variable work, whilst it will be comparatively easy to go a step further and dis- 
 tribute the work according to the state of trade. The same considerations will often 
 apply to lai^e works or repair or redecoration to single buildings. 
 
 Mr. Dearie then takes up the third class of work in connection with 
 public buildings, namely, maintenance of same which falls into two 
 classes : 
 
 Work of a recurrent character, mostly cleaning and decoration, and odd jobs of 
 various kinds which have to be done mainly as the need arises. Such work can only 
 operate on seasonal fluctuations, and whilst the amount done by any single authority 
 may be small, the sum total of it is very considerable. Much of it, however, is not 
 for our purpose. 
 
 To begin with, a very large part of it must be done as it occurs. A collajjsed sewer 
 or burst pipe must be taken m hand at once. Secondly, weather conditions prac- 
 tically render impossible the doing of outdoor work in winter, as all experiments in 
 this direction have proved, but such work can very largely be utilized to meet the 
 summer slackness. Thirdly, certain work can only be done within strictly limited 
 periods. Thus the internal painting of schools must be done in the holidays, and so 
 for our purpose only the Christmas holidays are available. Again libraries are in 
 fullest use in winter and can not be done then, nor can churches, whose busy season 
 
78 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 ecclesiastically is from November to June. Fiaally, there is the question of conven- 
 ience. The internal painting of offices of public authorities can be done best in the 
 summer holidays, though from a purely busirites6 point of viei? the doing of the work 
 in winter would be perfectly feasible, and the matter does not appear beyond the scope 
 of organization. 
 
 In discussing what is being done already in the way of regularizing 
 public work on buildings Mr. Dearie states : 
 
 Much is being done already, as most public authorities are attempting to carry out 
 as much internal painting as possible in winter. Much more might still be done, but 
 distinct progress is being made. Recently the board of works (London), as the result 
 of representations, issued instructions for painting to be done, as far as was practicable, 
 so as to fall in with the painters' slack season, and the results are understood to be 
 satisfactory. As regards winter work, however, it is not possible to do more than 
 mitigate existing slackness, but far more can be done to meet the slack seasons of 
 summer, and this is being realized by some authorities. Except for work which has 
 to be done in the holidays, a very great proportion of outdoor work could be put into 
 the slacker months, and even with schools there would not be the same necessity for 
 doing external work in the holidays. 
 
 The accompanying table shows the national expenditures of the 
 United States for 1914. It is difficult to say, without detailed ex- 
 amination, just how much under each head might be arranged accord- 
 ing to the needs of the labor market; but the possibilities of such 
 arrangement in at least part of the following divisions are obvious : 
 
 Public buildings, construction and site $11, 277, 797. 10 
 
 Fortifications, arsenals, military posts 7, 759, 118. 77 
 
 Rivers and harbors '. 49, 921, 592. 16 
 
 Miscellaneous public works 452, 365. 52 
 
 Naval establishments, including construction of new vessels, ma- 
 chinery, armaments, equipments, improvements at navy yards, 
 
 etc 139, 682, 186. 28 
 
 Total 209, 093, 059. 83 
 
 Annual registry, 19H. United States Treasury Department (finance) — General fund, pages 
 
 43 and 44. 
 
 RECEIPT8 (excluding POSTAL SERVICE). 
 
 Customs $292, 320, 014. 51 
 
 Internal revenue: 
 
 Ordinary ; $308, 659, 732. 56 
 
 Corporation excise tax 10, 671, 077. 22 
 
 Corporation income tax 32, 456, 662. 67 
 
 Undivided income tax 28, 253, 534. 85 
 
 380,041,007.30 
 
 Sale of public land 2, 571, 774. 77 
 
 Miscellaneous 59, 740, "370. 13 
 
 Total ordinary receipts 734, 673, 166. 71 
 
 DISISURSBMENT.S (EXCLUDING PANAMA CANAL AND POSTAL SERVICE). 
 
 Civil establishments: 
 
 Legislative establishments |]3. 468, 827. 66 
 
 Executive office 564, 134. 36 
 
 State Department 5, 253, 911. 78 
 
 Treasury Department proper 48, 862, 059. 68 
 
 Pubhc buildings, construction and site 11, 277, 797. 10 
 
 War Department, civil 2, 237, 069. 37 
 
 Department of Justice ' loi 188, 151. 26 
 
 Post Office Department 2] 236, 202. 24 
 
 Navy Department, civil ' 86o| 873. 02 
 
 Interior Department proper 22, 656 130. 62 
 
SOCIAL INSUBANCE AND UNEMPLOYMEMT. 79 
 
 Civil establishments — Continued. 
 
 Department of Agriculture $22, 208, 141. 12 
 
 Department of Commerce 10, 958, 882. 40 
 
 Department of Labor 3, 768, 904. 05 
 
 Independent offices 3, 232, 179. 61 
 
 District of Columbia 12, 756, 971. 18 
 
 Military establislunents: 
 
 Army, Military Academy, and Militia 105, 542, 431. 71 
 
 Fortifications, arsenals, military posts, etc 7, 759, 118. 77 
 
 Rivers and harbors 49, 921, 592. 16 
 
 Miscellaneous public works 452, 365. 52 
 
 Miscellaneous objects 9, 847, 296. 04 
 
 173, 522, 804. 20 
 
 Naval establishments, including construction of new vessels, machin- 
 ery, armaments, equipments, improvements at navy yards, etc... 139, 682, 186. 28 
 
 Indian Service 20, 215, 075. 96 
 
 Pensions 173, 440, 231. 12 
 
 Interests on public debt 22, 863, 956. 70 
 
 700, 254, 489. 71 
 
 Excess of ordinary receipts 34, 418, 677. 00 
 
 Panama Canal expenditm:e, $34,000,000. 
 
 In conclusion, in so far as the unemployable workers are concerned, 
 the supply of them will be checked at its source by enlightened 
 measures for dealing with unemployment. For those that remain, 
 pressure must be brought to bear upon them to work if able. An 
 important function of labor exchanges is to apply the work test, the 
 real work test, because it can never do known whether a man refuses 
 to work until the opportunity has been offered him. If you know 
 he can not get a job, then that is a case of genuine unemployment. 
 If he does not work when work is available, there is something the 
 matter with him. If he is ill, has tuberculosis, or is sick in any 
 other way, he should be provided for by the devices afforded by a 
 system of sickness insurance. If he is old, then there should be pro- 
 vision in the form of old-age pensions. If he is mentally deficient, 
 he is a subject for institutions for the feeble-minded. We must 
 analyze the problem in all its aspects, and not throw the whole vm- 
 employed army indiscriminately together and attempt to deal with 
 it as a whole. 
 
 I would like to say once again that unemployment is a vast prob- 
 lem; that it is a tragic problem, more tragic than we can realize; it 
 means desperation for the worker who is underfed, who has a family 
 to support, who has children who are unable to work for themselves. 
 Even the charity organizations are beginning to recognize that un- 
 employment lies at the root of their problems, and that constructive 
 measures are needed instead of the doling out of alms. We need a 
 thorough analysis of the problem of unemployment. We need tre- 
 mendously such a commission as is bemg requested at the present 
 time. We are simply asking for a little more light on the subject. 
 
 Mr. Keating. Are there any members who wish to ask any ques- 
 tions of Miss Poyntz ? 
 
 Mr. Browne. Is unemployment insurance in force in England? . 
 
 Miss Poyntz. It is. It is in force in seven industries, in industries 
 which are in the main irregular industries, such as the building trades^ 
 
80 SOCIAL INStTBANCE AND UNEMPLOYMENT. 
 
 engineering, and shipbuilding. In these seven industries, insurance 
 is compulsory. The benefits are 7 shillings a week for a period of 20 
 weeks during the year. The payments made by the workers and 
 the employers are equal — 2J pence each — that is, 5 cents each per 
 week. The contributions of the employees are deducted from their 
 wages. The amount paid by the state is one-third added to the 
 combined contributions of employers and workers. If these seven 
 trades unions had previously given benefits, a certain smn was added 
 to the regular subsidy by the government in order to encourage 
 and stimmate that sort of cooperative activity on the part of unions. 
 
 I think the general testimony of the labor organizations is that the 
 act has proven very successful. The chief objections from this 
 source are as foUows: That the benefits are not large enough; that 
 they do not continue long enough; that the eUgibiEty to benefit is 
 hedged about by too many restrictions, and that the operation of 
 the act should be extended to all other trades. At the present time 
 the insurance fund has a large surplus. The idea of the act is to 
 build up a large fund in good years, to provide for crises. At^the 
 time of the introduction of the act there was talk of the "Prussian- 
 izing" of the English social system. A national system of labor 
 exchanges and unimployment insurance has, however, never been 
 established in Germany; but has been developed for the first time in 
 England. The trade unions cooperate actively in administering the 
 unemployment insurance, and have been given large powers under 
 the act. 
 
 Mr. Browne. Have you a copy of that law ? 
 
 Miss PoYNTZ. Yes. 
 
 Mr. Browne. If you can put it in the record, I would like to make 
 that suggestion. 
 
 Mr. Keating. I think it would be a good idea if you can incor- 
 porate the English law in the record. 
 
 Miss PoYNTZ. I could make a few remarks about unemployment 
 insurance on the Continent. 
 
 Mr. Browne. They h&ve that on the Continent also ? 
 
 Miss PoYNTZ. Yes. 
 
 Mr. Browne. In many countries ? 
 
 Miss Poyntz. In practically all the coimtries on the Continent, 
 in one form or another. A system very prevalent is that of giving 
 over funds to the trade unions, to be distributed by them. "Hiat is 
 to be added to unemployment benefits paid by the imions. That 
 is the Ghent system, as it is called. 
 
 Mr. Browne. Does the government appropriate money to turn 
 over for this work ? 
 
 Miss Poyntz. Yes. 
 
 Mr. Browne. It does not come out of the employees ? 
 
 Miss Poyntz. The city or state governments appropriate it. In 
 England it is the workers, the employers, and the state, as I have 
 outlined. 
 
 UNEMPLOYMENT INSUBANCE. 
 
 The system of unemployment insurance interpreted in the broadest sense can be 
 divided into three groups: 
 1. The system of compulsory insurance. 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 81 
 
 2. The system of subsidies of public bodies to tte unemployment insurance funds 
 (if the trade-unions usually called the "Ghent system," after the city in which it was 
 first applied. 
 
 3. Tne system of State or communal voluntary unemployment funds. (See 
 Addenda.) 
 
 COMPULSORY INSURANCE. 
 
 The most complete scheme of unemployment insurance is presented by the British 
 national insurance act of 1911, which went into effect in July, 1912. Ihe following 
 is an analysis of the act and the workings of the same by the mayor's committee on 
 unemployment of New York City (report 1916, pp. 70-73). 
 
 "The act is compulsory for all workmen in seven trades — building, construction of 
 works, shipbuilding, mechanical engineering, iron founding, construction of vehicles, 
 and sawmilling. The employers and the workmen each contribute 5 cents a week, 
 except that rates are lower for persons under 18. The dues are paid through the 
 employer, who deducts the workman's share from his wages. An amount equal to 
 one-third of the total contributions of the employers and workmen is contributed by 
 the Government. 
 
 "The law originally required that in order to be entitled to benefits a workman 
 must have been employed in an insured trade for a period of not less than 26 calendar 
 weeks in each of the preceeding five years. This was amended in 1914 by substitut- 
 ing payment of 10 full contributions. 
 
 "Benefits are paid in an insured trade to workmen who have made 10 full contri- 
 butions, who have made application for unemployment benefit in the prescribed 
 manner, and who have since the date of the application been continuously unem- 
 ployed; who are capable of working, but unable to obtain suitable employment, and 
 who have not exhausted their rights to unemployment benefits under this part of the 
 act. A workman is not obliged to accept work on conditions lower than those fixed by 
 qpntract or custom in his trade and in the locality, nor to accept work in an establish- 
 ment in which there is a trade dispute. No benefits are paid during strike or lock- 
 out. If a workman has been discharged for misconduct or has voluntarily left his 
 employment without just cause he can not enjoy benefit for six weeks. 
 
 "There are also provisions looking toward the prevention of unemployment by 
 refunding one-third of the contributions of employers who keep their men regularly 
 employed and who have paid 45 weekly contributions during a year and by refunding 
 contributions paid in respect of workmen working short time in times of depressed 
 trade. Higher contributions are levied for casual employment, except that the 
 employment of different persons on different days through a labor exchange may 
 coimt as the steady employment of one person. Workmen who have paid contri- 
 butions for 500 weeks are entitled to the return of all contributions paid, with com- 
 pound interest at 2i per cent a year, when they have reached the age of 60. 
 
 "The board of trade (the Government department exercising supervision) has power 
 to extend the provisions of the act to trades other than those specified in the original 
 draft, and may, after seven years 'revise the rates of contribution * * * and pre- 
 scribe different rates of contribution for different insured trades, * * * provided 
 * * * no * * * increase (shall be) more than 1 penny per week.' 
 
 "A provision of far-reaching importance empowers the 'insurance officer' to test 
 the skill of knowledge of worlanen who are unable to retain employment because of 
 lack of skill and to provide, out of the unemployment fund, 'suitable technical train- 
 ing' for such workmen. 
 
 "An 'association' of workmen in an insured trade may make an arrangement with 
 the board of trade by which the union is repaid three-fourths of the amount of benefits 
 paid its unemployed members, provided the total benefits paid exceed the State 
 benefit by one-third. 
 
 "There is also a provision for repayments to the amount of one-sixth of benefit to 
 associations which make payments to unemployed workmen whether in an insured 
 trade or not, provided benefit does not exceed 17 shillings per week. This is to 
 encourage voluntary unemployment insurance in other than insured trades. 
 
 " Workings of the British national insurance act. — The benefits fixed at 7 shillings per 
 week are, of course, not sufficient for full maintenance, but are intended to prevent 
 destitution. The British supporters of the act advocated it as a much more satis- 
 factory and more dignified form of relief than reliance on the poor law, charitable 
 institutions, or relief works. The practice of placing part of the burden on the em- 
 ployer is defended as equitable, since it is because of the fluctuating demands of the 
 employer that the workers are sometimes in reserve rather than being regularly 
 employed at all seasons. 
 
 39501—16 6 
 
82 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 "Between 2,250,000 and 2,500,000 of workers in the insured trades are covered. 
 Since the war there has been a falling off (in some trades) due to enlistments. 
 
 "The following table shows the number of insured workmen in insured trades in 
 July, 1915: 
 
 Building 
 
 Constmction of works 
 
 Engineering and iron founding 
 
 Shipbuilding 
 
 Construction of vehicles 
 
 Sawmilling 
 
 Other insured work people, . . . 
 
 Number. 
 
 640,947 
 
 31.2 
 
 150,974 
 
 7.5 
 
 758, C93 
 
 37.6 
 
 242, 963 
 
 12.1 
 
 174,275 
 
 8.2 
 
 9,^33 
 
 .4 
 
 42,99.<! 
 
 2.1 
 
 2,019,083 
 
 Per cent 
 of total. 
 
 "Benefits are limited to 15 weeks in one year, and not in greater proportion than 
 1 week of benefit to 5 weeks of contribution, and are not paid for the first week. In 
 the first annual report of operations under the act it was shown that in the studjr of 
 130,000 spells of unemployment, 63.1 per cent of unemployment among nonunion 
 men was covered, and 59.3 per cent among union men. The" spells of unemploy- 
 ment among nonunion men are longer than among unionists, as shown by the fact 
 that the percentage of nonunion men unemployed, but not entitled to benefit because 
 of the 1 week waiting time, amounted to 27 per cent, while among union men it was 
 34 per cent. 
 
 "During the 12 months from January 15, 1913, to January 17, 1914, payments were 
 made in respect of unemployment benefits to a total of £497,725 and an average 
 payment of 6 shillings. During that period 1,144,213 claims for benefit were made; 
 822,689, or 72.1 per cent, were made directly to the board of trade; 321,524, or 27.9 
 per cent, were made through trade unions. 
 
 "In July, 1913, according to the first annual report, the fund had expended less 
 than was expected and had accumulated a balance of £1,610,000." 
 
 Miss Olga S. Halsey, writing of her study of the act in the American Labor Legis- 
 lation Review for June, 1915, says she was particularly impressed by the degree of 
 cooperation with the trade unions: 
 
 "Up to July, 1914, 105 associations with 539,775 members had entered into these 
 arrangements, * * * and of these the president of the board of trade stated that 
 21 unions, with a membership of 86,000, had begun to make provisions for unem- 
 ployment insurance since the passing of the act. Thus compulsory insurance has 
 stimulated voluntary insurance. 
 
 "During the first year's operation 172 unions, with a membership of 376,041, in 
 noninsured trades had made arrangements to gain this subsidy. In each case the 
 union must certify that unemployment has not been connected with a trade dispute, 
 and allow the Government to audit the books of the unemployment fund. 
 
 "The board of trade, in the first annual report, states that the first year's experi- 
 ence proves, among other things, that compulsory state insurance is administratively 
 practical and that it can be introduced without destroying voluntary insurance. 
 In fact, the amount of voluntary unemployment insurance had been enlarged under 
 the operation of compulsory insurance. 
 
 "While the three years' experience of the British unemployment insurance act is 
 not sufficient to warrant any final conclusion, and the breaking out of the war has 
 disturbed ordinary conditions of employment, it is possible to say that this experi- 
 ence warrants the belief that compulsory unemployment insm'ance administered 
 along the lines of the British act is practical and possible. 
 
 "In October, 1914, the board of trade announced that emergency grants would be 
 made to trade-unions in aid of exceptional expenditures on account of unemploy- 
 ment benefit owing to the war. Because of the improved conditions of employ- 
 ment the board of trade later announced that no emergency benefits would be paid 
 on expenditures incurred after the month of May, 1915. 
 
 "So exceptional were conditions of employment that for the first seven months of 
 1915 the average weekly number of claims madef or unemployment benefit equaled only 
 40 per cent of those made for the corresponding seven months of 1914. The average 
 weekly amount of benefits paid during the first seven months of 1915 equaled only 30 
 per cent of the average jreekly amount of benefits paid the first seven months of 1914. 
 
 "These data covered all of 1914 prior to the breaking out of the war. To August 
 1, 1915, applications for emergency benefit were granted to 185 unions, with 284,297 
 members, to the amount of approximately |410,000." 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 83 
 
 The English Labor Year Book for 1916, in diBcussing unemployment insurance, 
 BUggeets that the British system falls short in the following respects: 
 
 "Far from universal. — 1. The Government's compulsory insurance is very far from 
 being universal— applying, indeed, at present only to one in six of the wage-earners 
 and t» hardly any women. It can at any time be extended by the Government by 
 mere order to any other trades, provided that the extra expense involved would not, 
 in the opinion of the treasury, entail an increase in the sum contributed by the State 
 of more than 1,000,000 pounds a year within the ensuing three years. 
 
 "Far from adequate. — 2. The Government provision of 7 shillings per week is in- 
 sufficient for the proper maintenance of the family, and, moreover, there is nothing 
 to save the unemployed man from the deterioration that prolonged unemployment 
 almost inevitably produces. It is suggested that during his periods of unemployment 
 the manual worker should have the option of putting in his time at self -improvement, 
 and that he should be able to attend, free of charge, the trade schools and day technical 
 and other classes that the local education authority should provide. 
 
 "Not sufficiently encouraging to trade unions. — 3. Many trade unions in certain 
 industries pay no out-of-work benefit or pay only in certain contingencies, or on a 
 very low scale, or for a very short period. The effect of clause 106 of the insurance 
 act has been in a few cases to cause such benefit to be instituted, but the government 
 subvention of one-sixth of the amount paid in out-of-work pay is far too small to 
 have any widespread influence, and, in addition, the conditions imposed by the 
 board of trade as regards registration at the Labor Exchange, etc., prevent some unions 
 from coming under the clause. In some foreign countries (Belgium, Norway, Switzer- 
 land, etc.) as much as half of their expenditure on out-of-work pay is given to the 
 trade-unions out of public funds." 
 
 THE GHENT SYSTEM. 
 
 The subvention to union treasuries out of public funds was inaugurated by the 
 municipality of Ghent in 1901. The conditions under which benefits are paid was 
 left to the discretion of the unions, but the public subsidy is added only for a certain 
 length of time, for involuntary unemployment and in a certain proportion to the 
 whole benefit. This allows union officials to administer the scheme, prove the fact 
 of unemployment, collect contributions, pay benefits. With modifications this 
 system has been adopted in something over 100 cities throughout Europe, and by the 
 national Governments of Belgium and France. Norway and Denmark also utilize the 
 same general method. City or national treasuries have added from 50 per cent to 100 
 per cent to union benefits for a period of 60 days in a year for each unemployed per- 
 son. The total of this amount is usually paid to the union in lump at the end of the 
 year or quarter. 
 
 Here again the very serious limitations are those set by the absence of labor organi- 
 zations. In the six countries where some form of the Ghent system has been tried, 
 there were in 1912 in the neighborhood of 33,500,000 wage earners. At the very 
 most there were not over 500,000 insured under subsidized schemes. There is still 
 need for a plan whereby far more wage earners, organized and unorganized alike, 
 can have the equivalent of a portion of wages regularly even when there is no work. 
 Only an inclusive scheme affords a real solution. 
 
 Addenda. 
 
 IPreparetl bv the Gei'man Imperial Statistical Bureau, Division of Labor Statistics, Borlin. Translated 
 by the Statistical Bureau, Metropolitan Life Insurance Company. 1 
 
 PRESENT STATUS O'F UNEMPLOYMENT INSURANCE ON THE BASIS OP OPPICIAL SOURCES 
 AND OP REPORTS PREPARED FOR THE GENERAL CONVENTION AT GHENT OP THE INTER- 
 NATIONAL ASSOC^TION OP UNEMPLOYMENT. 
 
 [Special Supplement to Reichs-Arbeitsblatt, No. 12, December, 1913.] 
 
 Of. previous memoir. Die bestehenden Einrichtungen zur Versicherung gegen die 
 Folgen der Arbeitslosigkeit in Deutschland und in Deutschen Reich, Berlin, 1906 ; 
 as also, in connection with legislation discussed below, for Denmark: Dr. Zacher, Die 
 Arbeiterversicherung im Ausland, No. la, p. 30; No. lb, pp. 49, 47*, 69* ff.; Reichs- 
 Arbeitsblatt, 1911, p. 182; li)12, p. 190 ff.; 1913, p. 590. For Norway, cf. Zacher, 
 ibid.. No. Illb, pp. 43, 19*, 23* ft.; and Reichs-Arbeitsblatt, 1911, p. 276 ff. For 
 Great Britain, cf. Zacher, ibid.. No. Va, p. 51; No. Vb, pp. 6, 84, 91 ft., and Reichs- 
 Arbeitsblatt, 1909, p. 830; 1910, p. 357; 1911, pp. 448, 560, 702, 860; 1912, pp. 55, 
 140, 160. 
 
84 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 EXPLANATORY NOTE. 
 
 A number of reports of progress in the field of unemployment insurance have recently 
 been published in the German Reichs-Arbeitsblatt.* The reports prepared for the 
 general convention at Ghent of the International Association on Unemployment in 
 September, 1913, furnish a new stimulus to issue a statement with regard to the present 
 status of unemployment insurance. In order to facilitate a summary view of the situ- 
 ation, an attempt has been made to arrange the most important information in the 
 comparative tables which follow, on the basis of the r&um^s of social insurance in 
 Europe.^ Use has been made of official publications, as well as of the reports prepared 
 for the meeting at Ghent.' 
 
 Attention has been paid solely to the arrangements made by public bodies (States, 
 Provinces, communities), leaving out of consideration measures for self-help on the 
 part of workmen. The latter will be treated in detail for Germanjr, and briefly for 
 other countries, in Special No. 8 of the Reichs-Arbeitsblatt.* This will appear shortly 
 and will be devoted to the status of unions of employers, workmen, and other employ- 
 ees in 1912. Moreover, we have left out of consideration the philanthropic work of 
 employers, as well as that of funds and societies. 
 
 In the arrangement of the tables Germany has been placed at the end of the series. 
 
 Interpreting the term "insurance" in its broadest sense, the systems of unemploy- 
 ment insurance which have thus far found application are three in number, as follows: 
 
 1. The system, of subsidies paid hy public bodies to the unemployment insurance funds 
 of industrial unions. — This is usually called the "Ghent system," after the city in 
 which it was first applied. It has been introduced more generally than any other. 
 In this connection it is important to determine whether the payment of subsidies is 
 left entirely to the communities or other public bodies, or whether additional sums 
 are given by the State, and, in the latter case, whether these sums are dependent upon 
 the budget or are determined by law. 
 
 ■ The system of subsidization is left entirely to the communities (or provinces) in 
 Germany, in Belgium (where its development is oldest and greatest), in Holland, 
 in France (where, besides a number of communities and departments, the State has 
 set aside the sum of 100,000 francs in its budget, which amount has never been fully 
 utilized, as the slight importance of the industrial benefit system in that country 
 does no seem to have been influenced by subsidization), in Luxemburg, and in a num- 
 ber of cantons of Switzerland (in the form of cantonal subsidies). 
 
 Legal regulation for the whole country has been instituted in Norway, in Denmark, 
 in Great Britain (besides the compulsory insurance which has been introduced into 
 some industries), and, if we take the Swiss cantons into consideration, in Geneva and 
 in the city of Basel (besides the voluntary unemployment insurance fund). It is 
 noteworthy that, in Norway, Denmark, and Great Britain, the system of labor ex- 
 changes has been regulated by law, hand~ in hand with insurance. (Of. the Nor- 
 wegian law of June 12, 1906, the English law of September 20, 1909, the Danish, law 
 of April 29, 1913, and the international report to the Ghent conference, September, 
 1913, printed in the Reichs-Arbeitsblatt, 1913, p. 761 ft.) 
 
 The results of the Ghent system must in general be designated as slight. Its pur- 
 pose, "training in self-help," has been fulfilled almost nowhere, either in the sense 
 that the industrial unions have received a greater- influx of members because of the 
 subsidies, or in the sense that they have introduced or further developed unemploy- 
 ment benefit. Only this has been attained — the benefits given by these unions have 
 been increased. However, those who have received them constitute a comparatively 
 small portion of the total number of unemployed, even where, as in Denmark, the 
 organization of workmen was far advanced before the introduction of the subsidy sys- 
 tem. In Belgium, moreover — ^in the mother country of the system — comparatively 
 few workmen reap its benefits. It is true that the organization movement has forged 
 ahead in Germany much farther than in Belgium or in Prance, Mid that imemploy- 
 ment benefit has attained a much greater development there than in other countries. 
 (Of. Special No. 8, Beichs-Arbeitsblatt.) Yet it has thus far been impossible to 
 determine any effect upon the stren^h of organization, and upon the development 
 of unemployment insurance, in the cities which have introduced the Ghent system. 
 Furthermore, it can not be denied that conditions are less favorable to success in Ger- 
 
 1 Ct. Supplement to No. 4, April, 1913 (Index for 1903-1912), p. 10. 
 
 ' Supplement to No. 12, December, 1912, of the Reiohs-Arteftsblatt. 
 
 8 For Germany cf. Der gegenwartige Stand der Arbeitalosenfiirsorge imd -Verslcherung in Deutschland, 
 Tublications of the German Association on Unemployment, No. 2, prepared hy Dr. E. Bernhard. The 
 reports for other countries are at hand in the form of publications of the conference; they will appear in tli» 
 Bulletin Trimestriel de I'Asaooiation Internationale pour la Lutte oontre le Chomage. 
 
 « Cf. Statistisches Material zur Prage der Arbeitslosigkeit, prepared by the imperial ministry of the in- 
 terior (November, 1913), p. .92 fl. For foreign countries, cf. Statistisches Jahrbnch ffir das Deutsche Eeich, 
 1913, p. 16* f. 
 
SOCIAL INSTJEANOE AND UNEMPLOYMENT. S5 
 
 many than anywhere else. While in other countries industrial unions are preponder- 
 antly organized on a local basis, the German bodies are invariably strongly centrahzed. 
 iii^eoYeT.theu benefit system is, in general, unified and adapted to the entire empire. 
 
 Ihe light financial burdens wliich, according to the tables, are necessitated by the 
 Orhent system (in 9 German cities for which we know at least the amount of the 
 annua,l grants, they add up to only a little more than 40,000 marks) Jiave aided its 
 adoption greatly, hut have at the same time contributed to decreasing its efficiency 
 in the campaign agiainst the consequences of unemployment. Hence, its ardent cham- 
 pions have become convinced that at least a partially compulsory insurance svstem 
 -should be instituted. i- j j 
 
 The subsidization of industrial unions is frequently, as in Ghent, associated with 
 the subsidization of savings societies or of individual savers, which, however, has 
 almost universally tm-ned out to be a failine. 
 
 We have still to consider the payment of subsidies to voluntary unemployment funds. 
 
 2. The system of state or communal voluntary unemployment funds. —The best-known 
 funds of this class are those of the city of Berne, of the canton of Basel, and of the city 
 of Cologne (formerly a free society with a considerable municipal subsidy) . Recently, 
 on the basis of the modern charters worked out by the Bavarian government, the 
 cities of Kaiserslautern, Bavaria, and Schwabisch Gmund, Winttemberg, have asso- 
 ciated with the subsidy system the institution of voluntary unemployment insurance 
 funds. However, we have no reports as yet concerning their experience. 
 
 In general, the voluntary unemployment funds are hampered by the fact that only 
 a comparatively small number of workingmen join them. In the case of almost all 
 of these the danger of unemployment is especially great, or lack of work is a regularly 
 recurring phenomenon. The greatest number of voluntary insured belonged to the 
 Cologne fund in its earlier form. Since its modern reconsti-uction, with increased 
 dues, it has been able to obtain but few members. 
 
 Greater success has been experienced by the Cologne fund in its new activity, the 
 reinsurance of industrial unions. Tliis is akin to the Ghent system, but is distinguished 
 from it by requiring payment from the unions in return for subsidization. P'urther- 
 more, from the viewpoint of advancing self-help, Cologne has obtained better results 
 than other cities by means of the Ghent system. It has been able to win over four 
 industrial unions to the introduction of unemployment benefits on the basis of rein- 
 surance. It is true that the unions in the building trades, upon whom the greatest 
 reliance had been placed, have thus far dechned to participate^the free industrial 
 unions for the reason that they are organizations for combat and not for unemploy- 
 ment .benefit, and the Christian unions because they feel no need. 
 
 3. The system of compulsory insurance.- — ^Aside from the .unfortunate and rapidlv 
 abandoned experiment of 1894, in the city of St. Gall, there has never, as yet, been 
 a system of compulsory insurance for all workmen, nor was there such an institution 
 for particular industries until the enactment of the English national insurance act of 
 1911. So short a time has elapsed since the enactment of this law, which extends 
 compulsory insurance to about 2,500,000 workmen, and its enforcement was begun 
 in a period so favorable from a commercial point of view, that no final judgment can 
 be given. This fact haa been recognized by the convention at Ghent of the Inter- 
 national Association on Unemployment, in agreement with the report of the English 
 section. 
 
 The plan for compulsory insurance of workers in the watch and clock industry in 
 the Swiss canton of Neuenburg is still in the preparatory phase. 
 
 ******* 
 
 Tables I, II, and III, refer to arrangements outside the German Empire. The first 
 treats of the three countries which have legal regulation. The second table contains 
 the data for those countries in which state subsidies are provided for in the budget, 
 and for those in which there is no state subsidy (or, in Switzerland, no federal subsidy). 
 The third is devoted to the two voluntary unemployment insurance funds of Swit- 
 zerland. 
 
 The tables for Germany are so arranged that Table IV concerns subsidies to indus- 
 trial unions; Table V, subsidies to savers and to savings societies; and Table VI, 
 public voluntary unemployment insurance funds. Thus some cities occur in two 
 tables; they are those which associate subsidies to industrial unions with sinilar 
 payments to individual savers or to volilntary unemployment funds (Berlin-Schone- 
 berg, Stuttgart, Feuerbach, Freiburg i. B., Kaiserslautern, Schwabisch Gmiind). 
 Those cities are not included which give free unemployment benefit, which differs 
 from poor relief only in the fact that it is governed by special legislation, and that, 
 according to the local statutes, it is not to be considered as such relief. Where bene- 
 fits are paid to those who are not included in the subsidy system (particularly the 
 unorganized), this has been especially indicated (BerUn-Schoneberg [food stamps], 
 Erlangen, Mannheim). 
 
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 SOCIAL lliTSUEAKCE AND XHSTEMPLOYMENX. 
 
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98 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. Smith. You spoke a moment ago of what might be done to 
 get these people that are mioraployed to occupy land somewhere, 
 i-lave you given any thought to whether or not they would be willing 
 to go f.nd how you could get them out of the city, those who have no 
 me^.ns to get oiat or to buy tools? What arrangements to you think 
 could be made to that end ? 
 
 Miss PoYNTZ. My attention was fjst cttlltd to that problem in the 
 work for the immigration commission. I found that great numbers 
 of the newer immigrants were peasants and dissatisfied in the cities, 
 and that they wanted to go out on the land, that they longed to go 
 to the country. That is particularly true of a great many of them 
 that drift into the large cities, like New York, Chics go, and Boston, 
 and so on, because they have no funds with which to settle upon 
 the land. It might be posuible to provide funds for this work. Tliat 
 is being tried in several countries in J* urope. The establishment of 
 the land-bank system in Ireland has regenerated Irish agriculture. 
 The Fnglish Govcrmnent has expended millions of pounds in the 
 establishment of land banks. It opens the way for the penniless 
 worker to go back to the land. 
 
 In H. Demarest Lloyd's book, Newest England, there is a descrip- 
 tion of a similp-r policy, followed out in New Zealand, where state 
 funds are provided to give opportunity to agricultural workers to 
 settle on the land. They open up roads and build homes on money 
 borrowed from the government. It is a very successful system, and 
 has greatly reduced the percentage of unemployment. 
 
 Mr. Smith. Do you tliink the people of the United States would 
 approve of that? 
 
 Miss PoYNTZ. Our American people are coming to approve of all 
 sorts of things nowadays. 
 
 Mr. Smith. Why not, then, furnish money to establish other 
 industries, such as buying mines, for instance, or quarries, etc. ? 
 
 Miss PoYNTZ. The problem in industries is not to acquire more 
 industries, but to organize the labor market for those already in ex- 
 istance. 
 
 Mr. Crisp. It is the same problem, as the industries have. 
 
 Miss PoYNTz. The problem in agriculture is to drain off the sur- 
 plus workers from the industrial centers and stop the drift to the 
 cities. The industrial problem is to make employment regular. 
 
 Mr. Smith. There is a great demand for agricultural Istbor in this 
 country at high wages, for such labor as is almost skilled — we might 
 call it skilled labor. Why do not these people accept that sort of 
 labor? 
 
 Miss PoYNTZ. Because in many cases they know that the work 
 lasts a comparatively short time, and that ii they go out they will 
 have to drift back unemployed to the cities. 
 
 Mr. Smith. It is a great problem in the country how to get help to 
 go on the farm ? 
 
 Mr. Browne. I would like if you have any information upon the 
 law you spoke of to establish land banks in Ireland, to settle up the 
 agricultural parts of Ireland, to have it in the record. Have you any 
 references ? 
 
 Miss PoYNTZ. There is a book on Ireland by an author named 
 Paul-Dubois. I also have other references in my notes, if you wish 
 to have them. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 99 
 
 Mr. Browne. You might put them m the record. 
 
 Miss PoYNTZ. And, perhaps, also a description of that legislation. 
 I do not say I am recommending just this sort of legislation, because 
 it is a question as to whether it is desirable; but I think that ought 
 to be studied here in America. 
 
 I append herewith a list of books on unemployment, and in addi- 
 tion a somewhat more complete bibliography. 
 
 LIST OF BOOKS ON UNEMPLOYMENT. 
 
 W. H. Beveridge, Unemployment, a Problem in Industry. 
 
 Sidney and Beatrice Webb, The Public Oragnization o£ the Labor Market, being 
 
 Vol. II of the Minority Report of the Poor Law Commission. 1909. 
 Sidney and Beatrice Webb, The Prevention of Destitution, 1911. 
 Various authors, Seasonal Trades, with general introduction on Unemployment by 
 
 . Juliet Stuart Poynts, London, I9I2. 
 F. Isabel Taylor, A Bibliography of Unemployment and the Unemployed, London, 
 
 1909. 
 See article "Unemployment" in Bliss's Encylopedia of Social Reform and Arbeits- 
 
 losigkeit in Conrad, Handwoerterbuch der Staatswissenschaften (Bibliography). 
 Karl Marx, Capital (Kerr edition 1909), vol. 1, pp. 689-783. 
 Dearie, N. B., Problems of Unemployment in the London Building Trade, 1908. 
 Percy Alden, The Unemployed: A Natural Question. London, 1908. 
 J. A. Hobson, The Problem of the Unemployed. London, 1906. 
 ('harles Booth, Life and Labor in London. 
 E. F. Rathbone, Report of an Enquiry into the Conditions of Labor at the Liverpool 
 
 Docks, pp. 50. Liverpool, 1904. 
 E. G. Howarth and Mona Wilson, West Ham, 1907. 
 Unskilled Labor, Report of a Special Committee of the Charity Organization Society. 
 
 London, 1908. 
 Geoffrey Drage, The Unemployed, London, 1894. 
 
 Rowntree, B. S., and Bruno Lasker, Unemployment, a Social Study. London, 1912. 
 B. S. Rowntree, Poverty: A Study of Town Life. 
 
 Massachusetts Bureau of Statistics, Quarterly Report on State of Employment. 
 New York State Bureau of Labor Statistics, Annual Report. 
 
 Third Report of the New York Commission on Employer's Liabilty, entitled Unem- 
 ployment and the Lack of Farm Labor. Unemployment in the State of New 
 
 York, by Dr. W. M. Leisereon. 
 Twenty-fourth Report of the United States Commissioner of Labor, 1903 passim. 
 Twelfth Census, Volume on Occupations, pp. ccxxv-ccxxviiandpp. ccxxxii-ccxxxiii. 
 I. M. Rubinow, Social Insui'ance, 1913. 
 Final Report of the Industrial Relations Commission. 
 Robert Hunter, Poverty. New York, 1909. 
 H. R. Seager, Social Insurance. New York, 1910, chapter 4. 
 Minority Report of the Poor Law Commission, London, 1909. 
 Reports of the New York Bureau of Labor Statistics (Union Stat.). 
 United States Geological Survey, Annual Report (number of days worked in the coal 
 
 mines of United States). 
 Scott Nearing, Social Adjustment, 1912. 
 
 Alica Willard Solenberger, One Thousand Homeless Men, New York, 1911. 
 Report of the New York Unemployment Committee, New York, 1916. 
 Joseph Willets, The Unemployed in Philadelphia, Department of Public Works, City 
 
 of Philadelphia, 1915. 
 Heinrich, Herkner, Die Arbeiterfrage, 5th edition, Berlin, 1908. 
 Philippede Las Cases, Le Chomage (Biblioqus), Paris, 1909. 
 A. de Lavergne and L. P. Henry, Le Chomage, Causes, Consequence, Remedes, 
 
 Paris, 1910. 
 Max Lazard, Le Chomage et la Profession, Paris, 1909. 
 See especially periodical publications of the International Association for the 
 
 Struggle Against Unemployment, Bulletin Trimestriel de I'association pour la 
 
 lutte contre le chomage. 
 
100 SOCIAL INSUBANCE AND UNEMPLOYMEKT. 
 
 BIBLIOGRAPHY. 
 
 Anti-Sweating League, Short Bibliography of Sweating and the Legal Minimum Wage. 
 
 1906.' 
 Conrad, Handworterbuch der Staatewissensrhaften. 1" Band. (Ed. 1909.) 3= Auf- 
 
 lage. 
 Stammhammer, J., Bibliographie der Sozialpolitik. Jena: 1896. 
 
 Bibliographie des Socialismus und Communismus. Jena: 1893. 
 
 Muhlbrerht, 0., Wegweiser durrh die neue Literatur der Kechts und StaatswiBsen- 
 
 schaften. 2' Auflage, 1893. 
 Taylor. F. I,, Bibliography of Unemployment. London, 1909. 
 Adler, Georg, Arbeitlosigkeit und Arbeitslosenversicherung: In Handworterbuch der 
 
 StaatswLasenBchaften. 3" Auflage. 1 Band, pp. 1101-1130. 
 Arbeitsnachweis und Arbeitsborsen: Art. in Hanworterbuch der Staatawis- 
 
 senschaften. 3» Auflaga, 1909. 1 Band, pp. 1130-1140. 
 Uber die Aufgaben des Staates augesichts der Arbeitslosigkeit Tubingen, 
 
 1894. 
 Versicherung der Arbeiter f,egen Arbeitslosi' keit im Kanton Basel-Stadt. 
 
 Bassl, 1895. 
 Alden, Percy, 'j he Unemployed: A National Question. London. 1905. 
 Barnett, S. A.. The Unemployed and the Unemployable. Econ. Rev., Vol. viii. 
 
 London, 1903. 
 Bernat, Die Arbeitslosigkeit: Ihre Bekampfung und Statistik. Berlin. 1899. 
 Beveridge, W. H., he Problem of the Unemployed. 1907. 
 
 Unemployment: A Problem of Industry. 1909. 
 
 Black, Clementina, Makers of our Clothes. 1909. 
 Sweated Industry and the Minimum Wage. 1907. 
 
 Bohmert, V., Die Beschaftigung von Arbeitslosen als gemeiniitzige und kommunale 
 
 Aufgabe: Arbeiterfreund Jahrg. xxxvii. Berlin, 1899. 
 Booth, Charles H., Life and Labour in London. Second Series: Industry. 
 Booth, William, In Darkest England. 1890. 
 
 - The Vagrant and tho Unemployable. London: Salvation Army. 1904. 
 
 Van der Borght, Dr. R., Grundzilge der Soziilpolitik. Leipzig, 1904. XV. Bind, 
 
 Hand und Lehrbuch der Staatswissenschaften. 
 Bosanquet, Helen, The Po ir Law Report of 1909. 1909. 
 Bums, J., The Unemployed. Fabian Tract, No. 47, 1893. 
 Buschmann, Die Arbeitslosigkeit u. die Berufs — organisation. Berlin, 1898. 
 Calwer, Arbeitsmarkt u. Arbeitsnachweis in ihrer Bedeutung fiir die Arbeiterklasse. 
 
 Stuttgart, 1899. 
 Davies, Maud, Life in an English Village. 1909. 
 Dawsen, W. H., The Vagrancy Problem. 1910. 
 Dearie, W. B., Unemployment in the Building Trades. 1909. 
 Devine, E. T., Misery and its Causes. 1909. 
 Drage, Geoffrey, The Unemployed. London, 1894. 
 Engels, Friedrich, Conditi(m of the Working Class in England in 1844. Tr. by F. 
 
 Wischnewetzky. 1892. 
 Forster, Die Arbeitslosigkeit und die moderne Wirtschaftsentwickelung. Berlin, 
 
 1897. 
 Foxwell, H. S., Irregularity of Employment. (In Oliphant, "Claims of Labour.") 
 
 . 1886. 
 Gibbon, I. S., Unemployment Insurance. London, 1912. 
 Gide, Ch., Les sans Travail. Vals-les-Bains, 1901. 
 Haenisch, Kom., Zur Frage der gewerkschaftlichen Arbeitsloaenunterstittzung. 
 
 Neue Zeit, Jhrg. 16, 21, 1898. 
 Die Vortheile der gewerkschaftlichen Arbeitslosen Unterstiitzung. Neue 
 
 Zeit, Jhrg. 16, 2, 1897-98. 
 Hardie, J. Keir, The Unemployed Problem. 1904. 
 
 Hartmann, Die gemeindliche Arbeitsvermittlung in Bayern. Munchen, 1900. 
 Hatch, E. F. G., A Reproach to Civilisation. 
 
 Haw, George, From Workhouse to Westminster: Life of Will Crooks. 
 Herkner, Hemrich, Die Arbeiterfrage. 1894. 
 Studien zur Fortbildung des Arbeitsverhaltnisses, im Archiv fiir soziale 
 
 Gesetzgebung und Statistik. Berlin, Bd. 4. Heft. 4/. pp. 590 ff. 
 Higgs, Mary, How to Deal with the Unemployed. 1904. 
 Hirschberg, Ernst, Arbeitlosenversicherung und Armenpflege (in Volkwirtschaft- 
 
 lichen Gesellschaft, 34 pp.). 1903. 
 
 Die Massnahmen gegeniiber der Arbeitslosigkeit. 
 
 Die soziale hage der arbeitenden Klaase in Berlin. 1897. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 101 
 
 Hobson, J. A., The Industrial System: An Inquiry into Earned and Unearned In- 
 come. London, 1909. 
 
 Problem of the Unemployed. London, 1896. 
 
 Howarth, M. M., and Wilson, Mona: West Ham. 
 
 Imle, Fanny, Die Arbeitslosenunterstutzung in den deutschen Gewerkuchaften 
 
 Berlin, 1903. 
 Jackson, Cyril, Unemployment. 1910. 
 Jastrow, Die Finrichtung a-. Arbeitsnachweisen u. Arbeilsnachweis-Verlanden 
 
 Berlin, 1900. 
 MacCormac, Henry. Plan for the Relief of the Unemployed Poor. Belfast, 1830. 
 National Conference on the Prevention of Destitution. 1911: Papers and proceedings 
 
 of the Unemployment Section. 
 Nicholson. J. S., Strikes and Social Problems. 
 Paton. J. B., The Unemployable and the Unemployed. 1905. 
 Reichsberg, Der Kampf gegen die Arbeitslosigkeit m der Schweiz. Bern, 1899. 
 Pigou. A. C, Variations in Fmployment. Saturday Westminster, July 8, 1911. 
 Reumann, Stadtische Arbeitsvermittlung als Mittel im Kampfe gegen die Sozial- 
 
 demokratie. Wien, 1899. 
 Rowntree, B. Seebohm, Poverty. 1901. 
 Schappi, Das Recht auf Arbeit und der Kampf gegen die Arbeitslosigkeit. Zurich, 
 
 1894. 
 Schalby, Zur Frage der Arbeitslosenversicherung-Untersuchungen, Bamberg. 1895. 
 Schikowski, Uber Arbeitslosigkeit u. Arbeitslosenstatistik. Leipzig, 1894. 
 
 Methode der Arbeitslosenstatistik. Leipzig, 1895. 
 
 Smith, Constance, Case for Wages Boards. 1908. 
 
 Webb, S. and B., Vol. I, The Break-up of the Poor Law; Vol. II, The Public Organi 
 
 sation of the Labour' Market. 1909. 
 
 The Prevention of Destitution. 1911. 
 
 Wolf, Julius, Arbeitslosigkeit und ihre Bekamfung. 1896. 
 
 Arbeitsmarkt: Der Monatschrift der Centralstelle f. Arbeitsmarkt Berichte. Berlin. 
 Jahr. 
 
 Arbeitsvermittlung in Oesterreich. Stat. Departement im k. k. Handelsministerium, 
 Wien, 1898. 
 
 Association of Municipal Corporations. Conferences, May 17 and June 14, 1906. 
 
 Central Unemployed Body. 1905-6. 
 
 Casual Labour, C. J. Hamilton. 1908. 
 
 Charity Organisation Society, Casual Labour, C. J. Hamilton. London, 1908. Ex- 
 amination of General Booth's social scheme. 1890. 
 
 Exceptional Distress. 1886. 
 
 Homeless Poor. 1 891 . 
 
 Last Year's Unemployed. 1906. 
 
 Occasional Papers, 5, 11, 21. 29, 30, and 53. 
 
 Relief of Distress due to want of Employment, 1904. 
 
 Reviews: March, 1903 ; January, March, May, August, September, and Decem- 
 ber, 1905; November, 1906. 
 
 Unskilled Labour and Relief Work, Sir Samuel Johnson. 1894. 
 
 Chj'istian Social Union (Oxford). Unemployment leaflet, 45. 1906. 
 
 Economic Journal, December, 1904; March, June, September, December, 1905; June, 
 
 1906. 
 Howarth, B., Report of a Temporary Colony at Garden City. 1905. 
 Liverpool, Report of a Committee of Inquiry into the Subject of the Unemployed, 
 
 1894. 
 London County Council, Conference on Lack of Employment, 1903. 
 London Unemployed Fund, 1904-5. 
 Mansion House. Report of Conference, 1887. 
 
 Report of Conference, 1892, 
 
 Committee Report, 1893. 
 
 Executive Committee, 1894. 
 
 Committee, 1903-4. 
 
 Fund Report, 1886. 
 
 The Queen's Unemployed Fund, 1906. 
 
 Toynbee Trust, Report of Inquiry under the. 1895-6. 
 
102 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 United Kingdom, Board of Trade. Agencies and methods for dealing with the 
 
 Unemployed in Foreign Countries. 1904. (C. 2304.) 
 
 Alien Immigration, 1893. (C. 7113.) 
 
 Charts for the New Zealand Exhibition, 1900. 
 
 Charts for the St. Louis Exhibitioii, 1904. (C. 2145.) 
 
 Contracts given out by Fublic Authorities to Associations of Workmen, 1896. 
 
 (C, 8233.) 
 
 Employment of Women and Girls, 1897. (G. 7564.) 
 
 Immigration from Eastern Europe, 1894. (C. 7406.) 
 
 Labour Department, Report on Agencies and Methods for dealing with the 
 
 Unemployed, 1893. (C. 7182.) 
 
 Labour Gazette. Monthly. 
 
 Report of Chief Labour Correspondent. (C. 2838.) 
 
 Second Series of Tables and Charts on British and Foreign Trade and Industry, 
 
 1904. (C. 2337.) 
 
 Tenth Abstract of Labour Statistics, 1902-4, 1905. (C. 2991.) 
 
 Trade Unions (1902-4), 1906. (C. 2838.) 
 
 Committee on Distress from Want of Employment, 1895-6. Reports i-iv. 
 
 Departmental Committee Report on the Report of Mr. Rider Haggard, 1906. 
 
 (C. 2979.) 
 
 Departmental Committee on Vagrancy, 1906. (C. 2852, 2891, and 2892.) 
 
 Local Government Board, Thirty-fifth Annual Report of, 1906. 
 
 Parliamentary Return on Unemployed Relief (Mr. Whitman), 1905 (193); do. 
 
 (Mr. Burns), 1906 (392). 
 
 Parliamentary Return on Pauperism and Distress. 1886. 
 
 Poor Laws Commission, Reports and Evidence, 1909. 
 
 Royal Commission on the Depression of Trade and Industry, 1885-86. (C. 
 
 4715, 4797, and 4893.) 
 
 Royal Commission on Labour, 1891-94. 
 
 Local Government Board, Report on Salvation Army Colonies, 1905. (2562.) 
 
 Select Committee of the House of Commons on Distress Tlirough Want of 
 
 Employment. 1895 (111, 253, and 365); do., 1896 (321). 
 ■ Select Committee of the House of Lords on (1) the Sweating System; (2) on 
 
 Poor Law Rehef. 1888 (239); (3) on Immi&ration and Emigration. 1888 (305) and 
 
 1889 (311). 
 Annual Reports of the Irish Government relating to Irish migratory labourers. 
 Vierteljahrsheften zur Statlstik des Deutschen Reiches. December, 1896. 
 
 IV. — LABOUR EXCHANGES. 
 
 Bohmert, Zur Statlstik der Arbelts Losigkeit, der Arbeltsvermlttlung usw. in der 
 
 Zeitschrift des Sachsischen Statistischen Bureaus. Jahrg.. 1894. 
 Conrad, Carl, Die Organisation des Arbeitsnachweises in Deutschland. Leipzig, 1904. 
 Eckert, Der moderne Arbeitsnachweis. Leipzig, 1902. 
 Evert, Der Arbeitsnachweis in Jahrb. tiir Ges und Verw. Jahrg., xil. 
 France. L'OfRce du ' ravail, Le placement des emploves, ouvriers et domestiques en 
 
 France. Paris, 1893. 
 Leo. Die bestehenden Einrichtungen zur Ver.sicherung gegen die Folgen der Arbelts 
 
 losigkeit. Berlin. 1906. 
 Ludwig, Der gewerbsmassige Arbeitsnachweis. Berlin, 1906. 
 Malav^, La Bourse du ',' ravail a Paris. Briissel, 1887. * 
 Mollnari, La Bourse du Travail, Journal des Economistes. Jahrg.. 1888. Also Les 
 
 Bourses du 'j ravail. Paris, 1893. 
 Reins, Conf&ences pr^paratolres k 1' organisation d'une bourse du '.'"ravail a Bruxelles. 
 
 Briissel, 1885. 
 Singer, Rudolf, Die Organisation des Arbeitsnachweises in Wien, Zeitschrift fiir 
 
 Volkswirtschaft, Sozialpolitlk und Verw. Jahrg., 1895. 
 F. V. Reitzensteln, Der Arbeitsnachweis. Berlin. 1897. 
 United Kingdom, Board of '. rade (Labour Department). London. 1893. 
 Report on Agencies and' Methods of Dealing with the Unemployed in certain 
 
 Foreign Countries. (Cd. 2304.) 1905. 
 
 Miss PoYNTZ. This item on the Wisconsin report on old-age relief 
 should, if possible, be made part of the general record of the nearing 
 on social insurance. 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 103 
 
 OLD-AGE REUEF IN WISCONSIN. 
 
 Ill a pamphlet oj 76 passes the Industrial Commission of Wisconsin presents the 
 results of an investigation into the problem of relief for aged persons, the work having 
 been undertaken in compliance with the provisions of a law (ch. 185, acts of 1913), 
 directing such an Inquiry. The act prescribes "a thorough and complete investi- 
 gation of the number, condition, and welfare of the aged and infirm in this State with 
 a view of establishing old-age pensions." It was also directed that such recommen- 
 dations and bills as the commission should deem necessary to offer should accompany 
 the report. 
 
 The commission is a permanent one. charged with the administration of all labor 
 laws of the State, including the workmen's compensation law. The present report 
 was made, therefore, by men who are in direct contact with the great body of wage 
 earners, for whom the question of old-age relief is not to be answered by improved 
 methods of charity, but by what the commission designates "a dignified form of 
 support, "in keeping with the character and habits of those who have rendered worthy 
 industrial service, but whose declining years are without adequate provision for their 
 material needs. The report does not claim exhaustiveness, nor does it advocate any 
 existing plan or scheme of old-age pensions, but it offers suggestions favorable to the 
 idea, and submits a rough estimate of the probable cost of such pensions on plans that 
 might prove to be feasible. 
 
 The reason for some provisions of the sort is found in five principal causes arising 
 out of modern industrial conditions. In brief these are (I) the great and increasing 
 number of persons dependent upon the returns of their daily labor for the supplying 
 of daily needs; (2) the shortening of the effective working life by reason of the demand 
 in speed in the performance of industrial operation, so that men not in any sense 
 decrepit are none the less unable to secure employment because of the physical 
 necessity of a degree of slowing up; (3) the generally increased longevity of human 
 life, prolonging the unproductive period induced by the second cause; (4) the ten- 
 dency of home and neighborhood ties to be broken, due to the mobility of our popu- 
 lation, so that one may find himself in his declining years isolated from those to whom 
 he might naturally and successfully look for needed assistance; (5) the more humane 
 attitude toward poverty, especially, where coupled with age, so that the aged poor are 
 not so readily consigned to the almshouse as formerly. The result of these conditions 
 has been the adoption of systematic measures in most industrial countries other than 
 our own. In Great Britain, Denmark, Australia, and New Zealand, State pension 
 systems exist. Belgium, France, Germany, Italy, Spain, and Sweden provide old- 
 age pensions under State management. 
 
 In discussing the present means of support for the aged in Wisconsin, seven prin- 
 cipal sources are considered: (1) Individual savings characterized as an uneconomic 
 method because by it every person is charged with providing, by a lifetime of effort 
 and often of painful frugality, against a contingency which only a few persons will 
 survive to experience; this uncertainty, and often the impracticability, combines 
 with other causes to render this an inadequate general dependence; (2) private insur- 
 ance, which has been but little practiced in this country, either by purchasmg 
 annuities or through trade-unions or by fraternal organizations; (3) support by children 
 and relatives, which in many cases doubles the burden to be discharged by those 
 undertaking to provide for a growing family, even if there be those m existence who 
 could be called upon tor aid; (4) retirement or service pensions provided by employers, 
 which is in practice and of necessity a restricted resource; (5) United States military 
 pensions, which are now paid to some 19,000 residents of Wisconsin— a number which 
 must decrease from year to year; (6) public poor reUef, mainly by means of alms- 
 houses; and (7) private charity, either through the maintenance of old people s 
 homes" or more uncertain and transitory agencies. , ,, i„c ««„ 
 
 The inadequacy of these methods to meet the needs of the indigent of the 185,000 
 inhabitants of the State 60 years of age and upwards is so evident as to require little 
 more than their statement to raise the question as to what other measures may be 
 adopted. Four forms of relief are discussed: (1) Voluntary insurance under the 
 supervision and encouragement of the State; (2) compulsory insurance of wageworkers; 
 (3) universal compulsory insurance; and (4) gratuitous pensions. 
 
 LAND SETTLEMENT IN NEW ZEALAND. 
 
 [Henry D. Lloyd, Newest England, 1903.il 
 
 Large estates are being bought by the Government in small parts and offered to 
 settlers for lease in perpetuity. The leaseholder can keep his capital and use it in 
 farming He can not be foreclosed if he borrows money and if he leaves or is unable 
 
104 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 to pay his loan he is certain to secure the full value of his improvements. The lease- 
 holder is not allowed to borrow on the security of his lease either from a private banker 
 or the Government. Neither can he borrow ordinarily from a private lender on the 
 security of his improvements, but the Treasury, through the Advances to Settlers 
 Office, will make loans on such security. 
 
 Cooperative villages have especial recognition in the New Zealand land system. 
 Ordinarily land is distributed among applicants by ballot. People who want to 
 organize a cooperative village do not have to compete with other persons for the land 
 but apply for a block of land to cover the number of settlers. No one can hold more 
 than 320 acres. This land is held under 999 years' lease. The system of ' ' closer settle- 
 ments," as the leasing of land in small parcels is called, is a mutual understanding 
 between the people of the State. 
 
 The Government secures rent from the land and is interested in the welfare of the 
 settler. It is claimed that the Government is making a profit of 5 per cent on its 
 investment in land. Parts of the profits are used for public works in the vicinity of 
 the public land. As in the case of advances to settlers, the profits enabled the Gov- 
 ernment to reduce the rates of interest, the profits of the land operations will lead to 
 reductions of rents. The conditions as to residence and improvements are strict and 
 the settlers must comply with them in order to hold the property. 
 
 Within the first two years of residence the settler must improve the property equal 
 to 2^ per cent of the value of the land each year, must have the fields fenced, and 
 otherwise take care of the property. The system of crops is also prescribed. — Land 
 Settlement in Ireland.' 
 
 The land act of 1903 established a system of land purchase by farmers. The act is 
 optional and the landlords and farmers are left free to agree on the price. The sales are 
 made by estates under the control of commissioners especially appointed to admin- 
 ister the act. 
 
 Landowners are paid in cash. The tenants can have advances of capital made to 
 them up to £7,000, which they are to pay off in fixed annuities for a number of years. 
 The act aims to do away with large land holdings and establish peasant proprietorships. 
 
 STATEMENT OF HON. CHARLES F. NESBIT, SUPERINTEND- 
 ENT OF INSURANCE, DISTRICT OF COLUMBIA; 
 
 Mr. Nesbit. I have very little to say, gentlemen, in the way of 
 theory about this matter, at this time at least. I only wanted to lay 
 before you a few figures that have come to me in the course of doing 
 the work in the District of Columbia as superintendent of insurance. 
 
 We have here about 90,000 — something over 90,000 — wage-earning 
 negroes, colored people, in Washington, as you know. They form 
 most of the casual labor, not skilled labor, but servants and day 
 laborers and drivers, and such workers as those. Among these people 
 there has grown up a System of insurance against sickness. This has 
 grown up largely in this section, and south of here, in Maryland, Vir- 
 ginia, and the Carolinas, and somewhat in Tennessee. The greatest 
 problem with these people is that when they become sick their pay 
 stops. 
 
 To show you how thoroughly they try to insure against sickness in 
 the District of Columbia I will state that in this city they pay $500,000 
 in premuims. And out of that all that they get back is $200,000 — 
 approximate figures. 
 
 Mr. Keating. In one year ? 
 
 Mr. Nesbit. In one year; yes. There are no reserves on these 
 policies. 
 
 Mr. Smith. How much is paid out ? 
 
 Mr. Nesbit. 1500,000 is paid in. 
 
 Mr. Smith. And they -get back how much ? 
 
 Mr. Nesbit. They get back $200,000. 
 
 1 L. Paul-Dubois: Contemporary Ireland. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 105 
 
 Mr. Smith. By these colored people alone? 
 
 Mr. Nesbit. By white people, as well as colored — the poor people 
 of the District. There is a very strenuous effort on the part of the 
 poorly paid people to provide against sickness; but this is a totally 
 inadequate way of providing. 
 
 I find that all the other work connected with the insurance depart- 
 ment is not so troublesome as taking care of these sick claims. Ihese 
 people come in and claim for one, two, or three weeks' sickness. It 
 IS impossible to go to court on a claim Eke that. It would not pay; 
 and besides, these people could not afford it. It does not pay to 
 spend $30 to get $6. It has given me more work, more trouble, in 
 taking care of these claims, than has all the other work connected 
 with the insurance department combined — largely because, I will 
 admit, I permit it, for I feel they are entitled to some consideration. 
 
 I have figured this matter out for 10 years, and I find that the sum 
 paid in in 10 years amoimts to $40,000,000 all told, in sick and acci- 
 dent companies doing business in the District. 
 
 Mr. Keating. Isn't that $4,000,000? 
 
 Mr. Nesbit. No. I am taking all the companies doing business 
 here. In Washington alone it has been less than $4,000,000. I take 
 these figures from their own statement, and do not differentiate be- 
 tween the District and other places. 
 
 Gentlemen, here is what we find. Without going into the question 
 of whether these people are as honest as other people or not — I think 
 they are as fair as others — I will say that every time you collect 
 $100,000 from the poorest citizens of this territory, it costs you 
 $60,000 to collect it, and $40,000 is all that is paid back. They say- 
 it can not be done for less; it costs that much money. That much 
 money is taken away from our people here who are on the verge of 
 going over the brink into the airest poveity. What is the net result ? 
 That they get 40 cents back out of a dollar of the hardest kind of 
 earned money they give up. 
 
 Mr. Smith' Who gets the other 60 cents ? 
 
 Mr. Nesbit. That is for the expenses and profits of these com- 
 panies. The expenses are high, because the premiums are collected 
 in small amounts of 10, 15, and 25 cents a week. Agents collect it by- 
 going around from house to house. We, of course, can not exactly tell 
 these people how they should run their business. Yoii can readily 
 see, however, that it costs a great ahiount of money to collect money 
 in small amounts like that, when you have to run around through the 
 alleys of the city, sometimes calling three or four times.in order to 
 collect 10 cents. ' That is going to cost money. 
 
 But that does not alter the fact that these people have to give 
 up one dollar for every forty cents they get back. It is a pathetic 
 thing, and I can not tell you how pathetic some of the cases are. I 
 remember a case that came before me the other day, of a colored 
 woman who came here from out of town, from somewhere in Virginia. 
 Not aU these people are in the District, you understand; some of them 
 are out in the country. She came in and claimed $67 death benefits. 
 The company offered to pay $30; There was nothing I could do about 
 it; it was a matter of a lawsuit or accepting this compromise. It was 
 a matter which I could not settle. After I had told her what the 
 facts in the case were, this colored woman, who sat there with a 
 
106 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 flannel cloth about her head, said: "That is about all we ever gets 
 out of anything. I guess we better take it." 
 
 It is not gOod for the people of the community to have to struggle 
 this way and guard against the misfortunes of sickness and death in 
 so inadequate a manner. 
 
 I have no charges to make against these people who run these 
 companies. They do not reject one claim out of sixteen. Sixteen 
 claims will be paid out of every seventeen put up to the company. I 
 call that a very clear record, and I find very few cases that come down 
 to me that have merit in them; that is, 1 find very few meritorious 
 cases that are rejected by the companies. It must be remembered, 
 too, in considering this record, that these companies* are dealing with 
 people who are very ignorant, and whom it is very hard to make 
 understand cases of this kind. 
 
 However, this is an absolutely inadequate method. It seems to 
 me that some inquiry should be included in this inquiry looking to 
 taking care of this particular problem. That it is a serious problem 
 is indicated by the figures that I have given for the city. When you 
 consider the. amount of money that is paid in by a limited part of our 
 population — $450,000 a year — ^which is paid in in amounts of 10, 15, 
 and 25 cents a week, you will realize how hard these people are 
 struggling to provide against sickness. All kinds of people come 
 to these companies. There are servants in houses, men working on 
 the roads and streets and all that class of people. When they get 
 sick, everything stops, as their pay stops. That is the terror of life 
 to them. There should be some better way to provide against 
 sickness, or loss on account of sickness, among these people, than a 
 system which exacts 60 cents out of every $1 that is paid in. 
 
 I believe that is all I have to say, but it there are any questions I 
 shall be glad to answer them. 
 
 Mr. Smith. Can there not be some way devised to save that 60 
 cents out of the $1 ? 
 
 Mr. Nesbit. It is pretty hard to tell how to do it. 
 
 Mr. Smith. I myself have paid a couple of insurance premiums 
 to-day. If I did not pay them, they would be dropped. Does that 
 fact appeal to them ? 
 
 Mr. Nesbit. Oh, yes ; it appeals to them tremendously. 
 
 Mr. Smith. You take 60 cents out of them to get 40 cents in benefits. 
 It seems to me it would be better to leave the 60 cents with them. 
 
 Mr. Nesbit. Ivet them keep their money ? 
 
 Mr. Smith. It seems to me they should be given to understand the 
 purposes of insurance. 
 
 Mr. Keating. The witness is not claiming that the insurance has 
 failed to pay, but that the overhead expense is so high that it absorbs 
 it all. 
 
 Mr. Smith. Oh, the 60 cents is absorbed legitimately enough. But 
 if I do not pay my insurance premium I am cut right off. 'fliat was 
 my inquiry, as to whether or not they could not save a larger propor- 
 tion of this dollar by the introduction of some scientific management, 
 such as the Taylor scientific shop management we have been sitting 
 here and listening to lately, and the stop. watch, and all that sort of 
 thing. 
 
 Mr. Nesbit. I am not familiar with the Taylor system, I am sure. 
 You have been speaking of attempts to solve similar problems, along 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 107 
 
 with industrial insurance; but I am not talking about industrial 
 insurance, but about the expense incident to handling this class of 
 insurance, where 60 cents is paid out in order to get back 40 cents in 
 benefits. I am speaking of sick benefits solely. It is an expensive 
 business. I can not figure out any way to do it as cheaply as they 
 are doing it. It is a business of infinite detail; and there is another 
 reason that should move us to thinking of social insurance in this 
 connection. There is the question of malingering and fraud, which 
 are on the increase. There is a natural tendency that way. Some 
 doctors, for instance, find that by filling out certificates they can be 
 paid for their visits; and they fill them out. There is a widespread 
 feeling that not all the claims paid are legitimate. A system of 
 social insurance would largely obviate that. You have some author- 
 ity then; you have some real knowledge of it. It seems to me that 
 this is a matter that should be well considered in this inquiry, along 
 with the question of unemployment. In this matter, the people 
 who have no income and no money when work stops on account of 
 sickness ought to be taken care of in some way; some provision 
 ought to be made for protecting them from sickness. I think that is 
 a very important matter in connection with the social weUare of this 
 country. 
 
 Mr. Smith. Don't you suppose that if the Government undertook to 
 embark in this it would find the same difficulty you are finding ? 
 
 Mr. Nesbit. No. These people would go and pay and take their 
 insurance. This involves a discussion of inside facts concerning the 
 management of companies, in connection with which I have clearly 
 made up my mind. There are a great many companies. They 
 have a lot of agents. These agents nave to be paid to go out and 
 make these collections in the small amounts of 10, 15, and 25 cents a 
 week. That is a very expensive business. Then there is a great 
 deal of competition. This involves agents to go out and sell the 
 insurance. These people with whom they deal are of a rather 
 ignorant class, and the arguments these agents put up to them are 
 very convincing to them. A new company will come in, and its 
 agents wiU go out to policyholders in other companies and tell them 
 that they are going to give more than the other companies, and so on. 
 There is a constant change going on. This is very expensive. You 
 must expect that where a large number of companies are fighting 
 for business in the same community. If there was one system of 
 insurance all these people could go to the offices and pay their pre- 
 miums; and there would be very little expense connected with 
 collecting the premiums. People would come into these offices juts 
 as they now go to deposit small amounts of money at the post office, 
 in the postS savings department. Another thing in connection 
 with the present system is the cost of collecting the benefits. Each 
 claim has to be looked into. There are two or three doctors who see a 
 patient. First the patient's own doctor comes and sees him, and 
 signs a certificate, which is sent to the company ; the company sends 
 out a doctor to see whether the patient is really sick. The govern- 
 mental organization would determine whether they were really sick 
 or not. 
 
 Mr. London. So there is an element of waste which is the result 
 of competition. Then there is the element of profit when the busi- 
 ness is carried on as a commercial business. These two elements 
 would be eliminated by social insurance. 
 
108 SOCIAL INSUHANCE AND UNEMPLOYMENT. 
 
 Mr. Nesbit. Very largely. 
 
 Mr. London. Is it your experience that malingering and simula- 
 tion are more frequent as times become bad ? 
 
 Mr. Nesbit. There are no two ways about that. Malingering 
 claims come in in larger numbers during hard times than they do in 
 
 food times. The records in my office show that. The weather also 
 as some effect on it. In bad weather they come in, while in good 
 weather they do not come in so much. In the month of March, 
 which is often a very bad month, very wet, very rainy, and very cold, 
 there are a great many claims. 
 
 Mr. London. Lack of fuel and lack of proper clothing have the 
 same effect, have they not ? 
 
 Mr. Nesbit. That enters into it too. 
 
 STATEMENT OF DE. N. I, STONE, STATISTICIAN, 30 CHURCH 
 STREET, NEW YORK CITY. 
 
 Mr. Stone. I represent here the New York unemployment com- 
 mittee. 
 
 Mr. London. I understand you were the statistician for the tariff 
 board ? 
 
 Mr. Stone. I was statistician of the late United States tariff board, 
 since abolished. 
 
 Wliat experience I have gained on the subject has been in my 
 capicity as statistician of the tariff board and in the dress and waist 
 industry in New York City. An organization is maintained by the 
 manufacturers' association and the union for the purpose of studying 
 their problems and assisting in the adjustment of relations between 
 employers and employees. I have made an extensive study of the 
 general problem of unemployment ; I will confine myself at this time 
 to one phase of it, namely, the possibility of regularization of employ- 
 ment through a system of public works. By this I do not mean the 
 kind of relief measures that our municipalities are engaged in from 
 time to time, in times of distress, which take the form of giving relief 
 through work at the woodpile or stone-crushing pile, which is more 
 in the nature of charity than regular employment. 
 
 What I have in mind is a comprehensive plan, and one to be under- 
 taken, not as a method of charity to the unemployed, but as a meas- 
 ure of self-protection by the Nation — one of those steps of prepared- 
 ness of which we have heard so much lately. By way of analogy I 
 would like to say a word about the Federal Eeserve Board, which I 
 consider the most important step undertaken by the present adinin- 
 istration in the work of preparedness. It has, in my opinion, done 
 more than anything else to put this Nation in a position of strength 
 in its rivalry with other nations, to take advantage of the situation 
 of the extraordinary demand on account of the war. 
 
 Perhaps I will get over the ground much more rapidly by reading 
 from a paper which I recently prepared on the subject. 
 
 The recent establishment of the Federal Reserve Board marks a great stride in 
 advance in the effort of the Nation to grapple with the evil of industrial and financial 
 depressions. It marks the triumph of social collective control over the former indi- 
 vidual helplessness before the disasters of industrial and financial, crises which tfted 
 to strike the individual banker and the individual business man with the inexorable 
 fury of blind elementary force. 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 109 
 
 While we have thus taken care of the banker, the manufacturer, and the merchant, 
 who apparently do not regafd this exercise of government activity in their behalf as 
 paternaliem, the workman, to whom unemployment invariably means hardship and 
 frequently privation and even starvation, is still left to struggle for himself with such 
 meaner assistance from society as relief through soup kitchens, bread lines, and free 
 lodging houses. Emergency relief work is started sporadically, with great difficulty 
 and much lost motion, due to the extraordinary nature of such undertakings and the 
 absence of any organization to meet such emergencies. 
 
 No attempt to deal with the problem of unemployment will succeed unless born 
 from the recognition of the permanency and nation-wide scope of this disorder of our 
 body politic. A year ago our troubles were accentuated by the European war. But 
 during the preceding winter the problem of unemployment was no less acute, though 
 the number of sufferers was somewhat less. Apart from the periodic fluctuations of 
 employment in seasonal trades, such as in the garment and building industries, there 
 are deeper causes which produce sporadic disturbances in all industries, causing wide- 
 spread industrial depression. While much may be accomplished by a systematic 
 campaign for the regulation of employment in various industries and the dovetailing 
 of employment through the distribution of superfluous workers in one industry to 
 industries which can employ them, the extent to which the labor exchanges and in- 
 dustrial training will be able to reduce unemployment by these means will fall far 
 short of the total abolition of unemployment. 
 
 No appeal to individual employers to take on additional labor will result in an 
 appreciable increase of employment at a time of industrial depression when the indi- 
 vidual business man has all he can do to keep head above water and is forced to dis- 
 miss his help in order to weather the storm. Even large employers, such as our large 
 railroad companies, have been forced to lay off their men wholesale as a part of the 
 policy of retrenchment and economy. As an illustration of this, let me mention an 
 incident from personal experience. 
 
 About a year ago a committee on unemployment was appointed 
 by the mayor of the city of New York. This committee appealed to 
 the employers of the city to take on additional help in order to relieve 
 the situation. At that time I asked a well-known railroad president, 
 who was a member of that committee, what he was going to do on 
 his railway, whether he was going to take care of a larger number of 
 men there. He said: "It is impossible. We have aU we can do 
 to meet expenses." Yet his committee was making a perfectly 
 useless appeal to the business men of the city to do the very thing 
 which his railroad, commanding much greater resources than the 
 average business concern, felt unable to do. 
 
 Mr. London. In other words, the employer was caUed upon to 
 make a sacrifice at a time he was least capable of making it. 
 
 Mr. Stone. Yes. [Reading:] 
 
 The individual employer or stock company is helpless or at best can meet the situa- 
 tion to but a limited extent, and only society as a whole through the National and 
 State Governments can grapple with this iiational ill. 
 
 JThe proposed adoption of a comprehensive scheme of unemployment insurance 
 similar to that recently introduced in Great Britain would, no doubt, go far to relieve 
 extreme distress among unemployed workers, though the relief would necessarily 
 be limited to an amount barely adequate to provide mere necessaries of life. While 
 that would be better than leaving the worker and his family exposed to starvation 
 and dependence upon charity, any system of State unemployment insurance has the 
 disadvanta<;e of being an unproductive expenditure of wealth on the part of society 
 which on the one hand maintains the most productive members of the nation m 
 idleness and on the other fails to maintain them and their families in such comfort 
 asthey are accustomed to when regularly employed. ,.,.., 
 
 No measure can be regarded as an adequate solution of the difficulty which tails to 
 provide productive work for men and women thrown into involuntary idleness and 
 thus help all able-bodied members of society to maintain their accustomed standard 
 of life without their becoming at the same time a charge upon the public treasury 
 or upon the charitably inclined. . 
 
 This can be provided only by a well-maintained system of public works so organized 
 as to have the elasticity of our newly devised Federal banking reserve, by being 
 
110 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 capable of quickly absorbing the surplus labor of the country released by the seasonal 
 or sporadic contractions of industry and of contracting when the needs of expanding 
 business call for the reserve army of labor. 
 
 The suggestion as to the use Of public works as a means of relieving acute unemploy- 
 ment will not appear as something new. We are all familiar with so-called public relief 
 works, which are emergency measures usually gotten up by municipalities to give 
 employment for the purpose of relieving distress. Owing to the suddenness with 
 which such works have to be organized, they rarely, if ever, prove satisfactory. They 
 usually lack the element of usefulness and are looked upon both by the givers and 
 receivers as ill-concealed charity, the compensation doled out to the workers being 
 barely adequate to enable them to keep body and soul together 
 
 ■ What I have in mind is a scheme that would insure the steady employment of labor 
 at remunerative rates of wages and would aim at a comprehensive, nation-wide, per- 
 manent, regularly operating elastic system for absorbing and releasing the labor supply 
 of the country in exactly the same manner as the Federal Reserve System has been 
 devised to absorb superfluous idle funds when not required by the industries and com- 
 merce of the country, and for supplying adequate funds when so required. The par- 
 allel is complete, except that in the former case we deal with forms of wealth which 
 can be conveniently stored in vaults when not needed, while in the latter we must deal 
 with human labor which can only be stored in the bodies of human beings when main- 
 tained in health and which is irretrievably lost to society when these bodies are allowed 
 to deteriorate or perish through privation and want. 
 
 Apart from any considerations of humanity and fair play, the present system, or 
 rather lack of system, in allowing the individual worker to shoulder the full weight of 
 the hardships resulting from unemployment is tantamount to destroying a large part of 
 the productive equipment of the Nation which can only be restored in some 15 or 20 
 years, which is the period necessary to raise a new working member of society. This 
 is apart from the enormous money loss to the community, wliich can not be measured 
 accurately, but which is so huge as to stagger imagination. According to the figures 
 of the Federal census for 1900, there were nearly six and one-half million people unem- 
 ployed during the year 1899 for periods varying from 1 to 12 months each, representing 
 a loss of wages, figured by the American Association for Labor Legislation at an average 
 of 110 per week, at a total of about .$1,000,000,000 for that year. This billion' dollars 
 had to be covered by the Nation in the form of charitable and public relief as wellasout 
 of the savings of the unemployed, and, in so far as not so covered, the deficit resulted in 
 the deterioration or total destruction of the physique of the working people, which was 
 thus entirely lost to the Nation. A part of the wage deficit was covered by crime, with 
 the additional loss to society represented by otherwise unnecessary expenditures on 
 prisons, police, jailers, prosecuting attorneys, judges, etc. Finally, there was the loss 
 of wealth which the idle workers would have produced in return for the billion dollars 
 of wages they failed to earn and which may be estimated at not less than two and one- 
 half billion dollars (on the basis of the census figures, which show an output of two and 
 one-half dollars' worth in new products for every dollar paid in wages). 
 
 This estimate does not include losses which can not be estimatod in dollars and 
 cents, but which are none the less real, such as the impairment of efficiency and 
 vitality and other conditions already referred to. If all this could be estimated, the 
 loss would be greatly increased. Thus, the havoc wrought by unemployment rivals 
 in magnitude that caused by some of the greatest wars. But there is this difference; 
 wars are necessarily of brief duration and followed by long periods of peace and recuper- 
 ation, while unemployment adds its cumulative destructive effect year by year. 
 
 Once this condition is realized, no effort will be thought too great, no measure too 
 ambitious which will hold out the promise of an effective cure of this greatest of our 
 economic ills, which carries in its train grave social and political evils. 
 
 Mr. London. I understand that statistics of unemployment were 
 gathered in 1910 by the Census Bureau. Do you know anything 
 about that ? 
 
 Mr. Stone. I do not beheve they have been pubhshed. Perhaps 
 Mr. Meeker can tell you. 
 
 Mr. London. I understand the statistics were gathered but never 
 published. 
 
 Mr. Meeker. That is true. I have been trying to get the Census 
 Ofl&ce to have them published. They have always given some good 
 reason why they have not published them, but they have given me 
 assurances that they will be eventually published. That is the 
 
SOCIAL INST/RANCE AND UNEMPLOYMENT. Ill 
 
 status of the case, and I suppose it is up to me to put a firecracker 
 under the Census Bureau once more to start them into some activity. 
 
 Mr. London. For what period were those figures ? 
 
 Mr. Meekeb. They were collected as of April, 1910, and they were 
 real unemployment figures, which is not true of any other figures 
 published by the Census purporting to he figures of unemployment. 
 
 A national employment reserve. 
 
 Mr. Stone. Bearing in mind what I said before, we should be pre- 
 pared to consider a comprehensive scheme for a National Employ- 
 ment Reserve. What could such a reserve do ? I will try to indicate 
 a few things for the purpose of illustration. 
 
 First let us see what would be done by way of road building. For 
 years the construction of a national highway system has been agitated 
 without appreciable progress being made in this direction. As com- 
 pared with countries like Germany and France, we have most back- 
 ward and inadequate highways, comparable in a large part with the 
 miserable rural roads of Russia. The absence of good roads is re- 
 sponsible for the fact that millions of dollars' worth of agricultural 
 produce are left to rot in the fields, because it would cost the farmer 
 more to haul them over the poor roads than he could get for them 
 in the city. The construction of good roads would save the farmers 
 untold millions in wealth and bring within the reach of the city 
 dweller food products which would help reduce the high cost of living. 
 The increased automobile traffic would go to cover a part of the cost 
 of road construction. 
 
 Our present system of road building by the States and counties, 
 done mostly on contract, results not only in poor construction at a 
 high cost in a great many instances, but also in a lack of a compre- 
 hensive system of highways which are built to meet local needs only, 
 and therefore frequently end "ten miles from nowhere." With the 
 equal interest in a comprehensive system of uniformly good roads on 
 the part of the Nation, State, and local community it seems but fair 
 that each be made to bear an equal or whatever may be found to be 
 a justly proportional share of the cost of construction. If the Fed- 
 eral Government were to adopt a policy of contributing, say, one- 
 third of the cost of highway building on the condition that the State 
 and county concerned contribute their respective thirds and build 
 the highways according to a previously worked out plan, so as to 
 make them fit into a great scheme of-national highways, most, if not 
 all, local governments would be sure to avail themselves of the op- 
 portunity. The success which marked the digging of the Panama 
 Canal by the National Government warrants the belief that if na- 
 tional road making were placed in charge of Government engineers 
 to be done directly by labor hired by the National or State Govern- 
 ment without the corrupting influence or, at best, the legitimate, 
 but wholly unnecessary profits of intermediary contractors, that we 
 would get superior roads at a saving in cost as compared with the 
 present system of helter-skelter road building. 
 
 The magnitude of this task, the vast area of swamp lands which 
 await drainage to be turned into fertile fields and gardens, the build- 
 ng of works to stop inundations, with their consequent destruction 
 
112 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 of life and property, by the Mississippi and its tributaries, the har- 
 nessing of our water powers and similar enterprises, is a guaranty 
 that the system once adopted would have ample work before it to 
 keep it going for an indefinite period. In turn, good roads and drain- 
 age would open up millions of acres of land for the permanent em- 
 ployment of a large agricultural population and cause a demand for 
 the products of industry and commerce giving employment to a mul- 
 titude of other workers, women as well as men. 
 
 The adoption of the scheme would involve the constant maintenance 
 of a small nucleus force of engineers and skilled and unskilled workers, 
 so as to maintain the organization intact and capable of expansion on 
 short notice. It would involve a road-building program extending 
 over a period of several years similar to the buildmg program of the 
 Navy. We have just had a building program submitted by the 
 Navy Department covering a period of 5 years. The German pro- 
 gram extends, I believe, over a period of 10 or 12 years.. Under such a 
 plan the Congress would be asked to appropriate annually a minimum 
 amount necessary to maintain the nucleus force and to authorize 
 the President to expend an amount equal to one-third of the total 
 cost of any roads in the United States for which any State (alone or 
 together with its constituent counties) was willing to appropriate 
 the remaining two-thirds. The subvention to States would be made 
 subject to certain conditions which would insure the construction of 
 the roads under Federal supervision and according to Federal stand- 
 ards of workmanship and terms of employment, and as a part of a 
 Federal highway system. In this manner the presence of consider- 
 able unemployment in any part of the country would stimulate in- 
 creased appropriation for public works from the local public treas- 
 uries, preference in employment being given to local residents. The 
 Federal authorities would thus have to possess elastic powers to push 
 the work at any time ahead of the regular schedule. In years of 
 great business activity, such as the present, with labor in great de- 
 mand in private industries the Government would be authorized to 
 slow down the building program. 
 
 At a recent hearing before a committee of the British Parliament 
 Prof. Bowley testified to the effect that if 3 to 4 per cent of the annual 
 appropriations for public works had been withheld and laid aside 
 for a rainy day the amount thus saved would have been sufficient 
 to provide wages for the unem.ployed in times of commercial depres- 
 sion for the entire decade that preceded the time when this testi- 
 mony was offered.' If this is true of England, there is every reason 
 to believe that that would apply to the United States, where the 
 industrial conditions are practically the same. This is not merely 
 a pipe dream, gentlemen, of a statistician, but is a practical scheme. 
 England is working along the line I have suggested here. They 
 have now a development commission; which has just such powers 
 as I have indicated, namely, to recommend to the treasury the grant- 
 ing or loa,ning of funds to government departments, local authorities, 
 or educational institutions for the development of agriculture, f orfestry, 
 fisheries, and similar undertakings. The road fund board, a part and 
 parcel of the development commission, plans the construction of roads 
 for years ahead. 
 
 'Evidence of A. L. Bowley before the British Poor Law Commission, Mar. 27, 1907: Minority 
 Report, p. 658. 
 
SOCIAL INSXTRANCE AND UNEMPLOYMENT. 113 
 
 It has the power to grant or loan funds to any of the local govern- 
 ments for the construction of roads and to stimulate that work in 
 times of industrial depression and to reduce it in times when there 
 is a great demand for labor. Since the outbreak of the war the 
 board has set aside over $15,000,000 for road making for the purpose 
 of relieving unemployment. That .$15,000,000 looks like a bagatelle 
 beside the cost of the great struggle that is going on in Europe, but 
 is probably all that proved necessary in view of the great demand 
 for labor that sprang up later on. Prussia, following the outbreak 
 of the war, appropriated one and one-half billion marks, or $375,- 
 000,000, to be spent in combating unemployment through the 
 construction of dikes, the draining of swamps, afforestation, road 
 building, etc. 
 
 If a single State of the German Empire, like Prussia, could appro- 
 priate so large a sum at a time when every resource of the Empire 
 was being strained under the burdens of war, can Congress balk at 
 a small appropriation for the necessary investigation and study 
 of the subject by a commission ? In all of our public works. Federal, 
 State, and municipal, we push the construction of new buildings, 
 harbor and river improvements, etc., in times of prosperity, when 
 labor is scarce and.when prices of materials are at their highest point. 
 In times of depression, when labor is thrown out of employment and 
 when materials can be purchased at most advantageous prices, our 
 local. State, and national authorities, instead of enlarging their 
 scale of operation, become as panicky as private employers, though 
 without the justification which prompts the latter to curtail their 
 operations and reduce public works to a minimum. The savings 
 and economies which could be effected from a reversal of this policy 
 would well repay the cost of a commission such as is proposed in 
 the London resolution and would be more than sufficient to pay 
 the interest on bonds which the Government might find necessary 
 to issue in order to enable it to push public works in a time when 
 industrial depression caused a faQing off of ordinary revenues. 
 
 No doubt a great many difficult problems of organization would 
 have to be solved in working out a scheme of such magnitude. The 
 details of organization, of Federal and State financing, of the adjust- 
 ment of wages and hours, of the distribution and assignment of the 
 unemployed, and many other features will require much thought 
 and study. So did the details of the Federal Reserve System, which, 
 however, were solved as a result of the careful and extended study 
 by a Federal commission created for that purpose. 
 
 In recommending to Congress the adoption of Congressman Lon- 
 don's resolution your committee would, therefore, follow a well- 
 established precedent which proved so fruitful on another occasion. 
 
 Of course, it is a very difficult problem, but there is no reason to 
 think it is insoluble, and this is the very reason why I am heartily in 
 favor of the resolution of Congressman London, because what we 
 want is not so much more legislation as a very careful study of a plan 
 which wiU look years ahead. 
 
 Mr. London. Dr. Rubinow referred to a pamphlet or a bookwhich 
 shows the trend of real wages. 
 
 Dr. Rubinow. I made a study of real wages some years ago, indi- 
 cating the trend of wages, as expressed in the cost of living from 1890 
 to 1912, which, for the first time, indicates the real trend of wages. 
 
 39501—16 8 
 
114 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Mr. London. That being the purchasing value of money wages ? 
 
 Dr. RuBiNOw. Yes. I did not have time to prepare a diagram to 
 present to this committee. One might be prepared to indicate since 
 1907 the trend of wages, showing that the cost of hving has increased 
 in greater ration than wages, resulting in a less purchasing power for 
 all wages. I have figures here prepared on that subject in a pamphlet 
 which I should like to present to the committee. 
 
 Mr. London. What is the size of it ? 
 
 Dr. RuBiNOW. About 15 pages. I think it would be very valuable 
 to the committee. 
 
 Mr. London. I suggest that it be put in the record. 
 
 Mr. Keating. Without objection, the gentleman will be permitted 
 to insert the figures referred to. 
 
 Mr. Sumnees. Di . Rubinow, you spoke of real wages or pm chasing 
 value of wages. Now, as wages have increased and each wage earner 
 has to buy the product of the other man's labor, his wages are reduced, 
 as, naturally, he has to pay more for what he gets. Isn't that true ? 
 
 Dr. Rubinow. Provisionally, I would say, "yes." 
 
 Mr. Sumnees. The difficulty, as I understand it, is that the difficul- 
 ties of the wage earners whom you have in mind — their wages have 
 not kept pace with this increased price. That is what you mean, 
 is it? 
 
 Dr. Rubinow. The curves would indicate an upward trend since 
 1900, and another upward curve for prices. For wages and prices 
 of commodities have not run parallel; but, on the contrary, the curve 
 of prices unfortunately runs upward very much faster than the curve 
 of wages. 
 
 Mr. Sumnees. In what particular part of our industrial and 
 economic machinery has this increase occurred ? 
 
 Dr. Rubinow. To answer that categorically would require rather 
 a complicated investigation, but I would be willing to say that it is 
 in the increased income to the land-owning community, which is 
 reflected in the very large increase in land values; and this has 
 resulted in a general increase in prices. . 
 
 Miss PoTNTZ. I want to point out, if I may, that unemployment 
 insurance is not a subsidy to the working people alone. If we look at 
 crises, for instance, we find that the chief cause of them is lack of 
 buying power in the people. If they could buy the product of the 
 factories, the factories would be m a position to produce, and this 
 would give employment to the workers. So, that insurance in times 
 of crises would mean an immense increase in consuming power of 
 the working people. If the subsidies are large enough, it might mean 
 a great mitigation of the losses of the industries, as well as the people 
 themselves. 
 
 Mr. Sumnees. Is the general scheme for raising a fund to take 
 care of the unemployed similar to the plan for raising a fund to take 
 care of the people who are sick 1 Does the Government pay for the 
 entire fund or do the people ? 
 
 Miss PoYNTZ. The most effective scheme at present is the British 
 scheme, in which the workers, the employers, and the state partici- 
 pate in the contribution. We are not recommending any scheme, 
 any particular scheme. 
 
 Mr. Sumnees. You would not recommend any? 
 
SOCIAL INStTEANCE AND UNEMPLOYMENT. 115 
 
 Miss PoYNTZ. No; I would not. I am just pointing out the neces- 
 sity for studying the question. 
 
 Mr. Keating. If the chair might suggest, I think it would be well 
 for one of these witnesses to prepare a short summary of these various 
 schemes of social insurance, stating where they have been in opera- 
 tion, a description of them, and the results obtained. 
 
 Mr. London. Very well. 
 
 Mr. Keating. With the consent of the committee, Mr. London 
 will be given leave to extend his remarks in the record in the name 
 of some one of the witnesses. 
 
 Mr. London. Thank you.- 
 
 STATEMENT OF JAMES L. COWLES, PRESIDENT OF THE 
 WORLD POSTAL UNION. 
 
 Mr. CowLES. I want to suggest that this world is round, and that 
 in speaking of these seasonal changes, this seasonal proposition, mj^ 
 theory is that when the idea of competition is exploded, we will be 
 rid of these iUs. I say that cooperation is the law of human life, and 
 that what we want to do in order to get over these obstacles is to 
 separate ourselves from this idea of competition, and combine our 
 interests and cooperate. 
 
 We have the big postal service, covering the entire business and 
 transportation world. That great organization should be used in 
 this matter of cooperation . 
 
 Mr. Keating, i know, Mr. Cowles, that you have given a great 
 deal of study to this question; but I do not think that has any par- 
 ticular bearing on this hearing. 
 
 Mr. Cowles. Then, in connection with my friend's work here, I 
 am thoroughly in sympathy with this proposition. I am able to 
 speak of this part of man's work, because I am the representative of 
 the great system of communication by which this cooperation I have 
 urged can be brought about and made most effective. It gives the 
 people an unusual opportimity to exchange services with each other, 
 exchange commodities, and so on. 
 
 When this whole world is open, in this way, and cooperating, this 
 proposition of seasonal employment will most assuredly pass off 
 from the face of the earth. There are differences between the various 
 countries of the world — differences of climate, differences of soil, etc. 
 This suggests a way by which this seasonal unemployment can be 
 largely overcome and done away with. There is no such thing, 
 in the broad sense, as competition. What we need is cooperation. 
 
 Mr. Keating. Mr. Cowles, that is not in order now ? 
 
 Mr. Cowles. In this matter of insurance, in carrying out that idea, 
 the great postal system can be used to great advantage. I simply 
 wanted to express the one great big fact. 
 
 Mr. Keating. We thank you very much. 
 
 Mr. London. I would like to have Mr. Meeker make a short 
 statement. 
 
 Mr. Keating. We will be very glad to hear from Mr. Meeker. 
 
116 SOCIAL INSUBANCE AND XTSTEMPLOYMENT. 
 
 STATEMENT OF HON. ROYAL MEEKER, UNITED STATES 
 COMMISSIONER OF lABOR STATISTICS. 
 
 Mr. Meeker. It is growing late and my dinner hour is approaching. 
 I suppose that the rest of the ladies and gentlemen here will want 
 dinner, and certainly the members of the committee have a dinner 
 hour. I will therefore be very brief. 
 
 I would like, if it is allowable in this committee, to beg the privilege 
 to extend my remarks to include the furnishing of any information 
 that the committee may desire from the Bureau of Labor Statistics, 
 which the bureau is capable of furnishing. I am very much interested 
 in this whole field of social insurance. I am not ready to commit 
 myself on all points, but I am ready to commit myself absolutely 
 to the resolution introduced by Congressman London. 
 
 It seems to me that it is extremely essential that we should appoint 
 a. commission for the purpose of studying this thing. We do not have 
 to read the minutes of the last meeting before we pass upon the 
 advisability of providing for such a commission. We do not have to 
 accept as a foregone conclusion that this commission will be social- 
 istic. The commission may even find that socialistic measures are 
 extremely undesirable. On the other hand it may find that some 
 socialistic action is very necessary, as indicated in Mr. Nesbit's 
 remarks. While he was talking, it was all I could do to keep from 
 jumping up and interpolating some statements there. The gentleman 
 from Michigan (Mr. Smith) could have been answered completely. 
 The matter of the provision against illness can not be handled cheaply 
 by private insurance companies. It could be handled cheaply as a 
 social insurance proposition. If the State handles it, the item of 
 expense for collection of payments is wiped out at once by means 
 of stamp books, of the kind that are used in every country on the 
 Continent of Europe. 
 
 That is all I have to say. I shall be glad to answer any questions 
 that gentlemen of the committee may care to ask me. 
 
 Mr. Keating. I presume your bureau has issued a number of 
 documents on this subject, hasn't it? 
 
 Mr. Meekek. It has, yes, sir; and some of them of course do not 
 bear directly upon the subject; that is, the titles of the bulletins 
 would not indicate that they had matter in them that relates to the 
 subject. 
 
 Mr. Keating. What I think Members of Congress wiU want in this 
 hearing is to learn what has been done in other countries, the extent 
 to which this has been carried out, etc., in such form that a man can 
 go over it in a night or two and get a basis for his further studies. 
 
 Mr. Meeker. I may say, Mr. Chairman, that I have appeared 
 before this committee before, and I have already prepared a state- 
 ment that was included in the published hearings on the establish- 
 ment qf a Federal bureau of employment. In that statement a good 
 many of the points touched upon to-day were covered. It deals, 
 among other things, with the working of the emplojTnent offices in 
 Great Britain, and the unemployment insurance as it exists in the 
 cities of Germany, etc. I shall set a force at work upon the subject 
 and compile any additional information obtainable which may be of 
 use to the committee. 
 
SOCIAL INSTJEANCE AND UNEMPLOYMENT. 117 
 
 I have suggested to Congressman London the advisability of his 
 calling for the preparation of a statement by the Bureau of Labor 
 Statistics, giving the operation in Great Britain of the unemployment 
 insurance act. Information on that subject is very fragmentary and 
 very widely scattered. So far as I am aware, no thoroughgoing dis- 
 cussion has been given since the article written by Mr. W. H. Bever- 
 idge, who majr be said, in a way, to have invented the whole system 
 in Great Britain. That was in May, 1913, and it takes in only about 
 four months of the operation of the law; but I think by due diligence 
 and industry we can get information of later date. Of course you 
 would have to bear in mind this, that conditions in Great Britain have 
 been extremely abnormal. The unemployment insurance law in 
 Great Britain has never been subjected to a fair test, because unem- 
 ployment has dwindled to the vanishing point during 1915. 
 
 Mr. London. I understand that in that act they adopt a system 
 that is a great money saver and time saver, namely, the using of 
 stamps to make the collections ? 
 
 Mr. Meeker. Yes, sir. The stamps are purchased by the employer 
 and attached to the stamp books by him as soon as the employee takes 
 employment. That obviates the necessity of sending out any agents 
 to make collections. That applies to Great Britain and Germany and 
 everywhere else where social insurance against unemployment and 
 illness prevails. Everybody is covered, and it is much cheaper. 
 Under private insurance those who need insurance most don't get it 
 at all. Only those who are least in need can afford to purchase pro- 
 tection at the competitive commercial rates charged by private com- 
 panies. I can not understand why anybody should take a position 
 m opposition to social insurance; but I am afraid I am committing 
 myself. 
 
 Mr. SuMNEEs. What is the method of determining when an indi- 
 vidual is entitled to benefit of unemployment insurance ? 
 
 Mr. Meeker. I suppose that varies. Usually it is a perfectly 
 determinable thing. 
 
 Mr. SxTMNERs. I know it is; but I thought you might very briefly 
 tell us about it. 
 
 Mr. Meeker. It presents certain difficulties, but no insuperable 
 difficulties. I shall answer your question in detail in my revised 
 remarks. [See Exhibit A, the division on benefits.] 
 
 Mr. SuMNERs. I imderstand that. 
 
 Mr. London. In Great Britain they cooperate with the trade- 
 unions, and the theory of it is that the* officers of the union are best 
 qualified to pass upon the question of whether a man in malingering 
 or is really out of a job. 
 
 Mr. Meeker. They also cooperate with employment offices. 
 Unemployment insurance is perfectly unthinkable without the estab- 
 lishment of employment offices. 
 
 Mr. London. And without making use of the unions. 
 
 Mr. Meeker. I would not say it is unworkable without the cooper- 
 ation of the unions; but it certainly works very much better with the 
 unions. 
 
 Mr. Browne. I would lika to elucidate that question of Mr. Sum- 
 ners, as to how they detei-mine when a man is entitled to receive this 
 insurance. If a person is purposely unemployed and don't want to 
 
118 SOCIAL IJSTSUKANCE AND UNEMPLOYMENT. 
 
 work, he would not receive it. How would you determine whether 
 he was quahfied to receive this insurance or not ? 
 
 Mr. Meeker. Will you allow me to answer that question after I 
 have had an opportunity to examine the sources of informatioji, 
 because I do not want to put a partial answer into the record? I 
 think, if I remember correctly — and probably there are others here 
 who can correct me if I am wrong — that the law covers that point; 
 that anybody who refuses work perforce is not entitled to insurance. 
 [See Exhibit A, where the matter of those entitled to benefit is treated 
 in full.] 
 
 Mr. London. And the system enables the Government to know 
 whether there is work in the particular line in which the man works. 
 Isn't that so ? 
 
 Mr. Meeker. Yes; and the man is sent from one employment 
 office to another to find work, getting his lodging on the way. 
 
 Mr. London. If he can not obtain a job for wages which are up 
 to the ordinary standard prevailing in the trade, he is entitled to 
 insurance, isn't he? 
 
 Mr. Meeker. Yes, sir. 
 
 Mr. Browne. Would the Government finally determine whether 
 he had a right to this insuran(;e or not ? 
 
 Mr. Meeker. I am afraid I can not answer that completely, but the 
 employment offices and in some cases the trade-unions would furnish 
 information as to whether the man was willfully or involuntarily 
 unemployed. They would furnish information also as to wage rates 
 in the different localities, so it could be ascertained whether the 
 man had received a bona fide offer of employment and refused it. 
 [See Exhibit A.] 
 
 Mr. SiTMNERS. Docs tho amount a man has been contributing to 
 the general fimd determine the extent of the compensation he re- 
 ceives during the period of unemployment ? 
 
 Mr. Meeker. No, sir; it does not affect the amount received per 
 week of unemployment, but no man can receive more than one week 
 of benefit for every five weekly contributions made by him. 
 
 Mr. Keating. I think the standard is seven shillings in Englaml, 
 isn't it ? 
 
 Mr. Meeker. Yes, sir. 
 
 Mr. London. That is a very low standard, as compared with con- 
 ditions in America. 
 
 Mr. Meeker. That is just seven shillings more than nothing. 
 
 Mr. London. But we are not boiind to accept that low standard 
 here. 
 
 Mr. SuMNERS. After this commission is created and an examination 
 made into this matter, I would ask this question, in view of what 
 has been said with reference to organizations in countries of Europe: 
 Is it your jugdmnnt that the economic, industrial, and social condi- 
 tions in this country and in the countries mentioned are sufficiently 
 similar to justify this country in following their lead, with reference 
 to the plan of this country relative to insurance ? 
 
 Mr. Meeker. I think the economic, social and political, and other 
 conditions in this country are such as to justify the United States 
 Congress or any other authoritative body in following the lead of a 
 commission that has done its work faithfully and found its facts 
 and made its recommendations of policy with respect to the facts. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 119 
 
 no matter where those recommendations may lead, whether toward 
 or away from social insurance. 
 
 The statement has been made by one of the- previous speakers — 
 caUing attention to the immense difference in social organization, 
 political organization, and economic and industrial achievement in 
 the various countries of Europe, and yet in spite of these differences 
 all of these countries have some form of social insurance national in 
 character, while the only thing that can be pointed to in this country 
 as even approaching national social insurance is that pitiably inade- 
 quate and ineffective law, the Federal workmen's compensation law. 
 
 In a previous hearing before this committee, I called attention to 
 the fact that, so far as unemployment is concerned, conditions are 
 very much worse in this country than in other countries — than in 
 Europe. There is no country in the world where unemployment 
 exists to a greater degree than in this country. We do not know the 
 percentage, but we do know from the very inadequate investigations 
 that have been made, and from general observation, that there is a 
 much higher percentage of unemployment in this country than there 
 is in Europe. 
 
 Mr. SuMNERS. I would like to know whether the European system, 
 in your judgment, would be applicable without very material change 
 to American conditions, or whether or not an American commission 
 undertaking to ascertain what would be needed for our country 
 should undertake to diagnose the situation in America rather than to 
 go to Europe, where the conditions are different from those in this 
 country ? 
 
 Mr. Meeker. Am I to understand that you are asking whether the 
 commission should be sent to Europe or should be set to work here at 
 home ? 
 
 Mr. SuMNERS. No, sir; I was just trying to find out, as a guide. 
 
 Mr. Meeker. I think the committee should study American con- 
 ditions, as it undoubtedly will; and I think that it will find that 
 American conditions are not so entirely dissimilar from those existing 
 in Great Britain and Germany; but that is for the commission to 
 find out. 
 
 Mr. Smith. To what do you attribute the unemployment in this 
 country being in excess of unemployment in other countries, according 
 to population ? 
 
 Mr. Meeker. As I have indicated in a previous hearing that you 
 have evidently forgotten about, the necessity for developing a crude, 
 backward country, with enormous resources, but with insufficient 
 capital and insufficient labor force; as a consequence, the necessarily 
 speculative character of our industry. 
 
 Mr. SuMNERS. Don't you think the fact that we have to absorb 
 500,000 people on the shores of America has had something to do with 
 the problem of unemployment? 
 
 Mr. Meeker. Undoubtedly. 
 
 Mr. SuMNERS. They all come in here without a job. 
 
 Mr. Meeker. The immigration poljycy or lack of policy is undoubt- 
 edly partly responsible for the higher degree of unemployment in 
 this country. 
 
 Mr. London. A change of tariff Avill bring about a temporary 
 increase of unemployment, too. A change in the tariff will bring 
 about temporary unemployment, won't it? 
 
120 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. Meeker. Yes, sir. 
 
 Mr. London. The unstable character of industry is responsible for 
 a certain amount of unemployment, isn't it? 
 
 Mr. Meeker. Certainly. 
 
 Mr. London. And new methods of efficiency will cause temporary 
 unemployment, too. 
 
 Mr. Meeker. Yes, sir. Even the economists finally admit that 
 the introduction of new machinery does displace labor. I am an 
 economist. 
 
 Mr. London. A strike and lockout wiU, of course, cause temporary 
 unemployment. 
 
 Mr. Meeker. Whether that should be denominated unemploy- 
 ment is very doubtful. 
 
 Mr. London. A strike which is brought about through the attempt 
 of an employer to reduce wages can surely be classed under involun- 
 tary unemployment. 
 
 Mr. Meeker. Tt would have some of the aspects of it. The work- 
 men certainly aren't working. 
 
 Mr. London. Every lockout would certainly be. 
 
 Mr. Meeker. Surely; but it is hard to tell a lockout from a strike. 
 
 Mr. London. Then the movements of labor due to harvest con- 
 ditions also cause temporary shifting of labor, and then crises, 
 whether financial or commercial, intensify the state of unemployment. 
 
 Mr. Meeker. I do not think there is any difference between crises. 
 I think a financial and an industrial crisis are different names for the 
 same thing. There is only one kind of crisis. 
 
 Mr. London. Industries, under normal or abnormal conditions, 
 show a large percentage of workers out of employment, do they not ? 
 
 Mr. Meeker. Yes, sir. 
 
 Mr. London. That is an ever-present condition. 
 
 Mr. Meeker. Yes. 
 
 Mr. Gqmpers. May I make a statement, Mr. Chairman ? 
 
 Mr. Keating. Certainly. 
 
 STATEMEITT OF HON. SAMUEL GOMPERS, PRESIDENT OF THE 
 AMERICAN FEDERATION OF LABOR. 
 
 Mr. GoMPERS. I am not here representing myself alone. I am not 
 representing my own views alone, although I would not represent any 
 views that were not consistent with my own. If the great rank and 
 file of the organized labor movement of America should express views 
 or should make a declaration inconsistent with my own. convictions, 
 I should lay aside the responsibilities and representative position 
 that I occupy and permit the rank and file to choose one who could 
 and would express the views entertained by them; but, acting as I do, 
 believing as I do, and being the executive officer of the organized 
 labor movement of America and acting in a representative capacity, 
 I should like to know and hear the exact position taken by lir. 
 London in the various preambles and resolutions he has introduced. 
 At some convenient time, if the committee is agreeable, after Mr. 
 London has presented his position, 1 would be very glad to state 
 what I believe to be the position of the organized labor movement of 
 America. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 121 
 
 I can say now that when that opportunity is afforded me, I shall 
 decidedly dissent from many of the expressions that have been 
 uttered before this committee to-day. 
 
 (Whereupon, at 5.40 p. m., an adjournment was taken until Tues- 
 day, April 11, 1916, at 10 o'clock a. m.) 
 
 Subcommittee of the Committee on Labor, 
 
 House of Kepeesentatives, 
 Washington, D. C, April 11, 1916. 
 
 The committee this day met, Hon. Ed"wp,rd Koating presiding. 
 
 Mr. Keating. The committee will come to order. The committee 
 has met this morning to resume its hearings on House joint resolu- 
 tion No. 159, which was introduced by Mr. London, for the appoint- 
 ment of a commission to prepare and recommend a plan for the estab- 
 lishment of a national insurance fund and for the mitigation of the 
 evil of unemployment. 
 
 Mr. London. I will say that I expected Mr. Frank P. Walsh to 
 appear here this morning, but it seems impossible for him to be here. 
 I would like to ask whether Mr. Gompers expects to make a statement 
 now. I have practically closed my side of the hearing. 
 
 Mr. Keating. Mr. Gompers, do you desire to make a statement at 
 tnis time ? 
 
 Mr. Gompers. Yes, Mr. Chairman. 
 
 STATEMEITT OF MR, SAMUEL GOMPERS, PRESIDENT 
 AMERICAN FEDERATION OF LABOR. 
 
 Mr. Gompers. Mr. Chairman and gentlemen, ever since the incep- 
 tion of the trade-union movement, both in the United States and in 
 every other civihzed country on the face of the glob^, these trade- 
 unions have concerned themsslves with some form of social insurance. 
 As a matter of fact, the guilds of old had three primary purposes: 
 First, the pride of trade ; second, the right of domicile and assistance 
 for journeymen; and, third, what is known as benevolent assistance. 
 Alter the evolution from the guild to the trada-unions the trade- 
 unions had no legal standing before the courts or the Government. 
 They started with a movement to secure or to provide for the mem- 
 bership of these early trade-unions benefits in case of sickness and 
 unemployment. It is due to the last fact that many early trades- 
 unions were known as benevolent societies, coming under the British 
 act of "Friendly societies." It was later in the history of the trades- 
 unions that they assumed the position of protecting the interests of 
 the membership by providing for benefits m cases of strikes or lock- 
 outs, etc., commonly known under the term "trades disputes." 
 
 As to what these trades unions have done in the form of social 
 insurance, I shall be in a position to give only a very brief and 
 meager resume when I reach that point. 
 
 Addressing myself first to the resolution under consideration, I 
 should say that if its purpose were an investigation into the subject 
 of social msurance, I should find myself in absolute accord with it. 
 Inasmuch as it is not primarily a resolution for an investigation of 
 
122 SOCIAL IJSrSUBANCE AND UNEMPLOYMENT. 
 
 social insurance, but rather the enunciation of certain claims, state- 
 ments, and plans, nearly all of them contradictory to each other, 
 and inasmuch as it undertakes to commit the coiiiiriission, which the 
 resolution proposes to create, to a species of speculative theories, I 
 say that although favoring and earnestly trusting that the Committee 
 .on Labor of the House of Representatives will report favorably to 
 the House, and that the Congress will adopt some measure for an 
 investigation of the subject of social insurance, I am decidedly 
 opposed to the resolution as introduced by Mr. London. Yesterday 
 afternoon was the first time I was able to get away from my other 
 work and duties to devote a little time to the making of memoranda 
 upon which I desire to base my statement to this committee to-day. 
 During the course of yesterday afternoon I dictated and had written 
 out a proposed biU which I shall, with your consent, read to the 
 committee, and which I trust may be accepted by the committee 
 as a substitute for the resolution offered by Mr. London. It reads 
 as follows: 
 
 A BILL 
 
 To create a commission to inquire into the subject of unemployment, of disability and of sickness of 
 wage earners of the United States, and to what extent the Government of the United States can 
 aid, financially and otherwise, in the mitigation thereof by voluntary social insurance. 
 
 Be it enacted by the Senate and House of Representatives of the United States of America 
 in Congress assembled, That a commission is hereby created, to be known and called 
 the Commission on Social Insurance. Said commission shall be composed of five per- 
 sons, to be appointed by the President of the United States, by and with the advice 
 and consent of the Senate, two of whom shall be employers of labor, and two of whom 
 shall be representatives of organized labor, the Secretary of labor to be the fifth mem- 
 ber of the commission and chairman thereof. It shall be within the power of the Sec- 
 retary of Labor to select a representati^-e of the Department of Labor to act in his stead 
 in any hearing or investigation in which the Secretary himself may be unable to par- 
 ticipate, and said representative shall have full power to act in the name of the Sec- 
 retary of Labor, but the position of the Secretary of Labor, as the fifth member and as 
 chairman of the commission, shall in no wise be impaired, and in the report, findings, 
 and recommendations of the commission he, his name and title shall be appended to 
 the report. 
 
 Section 1. It shall be the duty of the commission to inquire into the causes of 
 unemployment, su(h as the character of existing seasonal industries, the changes in 
 me*h<)ds and proscesaes of production, disability, invalidity, and sickness, and what 
 the Government of the Uiited States can do to alleviate these conditions; to inquire 
 into the subject of systems of ii'surance row in vogue to meet unemployment, inva- 
 lidity, a^d sickness, and to \\hat extent the Government of the United States may aid 
 in the establishment of a Federal insurance system of which the wage earners of the 
 United States may avail themselves. The commission shall also inquire into the 
 subject of the establishment by the several States of financial and other aid for a. 
 voluntary system of insurance against unemployment, invalidity, and sickness of 
 wage earners within the States. 
 
 Sec 2. The members of this commission shall receive a compensation of $15 per 
 diem during the life of the commission, and shall be paid actual traveling and other 
 necessary expenses while going to or returning from any place which the requirements 
 of their duties shall direct them. 
 
 Sec. 3. The commission is authorized, as a whole or by subcommittees of the com- 
 mission duly appointed, to hold sittings and public hearings anywhere in the United 
 States; to send for persons and papers; to administer oaths; to summon and compel 
 the attendance of witnesses and. to compel testimony; to employ such secretaries, 
 ei^perts, stenographers, and other assistants as shall be necessary to carry out the 
 purposes for •« hi( h said commission is. created; ard to rent such offices, to purchase 
 such stationery and other supplies, and to have such printing and binding done as 
 may be necessary to carry out the purposes for whi h the commission is created; and 
 to authorize its members or its employees to travel in or outside the United States on 
 the business of the commission. 
 
 Sec. 4. The commission shall also prepare and report upon the following: 
 
 1. Shall the Government of the Uiited States create a fund to contribute toward 
 insurance against (a) unemployment,. (6) invalidity, (c) sickness. 
 
SOCIAL INSTJEANCE AND UNEMPLOYMENT. 123 
 
 2^ If the commission shall recommend that such a fund shall be instituted by the 
 Government of the United States, the amount of said fund to meet the obligations to 
 carry out the plan recommended. 
 
 3. The commission shall also inquire into and report the regulations that would 
 be necessary in the successful administratio)! of such unemployment, invalidity, and 
 sickness insurance, if establish'd, and what rights the wskgs earners now have which 
 must be minimized or regulated in order to be entitled to the benefits of the insurance. 
 
 Sec. 5. It shall be the duty of the commission to submit and to report through the 
 President of the United States to Congress such recommendations for the relief of 
 unemployment by the voluntary regulation of industry both by employers and wage 
 eamoi-s; by the employment of workors in the reclamation of arid lands, reforestation, 
 and the utilization of the natural resources contain ■■■d in the public lands of the United 
 States, on the work connect-^d with the prevention of floods and inundations, the 
 reclamation of swamp lands, the building of public roads, canals, and similar publ'c 
 undertakings. 
 
 Sec. 6. The commission shall r.port to the President of the Unit'^d States and 
 through him to Congress its findings and rocommendations not later than two years 
 from the date of the appolntm;-nt of this commission. At the expiration of two years 
 from the appointment of this commission this act shall ceas? to exist and the life, 
 power, and authoi'ity of the commission cease with it. unless the Congress of the United 
 States shall extend this act and the life of the commission beyond the terms herein set 
 forth. 
 
 Sec 7. That the sum of $100,000 is h reby appropriated out of any money in the 
 Treasury of the United States not otherwise appropriated , for the use of the comm ission 
 for the period of two years from the date of the appointment of the commission; Pro- 
 vided, That no portion of this money shall be paid except upon the order of said com- 
 mission, signed by the chairman thereof: Provided, That the commission shall expend 
 not to exceed $5,000 per annum for the employment of experts at such rate of com- 
 pensation as may be fixed by the commission but no other person employed hereunder 
 by the commission, except stenographers temporarily employed for the purpose of 
 taking testimony, shall be paid compensation at a rate in excess of S3,000 per annum. 
 
 Sec. 8. That all acts or parts of acts inconsistent with the provisifms of this act be 
 and they ar;' hereby repealed . 
 
 Because of what I have ah'eady said, and because of the tentative 
 hill which I have suggested to the committee as a substitute for the 
 London resolution, I think it is not necessary for me to add many 
 words to the one bare convincing statement that I am earnestly in 
 favor of an investigation of the subject of social insurance. To 
 inquire into a subject is one thing, but to com.mit the American 
 Government, and particularly a committee of wage earners of this 
 country, to declarations such as are contained in the London resolu- 
 tion, in its preambles and provisions, is quite another thing. 
 
 I doubt if there is any cjuestion with which the Government of 
 the United States could concern itself with greater advantage than 
 to ascertain the facts and to learn what exists, what can be done, 
 what should be done, and what should not be done. 
 
 Perhaps, if Mr. London's- joint resolution was before this com- 
 mittee ancl its adoption urged as a matter of investigation, I naight 
 have appeared before you and asked the indulgence of this committee 
 to suggest changes in the resolution, and without further ado try to 
 prevail upon the committee to report the resolution with suggested 
 changes and amendments, for the favorable consideration of Congress. 
 But, sirs, on last Thursday, in this committee room there was enacted 
 a drama or a farce of such a tragical or ludricrous character that I 
 can not permit myself to remain silent, or to let the matter go with- 
 out protest. 
 
 It may be interesting for the committee to know that just prior 
 to tho opening of this hearing last Thursday the author of the reso- 
 lution, Mr. London, came to me and asked what I thought of the 
 resolution. My answer was substantially that that question might 
 
124 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 have been asked me with a great deal more propriety before the 
 resolution was introduced rather than after its introduction; that 
 what opinion I had of the resolution would depend upon what was 
 brought out before the committee, and that I preferred to tell the 
 committee my opinion. 
 
 Mr. London is a Representative in Congress from one of the dis- 
 tricts of New York. I counted it a duty, as well as the right thing to 
 do, to give some little support to the candidacy of Mr. London for 
 congressional honors. 
 
 Mr. London. For congressional work, Mr. Gompers. 
 
 Mr. Gompers. It all depends upon the point of view. I am willing 
 to say that I was in hopes that it would be for service in the interest 
 of the rights, the welfare, the justice, and the freedom of the great 
 wage-earning masses of America. I found that there was not one 
 trade unionist who was invited to participate in this hearing — ^not one. 
 Were it not either for my coming upon this resolution by pure accident 
 or my having been informed through the alertness of the legislative 
 committee of the American Federation of Labor that this bill was 
 introduced, I would not have known of it at all. 
 
 One after the other the author of the resolution, Mr. London, called 
 the names of professors, insurance actuaries, research workers, and 
 commissioners; and each in turn gave his or her judgment of the 
 bugs that they had studied microscopically. Every one seemed to. 
 know his part and to speak his lines and every one seemed to know the 
 lines of the other members of the theatrical or farcical production. 
 
 Speaking with all due respect of the high ideals, the noble purposes, 
 and the altruism of the witnesses, there was presented to this com- 
 mittee a production which, in the slang of the theatrical profession, 
 would be called the work of "scientific hamfatters". 
 
 I have heard time and again and have read time and again of the 
 declarations of socialists here and there who have made pronuncia- 
 mentos on a par with those made by Dr. Rubinow at the meeting here 
 last Thursday, but not in 20 years have I heard any man who held the 
 credentials of the Socialist Party of America or of the Socialist Party 
 of any other country on the face of the globe, make the declarations, 
 in his official representative capacity, that Dr. Rubinow made at the 
 meeting last week. If Dr. Rubinow had represented himself only, I 
 should be content to leave the matter as he presented it, unanswered 
 and unchallenged, because on sober second thought all the people 
 would understand that the conditions of life carry with them a refu- 
 tation of Dr. Rubinow's statement. 
 
 I have not the record before me and which I think is unavailable 
 at the present time so I shall have to depend entirely upon my 
 memory, but I think that apart from possible verbal inaccuracy, 
 I can repeat, in substance, what Dr. Rubmow said. He said that in 
 the last 12 years the cost of living, the cost of the necessaries of life, 
 has increased by 15 per cent greater than the increase in wages, and 
 that despite trades union activities the net result is that the condition 
 of the working people to-day is worse than it was 10 or 12 years ago. 
 If I have incorrectly quoted Dr. Rubinow in any essential, I stand 
 ready to be corrected. Dr. Rubinow is present, and after waiting 
 about a minute 
 
 Dr. Rubinow. I did not assume I have any right to interrupt you 
 in the course of your remarks. 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 125 
 
 Mr. Keating. It will not be in order for the doctor to interrupt 
 at this time. Under the procedure adopted by the committee, wit- 
 nesses are not to be interrupted until they have finished their remarks. 
 
 Mr. GoMPEES. I yield to anything that the committee may decide 
 in that respect. I asked the question whether I have correctly or 
 incorrectly quoted Dr. Rubinow. I simply wanted to know whether 
 I had quoted him correctly in regard to the essential points, for upon 
 the essential accuracy of the quotation will- depend very largely what 
 I shall have to say. 
 
 First, let me call attention to the fact that these are not facts. 
 They simply have their basis in a peculiar and speculative theory 
 called by the possessors philosophy, but which might better be 
 termed sophistry. From the viewpoint of these super-speculative 
 theorists, when facts do not conform to the theory, it is so much the 
 worse for the facts. 
 
 In the New Review magazine of Xoveniber 15, 1915, only about 
 four or five months ago, there appeared an article written by Dr. 
 Rubinow, under the caption, ''A Socialist remedy for unemploy- 
 ment." In that article he said: "Twelve years ago, when I began 
 to preach social insurance, I was a man with a new idea in this 
 country." Then follow some stars showing the omission of matter 
 that does not pertain to what I desire to submit to you, and the article 
 goes on: 
 
 Afte^sU, social ills and bodily ills have only one true remedy, although it is not 
 always known in time, and if we socialists are at all right, these remedies must be 
 in line with our philosophy. 
 
 In other words, the Socialists, or the professoriat of the Socialist 
 Party, start out with a theory and then proceed to distort facts in 
 order to try to prove it. 
 
 It is not uninteresting to note this fact, that' there appeared in the 
 New York Call, of November, 1913, one of the official journals of 
 the Socialist Party, this statement by Dr. Rubinow: "The theory of 
 increasing misery has been gradually abandoned by the Socialist 
 movement." 
 
 Of course, it is not necessary at all for a man to be consistent in 
 order to be intelligent, but it does seem that when a professor, a 
 doctor, a philosopher, undertakes to set down a dictum, that dictum 
 can not be right in one article and wrong in another; it can not 
 be one way to-day and another way the following day. The fact of 
 the matter is that that which Dr. Rubinow, as a representative of 
 the Socialist Party, has set forth, has been abandoned by every in- 
 telligent Socialist in the whole civilized world. 
 
 You will notice that Dr. Rubinow, in the extract which I have 
 read from his New Review article of November 15, 1915, said that 
 12 years ago, when he began to preach social insurance, he was a 
 man with a new idea in this country. 
 
 Before Mr. London leaves, I want to say nomcthing about him. 
 You will ri»call that, in sm aside, the author of this resolution, Mr. 
 London, said at the laft meeting, in regard to the resolution, that it 
 w,is a wis ."5 man who introduced it. 
 
 Mr. LoxDON. That is not a part of the record, Mr. Gompers. 
 
 Mr. GoMPERS. Mr. London may make remarks which were intended 
 to be in the record but which, when they were resented later, he found 
 
126 SOCIAL INSUBASrCE AND UNEMPLOYMENT. 
 
 convenient not to put into the record. Xow, I propose to put them 
 into the record in my time. The fact of the matter is this : You can 
 not say one thing in a, public meeting in my presence and then r How 
 it to escape from the official record. 
 
 Mr. London. AU right, then. I insist that I iim a wise man. 1 et 
 it go into the record. 
 
 Mr. GoMPERS. It appears thp-t when Dr. Ru})inow mentions his 
 own name or Mr. London refers to himself, they always t?ike of? their 
 hats as a matter of reverence and respect for themRelvcn. 
 
 In the last 12 years the conditions of the working people in the 
 matter of wages, hourj, conditions of employment, safety while at 
 work — in fact, all conditions that make for a better life — have im- 
 proved more than they have during any other period or among any 
 other people in the history of the world. I say this despite the spirit 
 of disappointment I feel because of the f seemingly slow prof^ress mr dc. 
 There is just resentment ag inst conditions that deny to the workers 
 the best possible opportunities of work and Ufe, and out of th. t spirit 
 of resentment theie is a movement of men and women who i.re press- 
 ing home upon employers and society the greater rights and the 
 greater opportunities to which the toilers of America are entitled. 
 But because of this impatient and resentful spirit of trades unionists, 
 I can not permit to go unchi-Uengcd the attempt that h- s been mr de 
 in the name of the Socialist Party of America to aim a death blow at 
 the trades-union movement . That, titer aU, is the main purjiose of 
 the whole seance of last Thursday. 
 
 If, through the trade-unions of America and their activities, as 
 well as to the activities of the rank and file of these organizations, 
 there has come this alleged condition of deterioration, as the result 
 of 12 years' hard work, of sacrifice, of struggle, of hunger, and of 
 heroism, then this movement has been a failure. If men and women 
 and children have gone hungry in furtherance of their rights and 
 their interests; if men have challenged the courts at the peril of 
 their liberties; if men, mistaken as they have been at times, have 
 taken human life, as they did in California; if men have undertaken 
 foolishly, mistakenly, but seriously and heroically, from their point 
 of view, to do what they could in furtherance of what they believe 
 to be trade-union activities, to protect and promote the rights and 
 interests of labor, and it all has resulted in a deteriorating condition 
 during that period of time, then the movement is a failure. 
 
 I say again, then the movement is a failure, and the life of more 
 than 50 years which I have given to the labor movement and to the 
 trade-union movement in order to help my fellows organize and to 
 press upon employers and upon society the rights to which they are 
 entitled, has been misspent; and the American Federation of Labor, 
 in existence for 36 years, has done worse than waste its time. 
 
 The organization of trade unions extending over more than three- 
 quarters of a century has been in vain, and the- organization of the 
 railway men has been a failure, if the statement of Dr. Rubinow is 
 true. > 
 
 It is not true; it does not need a professor or a doctor to show 
 that it is not true. Go to the homes of the workers; go to the men 
 and women who work, not only with their heads but with their 
 hands, and ask them as to these conditions; ask them whether they 
 are 15 per cent worse oif now than they were 10 or 12 years ago, or 20 
 
SOCIAL INSUKANOE AND UNEMPLOYMENT. 127 
 
 years ago, or 30 years ago. They will answer you not in well-rounded 
 sentences, perhaps, but they will know. They will know. 
 
 The truth is that due to present abnormal conditions prices have 
 risen, and are now abnormally high. You can not use this last year 
 as a criterion, because everything has been disaiTanged; the inter- 
 national conimerce of the world has been disarranged and disorgan- 
 ized. At this moment comparisons are not fair either to one side or 
 the other of any controversy. Disregarding this period of disor- 
 ganization, the prices of the essentials have gone downward since 
 1870. The fact of the matter is that we have so far enlarged our 
 conception of what we call the necessaries of life during the past 30 
 years that there is no way to compare the standard of life of the worker 
 of the past with the life of the worker to-day. Hours of labor have 
 been shortened, working conditions have been improved, and there 
 is a growing tendency toward safety and sanitation. The increase 
 in wages alone has been of tremendous importance. 
 
 Perhaps I can do no better than to refer to a statement made by 
 Surg. Gen. Gorgas last week. In an address delivered before the 
 Consumers' League of Washington, D. C, by Maj. Gen. W. C. Gorgas, 
 Surgeon General of the United States Army, he said : 
 
 The disappearance of yellow fever and malaria was due to special measures of 
 mosqtiito destruction.- But what later caused the marked decrease in all other 
 diseases? 
 
 We know that mosquito destruction could have had little effect on these diseases. 
 We found we had on the Isthmus another disease breeder, worse by far than either 
 the yellow fever or malarial mosquito, namely, "poverty." 
 
 Our increase of wages tended to alleviate this poverty, and I am satisfied that as to 
 this measure the increase of wages yields a greater part of our success in general 
 sanitation, outside of malaria and yellow fever. 
 
 I wish this great sanitary measure — increase of wages — could be universally adopted. 
 I am aware that it is impossible to be done in the United States by edict of Govern- 
 ment, as it was done at Panama, but I believe it could be done even more effectually 
 by other methods. 
 
 In an address last summer, Gen. Gorgas said: 
 
 Add to the laboring man's wages from $1.25 to $2.50 a day and you will lengthen 
 the average American thread of life by 13 years at least. 
 
 The rich are overeating. The poor are undereating. Both are contributing to 
 short lives. But where overeating shortens the life of one person in one hundred, 
 undereating shortens the life of ninety-nine. If we are to lengthen the average life, 
 you must pay attention to the poor man. 
 
 In other words. Gen. Gorgas declares, as the result of his investi- 
 gation, large experience, and ripe judgment, that there is no measure 
 so potent to abolish poverty as an increase in wages. 
 
 That is the point. No movement, no remedy, is so potent to pro- 
 long life and to give help to the individual and to remove poverty 
 as increases in wages. Where are all these professional microscopic 
 examiners on this (juestion of the poverty of the working people ? Are 
 they looking to mcrease the wages of the workers? Tliey have 
 made no such attempts. The only movement — the trade-union 
 movement — that undertakes to address itself and to devote its 
 entire attention to the question of wages, hours, and conditions of 
 employment incurs their savage attack. 
 
 I have here, Mr. Chairman and gentlemen, a copy of a report made 
 by the president of the Cigarmakers' International Union of America 
 
128 SOCIAL INSTJEANCE AND XINEMPLOYMENT. 
 
 to the last convention of that organization, held in Baltimore in 
 1912. In that report President Perkins gives data of that organ- 
 ization for a period of 27 years, and he gives the figures and tables 
 showing the average length of hfe of the membership of the Cigar- 
 makers' International Union of America from the first period when 
 accurate data could be obtained up to the last month before the 
 convention. And let me say that these data are obtained something 
 like this: Each local unit is required to make its monthly reports to 
 the international union headquarters, now located in Chicago. Those 
 reports are made to the headquarters; and if a member should die 
 in the interim of a month the report must be made to the inter- 
 national headquarters, accompanied by the death certificate of the 
 member who died, the certificate of the attending physician, and the 
 accompanying certificate of the board of health on vital statistics; 
 the age of the deceased is given, and the cause of death, etc. , 
 
 Throughout the entire jurisdiction of that organization, covering 
 the territory of North America, there can be no collusion. These 
 reports are sent into the office of that international union. The data 
 are tabulated, and the average length of life for a period of a year is 
 made, and then so on, year after year, and as a result of the intro- 
 duction of the eight-hour workday in the trade, the increase in 
 wages secured by our union, the better conditions wrung from vmwil- 
 ling employers, there has resulted an average increase in the longevity 
 of the members of our organization of more than 15 years. The 
 thread of life of the members of that industry has been lengthened 
 out more than 15 years. 
 
 Not alone that, but since that time, on account of the improved 
 economic conditions, the members of the organization and of the 
 trade have been enabled to give their wives more time, more leisure, 
 more opporttmity, more food, and better homes, so that the average 
 length of Hfe of the wives of the members of that organization has 
 been increased more than 14 years. 
 
 May I, Mr. Chairman, furnish the stenographer with a copy of the 
 reports bearing upon this subject for incorporation in the record? 
 
 Mr. Keating. Without objection, the witness will be permitted to 
 insert it at this point in his remarks or at the conclusion of his 
 remarks. 
 
 Si 
 
 [Extract from President Perkins' report to the twenty-second convention International Cigarmakers' 
 
 Union, Baltimore, Md.] 
 
 In 1888 the average length of lives of the members was 31 years 4 months and 20 days. 
 
 In 1890 the total age of 212 deceased members was reported as 7,943 years, making 
 an average of 37 years and 6 months at time of death. 
 
 In 1900 the total age of 339 deceased members was reported as 14,762 years, making 
 an average of 43 years and 6 months at time of death. 
 
 In 1910 the total age of 588 deceased members was reported as 29,362 years, making 
 an average of 49 years and 10 months at time of death. 
 
 In 1911 the total age of 622 deceased members was reported as 31,209 years, makir^ 
 an average of 50 years and 1 month at time of death. 
 
 This shows an increase in the average length of lives of members of 18 years 8 months 
 and 10 days since 1888, or a period of 23 years. 
 
 The foregoing remarkable demonstration by facts and figures concerning the in- 
 crease in the longevity of our members gives the lie direct to the pessimist and com- 
 pletely explodes the oft-repeated expression by all such that the condition of the 
 masses'is growing worse. It proves at least that the far-reaching influence and benefi- 
 cent effects of trade-unions has caused a wonderful improvement upon those who have 
 sense enough to enroll under their banner. 
 
SOCIAL INSTJKANCE AND UNEMPLOYMENT. 
 
 129 
 
 The following shows the totals for the last six years, giving the numbers of deaths, 
 total age, and average age at time of death: 
 
 Year. 
 
 Number 
 of deaths. 
 
 Total age. 
 
 Average age. 
 
 1906 
 
 606 
 586 
 588 
 599 
 588 
 622 
 
 Years. 
 23,685 
 28,851 
 29,654 
 29,654 
 29,362 
 31,209 
 
 Yr. mo. days, 
 46 8 10 
 
 1907 
 
 49 2 10 
 
 1908 
 
 50 4 10 
 
 1909 
 
 50 4 10 
 
 1910 
 
 49 9 10 
 
 1911 
 
 50 1 10 
 
 
 
 Total 
 
 3,489 
 
 172,590 
 
 49 4 10 
 
 
 
 The following table shows the principal causes of death in the six preceding years 
 given, the number of members, the total ages, and the average age at time of death: 
 
 Disease. 
 
 Number 
 of deaths. 
 
 Total age. 
 
 Average age. 
 
 
 286 
 
 310 
 
 154 
 
 348 
 
 225 
 
 160 
 
 155 
 
 154 
 
 149 
 
 124 
 
 111 
 
 97 
 
 92 
 
 65 
 
 63 
 
 Years. 
 10, 667 
 12,066 
 6,835 
 18,887 
 11,712 
 10,629 
 6,709 
 8,492 
 7,202 
 6,861 
 6,410 
 5,334 
 4,859 
 3,074 
 3,312 
 
 Yr. mo. days. 
 37 3 10 
 
 
 38 9 10 
 
 
 44 3 10 
 
 
 54 2 10 
 
 
 52 
 
 
 66 4 10 
 
 Accident 
 
 44 5 10 
 
 
 65 3 10 
 
 
 48 3 10 
 
 
 55 3 10 
 
 
 57 7 10 
 
 
 65 
 
 
 52 8 10 
 
 Phthisis ^ 
 
 47 2 10 
 
 
 52 5 10 
 
 
 
 In 1890 the total age of 67 deceased wives and mothers of members was reported as 
 2,537 years, making an average of 38 years at time of death. 
 
 In 1900 the total age of 134 deceased wives and mothers of members was reported as 
 6,158 years, making an average of 46 years. 
 
 In 1910 the total age of 162 deceased wives and mothers of members was reported 
 as 8,143 years, making an average of 50 years and 2 months, a gain of 4 years and 2 
 months in 10 years. 
 
 In 1911 the total age of 180 deceased wives and mothers of members was 8,645, 
 making an average of 48 years at time of death. 
 .The last year given, namely, 1911, is somewhat below the general average, which, 
 for the years 1906-7-8-9-10-11 shows in total those whose ages are given 992 deaths, 
 with a total of 47,840, or an average at time of death of 48 years and 2 months. Fifty- 
 one died in addition to the above, but as the age or cause of death was not available, 
 are not figured in the result. 
 
 In 1890 the average age of the members' wives and mothers who died was 38 years. 
 
 In 1911 the average age of the members' wives and mothers who died was 48 years. 
 
 This shows an increase of 10 years in the length of lives of the wives and mothers of 
 the members in a period of 21 years. j. , „, , 
 
 The apparent retrogression in the longevity, as evidenced by the figures of 1911, 
 is due entirely to the very low average in the ages ofour new additions from the Porto 
 Rico unions, who have not been organized long enough to have enabled them to par- 
 ticipate in the improved conditions secured by organizations of long standing, and 
 further, to*the fact that we perhaps have more definite and accurate information at this 
 time than we did when former investigations were made. 
 
 It should be remembered that these figures relate to the wives and mothers ot the 
 
 members. , i i- • 
 
 The fact that there has not been, according to the figures, the same relative increase 
 in the length of the lives of the wives and mothers as that shown m the increased 
 length of the lives of the members is due to several causes, chief among which is en- 
 vironment. The wonderfully beneficient change in the sanitary conditions of the 
 
 39501—16 ^9 
 
130 
 
 SOCIAL INSTJEANCE AND TJNEMPLOYMElfT. 
 
 factories, brought about by trade-union activity, and in which only the members them- 
 selves participate directly, is largely responsible for the difference in increase in the 
 length of the lives of the members and their wives and mothers. 
 The five prevailing causes of death are: 
 
 Number 
 of deaths. 
 
 Average age 
 
 at.time of 
 
 death. 
 
 First, consumption . . 
 Second, heart trouble 
 
 Third, cancer 
 
 Fourtii, pneumonia . . 
 Fifth, kidney trouble 
 
 Yrs.mos.days 
 39 2 10 
 53 .. .. 
 52 3 10 
 49 1 10 
 
 48 
 
 The following table shows the total number of members who died in the various 
 geographical divisions given in 1911, showing the number of deaths in each, the average 
 age at time of death, average age at time of initiation, duration of membership, as 
 well as the amount of benefit paid : 
 
 Division. 
 
 , Number 
 of deaths. 
 
 Age when 
 initiated. 
 
 Length of 
 membership. 
 
 Average age at 
 time of death. 
 
 Amount 
 
 of benefit 
 
 paid. 
 
 
 18 
 IS 
 19 
 22 
 22J 
 322 
 
 Yrs.mos.days. 
 
 25 1 10 
 
 26 7 10 
 
 27 . . . . 
 30 6 10 
 33 1 10 
 35 .. .. 
 
 Yrs.mos.days. 
 2 9 10 
 9 1 10 
 13 5 10 
 18 9 10 
 16 5 10 
 16 8 10 
 
 YTS.mos.d'iys. 
 28 .. .. 
 35 8 10 
 40 6 10 
 49 5 10 
 49 a 10 
 51 8 10 
 
 ?1,D50 
 
 
 4,350 
 
 na.Ti?\^ia"s , 
 
 6,100 
 
 Coast States 
 
 9,850 
 
 Western Middle States 
 
 86,950 
 
 
 131,900 
 
 
 
 From January 1, 1906, to January 1, 1912, we paid total disability to 72 members. 
 
 The prevaiUng causes of disabiUty were: First, insanity, and, second, loss of use 
 of one or both hands. 
 
 Forty-nine received, each, $500. 
 
 Fourteen received, each, $300. 
 
 Nine received, each, $150. 
 
 A careful perusal of the many interesting and instructive facts and figures placed 
 before you enables you to know the amounts expended for all purposes and the cost 
 for each benefit per year and to judge of the future as nearly as it is possible to do so. 
 
 With the natural improvement in the social and economic condition of our member- 
 ship there will be less sickness, which, with the natural and indisputable increase in 
 the length of the lives of the members, means that the expenditures for both sick and 
 death benefit perhaps in years to come will not cost as much per capita as they do 
 to-day. 
 
 With a rigid enforcement of the laws in reference to the payment of sick benefits, 
 which is not only just but becomes absolutely necessary in order to enable us to meet all 
 of our financial obligations, and the insistence upon members discharging all of their 
 financial obligations to the International Union, with an occasional levying of a 
 small assessment, which I should favor instead of increasing the dues at this time, and 
 the lengthening of the periods before which members shall draw death benefits, there 
 is no question but what we can continue to pay the present benefits. 
 
 Mr. GoMPERs. In 1888 the average length of hves of the members 
 was 31 years, 4 months, and 20 days. 
 
 In 1890 the total age of 212 deceased members was reported as 
 7,943 years, making an average of 37 years and 6 months at time of 
 death. 
 
 In 1900 the total age of 339 deceased members was reported as 
 14,762 years, making an average of 43 years and 6 months at time of 
 death. 
 
 In 1910 the total age of 588 deceased members was reported as 
 29,362 years, making an average of 49 years and 10 months at time 
 of death. 
 
SOCIAL INSXJBANCE AND UNKMPLOYMENT. 131 
 
 In 1911 the total age of 622 deceased members was reported as 
 31,209 years, making an average of 50 years and 1 month at time of 
 death. 
 
 This shows an increase in the average length of the lives of members 
 of 18 years, 8 months, and 10 days since 1888, or a period of 23 years. 
 
 In 1890 the average age of the members' wives and mothers who 
 died was 38 years. 
 
 In 1911 the average age of the members' wives and mothers who 
 died was 48 years. 
 
 This shows an increase of 10 years in the length of lives of the wives 
 and mothers of the merabers in a period of 21 years. 
 
 I have not had an opportmiity to ascertain accurate figures and 
 data of the other organizations, the other international and national 
 unions of America, but I say this to you, gentlemen, with a knowledge 
 of the responsibility that is carried with the statement, that the other 
 organizations of labor, the other trade imions, can show as good, or 
 nearly as good, and in some instances better, results than I have 
 c[uoted to you from this Cigarmakers' International Union of Amer- 
 ica. 
 
 There has been, and is now, no force or group of people in the 
 United States of America that have done so much — or even con- 
 cerns itself, except academically — with this fundamental problem of 
 protecting and conserving the lives and the rights and the health 
 and the interests and the liberty and the freedom of the workers, as 
 the much misimderstood and misrepresented trade-union movement. 
 It does not lay claim in its preambles or pronunciamentos to the 
 ideals for which it stands. It does not engage, and is not engaged, in 
 vote catching. It cares less for votes than for an addition of 10 
 cents an hour to the wages, and the further purpose of what that 
 increase means in the lives of the workers. It is more concerned in 
 securing a reduction in the hours of labor of an hour a day than it is 
 in the Section of a President, much as we are interested in that. 
 
 Addressing myself to the resolution of Mr. London, I want to caU 
 your attention to this statement. In the third "whereas," he says 
 something about the employment of "miUions of children." Men 
 and women of the labor movement take pride in the fact that they 
 have done something toward the mitigation of the evil of child labor, 
 and we are very seriously engaged in an effort to secure the enactment 
 of a biU now before Congress, so that so far as the power of Congress 
 can go, the products of the labor of children at least under a certain 
 age shall not be transported from one State into another, and that if 
 a State is so backward and ignorant and selfish as to employ children 
 of young and tender years in the making of profits, we will let them 
 sell then? stuff within that State. Then those States will soon 
 remove the evil within their own jurisdiction. 
 
 ■ But I can not bring myself to believe — is there any data to prove 
 that there is anything Hke millions of children at work; and I say 
 this despite any statement which may be made upon the authority 
 of any other association of academicians and theorists. 
 
 In the preamble on page 2 — that would be the fourth preamble — 
 Mr. London has there, " whereas the methods heretofore eniployed to 
 mitigate the evils," which he enumerates, have tended only to degrade 
 the unemployed into the imemployable, etc. You will observe he 
 thereby criticizes all the methods heretofore employed to mitigate 
 
132 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 these evils, and consequently includes every trade-union effort to 
 alleviate and mitigate the evils of unemployment. 
 
 Mr. London. Wny do you try to say these things ? Where do you 
 find in the resolution an attapk upon trade unions ? 
 
 Mr. GoMPERS. I say, Mr. Chairman and gentlemen, that I have 
 asked that Mr. London state his position. 
 
 Mr. London. I shall not interrupt any more. 
 
 Mr. GoMPERS. I do not regard it as an unwarranted interruption; 
 on the contrary, I welcome it. I will say that on last Thursday I 
 suggested that Mr. London first explain what was in his mind in 
 regard to his joint resolution, and then I might have an opportunity 
 of speaking, not only upon the resolution itself, but upon Mr. Lon- 
 don's explanation of it. He declined to act upon that suggestion. 
 I am not at fault if he refuses to explain, and therefore am compelled 
 to rely upon the language of the resolutions. 
 
 Now, he says "whereas the methods heretofore employed to miti- 
 gate the evil of unemploym.ent," such as spasmodic relief work, public 
 and private charities, etc., have only tended to degrade. I am per- 
 fectly wUling, if the chair consents 
 
 Mr. Keating (interrupting); Well, the Chair would prefer that you 
 adhered to the rules of the committee and permitted Mr. London to 
 ask questions at the conclusion of your direct statement. 
 
 Mr. GoMPERS. I will say again that "whereas the methods here- 
 tofore employed" 
 
 Mr. London (interposing). Such as 
 
 Mr. GoMPERS. Wait a moment. 
 
 Mr. Keating. The witness will not be interrupted. We will have 
 an opportunity to ask questions at the conclusion of his statement. 
 
 Mr. GoMPERs. "To mitigate the evil," etc., etc., and then suggests 
 relief methods. If Mr. London had said, "whereas some of the 
 methods heretofore employed to mitigate the evils," and then said 
 
 "such as " and so on, he would nave made his meaning clear, 
 
 if he did not intend to say what he did. I take it he did not intend 
 to say those things. I do not think he intended it as a trade-union 
 attack. • 
 
 I want to call your attention to this fact, that during the periods 
 of industrial stagnation or reaction, it is a common practice among 
 workers, and particularly among union men and women, to go to an 
 employer and say, "Rather than you let a quarter or a half of our 
 feUow workers out, divide the work up among us." I am sure that, 
 course, is not to be condemned. 
 
 Your attention is called to this fact, and it is something that has 
 not yet been brought fully to your attention: When the panic of 1907 
 started there was a movement mooted in the journals and newspapers, 
 either controlled or owned by employers and other big corporations, 
 intimating to the workers that they would have to submit to reduc- 
 tions in wages, due to the then on-coming period of stagnation. The 
 American Federation of Labor sent forth its ringing cry to the toilers 
 of America, paraphrasing the old couplet. 
 
 It is better to have loved and lost 
 Than never to have loved at all, 
 
 the workers resolved that "we wiU resist any reduction of wages," for 
 
 It is better to resist and lose 
 Than not to resist at all. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 133 
 
 That declaration went ringing throughout America. The great 
 employers of labor sat up and took notice; and no less a personage 
 and controller of finance of his day than the late J. Pierpont Morgan 
 came out in an interview declaring that the interests with which he 
 was associated would not attempt to reduce wages. So the declara- 
 tion went ringing throughout the country, and the American Federa- 
 tion of Labor performed a great service for the people of the United 
 States in preventing the deterioration threatened against them by 
 making the industrial crisis prolonged and more acute. But that 
 fact is not interesting to our scientists, our philosophers, our micro- 
 scopic examiners, and our sociologists. 
 
 In section 3 of Mr. London's proposition or joint resolution, he 
 says "it shall be the duty of the commission to prepare a detailed 
 
 f)lan for the establishment and maintenance of a national insurance 
 und" — not to inquire into and to report and for Congress to enact, 
 but "it shall be the duty of the commission to prepare a detailed 
 
 fdan for the establishment and maintenance of a national insurance 
 und." And then, in the next line, line 2, "out of which workers 
 who shall be in need may be aided when involuntarily out of employ- 
 ment"; that is, somebody is to determine when the workers shall be 
 in need — somebody. In other words, then, it is a matter like kisses 
 which go by favor; and when the political kisses are most profuse 
 the aid may be most generous. How far that will go and can'go and 
 can be made to go in the establishment of a powerful autocracy is 
 better left for the imagination. 
 
 But I was particularly interested, when Mr. London asked Com- 
 missioner Royal Meeker the question last Thursday, while Mr. 
 Meeker was here — I am relying entirely upon my memory as to the 
 verbal phrasing of the question — and said, "Mr. Commissioner, 
 wouldn't you think that if the standard of wages were not paid, that 
 that would constitute involuntary. unemployment?" 
 
 Air. London. You are mistaken, Mr. Gompers. 
 
 Mr. Gompers. I think when there is a question, not of veracity, 
 but a question of understanding what the question or answer was an 
 interruption will be permitted. 
 
 Mr. Keating. Yes; under the circumstances. 
 
 Mr. Gompers. I will ask to have Mr. London state the question as 
 he remembers it. 
 
 Mr. London. As I remember it, it was this: I tried to draw a dis- 
 tinction between strikes which are the result of an attempt of an em- 
 ployer to reduce standards of employment. The unemployment 
 caused by such strikes I characterized as involuntary unemployment. 
 In other words, where a man gets $5 a day and strikes in order to 
 obtain $6, assuming that |5 is a sufhcient sum to support him ade- 
 quately, the man getting $5, as I say, and striking for $6, his un- 
 employment is not involuntary, but is voluntary; but when a man 
 gets a sum which is not sufficient to enable him to hve on, or is merely 
 sufficient for that purpose, and the employer attempts to reduce his 
 wage below the minimum necessary to live on, I look upon such a 
 strike andT the unemployment caused by such a strike as involuntary 
 unemployment. The distinction is a legitimate one. Unemploy- 
 ment due to some strikes should be held to be involuntary unemploy- 
 ment. That is the question I addressed to Mr. Meeker. 
 
134 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. GoMPERS. The question of a man getting $5 a day and striking 
 for $6. 
 
 Mr. London. Yes; assuming that $5 is the standard and is enough 
 to live on. 
 
 Mr. GoMPERS. I do not know anything of such a Umi't. You may 
 have such a hmit. I have no limit. I have no limit in the demands 
 of workers upon society. 
 
 In essence, the question as I stated it, was accurate. The question 
 as to how such standards may be threatened is not essential. In his 
 question Congressman London has arbitrarily set as an example a 
 man receiving |5 a day and striking for 16. But how about the man 
 or woman to whom Congressman London referred, who is working 
 for a mere pittance, and strikes for an increase from $1.25 to $L50 
 a day? 
 
 Ikfr. London. I would class that as involuntary unemployment. 
 
 Mr. Gom:^ers. There you are. It is a question of standards. It is 
 a question of discrimination. It is a question of administration. 
 And let me say this to you : As a rule, when the poorest paid of the 
 workers make a protest against deterioration of their conditions — as 
 a rule — others, like the Pharisees of old, express their sympathy and 
 walk by on the other side. It is the mOitant men and women who 
 fight for their rights, who are heard, and who are given support and 
 aid to Yictory. It is the labor movement, the men and the women 
 of the labor movement, who must help the poorest; and the ex- 
 planation given by Mr. London as to his position does no great 
 credit to his understanding of this subject, because if men nave 
 estabUshed a standard of lue as a result of their organization and 
 their work and experience requiring $5 a day for the maintenance 
 of themselves and their families, the question if they strike for a 
 dollar more, knowing and beheving that the employment and the 
 conditions in the industry warrant it, they are as much justified in 
 making that demand as the men who have been working for a long 
 time for $L25 or $1.50 a day. It is a question of principle. 
 
 Mr. London would like to have the $5 a day workman wait until 
 the .fl.50 workers are brought up to the level of $5 a day. They 
 will not do it. They are not molded in that form. They are human 
 beings. They have their aspirations and their hopes. They want 
 better hours and conditions of labor and better wages. And the 
 higher they are the greater will be theh' demand. The independence 
 and the intelligence that have been developed in their character and 
 make-up demand for them the better conditions for which they are 
 contending. 
 
 The whole scheme, the whole fault, the whole philosophy, repre- 
 sented by Dr. Rubinow officially before this committee and by Mr. 
 London as a representative of his political party, contemplate not 
 individual development, not opportunity for mitiative, for voluntary 
 action, but regulation by the State. These people want to have laws 
 enacted to make the other people conform • to their concepts and 
 recipes out of number. 
 
 Who is going to determine what is involuntary unemployment? 
 I venture to say that if the record is searched you will find that Mr. 
 London was not so sure in his mind as to what it ought to be, and 
 Commissioner Meeker, professor of Princeton, was equally wabbly 
 and noncommittal. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 135 
 
 I am speaking for the American Federation of Labor, and I think 
 that if there ever was an organization of workers for which a central 
 body could speak with authority, it is the American Federation of 
 Labor. It represents the best thought and the highest hopes of nearly 
 every wage earner of America, for, whether the workers he organized 
 or unorganized, it is to us they come, and it is to them we go, in order 
 that we may help them to protect and to promote their rights and 
 their interests. 
 
 Section 3 of Mr. London's proposition provides that the com- 
 mission shall prepare and recommend schedules of benefits. It shall 
 prepare and recommend rules and regulations — rules and regula- 
 tions — rules and regulations. That is the order of society as con- 
 templated in the philosophy of — if I may use that sacred term of our 
 friends, the Socialists — regulation of every man's and every woman's 
 every step, the regulation of the Government, the regulation of its 
 commissions and its officers. 
 
 I am heartsore, ill, and sad when any, the least of my fellows, is 
 hurt in any way. I am so constituted that I scarcely would hurt 
 anyone even in self-defense. And sore and saddened as I am by the 
 illness, the killing, and maiming of so many of my fellow workers, 
 I would rather see that go on for years and years, minimized and 
 mitigated by the organized labor movement, than give up one jot 
 of the freedom of the workers to strive and struggle for their own 
 emancipation through their own efforts. 
 
 It has been a constant struggle of the workers through the ages 
 to get the tentacles of govermental agencies from off the throats of 
 -the workers and to break the gyves from off their wrists. Here 
 comes along a movement of men and women, many of them good, 
 whole-souled, true, noble, many of them but led by sophistry as to 
 the causes of the ills and as to the hopes for a better life, and wilhng 
 to rivet the masses of labor to the juggernaut of government. The 
 American Federation of Labor has been attacked and ridiculed as no 
 other organization on the face of the earth, and just by these people — 
 not aU, but officially and severally by nearly all of them. But why 1 
 Because the American trade-union movement, the American Fed- 
 eration of Labor, refused to yield to any group one inch of the field 
 of activity in the interests of the working people. The advocates of 
 Government regulation may fight for it, but they wiU find a stout 
 contender against them in each human activity. They have been 
 unable to control the American trade-union movement, and that is 
 the great sum total of our offense. 
 
 The American Federation of Labor and the American trade-union 
 movement is the most effective militant, beneficent labor movement, 
 freer from governmental interference, influence, or control than any 
 other labor movement in the whole world. It is because we are a 
 labor movement, pure and simple, per se, a movement of wage earners, 
 for wage earners, by wage earners, that we incur the flippant, and 
 sometimes the serious, attacks and criticisms and subtle aintagonism 
 of the Socialist movement. 
 
 Section 4 of the resolution provides that it shall be the duty of the 
 commission to submit a report and recommendations for the reUef 
 of unemployment by the " regularization of industry." In other 
 words, the Government has to regulate industry and, ergo, regulate 
 
136 SOCIAL INSUEANCE AKD UNEMPLOYMENT. 
 
 the work of the toilers. "It shall be the duty of the commission," 
 etc., "to submit a report, plans, and recommendations for under^ 
 takiiig and establishing industries which are to be maintained by the 
 Government of the United States." I do not know that it is neces- 
 sary that I should take any of the time of this committee to discuss 
 this subject. ' 
 
 There was a remark made here, I do not know by whom, but inas- 
 much as those who appeared last Thurdsay appeared all in favor of 
 the resolution, I will mention it. There was some criticism made of 
 the workmen's compensation bill, which was rejected by the organi- 
 zations of the railroad brotherhoods. I believe they made a mistake 
 in the course pursued by one or two of the brotherhoods. I have done 
 my share to try to bring the brotherhoods to my point of view; but I 
 hold that, inasmuch as the act concerned them primarily, they have 
 the right to determine what is best for them. They have the right 
 to make a mistake, and it is better that they make a mistake against 
 their own interests than that they accept the course that you propose, 
 according to which they would not even be given a chance to make a 
 mistake. That is the difference between autocracy and democracy, 
 the difference between an autocratic form of government and a demo- 
 cratic form of government. A democratic form of government im- 
 plies that the people rule. As the people are, some of them, ignorant, 
 and some are jealous of their rights, in developing strength of charac- 
 ter and altruism, democracy may make mistakes; but it is better that 
 democracy should make a mistake and then rectify it as time goes on, 
 than to have an autocratic form of government, to have an auto- 
 crat with all the wisdom of Ejng Solomon or any other autocrat. 
 
 There is scarcely an international — although in saying this I maybe 
 saying it out of sequential order, as I have not arranged my statement 
 or my memorandum in such way that it will be necessarily be sequen- 
 tial, depending upon my own experience and understanding to clothe 
 my views with the words best adapted for them — there is scarcely 
 |an international union that has not provided some form of insurance 
 against sickness, against invalidity, against unemployment, tool 
 insurance in many of them, traveling benefits, going from place to 
 place in search of employment, railroad fare and enough for meals 
 and lodging, old-age pensions, and annuities. I can not give you the 
 figures just now. 
 
 I have just been handed this memorandum. The International 
 Typographical Union, over 60 years old, with a membership in 1915 of 
 59,100, has a pension roll of over 1,342 for members over 60 years of 
 age. The pension was established in 1908. The International Typo- 
 graphical Union established a imion printers' home 20 years ago out 
 m Colorado Springs, Colo. There are now 184 inmates. The pension 
 or superannuation provided by. the International Typographical 
 Union runs from about $5 to S8 a week. The railroad brotherhoods—, 
 engineers, firemen, trcinmen, and conductors — have also interesting 
 provisions. May I ask in my time for a gentleman to say a few words 
 and give the figures in reference to these benefits ? 
 
 Mr. Keating. Yes, without objection. 
 
 Mr. GoMPERW. Benefits are paid in accordance with the wages 
 earned. If the wages are low the benefit necessarily must be low. 
 Dues are necessarilv low. 
 
SOCIAL INSUBANOE AND UNEMPLOYMENT. 137 
 
 The organizations of labor have expended millions upon mUliona 
 of dollars in protecting and insuring the members of the organiza- 
 tions, and lot me say this: I know of not one organization of labor in 
 America, not one bona fide trade-union, which does not use much of 
 its funds and most of its voluntary contributions from the members, 
 to belp members of unorganized labor or unskilled. We go to the 
 unsldlled laborers and bring them the message of hopnfidness and pro- 
 tection, notwithstanding the attacks of Congressman London in the 
 House of Representatives upon the trade-unions r.nd upon the labor 
 leaders of America. 
 
 I have hero some correspondence between Mr. Royal Meeker, Com- 
 missioner of Labor Statistics of the Department of Labor, and Mr, 
 James Sullivan, upon the subject of conditions of labor, wages, prices, 
 etc., and ask that it be made a part of the record. 
 
 Mr. Keating. Without objection, it will be incorporated in the 
 record. 
 
 February 25, 1914. 
 Hon. Wn.LiAM B. Wilson, 
 
 Secretary of Labor, Washington, D. C. 
 
 Dear Sir: The findings relative to retail pricee of food published from time to 
 time by the Bureau of Labor Statistics are widely accepted by the press as indicative 
 of a constantly rising cost of living in the United States. A digest of Bulletia 138, 
 which is soon to be issued, appeared in a New York commercial newspaper on Feb- 
 ruary 16 under a series of "scare" heads, the leading one being "Food prices higher 
 than for 23 years"; the major heading for the same matter in another New York daily 
 paper was "Prices soar skyward," while a third newspaper announced "Sixty per 
 cent rise in the price of food in the last 13 years." The percentages given in the 
 bureau's bulletins seem to be generally regarded in this country as valid indications 
 of an uninterrupted tendency upward in the movement of prices, as if they were 
 governed by some unseen agency. The Board of Trade of Grreat Britain, the office 
 of the Statistique Gfe6rale de la France, and other European centers for the prepa- 
 ration of reference works accept the bulletin's percentages as official index numbers 
 and use them as records and bases of comparison. 
 
 An examination of the statistics of the bureau bulletins, however, shows that they 
 are inadequate as a basis for percentages representing the general cost of living, and 
 hence inaccurate sources for general inferences — ^in a word, they lack the elements of «^ 
 adequacy, lucidity, and correctness. 4 
 
 The principal table of summaries (p. 10, Sept. 15, 1913, issue of the pamphlet in-' 
 question, the last one at hand) is headed "Relative retail prices of food; simple and 
 weighted averages, 1890 to August, 1913, by geographical divisions." The percentages 
 in the final column, recapitulative of the other columns, give a rise in "prices 
 weighted " from 101.9 in 1890 to 166.1 in August, 1913. The title of the pamphlet (of 
 146 pages), "Retail prices, 1890 to August, 1913," probably misled the newspaper 
 head writers and condensers of the bulletin's contents, so that they have been taking 
 it for granted that the figures related to the general cost of living and have written up 
 their alarming headings accordingly. Perhaps they read also the assertion of the 
 compiler of the pamphlet that "15 articles of food enter into the relative prices in 
 this report, representing approximately two-thirds of the expenditures for food by 
 the average workingman's family." Here is approximately sufficient official justifi- 
 cation for alarming news-column headings, and despondent editorial comment. 
 
 Now, what are the 15 articles of food covered in the bulletins, and as a fact do they 
 represent the alleged two-thirds expenditure? Here is a list of them: Sirloin steak; 
 round steak; rib roast; pork chops; bacon, smoked; ham, smoked; lard, pure; hens; 
 flour, wheat; corn meal; eggs, strictly fresh; butter, creamery; potatoes, Irish; sugar, 
 granulated; milk, fresh. 
 
 Eight of these articles are meat, counting "hens" under this heading. Of the seven 
 other commodities, four showed a decrease on April 15, 1913, as compared with April 
 15, 1912. Flour had declined 4.1 per cent, corn meal 1.6, potatoes 47, and sugar 16, 
 Of the three remaining commodities, butter had increased 8.7 per cent, milk 4, and 
 eggs 0.4. For these seven commodities, the decreases that year far outbalanced the 
 increases. But the general average increase, in the meats being put, by the intricate 
 processes of the bureau, at 17 per cent, brought a showing of an "advanced cost of 
 living." The September bulletin gave a decrease of three of these commodities on 
 
138 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 August 15, 1913, as compared with August 15, 1912. The fluctuations of the 15 com- 
 modities, excepting meat, thus frequently take the downward curve as well as the 
 upward. The New Yorker looking over the bulletins notes these points: For New 
 York City butter is quoted in April, 1913, at 41 cents per poiind; on February 1, 1914, 
 it was quoted in the local papers at 30. Potatoes last year and the year before were 
 unusually cheap. Corn meal is not an article of everyday diet in New York. The 
 bottle price of milk, affected by the health regulations, has been nearly stationary 
 for several years. Fish, which takes a leading place in the food list of a large part of 
 New York's population, is not included in the bureau's table. Coffee, wholesale, fell 
 last year from 13^ cents to 9^. The bureau has given in percentages, in their reports, 
 1890, 1903, 1907, the prices of 18 commodities (namely, apples, beans, bread, butter, 
 cheese, coffee, corn meal, eggs, fish, flour, milk, molasses, potatoes, prunes, rice, sugar, 
 tea, vinegar). The general average percentages for these commodities were-^1890, 
 104.4; 190.3, 105.15; 1907, 114. Increases, 1890-1903, three-quarters of 1 per cent; 
 1903-1907, 8.85 per cent; for the entire period 1890-1907, 9.6 per cent. ' 
 
 It is to be noted that the rise in the price of meat in the United States has been 
 from a level far below the prices long prevailing in Europe, especially those of the 
 Continent. For example, sirloin steak in Chicago is given in the tables as selling, 
 even in April, 1913, for 22 cents a pound; in Paris or Berlin it would be difficult to get 
 steak of the same quality at 40 cents a pound. The Statistique G6n6rale gives the 
 price of steak in Paris in 1910 at 34 to 45 cents a pound, accordmg to quality. 
 
 The "weight" given in the eight articles of meat in the bureau's table is, to a cer- 
 tainty, out of all jiroportion to the present consumption of meat in an American working- 
 class family. The working man, like the moneyed man, has adapted his expenditures 
 to the acquirement of the best food values his purse commands. He has rearranged 
 the proportions in his food, substituting cereals for flesh food, or buying cheaper cuts 
 of the latter. Has the bureau modified its "weighting" of meats in accordance with 
 this fact, or has the weighting stood unchanged since the issue of the eighteenth annual 
 report in 1903? It is upon that report that the compiler of the present bulletins relies 
 for the statement that the 15 commodities of his tables represent two-thirds of the wage- 
 wol-kers' expenditures for food. The statement is at this date under a cloud of reason- 
 able doubt. 
 
 Making a comparison in the prices of certain meats and seven other articles running 
 back through the 24 years to 1890, and deducing from it a general increase of 60 per 
 cent in the cost of living, as has been done in the ress, falls impressively short of a true 
 indication of the present general level of prices for all the various commodities and 
 services which make up the total cost of living. 
 
 Bradstreet's of February 14, 1914, offers a much wider range for deductions as to cost 
 of living than the bulletin's 15 articles. It gives its usual comparative wholesale 
 prices of 106 commodities. From these it calculates an Index number which is the 
 lowest reported since October, 1911, and which is 6.2 per cent under the index returned 
 on February' 1, 1913. As compared with February 1, 1912, 46 articles declined in 
 price, 42 advanced, and 18 were without change. Among those declining in the year 
 Were wheat, rye, flour, mutton, beef, butter, coffee, sugar, beans, peas, lemons, 
 raisins, currants, and anthracite coal. As compared with January 1, 1910, the number 
 of commodities ha-ving a decreased price was 40, while 8 remained unchanged. Among 
 those lower in price in the tour-year comparison were wheat, oats, rye, flour ($5.40 to 
 $4.25), milk, pork, bacon, lard, butter (36 cents to 26.5), eggs (38 cents to 34), sugar, 
 peas, peanuts, lemons, cotton, wool, and tobacco. 
 
 There is enlightenment on the points in question in other official Federal statistics. 
 A bureau of the Agricultural Department reported in 1912 that on April 1 farmers 
 were getting less for their staple crops than on that date during the previous five years. 
 In March, 1913, the same bureau reported that staple crops in the United States 
 averaged about 21.7 per cent lower on March 1 than on that da,te the year previous, 
 3.9 per cent lower than in 1911 , 19 per cent lower than in 1910, and 10.3 per cent lower 
 than in 1909 on the same date. 
 
 A general report on prices issued by the Bureau of Labor Statistics itself in 1911 
 gave the results of an investigation of the wholesale prices of 257 commodities. Of 
 these 257, the number showing an average increase for the year was 148, while 26 
 showed no change and 83 showed decreases. Giving the average price (index number) 
 of the 257 commodities for 1890 as 112.9, the bureau found the average for 191C to be 
 131.6. For the raw commodities among the 257 the average price ran 115 for 1890 
 and 139.7 for 1910; and for food, 112 for 1890 and 128.7 for 1910. Here was an advance 
 for all the 257 commodities, 1890-1910, of 18.7 per cent; for the raw commodities of 
 24.7 per cent, and for food only 16.7 per cent. But for the same period, 1890-1910, the 
 
 ' These percentages of increase should be 0.71 per cent, 8.41 per cent, and 9.19 per cent.— Royal Meeker. 
 
SOCIAL INSUKAKCE AND UNEMPLOYMENT. 139 
 
 compiler of the statistics of the Labor Bureau special bulletin finds by his figures 
 relating to the 15 commodities a rise in retail prices of 46.5 per cent. It would make 
 the public feel better if reports on the 257 commodities were sent out frequently, and 
 the compilation as to the 15 forgotten. Rise, wholesale, 167; rise, retail, 46.5. 
 
 But here is another comparison in percentages, retail: Eighteenth report (p. 64B), 
 for 30 articles, 1890-1903, a rise of 8.8 per cent; special bulletin, September, 1913, 15 
 articles, 1890-1903, 14.9 per cent. Further, the bureau's own different series of reports 
 of the percentage in the rise in retail prices differ astonishingly. In the regular period- 
 ical bulletin of July, 1908, is a table dealing with 30 commodities including meats, 
 under the heading, "Relative retail prices of food in the United States weighted 
 according to average consumption in workingmen's families, by years — 1890-1907." 
 Basing the percent^es on prices in 1890 as 102.4, this table gives 1907 as 120.6. Here 
 is 18.2 advance. But the special September, 1913, bulletin, giving 1890 as 101.9, puts 
 its 15 commodities in 1907 at 125.9, an advance of 24. Here is a difference between the 
 two reports of nearly 6 points, or 25 in a hundred. At this ratio the difference in 
 estimates when the special bulletin's general percentage ai-rived at 166.1 (August, 
 1913) could be 16 per cent. 
 
 There is no justification as every compiler of statistics in the bureau knows, for the 
 assertion, as made in newspaper headings and by the prophets of calamity, that the 
 rise in wages has not kept up with the rise in prices. Wages, in general, the bureau 
 reports, have risen — per cent. .There has been no "rise in the cost of living" since 
 1890 of 60 per cent or 50 per cent or even 25 per cent. 
 
 Here are the statistical items in the average cost of living in 1903 in New York for 
 471 families earning $695, as given in the Eighteenth Annual Report of the Bureau 
 of Labor: 
 
 Rent, $121; fuel, $35; lighting, $8; clothing, $98; sundries, $130: food, $325; total, 
 $692. 
 
 A reasonable inference from this presentation of bureau statistics of the cost of living 
 is that the only commodity figuring largely and constantly in the total advance is 
 meat. As to this commodity, the arrivals from Argentine, growing monthly since the 
 change in the tariff, have already, according to Secretary Redfield, resulted in a de- 
 cline in the general New York wholesale market of 4 cents a pound. In New York 
 Argentina meats are widely advertised as selling at retail at a cut of 20 to 40 per cent 
 on usual rates. 
 
 The $325 for food represents only 47 per cent of the entire family outlay. Of this 
 $325 for food only $127 was represented by meats, viz: Beef, fresh, $60; beef, salt, $9; 
 pork, fresh, $15; pork, s.alt, $12; other meat, |18; poultry, $13— the $127 being but 39 
 per cent of the outlay for food and only .18. 6 per cent of the entire family expenditures. 
 As to the rise in prices on other food commodities than the meat, representing this 18.6 
 per cent of the total outlay, as we have seen, it is certainly to the present time not 
 more than 10 per cent since 1890. 
 
 As bearing on the alarming reports of our Bureau of Labor Statistics, the range of 
 prices for 24 articles of consumption at Paris, as published by the Bureau of Labor for 
 France, may be helpful. 
 
 The index numbers run: 
 
 1901, 100; 1902, 95; 1903, 98; 1904, 99; 1905, 97; 1906, 95; 1907, 100; 1908, 102; 
 1909, 100; 1910, 104. 
 
 That is, average prices in France for the entire decade ran below the level of 1901. 
 
 For 23 articles at London the British Board of Trade, taking account of the coeffi- 
 cient of consumption, gives: 
 
 1901, 100; 1902, 101; 1903, 103; 1904, 102; 1905, 103; 1906, 102; 1907, 105; 1908, 
 108; 1909, 108; 1910, 109; 1911, 109; 1912^ 115. 
 
 For Germany, 13 commodities (inclusive of the highest advances?) are reported 
 from Prussia, Bavaria, Baden, and Wurtemberg, as follows: 
 
 1900, 100; 1901, 103; 1902, 105; 1903, 105; 1904, 105; 1905, 114; 1906, 118; 1907, 
 116; 1908, 116; 1909, 124; 1910, 127; 1911, 128; 1912, 130. . . . , , 
 
 In December, 1912, our Bureau of Labor Statistics, with its 15 commodities, had 
 got up to 158 per cent, beating Germany, with its high-water mark for 13, by 28 per 
 cent. 
 
 "Unprecedented high prices of food," a phrase so frequently employed nowadays, 
 is out of place in the domain of fact. Layton's "Study of Prices," giving diagrams 
 of Jevons' and Sauerbeck's statistics for the United Kingdom, Aldnch's for the United 
 States, and Schmitz's for Germany, shows that from 1863 to 1883 (excepting during 
 the three years 1877-1879) the cost of living was uniformly higher in the four countries 
 than in 1910. . , , . , , , 
 
 Putting tabulated statistics aside and looking over the run of prices as he has known 
 them in the last 30 years, the middle-aged observer will recall various permanent 
 
140 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 reductions in his regular expenditures which have weighed continually on the side of 
 lowering the cost pf living. He will remember when sugar was almost double the 
 present price, and coffee, if not double, far above the present prices. In New York 
 butter v^aa rarely below 40 cents a pound in the winter months; flour long stood above 
 the present level. Up to 1883 wheat was never in the centuries as cheap ae in the 
 present year. New York commands now the fruits of the West Indies, as well as of 
 Florida and the Pacific coast. The effects of the new tariff are being realized. 
 Whatever the cause without doubt the present winter has seen an abundant and cheap 
 supply of grapefruit, oranges, and bananas. California grapes have recently been 
 shipped to New York by means of a new process of preservation in transit, with prices 
 within reach of persons of moderate means. The refrigerator car equalizes prices of 
 fruits, berries, and melons over the country, gives these commodities new markets, 
 extends their season, and encourages production in districts not able a few years ago 
 • to sell these and similar crops. Freight rates in the United States in 1870 were 1.8 
 cents per ton per mile; the average at present is 0.741 — a reduction of considerably 
 more than 50 per cent. Pullman car rates have just been reduced hy law in various 
 parts of the country. Passenger service, while rendered more safe through the steel 
 car, has come down by reason of the legal 2-cent or voluntary mileage rate, marking 
 the lowest point ever yet reached. 
 
 The rates of board, a sure reflex of the landlady's, outlay for food, have advanced' 
 little, either in New York or the country districts which are the resorts in summer of 
 many of its inhabitants of moderate means. Boarding-house, hotel, and restaurant 
 keepers seem to have learned to "weight" the meals they serve so that the cheaper 
 balance the dearer of their supplies. The alleged increase of 60 per cent in the cost of 
 food certainly does not apply in their case. It is to be doubted that the general aver- 
 age price of board for the artisan wageworker has risen $1 a week. The 25-cent factory- 
 neighborhood eating-house dinner remains 25 cents. Canned goods, every house- 
 keeper knows, show nothing like a 60 per cent, perhaps on the whole not even a 10 per 
 cent increase. 
 
 As to rents, the "new law" tenement houses — for which the statute prescribes win- 
 dow light to all the rooms and more yard space to a lot — indicates the better quarters 
 now occupied by a large proportion of the masses in New York to-day as compared with 
 the previous generation. Comparisons stumble on variation of standards; steam heat- 
 ing in many tenement houses has taken the place of stoves; hot and cold water is in 
 every new apartment, whereas formerly five families could draw only cold water from 
 one general tap in the hallway. The suburbs, being reached by improved transit, on 
 the steam railroads as well as the electric, exhibit an improvement in the well-being 
 of a large proportion of the population, having small incomes. This -is true of every 
 city in the United States. New York's transit systems carry hundreds of thousands 
 of passengers 15 miles for the nickel that 20 years ago carried them only 5 in a longer 
 time. The transfer and double transfer cover greater areas than ever. A trip from 
 New York to Brooklyn which in the old days of the city bridge service cost 13 cents 
 now costs 5. The worldngman hence has the choice of districts for a dwelling place 
 which only 10 to 15 years ago were beyond his range of daily travel. Robert CChapin, 
 studying working-class rents, found that out of 243 families only 102 reported increase 
 of rents from 1904 to 1909. Of these 102 families,' 46 gave an increase at $1 or less a 
 month, 36 at $1, and 27 at $2. An increase of $1 for all the class of tenants living on 
 $700 a year and paying $121 ($10 a month) rent would be an advance of but 10 per 
 cent, and not 2 per cent on the family income. 
 
 As to clothing, whatever the determining circumstances, it may be safely afiirmed 
 that the general prices late this winter in New York have reached the lowest level 
 known to this generation. In the clothing trade there are no jobbing houses which 
 standardize prices and no summary of comparative prices is possible. The matter 
 of comparing prices can only be left to general Observation. Secretary Redfield states 
 that woolen cloth from the largest makers has been reduced this winter from 15 to 25 
 per cent. The $2 derby hat has not changed in price; caps are cheap; collars, sta- 
 tionary; men's furnishing goods have not advanced. For the last 15 to 20 years the 
 standard price of a pair of well-wearing men's shoes, such as are worn by many men 
 throughout the United States who in the handmade days regularly paid $4 or $6 for 
 their footwear, has usually ran as low as $3 to $3.50. Women's and children's shoes 
 shared in the decrease in price. In all, working-class clothing may be set down among 
 the reductions in price since 1890. 
 
 As to light, gas m New York in 1880 was $2.25 per thousand feet; in 1885 it was re- 
 duced to $1.75; in 1890 to $1.25, later to $1, and six years ago to 80 cents, the present 
 price. The legal provisions for supervision as to quality are more stringent than ever. 
 A citizen, giving his name and writing as treasurer of an institution in New York, 
 
SOCIAL INSXTEANCE AND UNEMPLOYMENT. 141 
 
 states in public print that in 1907 his bills for light and electric power amounted to 
 $1,115, whereas in 1913 the same service cost |938. For coal he paid in 1907, |1,894; 
 in 1913, $1,280. The increased use of gas as fuel by the working class is indicated by 
 the increase in the use of gas stoves, the day consumption of gas, mainly as fuel, now 
 very nearly equaling the night consumption as fuel and gas. 
 
 As to sundries, compared with 1890: There are places of amusement patronized by 
 the wage-workers in every quarter, at prices of admission that average a half or less 
 of those of 25 years ago. The 10-cent stores supply at a dime, or even a nickel, numer- 
 ous articles of household and personal use which not so long ago cost a quarter at the 
 hardware or drug or notion store. The cheapenings in the cost of communication 
 of messages reach all classes, the lessened cost in the case of the business man finally 
 in some degree benefiting the general public. Telephoning from the outlying districts 
 within Greater New York to the heart of the city 10 years ago cost 25 cents, while a 
 "call" taking up more than five minutes cost 50; the same services are had to-day 
 for but 10 and 15 cents. Telegraph rates, especially night messages, have had a 
 reduction reaching in cases to 50 per cent or more. The millions of dollars in the 
 new business done by the parcel post counts, every dollar of it, for cheapness. The 
 recent cuts in express rates operate against an increased cost of living and promote 
 the use of such devices as the food hamper. The artisan class of this country are 
 aware of the significance throughout industry and the influence on costs of all goods 
 when there is considerable reduction in the price of basic raw materials. Pig iron 
 is now selUng at $14.75 per ton as against $18.50 a year ago; steel billets at $20.50 as 
 against $28.50; copper, 15 cents per pound as against 16^; and wool, 21.5 as against 
 28.2 cents. The lessened cost of periodical literature, including newspapers, which 
 have been more than doubled in size and halved in price, is an indication of the lower 
 expenditiu-es constantly brought about through the application of the sciences and the 
 arte. We are now in the era of electricity. And with all these lower expenditures have 
 come more varied enjoyments, services, conveniences, and forms of instruction. As 
 compared in these respecte with the period of 1890 the present year marks an advance 
 in civilization shared in to some extent by every laboring class family. 
 
 To bring all the foregoing considerations of prices to the point of trying for a true 
 possible average rise in the general cost of living is perhaps beyond the powers of the 
 calculation of anyone, however well provided with all existing statistics bearing on 
 the problem. However, it may be ventured that with meats up and sundries down 
 and other items fluctuating continually, it is to be doubted that a general established 
 rise for a New York family having an income of $700 a year can be figured to be 10 per 
 cent. For a family having $1,400 it can hardly be 15 per cent. 
 
 On the whole, whether we depend on the experiences of every-day life or on the 
 work of statisticians other than those of the Bureau of Labor Statistics for the 15 com- 
 modities, the result is a devout wish, for the peace of the country, that the findings 
 based on those 15 commodities be not given the press unless proper signals of caution, 
 relative to their narrow scope and their insufficiency as criteria of the trend in general 
 costs, be published with them. 
 Respectfully, 
 
 J. W. Sullivan. 
 
 Room 338, 1 Madison Avenue, New York. 
 
 March 18, 1914. 
 Hon. William B. Wilson, 
 
 Secretary of Labor, Washington, D . C. 
 
 My open letter to you dated February 28, as you were duly informed, was written 
 for the good of the country, for the assistance of the President, and for the benefit of 
 yourself. The benefit seems not to have been appreciated. 
 
 Two answers to that letter have reached me. 
 
 The first came by way of a press dispatch, March 7. It states that you had that day 
 decided to revise the system by which the Government had estimated the cost of 
 living; that you believed that a more thorough investigation, giving figures from a 
 greatly increased number of cities and a wider range of articles of food, would reveal 
 °'a different state of affairs"; that you believed prices were lower; that your action 
 had been taken in response to my letter; that President Wilson, whose attention had 
 been called to that letter, was also of opinion that a new system might give "vastly 
 different figures," and finally that you felt that in no wise was the present adminis- 
 tration to blame for the imperfect reporte, as in the course of events it had fallen heir 
 to the system now in vogue of collecting and publishing the data of the bureau. 
 Answer sufficient, assuredly, this, to the public and to all parties concerned, though 
 
142 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 perhaps it might fittingly have been supplemented by a courteous expression of 
 acknowledgement to myself. 
 
 Your second answer is of a different tone and character. Unfortunately, ignoring 
 my spirit and intentions, you. have, together with a curt line from jrourself, sent me 
 a labored defense of the bureau's reports, bristling with personalities, signed by a 
 subordinate. He plainly relied upon creating an effect in his favor only among the 
 uninformed as to the points discussed. 
 
 A reply in detail may be of service to you while working out your plans for the 
 promised revision of the bureau's methods. 
 
 Your commissioner writes: "The author of this criticism resorts to comparison of 
 wholesale prices with retail prices, actual retail prices from sale records with alleged 
 prices, the retail price of one grade of an article with the retfil price of another grade 
 of the same article, price relatives in Germany, France, and England with price rela- 
 tives in the United States, although there is nothing in common to compare. " Every 
 statement in this passage is flatly and completely contradicted by the carefully chosen 
 language of my letter wherever references were made to the prices given in the bureau 
 or other reports. In each instance wholesale or retail prices are quoted in explicit 
 terms. Not one comparison is made involving different grades of a commodity. 
 
 In penning the several assertions of that passage your commissioner exhibited a fine 
 audacity. The statistics of "price relatives" for Germany, France, and Ei^land, 
 spoken of by me cautiously as merely "bearing upon the alarming reports" of yovii 
 bureau, appeared in tabular form, with your bureau's averages, in the British Board 
 of Trade Labour Gazette and were reproduced in the October number of the 
 Bulletin of the Department of Labor of Prance under the heading of "Comparative 
 indexes, 1900-1912." These highest statistical authorities of the two countries men- 
 tioned employed those "price relatives" of the various countries as expressing the 
 very comparisons denied them by your commissioner. 
 
 Your commissioner took good care to evade mentioning the examples given in my 
 letter of the glaring inconsistencies occurring in tables of retail prices in different series 
 of the bureau's own bulletins. His silence on that point confesses the defects I 
 pointed oiit. 
 
 Your commissioner expresses this belief: "It seems hardly probable that any one 
 could be misled by the tables contained in the retail-price bulletins." But that is 
 precisely the trouble. What do the newsjjaper headlines which I quoted in my letter 
 to you tend to show? What is the impression as to increase in prices given throughout 
 the country with every new edition of the bulletin? Does its reported higher cost 
 of commodities help or hinder, not only the present administration, but the entire 
 nation at a time when the facts inspiring hope and good cheer should have at least 
 equal weight with the tales that tend to intensify depression and despair? Can the 
 commissioner possibly be unaware of the wave of sensation passing over the country 
 consequent upon the press interpretations of his tabular showing of high prices? 
 Do not his agents in the 40 cities send him newspaper comment on the reports? 
 
 Let us now take up the astonishing errors yoxir commissioner, in commenting on 
 my letter, has made regarding prices and other factors in the distribution of milk, 
 corn meal, potatoes, butter, and meat. 
 
 "The bureau's figures," he declares, "furnished by the dealers themselves, show 
 that the price of milk has risen steadily since 1890." This, in an attempt to refute 
 my mention of the point that in New York the "bottle price of milk, affected by 
 health regulations, has been stationary for several years" — a fact no one in this com- 
 munity would think of disputing. Verification: The records of the company which, 
 through its sales and organization, sets the price of milk in Greater New York, are 
 readily obtainable. They show that the price per bottle of milk, after resting for 
 years at 8 cents, was advanced to 9 on November 18, 1907, was reduced to 8 on Novem- 
 ber 15, 1908, was again increased to 9 on November 1, 1909, nearly four and a half 
 years ago, and at that price has since remained stationary. The ofiScial regulation 
 for the delivery of bottle milk brought an advance only in the case of other agencies 
 in the trade, theretofore selling "loose" milk. Thecompanyin question, which before 
 the period of the new regulation, sold 75 per cent of New YorK's bottled milk, now 
 serves 40 per cent in the city and suburbs. These facts fully substantiate my refer- 
 ences to milk prices. Further, to your commissioner's confusion, the bureau's own 
 bulletin tables (October, 1913), in 35 out of the 36 quotations printed, show 9 cents 
 as the uniform price of milk in New York for the years 1912 and 1913. The signifi- 
 cance to the bureau 's statistics of the price of milk or other commodities in commercial 
 Greater New York lies in the fact that in this community lives one-third the popu- 
 lation of the 40 cities from which the bureau gathers the data for all its 130 pages of 
 minutia-burdened tables. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 143 
 
 Cornmeal coming in question, "How does he know?" is the challenge, when I 
 venture to say it is not an article of every-day diet in New York. Cornmeal, to com- 
 mon knowledge, is but rarely eafen in Northern and Central Europe — hardly at all 
 among the Jewish people pf colder Russia, very little in North Germany and France, 
 and it is held as only barnyard feed in Great Britain. More than 40 per cent of New 
 York's population to-day is. made up of immigrants from those countries and the first 
 generation of their descendants. The rigidity of food customs, one of the constant 
 phenomena of race characteristics, applies here. Investigations I have directed of 
 cornmeal sales in New York at retail or wholesale have brought out illumining facta 
 as to the consumption of that commodity. At numerous lower East Side bakeries 
 and groceries, except in the Italian quarters, no cornmeal is on sale; in cas3S the 
 attendants in bakeries, speaking in broken English, said they had never heard of it. 
 A wholesale foodstuffs merchant stated that where he sells 10,000 barrels of rolled oata 
 in New York he sells only 1,000 barrels of cornmeal. The leading cereal house of the 
 country reported that it sells more rolled oats in New York and vicinity for human 
 consumption than cornmeal for human and animal consumption. Cornmeal, an article 
 of daily diet in the South, is to be found on few tables in New England. 
 
 That "potatoes last year and year before were unusually cheap" — disputed by your 
 commissioner — is to be easily verified. Your bureau's own tables give the retail ad- 
 vance from October 15, 1912, to October 15, 1913, as 42 per cent. " Bradstreet 's, " 
 quoting the wholesale price in June, 1901, at $2.37 and the present price at $2.25, gives 
 winter prices, 1910, $1.50: 1912-13, $1.75. 
 
 "Butter, creamery," is the grade quoted in all cases in yoiu: bureau tables. Of 
 that grade I therefore spoke in directing attention to its price, quoted in the local 
 press February 1, 1914, as 30 cents. But your commissioner, with a rare hardihood, 
 cites in reply the price, not of "creamery," but of a distinctly higher grade, so de- 
 scribed invariably in trade classification, that of "creamery extra." He does not 
 mention the prices for creamery at all. He takes from a single newspaper of February 
 2 the wholesale price of "creamery extra;" he next gives the average retail price for 
 "creamery extra" on February 15 as 36.2 cents. This is correct enough, in fair agree- 
 ment with my own market authorities, as to "creamery extra," not under discussion. 
 The disturbing suspicion is suggested that the commissioner is not aware that there 
 is a standing difference, running from 3 to 6 cents, in the retail market prices of "cream- 
 ery" and "extra creamery." 
 
 As to the retail price of "creamery" butter on February 2: The manager of pobably 
 the largest private retail outlet for butter in New York, a firm whose grocery sales 
 equal that of 300 side-street stores, has sales stubs showing that on the date mentioned 
 he was retailing "a fair grade of creamery" at 30 cents a pound. Besides, I have a 
 written memorandum from a firm operating 10 of the largest retail grocery houses in 
 New York, catering to the wealthier classes, which gives their retail price on January 
 30 for creamery butter "of a high grade" as 32 cents, while their "creamery extra" 
 was 35. On February 3 their difference in retail price between "creamery" and 
 "creamery extra" had become 4 cents and on February 6, 6 cents. 
 
 Lastly, meats. The eight articles in this line the bureau, in the expressed opinion 
 of your commissioner, can regularly quote with confidence, while the tables give 
 only seven articles among all other food commodities "because the quality of the same 
 description of an article varies so capriciously." This official conclusion was shown 
 to the New York representative of the largest meat interests in America. He laughed. 
 His reply was: "What is the price of sirloin steak? Try to get at it. You may 
 have fat steer steak or lean cow steak, corn fed or grass fed, fresh or frozen, 
 Texas or Iowa grown, high bred or no breed, or from a tough old animal or a tender 
 young one. "The steak may be sold under various circumstances, by all sorts of dealers, 
 in little side-street stores or at big provision houses or by dealers keeping only fancy 
 stock. There are even different grades of sirloin steak in the same oeef . There ia 
 a continual variation in price in neighborhoods on the same grade of beef. Sirloin 
 steak is selling to-day in New York by some houses with only a fine trade at 32 cents, 
 while big stores with a popular custom sell down to about half that price. The 
 variability in the retail price of meat exceeds what is possible to any other staple. 
 To ascertain through agents in 40 cities the price of steak of approximately the same 
 grade in six or seven hundred stores obviously presents obstacles greater than getting 
 at prices of standard grades of other staple commodities." 
 
 Had the commissioner said that the complications in the data of retail prices of all 
 foodstuffs are bewildering ready assent would have been granted. It is true, uncer- 
 tainty baffles correct interpretation of the numerous facts intended to be brought out 
 and put in print for general information. After visiting, last year and the year before, 
 more than a hundred markets, in this country and Europe, I decided not to attempt 
 to enter comparisons of prices among my published observations. Jly notes on prices 
 
144 SOCIAL INSTJEANCE AND UNEMPLOYMENT. 
 
 Stand unused. But the commissioner does not take my position. He undertakes 
 to differentiate between classes of foods that he claims are standardized at retail and 
 those which are not standardized when, in fact, very few are standardized or tan be. 
 
 In the meanderings of your commissioner's statement he once or twice comes to a 
 desired practical point. He admits as a fact that the bureau has not changed its 
 scheme of "weighting" since 1901. But it is the price of what people are eating now 
 that counts in the cost of their living. In these 13 years, distressed butchers tell us, 
 the masses have diminished their consumption of meats, especially of the higher 
 priced. But the bureau has gone on just the same, assuming that its 15 commodities 
 yet represent, as in 1901, "approximately two-thirds" the food outlay for the working 
 family. Your commissioner further admits that various changes are to take place 
 in the bureau's method. Good. All the rest of his letter is as naught compared with 
 that welcome avowal. 
 
 The managers of mercantile establishments and the other men of large affairs whom 
 1 have met in collecting data relative to the matters of which the bureau bulletins 
 treat, or should treat, have one and all exhibited an attitude toward the bureau's 
 price tables the reverse of flattering. These men are not actively hostile to the bureau; 
 they do not stigmatize it as a shame and a disgrace to the Government, but they regard 
 it as of pitifully small account. They doubt the authenticity of its findings as well as 
 the validity of its summaries. Said a leader in his branch of activities, national in 
 scope: "The public ought to know which are the 670 retail stores from which the 
 bureau's agents gather their figures, in order that it might pass upon the ao;ents' 
 judgment. , There are merchants and merchants; some are selling adulterated and 
 fraudulently labeled foods. The expos6 made of short weights and measures is an 
 element to be taken into account. Recently in New York it was shown that eggs 
 were sold in a number of stores on Broadway under four classes, running from 35 to 
 60 cents per dozen, the classification being wholly fictitious, and upon being candled 
 by an inspector it was proven that they all contained about the same percentage of 
 spots. Further, what verification of the agents' visits to the stores mentioned can 
 be produced? Do the storekeepers indorse by signature the data sent in to the bureau 
 as their testimony? Who judges the various grades quoted in the record? In the 
 wholesale trade, butter, for example, takes on approximate gradations, and retailers 
 may order accordingly, the deliveries subject to rejection, but in the retail trade the 
 storekeeper may easily risk palming oft on the unalert consumer a lower grade for 
 a higher. Can the agents test by standards? Can the judgment of one agent form a 
 criterion for another? But what is the use in plying one's self with such questions 
 about hair-breadths points when the entire scheme of the bulletins is so grievously 
 unsatisfactory that those responsible for it, yielding to criticism, confess a desire to 
 revise its methods radically? " 
 
 Some unhappy expressions contained in your commissioner's statement hardly 
 display the traditional affable bearing of a model American public official when 
 considering suggestions affecting his duties. My letter, as he out it up, was not 
 classed with ' ' honest criticism " ; it " revealed a purpose, " ; it was an ' ' effort to prove " 
 something. My methods were "haphazard," my quotations "guesswork," my state- 
 ments "gossip about individual experience." My reference to a familiar economic 
 fact was greeted with a scornful, "How does he know?" I had written "without 
 making any investigation at all." This ruffled dignity of officialdom in the novitiate 
 is out of place. The new commissioner, it is sympathetically conceded, is too fresh to 
 his office to be wholly responsible for its routine sms. Not an expression in my letter 
 was meant to give him pain. Allowances, we all know, must be made for rigidity of 
 procedure in public business. But since the commissioner, regarding his well-wisher 
 as an opponent to be disdained, has started in on the personality game, I am obhged 
 to obey its first exigent obligation. This is, to step into the arena in which the "defl" 
 has been proclaimed, to utter a return word by way of comment and explanation. I 
 had reason to expect, my dear Wilson, that you yourself should fend off any personal 
 shafts instead of incorporating them in your communication to me. To do so would 
 have been no task at all, since before getting into public office you were several years 
 in the labor movement and are doubtless aware of the character of my long-continued 
 service at the headquarters of organized labor in Washington. Besides, the veteran 
 employees of your bureau who have been permitted to hold over could have informed 
 you that I was active among the advocates of a Bureau of Labor years before one was 
 established, that more than once have my writings had some influence on its subse- 
 quent efficiency and value, and that its successive commissioners have respected my 
 qualifications to give testimony on labor subjects. 
 
 Evidence of watchfulness over the bureau is shown by my possession of a file of its 
 bulletins from the beginning. As to the absurd assertion of your commissioner that 
 I had directed your attention to the bureau's blundering "without making any 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 145 
 
 investigation at all," he could have learned better on a moment's inquiry at the 
 nearest bookstore or public library. But in concentrating his attention on such matters 
 as the price of coriuneal per package to the fourth decimal, to swell the amusing price 
 tables in his rapidly succeeding bulletins, he. probably has overlooked up-to-date 
 literature on the live world problem of marketing. The libraries could also have 
 let him know that my reputation as an independent investigator is not yet to be 
 made, that 25 years ago, unassisted, I conducted an investigation, and, without ask- 
 ing for the vantage of public office, initiated a movement which, as developed, has 
 efiected the greatest change yet known in democratizing our Government. To-day 
 11 States of our Union, and scores of the cities of other States, have the initiative and 
 referendum. 6 For 30 years investigating social conditions has been my avocation. 
 At times the chosen representative of organized labor, it has also been my vocation. 
 Never shackled with the chains of political office, always declining nomination, and 
 never once in any manner seeking public place, I have consequently not at any time 
 been driven to attempt to conceal partisan faults or explain away bureau deficiencies. 
 
 With this rejoinder, justifiable, I believe, in view of your commissioner's misjudged 
 animadversions on my respectful letter to you — in other words, having complied with 
 the rules of argumentative as well as the personalities" game — I leave you and him 
 to the interested public. Its verdicts are usually merciful; besides, it soon permits 
 our coming and going public servants, unless they rise well above mediocrity, to pass 
 into oblivion. 
 
 On the whole, Brother Wilson, I believe I have fair reason to be satisfied up to this 
 point with the outcome of my suggestions for reform in the bureau. Every official 
 who exercises an influence over its operations, from the President right along the line, 
 has decided it must do better. Hence, all is well. My regrets at having caused your 
 subordinate to be stung. But, his spell of crying and growling over, he no doubt may 
 be expected to work along pretty well, to the best of his abilities and disposition. 
 Eespectfully, 
 
 J. W. Sullivan. 
 
 1 Madison Avenue, New York City. 
 
 Department op Labor, 
 
 Office op the Secretary, 
 
 Washington, March 10, 1914. 
 Dear Sir: I am inclosing to you a statement prepared by the Commissioner of 
 Labor Statistics, replying to the statements and criticisms contained in your letter 
 addressed to me under date of February 25. 
 Very truly, yours, 
 
 W. B. Wilson, Secretary. 
 
 Mr. J. W. Sullivan, 
 
 Room 338, 1 Madison Avenue, New York, N. Y. 
 
 retail price reports of the bureau of labor statistics. 
 
 A criticism upon the retail price statistics issued by the Bureau of Labor Statistics 
 is contained in a 12-page document addressed as a letter to the Hon. WilUam B. Wilson, 
 Secretary of Labor, dated February 25, 1914, and signed by J. W, SulUvan. Excerpts 
 from this document appeared in a number of New York newspapers under date of 
 March 2, 1914, Its contents reveal a jjurpose to prove "statistically" that prices are 
 not as high as they seem to the housewife. In his effort to prove the Bureau of Labor 
 Statistics retail price index too high the author of this criticism resorts to comparison 
 of wholesale prices with retail prices, aCtual retail prices from sales records with alleged 
 prices the retail price of one grade of an article with the retail price of another grade 
 of the 'same article, price relatives in Germany, France, and England with price rela- 
 tives in the United States, although there is nothing in common to compare. 
 
 If the retail price index of the Bureau of Labor Statistics is wrong, it most certainly 
 can never be corrected by any such haphazard methods of price getting and price 
 comparison as those used by our critic. ,. . , , ... 
 
 The Bureau of Labor Statistics welcomes and has often sohcited honest criticisms, 
 questions and suggestions relating to the publications of the bureau. The difficulties 
 of gathering trustworthy price and wage statistics and computing pnce and wage 
 indexes which accurately measure changes in price levels and rates of wages render 
 
 39501—16 ]0 
 
146 SOCIAL INSUBANCE AND UNEMPLOYMENT 
 
 this statistical work of the bureau or any other agency engaged in the like activities 
 especially liable to criticism. An estimate is better than a guess, however, and a 
 statistical statement is better than an estimate. The critic who wishes to reform the 
 work of the Bureau of Labor Statistics must be able to suggest something better than 
 estimates and guesses to supersede the statistics issued by the bureau upon the basis 
 of records of actual sales. The bureau exercises the utmost care in gathering and 
 compiling price and wage data, Its statistics are by no means perfect, but they register 
 price and wage variations quite accurately. The methods employed by the bureau in 
 gathering and compiling statistics are being constantly improved. 
 
 Probably the best way to answer this criticism is to explain briefly how the Bureau 
 of Labor Statistics gathers and compiles retail price statistics. " 
 
 Retail prices are secured from 670 stores scattered throughout 40 representative 
 cities of the United States. These stores are carefully selected by the agents of the 
 bureau. No "cut rate" or "fancy" stores are taken. Stores that trade largely with 
 workingmen's families are chosen. These stores send in to the bureau the actual 
 sales prices on the 15th of each month of the 15 food commodities carried by the bureau. 
 Agents visit the reporting stores annually to make sure that the reports sent in are 
 correct. The 15 food commodities have been carefully selected after years of experi- 
 menting. A larger number of commodities was originally included in the bureau's 
 plans and would be desirable, but it is impossible to get reliable prices of fish, coffee, 
 fresh apples, fresh vegetables, canned goods, etc., because the quality of the same 
 description of an article varies so capriciously. Mocha Java blend of coffee, for ' 
 example, does not mean the same thing from store to store or fromtimeto time. Occa- 
 sionally the identical grade of coffee taken from the same bag is sold under difierent 
 names at different prices in the same store. Clearly increases and decreases in prices 
 can not be traced from prices of articles that are one thing at one time and something 
 different at another time or several different things at one and the same time. The 
 bureau has long been wrestling with the problem of getting quotations of more food- 
 stuffs and of including in its retail price index boots and dioes, men's and women's 
 clothing, and house rentals. This is very desirable, but as yet it has not been practi- 
 cable for reasons explained above. 
 
 It would also be very desirable to extend retail price statistics to include a larger 
 number of cities and a larger number of stores in those cities now covered. This can 
 not be done at present because of lack of funds. 
 
 With all their imperfections the bureau's statistics of retail prices are truly repre- 
 sentative of food prices in the larger cities situated in the different economic sections 
 of the country. They are certainly immeasurably more deserving of credence than 
 the gossip about individual experience with prices, which is cited to refute them. 
 The stores chosen are so typically representative that it is doubtful if doubling or 
 quadrupling the number of stores reporting would change the relative prices by as 
 much as 1 per cent. It must be brought out and emphasized that prices have in- 
 creased upon the cheaper grades of meats and substitutes for meats in even greater 
 proportion than upon the higher priced meats. It would probably make but little 
 difference in the general price relative for foodstuffs if a larger number of them were 
 included in the bureau's statistics. The extent to which American workingmen have 
 been able to substitute cheaper food for meats as prices have increased can only be 
 accurately determined by a new investigation into the expenditures of typical work- 
 ingmen's families. Such a survey was planned several years ago by the bureau, and 
 shortly after I assumed charge of the bureau, September 1, 1913, was again considered 
 and has been postponed only because of the lack of adequate funds. 
 
 The title of the bulletins giving retail prices of articles of food is criticised. The 
 bulletins in this series have been intentionally called bulletins on retail prices because 
 there is no other term that would adequately describe their contents. Prices are 
 jiuoted for coal and gas in addition to the 15 food commodities upon which are based the 
 index number. Other articles representing expenditure for clothing and rentals will 
 be included as soon as it is possible to secure tnjstworthy prices of standard articles of 
 clothing and rentals for standard houses. 
 
 It seems hardly probable that anyone could be misled by the tables contained in 
 the retail price bulletins because it is carefully stated, both in the table headings and 
 in the text, just what the tables include. 
 
 Mr. Sullivan criticizes the bureau's selection of 15 articles of food because 8 are 
 meats and because they do not represent, as he thinks, the actual expenditure for 
 food by the average workingman's family. These criticisms bring out clearly the 
 difference between a truly statistical method and a method of guessing at results. 
 'The expenditures of workingmen's families were investigated by the Bureau of 
 Labor in 1901 , and the amounts and proportion spent per family for different items 
 was determined as correctly as possible. The articles of food carried in the retail 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT, 147 
 
 price bulletins of the bureau represent two-thirds of the total expenditure for food 
 as shown by the above-mentioned investigation. Mr. Sullivan, without making any 
 investigation at all, declares that the results of the bureau's investigation are incorrect. 
 He does not suggest any better method of arriving at the actual expenditures of work- 
 ii^men's families. He contents himself with saying that the carefully gathered and 
 considered figures of the Bureau of Labor Statistics are wrong. As an example of his 
 qualifications as an investigator and a statistician it may be noted that he says, "For 
 New York City butter is quoted in April, 1913, at 41 cents per pound; on February I, 
 1914, it was quoted in the local papers at 30," The Journal of Commerce quoted 
 creamery extra butter in New York City at 26^ to 27 cents per pound wholesale on Mon- 
 day, February 2, 1914. The average retail price of this grade of butter as given by 
 the 17 New York City firms reporting to the Bureau of Labor Statistics for February 15 
 1914, was 36.2 cents per pound. Plainly the retail price of the grade of butter carried 
 by the Bureau of Labor Statistics could not have been quoted by local papers at 30 
 cents per pound in New York City on February 1, 1914, as stated by Mr. Sullivan. 
 Mr. Sullivan contents himself with saying, "potatoes last year and the year before were 
 unusually cheap . ' ' The prices reported by reputable grocers do not bear out Mr. Sul- 
 livan's statement. By referring to the bureau's price statistics or any other reliable 
 retail price statistics, one can readily test the accuracy or inaccuracy of Mr. Sullivan's 
 guess. He informs us that corn meal is not an article of everyday diet in New York. 
 How does he know? Corn meal is sold in large quantities in New York and elsewhere 
 in the United States. He states that the "bottle price of milk, affected by the health 
 regulations, has been nearly stationary for several jrears." The bureau's figures 
 furnished by the dealers themselves show that the price of milk has risen steadily 
 since 1900. 
 
 Plans were completed long ago to publish both wholesale and retail prices every 
 month, in order to give the public the latest information regarding price changes 
 and to show clearly the relation or want of relation between changes in wholesale 
 prices and changes in retail prices. The frequent publication of prices, wholesale 
 and retail, is very important, and the plans of the bureau to bring this about will 
 be carried out just so soon as funds and office force will allow. 
 
 In order that prices and wages may be compared, one country with another, inter- 
 national statistics must be gathered' and handled in substantially uniform fashion. 
 The statistics should be published in such a form that actual prices in the United 
 States, say, for January, 1914, may be compared with actual prices in other countries 
 for the same date. Price changes in the United States can not be compared with 
 price changes in other countries with any degree of accuracy until these statistics 
 of the several countries are standardized as to scope and method. The desirability 
 of internationally comparable statistics has long been recognized by the statisticians 
 of all the leading industrial countries, and rome discussion has already taken place 
 with the purpose of securing the adoption of uniform methods in some of the more 
 important countries. 
 
 Royal Meeker, 
 United States Commissioner of Labor Statistics. 
 
 Washington, D. C, March 10, 1914. 
 
 Mr. GoMPEES. Now, Mr. Chairman, I do not recall who it was at 
 the last meeting, but one of the witnesses mentioned the fact that in 
 considering social insurance the subject of wages is not to be taken 
 into consideration or not to be considered. That is an open question. 
 Every student knows, every man and workman knows that upon his 
 wages, hours of labor, and conditions of employment depend what 
 kind of a life is going to be led by the worker and the influence upon 
 his life and health and work, and the kind of insurance he requires. 
 
 No one has taken into consideration what has been done and is 
 being done in the United States through voluntary efforts for insur- 
 ance. I think I may say this, that I do not want you for a moment 
 to believe that I am a supporter of these private insurance companies. 
 I am not. I have tried to live a fairly consistent life, so consistent 
 that I have not one solitaij cent of insurance in any concern, outside 
 of 1550, for which I am insured in the Cigarmakers' International 
 Union. I have not one cent of insurance. Inducements have been 
 offered for me to become insured in certain companies, but I have 
 
148 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 consistently refused. I a m a living p rotest agaij^tjbhe^grait_anddis;;;_ 
 honesty of many of ourTnsurance companies. As a matter ot"fact7~ 
 "one ofmgTearsl51isTviiy"''wFreTiS^eH'to isSUe'^mmissions or to organ- 
 ize the sohcitors of these companies is because we feared that a man 
 may come with a union card to the back door of some poor family's 
 house, where the wife is a loyal woman, whose husband is a loyal 
 union man, to solicit her for insurance, and that, being such wife of 
 a loyal union man, she will insure with the soHcitor, saying, "Here 
 is a good union man, and I will patronize him as a union man." 
 
 I have incuiTe,d_ the bitter JiostiHty of these insurance companies 
 because I have refused to issue coihmissions to their sohcitors and 
 agents, or because I have beenja opposition to granting them char- 
 ters to organize as unions under the American Federatioii of Labor. 
 So-X^h^jz a no iis^e for these things. I should prefer that the Govern- 
 ment of the United States, so far as it has the power, or the govern- 
 ment of the States, if they have the power, handle insurance. 
 
 In speaking of the Federal Government and the State governments, 
 I want to say that I recognize the twihght zone between the claims 
 of rights and jurisdiction of the Federal Government and the States. 
 That does not have to be pointed out to me. So far as duahty of 
 government can go in the estabhshment of insurance funds in which 
 workers may insure and get the full benefit of honest administration 
 with the least possible expense and the absence of corruption of funds 
 and graft, I am in favor of it. It would be practically a mutual 
 insurance under the authority of the Government ; mutual insurance 
 based upon the voluntary action of the men and women of the labor 
 world. We will see to it. It may take us longer than it would take 
 them, but we demand the right to decide our course. 
 
 We have fought for the liberty of the workers to organize, and we 
 are grateful to the people of the United States, to the men of the 
 Congress of the United States, and to the President of the United 
 States for two things particularly. You defeated legislation inimical 
 to the eight-hour law or eight-hour workday. You passed some legis- 
 lation of practical interest to the wage earners. You wiU, I hope, 
 enact the convict labor bill, which would regulate the transportation 
 of the products of convict labor in interstate commerce. You will, 
 I hope, enact the child labor law — the regulation or prohibition of 
 chUd labor in interstate commerce. But all those things amount to 
 nothing in comparison with the two bills you enacted into law — one 
 ia 1915, March 4, signed by the President on that day, and the other 
 law, passed by Congress and signed by the President of the United 
 States October 15, 1914. The first named one of those two I have 
 mentioned, enacted last, is the seaman's bill, which gave the right 
 and opportunity to seamen to be free and to own themselves, and the 
 other, the labor provisions of the Clayton law, in which the Congress 
 of the United States has declared "that the labor of a human leing is 
 not a commodity or article of commerce." We have an opportunity 
 for freedom, for the exercise of our normal natural activities; We 
 ask you to give us an opportunity to work and exercise this hberty 
 and these activities, that we may work out our own salvation. 
 
 Emancipation of the working class depends upon the working class 
 itself. But it would seem as exemphfied in other things and by the 
 proponents of this joint resolution that the working class has noth- 
 mg to do with it. This resolution ignores the working class abso- 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 149 
 
 lutely. Simply because I happened to be here, Congressman Lon- 
 don did me the courtesy — I have always been courteous to him, and 
 he has always been courteous to me — to ask me whether I wanted to 
 be heard here. That is usually done. You want to make the subject 
 of our remarks a target for your antagonism. 
 
 Mr. London. Can you at this point try to refresh your memory, 
 whether you received a letter dated the 20th day of March, 1916, a 
 copy of which I am handing you [handing letter to witness] ? 
 
 Mr. GoMPERS. I think I did, sir; because this letter has been 
 brought in here, let me say that it is addressed to me, and reads as 
 follows : 
 
 Mr. Samuel Gompers, 
 
 President American Federation of Labor, Washington, D. C. 
 My Dear Mr. Gompers: May I obtain from you, for use in the hearing on the 
 inclosed resolution before the labor committee of the House on April 6, a copy of 
 your letter which was read at the recent hearing at Albany on a bill creating a "social 
 insurance commission"? 
 
 Dr. Rubinow, who will lead the discussion of my resolution here, suggested that 
 your letter would be valuable. He attended the Albany hearings. 
 
 Thanking you in anticipation of the courtesy, and welcoming any suggestions 
 which you may care to make on this measure, I am. 
 Sincerely and loyally, yours, 
 
 Meyer London. 
 
 Mr. London. That was three weeks before the hearing. 
 
 Mr. Gompers. Yes, sir; and asking for any suggestions I might 
 make. A letter was sent to you and your request was comphed with. 
 
 Mr. Chairman and gentlemen, I dissent strongly from the state- 
 ment made by Dr. Rubinow that the Sociahst Party speaks for all 
 the workers of America. If there be any man or woman who speaks 
 for the workers, I think it can be truly stated that they are in the 
 central labor unions and the State federations and the international 
 unions and in the American Federation conventions and, in the 
 interim of conventions, in the executive council of the Federation. 
 
 May I say this, that Dr. Frederick Howe, who has written a book 
 dealing with social insurance, in making contradistinctions as to the 
 systems in vogue in the United States and Germany, makes this 
 very significant remark: 
 
 Germany has so strengthened the state as to have devitalized the individual. 
 
 There is a difference as to concepts of forms of government, con- 
 cepts of what is best as to the make-up of a people, the character of 
 the people and the government which is estabushed over them or 
 which they estabhsh. I believe in that class of American citizens 
 who beheve in the vitality of the individual, in the vitality of the 
 people as against a strong centrahzed government, a "socialized" 
 government. The American Federation of Labor, with the trade- 
 union movement of America, is a living embodiment of that thought 
 of democracy and of that concept of government. We stiU beheve 
 in our movement, that governments are instituted among men for 
 the good of the people, and whenever governments become subver- 
 sive of the good of the people they should be overthrown. 
 
 We beheve in the democracy and the vitalization of the people, 
 of the man, rather than in the socialization and the strengthening of 
 the governments. There has never yet been in the history of the 
 whole world a government, called by any name, that did not, when 
 
150 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 the opportunity came, exercise injustice and tyranny. Government 
 in itself is the imphcation of that fact, and it is the vitahty and the 
 democracy of the citizenship of the country that challenge, and correct 
 injustice and tyranny in. the government. 
 
 Mr. Keating. May I suggest, Mr. Gompers, that if it is convenient 
 for you, the committee wfll take a recess until 2 o'clock? You 
 have been on the stand three hours, and I dare say you would like a 
 little rest. 
 
 Mr. Gompers. It does not bother me a bit. I am accustomed to 
 work until I feel that I could fly. 
 
 (Whereupon a recess was taken until 2 o'clock p. m. of the same 
 day.) 
 
 AFTER RECESS. 
 
 The hearing was resumed at 2 o'clock p. m., pursuant "to the 
 taking of recess. 
 
 STATEMENT OF MR, SAMUEI GOMPERS— Continued. 
 
 Mr. Keating. The subcommittee will be in order. Mr. Gompers, 
 you may resume. 
 
 Mr. Gompers. Mr. Chairman and gentlemen, during my statement 
 in the morning session I attributed to Dr. Rubinow a statement 
 which, during the recess, he said I was mistaken in attributing to him. 
 The statement was somewhat as follows: He claimed or said the 
 Socialist Party represented all the working people. Now, I am not 
 
 foing to set up my memory against his upon that point. If he says 
 e did not say it I shall accept his word, and, in so far as that utter- 
 ance is concerned, I withdraw it. The record, I take it, will show 
 what was said, and if not by him then by some one else. I can not 
 imagine that the remark was not made and that my memory should 
 be so treasonable as to lead me entirely astray. At any rate, in so far 
 as Dr. Rubinow is concerned, I shall assume that he did not make the 
 statement. 
 
 It has been suggested to me also that I have addressed myself 
 before this committee more to the criticism of the Sociahsts and 
 Sociahst Party than I have to the provisions of the resolution. A 
 friend of mine who overheard the statement, said, "Well, probably 
 it is due to the fact that there is httle or nothing in the resolution." 
 However, I think I have addressed myself to the resolution; have 
 made my criticism of it and declared that it was our desire to have 
 an investigation regarding the subjects of unemployment, sickness, 
 invalidity, and occupational diseases. I have submitted a draft of a 
 biU for the consideration of the committee as a substitute for Mr. 
 London's resolution. So I think there is httle, if anything, that I 
 have left unsaid upon the subject of an inquiry. Representing the 
 American Federation of Labor and speaking in its name, I prefer 
 that an investigation should be had of the subjects. 
 
 As a matter of fact, I think the investigation of the question of 
 employment is big enough in itself ; that there ought to be a special 
 commission to give that special subject a hearing without havmg it 
 tied up with the question of sickness, invalidity, occupational dis- 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 151 
 
 eases, and old-age pensions. It is a tremendously big subject, but 
 inasmuch as the thought has been that it might be grouped as one 
 of the duties of a single commission, I have fallen in line with that 
 thought and have submitted the draft of a substitute bill which I 
 trust may receive the favorable consideration of the committee. I 
 am not wedded to that and am not desirous that the exact wording 
 should be followed; I am not self-opinionated in those things which 
 I deem nonessential; but as to those matters about which I have 
 strong convictions, of course, no one can expect me to depart or 
 deviate from them. T want the investigation; I want the facts 
 and such suggestions and recommendations as a commission can 
 properly report. 
 
 But. the question is as to whether I was justified in my criticism 
 of the attitude before this committee of the Socialists and the Socialist 
 Party representative. If, for instance, I had interjected it, I think 
 that criticism of me would have been justified, but the fact is this, 
 that several of the gentlemen who appeared before this committee 
 swallowed the resolution as a whole, hook, line, and sinker, and one 
 
 fentleman appeared as the oflicial representative of the Socialist 
 'arty of America. A gentleman said to me during the recess that 
 a chance remark made by Dr. Rubinow ought not to be taken as an 
 official utterance, and I said this in reply, and I want to repeat it 
 here: The fact is that Dr. Rubinow came here as the official repre- 
 sentative of the Socialist Party; in addition to that he had a pre- 
 pared paper and read it before this committee. In the prepared 
 paper was the statement to which I took exception. Later, when 
 interrogated by a member of the committee, Dr. Rubinow repeated 
 the statement he quoted from his book; he submitted 14 or 15 pages 
 of printed matter which, at his request and by the authority of the 
 committee, were made part of the record. 
 
 The statement to which I took exception, and which I now empha- 
 size, was a subtle blow at the life and vitals of the trade-union move- 
 ment and trade-union activity. If, as Dr. Rubinow's charge imphes, 
 trade-union work has brought about but this one condition, that 
 wages have not kept pace with the cost of living; if, despite txade- 
 union activity in the past twelve years, there is 15 per cent less of 
 purchasing power of the necessaries of life, then the whole woik of 
 the trade-union movement is wrong and must of necessity be a faUme. 
 So far as I am concerned I will say this, that if I believed that to be a 
 fact I wotild not give my time and my life to trade-union work and I 
 would not advise any man or woman to join a trade-union. If the 
 condition of the workers is worse than it was twelve years ago, as I say, 
 our cause has been ^ failure. 
 
 But let me caU your attention to this which, perhaps, no one wiU 
 dispute, or not many wiU dispute, that the immigration is a great 
 contributor to unemployment m the United States. I do not mean 
 immigration as it has come to the United States within the past year 
 because of the war — that titanic struggle going on in Europe — but 
 as it has gone on for fifteen or twenty years until it has reached a figure 
 of nearly a million and a quarter a year. It is true that industrial and 
 financial crises as they come have a very great influence in creating 
 unemployment. It is true that in seasonal occupations unemploy- 
 ment occurs; it is true that by reason of changing processes of pro- 
 duction unemployment follows, but it is equally true that because 
 
152 SOCIAL lUSURANOE AND UNEMPLOYMENT. 
 
 of practically unrestricted immigration — by which a miQion and a 
 (quarter have come to our shores — the unemployment of the workers 
 in America has increased. And yet, while the author of the resolu- 
 tion, Mr. London, will try to minimize the conditions or causes of 
 unemployment which I have mentioned, he will vote and work to 
 defeat legislation to restrict immigration. I would not want to build 
 a Chinese wall around the United States but I do believe that those 
 who are here should have the first consideration. All that we have 
 is here and aU that we hope to have is here. Our loved oaes living, 
 our sacred dead, and those who are to foUow are here. It is the 
 fundamental duty of man to see to it that the best interests of the 
 people who are here and those who are to follow us here shall be 
 conserved. How could that be accomplished even if we had a social 
 insurance system such as is proposed, or a compulsory social insur- 
 ance system, and the gates of America were thrown open to the 
 world 1 I can imagine, with this wonderful El Dorado here, a great 
 stream of ^workers from all the countries of the world coming to the 
 United States. 
 
 Then the labor organizations and the labor leaders, if you please, 
 of which I may count myself one, are the subjects of criticism be- 
 cause they are so " ignorant,"because they are so "shortsighted," 
 because they "do not know," and because they aim to secure the 
 improvement of the condition of the workers of a given trade^ call- 
 ing, or industry. Because we do that we are subjected to this criti- 
 cism by the author of this resolution. Oh, the inconsistency of it, 
 wanting to have social insurance for the unemployed and the unem- 
 ployment caused by all of the things I have enumerated. 
 
 Yet, the author of the resolution for compulsory social insurance 
 uses every power at his command to criticise trade-unions; he re- 
 serves his right to revise his impassioned address and in his leisure 
 and calm moments indulges himself in attacks upon and criticism 
 of the trade-iinions and leaders of the' labor movement of America. 
 If I had interjected the thing, I say, I would be subject to just critic- 
 ism and rebuke, but there -were here about one dozen witnesses at the 
 last meeting, and six or seven of them were avowedly and openly 
 SociaUsts, and attacking and criticising the fundamentals of the trade- 
 union movement in its work. 
 
 I can not and will not take advantage of the courtesy of the com- 
 mittee in going into the subject too long, but I want to call attention 
 to the fact that at the Seattle convention of the American Federation 
 of Labor the question of the investigation of social insurance was 
 indorsed. The executive council of the American Federation of 
 Labor made a recommendation upon the subject -to the convention. 
 At the last convention of the American Federation of Labor, held in 
 San Francisco in November, 1915, a committee for the investigation 
 of unemployment was authorized by the con-mention and appointed 
 by me. 
 
 I would like to have the opportunity, Mr. Chairman, and gentlemen 
 of the committee, to submit, if I can obtain them within a reasonable 
 time, some figures and data relative to the organizations which pro- 
 vide for social insurance tor their membership, and what they have 
 done. In regard to that I will try to condense it as much as possible; 
 it may be helpful and I am sure it will not hurt anyone, and from it no 
 one will dissent. It will be a statement of what has been done. 
 
SOCIAL INSURAK-CE AND UNEMPLOYMENT. 153 
 
 Mr. Keating. I am sure the committee will be very glad to have 
 the data. 
 
 Mr. GoMPERS. Now, just one word or two and I shall be done. The 
 trades-union movement of the American Federation of Labor is a 
 movement of the wageworkers. It has about 2,000 volunteer organ- 
 izers who go through their respective vicinities and districts and help 
 bring the gospel of the rights of labor and humanity to the toilers ; to 
 preach the necessity and the duty to organize and by associated effort 
 to secure improvements to which they are entitled and for the asser- 
 tion of the rights to which they are entitled. The wage earners are 
 told that they should make common cause with the labor movement 
 and that the American labor movement will be helpful to them in 
 every way within its power and wiU do everything it can to organize 
 for and secure those rights. Wliether the toilers are skilled laborers 
 or unskilled workers or migratory or stationary workers is immaterial. 
 
 If we do not do more than we do it is simply because we have not 
 the means with which to do it. You might offer a man a million 
 dollar mansion or farm for $100,000, but if he has not that sum he 
 can not buy it. If there is a field in which to organize a million or 
 two million more workers to-day, and we have not the means with 
 which to go to the men and women of labor and try to bring the 
 gospel of truth, duty, responsibility, rights, and justice to them, that 
 ought not to subject us to criticism and attack as being ignorant and 
 as having failed in our duty. Ours is the organization of the poor. 
 We have no annuities; we have no grants; we have no subventions; 
 we are not made the residuary legatees of millions and foundations, 
 and one of the causes of it is this: The men who possess means, and 
 large means, know that social uphfters may promise the millennium 
 in the sweet bye-and-bye, which is not expensive to these multi- 
 mDlionaires, but they know that with the workers in the trades-union 
 movement, fighting for higher wages and shorter hours* and better 
 conditions, they lose a part of their profit and graft; that as a result 
 of more thorough organization all of that which goes to these cor- 
 porations and multimUhonaires now will go into the pockets and 
 into the homes of the workers. The multimillionaires desire to avoid 
 anything which wUl seem to further that. . They know to whom to 
 give then" money for their work. 
 
 John D. Rockefeller, jr., has just sent out a circular — ^it was to be 
 released for the morning papers of yesterday — ^in which he shows 
 what he has done for the erection of churches of all kinds. Catholic 
 and Protestant; he will give to a Mohammedan church if necessary; 
 he will do anything except pay decent wages; he will suborn anything 
 and everything and subsidize anything and everything to avoid getting 
 off the backs of the working people and giving them a chance to organ- 
 ize into a bona fide trade-union.. He has declared he will spend hia 
 last dollar to fight the estabhshment of a bona fide trade-union. 
 John D. Rockefeller, jr., and other employers recognize the difference 
 between a movement for fundamental reform and the advocates of a 
 theory. We are the organization of the working people — the poor— 
 and it is wrong to attribute to us ignorance or refusal to work and to 
 fight for the poor devil who can not fight for himself, or to say that 
 we refuse to go or faU to go into the ranks of the masses of unor- 
 ganized to a greater extent because we do not wish to go, is more than 
 
154 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 unfair. To say, as has often been said and charged, that we have no 
 interest in the unskilled workers or migratory workers is as big a 
 libel and as criminal a hbel as was ever invented and coined and 
 expressed against any body of men and women. There is not a 
 dollar received in the coffers of our unions, there is not a cent received 
 by the American Federation of Labor, but what is spent in the work 
 of organizing, agitating, and educating the workers and to protect 
 and promote their interests. There is always an endeavor to estab- 
 lish a common policy and a common polity for increasing numbers of 
 Workers. 
 
 I repeat, if I had interjected the thing into this discussion I ought 
 to have been rebuked, and the rebuke would have been just. But 
 sitting here and listening to the diatribes, to the attacks and to the 
 criticisms, subtle and open, directed against the work of the trade- 
 Union movement I would be treasonable to my associates, to the 
 great constituency which has honored me by their choice of me as > 
 their executive head and spokesman, and I would be untrue to my 
 own conscience and the judgment and convictions of a lifetime, if I 
 did not resent the attaclra. 
 
 Now, let me sum up in a few words. The American trade-union 
 movement stands for higher wages now and not in the sweet by 
 and by; for a shorter workday; for greater safety in health, in life 
 and mnb; for better sanitary conditions of the workshop and the 
 home, and for a better home now and not in the promised land; for 
 the life and opportunity of the cluldren in the schoolroom, the home, 
 the playground, and the sunshine, now; for a better life, better work, 
 better working conditions, and better opportunities for the cultivation 
 of the best that is in us, and all things that go to make up a better 
 life for the workers. 
 
 That is the work of the American trade-union movement. I 
 realize as much as does any man living it has shortcomings. Out 
 of my 66 years I was for 26 years working at my trade and was a 
 Wage earner and I have not risen from the wage earners or above 
 them; I am of them, heart and soul and fiber and make-up; I am a 
 part and parcel of them, feeling the same pangs and feeling the same 
 wrongs. I am anxious to fight for them and with them. I have four 
 children; they are workingmen; I have some grandchildren, some 
 of them old enough to work and who are wage earners. I belong to 
 a family of proletarians, if I may use that term. There are now four 
 living generations, my father and I and my oldest son and his daughter; 
 four living generations and all in good standing in trade-unions. I 
 want to prove true to that history. We do not want to get out of 
 the wageworkers' fife and we are not going to. 
 
 The wage-earners want such assistance as can be given by anybody 
 and everybody, but I give warning here and now, as I have felt im- 
 pelled to do elsewhere, that the incubuses on the labor movement of 
 America must quit; that the barnacles on the labor movement must 
 quit or there is something going to drop and drop hard. We want 
 peace; we are are willing to accept the cooperation, support, and 
 sympathetic assistance that anybody and everybody can give, but 
 any group of people, however well intentioned, that undertakes to 
 dominate the lives, liberty, and freedom of the workers of America 
 are going to be fought and fought with the same degree of intensity 
 
SOCIAL INSTJKANCE AND UNEMPLOYMENT. 155 
 
 as any other element in society that undertakes to impose its will on 
 the workers. 
 
 What the trade-union movement has done for the betterment of 
 the workers of America no people can tear away. There are some 
 things which are axiomatic and need no proof. One is that the sun 
 shines despite awnings, parasols, and the like; water runs down hill 
 in spite of all impediments; Hghtning strikes in spite of lightning rods 
 to divert the electricity into the ground; and just so with the trade- 
 union movement, which has burned itself into the hearts and gratitude 
 of the workers of America. If you want any proof of it go to Youngs- 
 town; if you want any proof of it go to the street-car men of this city; 
 if you want any proof of it go anywhere you will, and you will find 
 that there has been engraved on the hearts and minds of the workers 
 a new-found liberty and a new-found freedom which they never even 
 conceived before, and in addition there has been a-contribution in the 
 form of better wages, better hours, and better conditions of employ- 
 ment brought into the Hves of the workers and their homes. 
 
 We want the investigation made, Mr. Chairman and gentlemen of 
 the committee, as to social insurance, but we ask that when you 
 recommend an investigation of social insurance it shall be with the 
 understanding that the rights of the workers and the freedom secured 
 by the workers shall not be frittered away by a patch upon our social 
 system, and that under that patch there shall be a germ that shall 
 devitalize the American citizenship and take away from them the 
 vital principles of freedom of action in the exerise of their normal 
 activities and their higher and best concept of human welfare, com- 
 bined with freedom. That is the attitude of the American labor 
 movement as best I can express it. As you may have noticed, I have 
 been compelled to rely upon memoranda which I have made, but I 
 have presented my position in a way that I trust may commend itself 
 to your favorable consideration and action. 
 
 1 thank the committee for its courtesy. 
 
 Mr. London. Mr. Gompers, is Mr. Wm. H. Johnston the president 
 of the International Association of Machinists, a substantial figure in 
 the labor movement? He is the president of one of your interna- 
 tional unions, is he not ? 
 
 Mr. GoMPEES. Yes, sir; he is. 
 
 Mr. London. I will read a letter which he wrote to me in response 
 to an inquiry : 
 
 I have your esteemed favor of the 9th addressed to our association, inclosing copy 
 of House joint resolution 159, all of which has been read with much interest, and in 
 connection with your desire that I attend the hearings on the 23d, I beg to say that 
 I am leaving to-night for Pittsburgh, but if I am in the city on the above date, I shall 
 be glad to attend the hearings, and will put forth every effort to do so. 
 Fraternally yours, 
 
 Wm. H. Johnston, International President. 
 
 Mr. Gompers. Does it disclose the fact that you invited Mr. John- 
 ston to attend the hearings, and you did not me ? He is a member 
 of the Socialist Party, is he not ? 
 
 Mr. London. I do not know. 
 
 Mr. Gompers. You do not know? 
 
 Mr. London. I do not know. I would be glad to hear that he is. 
 I expect to have a good many more in the Socialist Party. 
 
156 SOCIAL INSUBANOE AND UNEMPLOYMENT. 
 
 Butj Mr. Gompers, you received a letter on the 20th of March 
 which directed your attention to the resolution— your attention was 
 called to the fact that the resolution was introduced ? , 
 
 Mr. GoMPEES. That letter was received in my office. 
 
 Mr. London. And you saw that letter ? 
 
 Mr. Gompers. I am not quite sure that I did. But at any rate 
 the request contained in the letter was complied with; that is, a 
 copy of my letter to Mr. Fitzgerald, for which you asked, was sent 
 you, so I was informed. 
 
 Mr. London. Yes; and the letter asked for suggestions on the 
 resolution. 
 
 Mr. Gompers. Yes, sir. 
 
 Mr. London. And you made no suggestions ? 
 
 Mr. Gompers. I did not. I preferred to make suggestions to the 
 committee and before the committee, which I have done. 
 
 Mr. London. At any rate, the president of the American Federa- 
 tion of Labor can not complain that his attention was not called 
 to the fact that the resolution had been introduced dealing with the 
 question of social insurance. 
 
 Mr. Gompers. Yes, sir. 
 
 Mr. London. I understand Mr. Wilson, the Secretary of Labor, 
 is not a member of the Socialist party, and he has been invited. 
 
 Mr. Gompers. I am happy to say that he is not. 
 
 Mr. London. But he has been invited to express an opinion on 
 the resolution. You have 2,000,000 organized workers, nave you 
 not, in the United States, about 2,000,000? 
 
 Mr. Gompers. Oh, that is very short of the figures. 
 
 Mr. London. What are they ? 
 
 Mr. Gompers. Two and three-quarters millions. 
 
 Mr. London. How many workers are there in the United States? 
 
 Mr. Gompers. That is a very indefinite question. 
 
 Mr. London. How many industrial workers are there ? 
 
 Mr. Gompers. I would say that there are about thirteen or fourteen 
 millions that would be eligible to be organized in unions. 
 
 Mr. London. How many agricultural workers are there? 
 
 Mr. Gompers. I can not give you the approximate figures. 
 
 Mr. London. Has the American Federation of Labor attempted 
 to organize agricultural laborers. 
 
 Mr. Gompers. Yes. 
 
 Mr. London. With what success ? 
 
 Mr. Gompers. With very little success, although there have been 
 a nmnber of unions formed of farm laborers, but for many reasons, 
 among others, the large territory covered by their employment has 
 affected or interfered with effective permanent organization. There 
 has been considerable transitory organization which has had signifi- 
 cance here and there for a few months, a few years, and then has dis- 
 appeared. They have not been successful in establishing many per- 
 manent agricultural labor organizations. 
 
 Mr. London. Now, it would be a fair estimate to say that there are 
 7,000,000 agricultural workers ? 
 
 Mr. Gompers. Perhaps that may be true; I can not say. 
 
 Mr. London. So that out of a total of 20,000,000 workers we have 
 less than 3,000,000 men and women organized into unions ? 
 
 Mr. Gompers. Yes, sir. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 157 
 
 Mr. London. Can you give us an idea of the number of workers 
 organized in Great Britain ? 
 
 Mr. GoMPEES. About two millions and a quarter. 
 
 Mr. London. You have a good memory for figures. It is 2,106,000. 
 
 Mr. GoMPEES. About two million and a quarter. 
 
 Mr. London. In Germany ? 
 
 Mr. GoMPEEs. Prior to the war about 2,040,000. 
 
 Mr. London. The statistical table I have before me gives 2,500,000. 
 In Austria about 500,000 ? 
 
 Mr. GoMPERS. Yes, sir. 
 
 Mr. London. In Hungary about 130,000? 
 . Mr. GoMPERs. Yes, sir. 
 
 Mr. London. In Italy, 191,000 industrial workers and 425,000 agri- 
 cultural workers; in Denmark, 99,000; Sweden, 126,000; Norway, 
 25,000; Holland, 128,000;. Belgium, 148,000 workers. Now, in all of 
 these countries only a small part of the working class, of the working 
 peolpe, belong to the unions. Isn't that true ? Mind you, I am not 
 criticising. I am just trying to get at the facts. 
 
 Mr. GoMPEKS. I think that is true, sir. 
 
 Mr. London. In the United States about 10 out of every hundred 
 belong to the unions; in Great Britain about 17 out of every hundred; 
 and in Germany about 18 out of every hundred. What percentage of 
 women workers belong to the unions in the United States ? 
 
 Mr. -GoMPEES. That is exceedingly difficult to say, because in our 
 unions there is no discrimination as between nien and women. Each 
 is an entity to himself or herself, and there is no distinction. 
 
 Mr. London. There is a good deal 
 
 Mr. GoMPERs (interposing). One moment, one moment; do not 
 interrupt my answer, please. The women in our unions are upon an 
 equality with men in every particular — rights, privileges, wages, condi- 
 tions, dues, and benefits, and they are known to us as simply John 
 Smith and Belinda Scott, as the case may be. As to sex, we make no 
 distinction and have undertaken no data. 
 
 Mr. London. You mean you have no record of the number of 
 women workers who are organized ? 
 
 Mr. GoMPEES. We simply have the number of workers organized, 
 wage earners organized into a union, and we do not differentiate or 
 attempt to secure data as to the sexes. 
 
 Mr. London. Now, without giving us the exact data, can you tell 
 us whether the proportion of organized women workers is smaller than 
 the proportion of organized men workers? 
 
 Mr. GoMPEES. I think that is true. 
 
 Mr. London. True in every country in the world? 
 
 Mr. GoMPEEs. I think that is true, and the reason is 
 
 Mr. London (interposing). I understand. We are not going into 
 that. 
 
 Mr. GoMPEES. I think if a fact is stated, some of the reasons ought 
 to be fflven. 
 
 Mr.XoNDON. One moment; we will come to that. I am trying to 
 
 Set at certain fundamental facts, and I want your help. It is evi- 
 ent, then, that in spite of all the sacrifices and martrydom of the 
 trade-unions, they have succeeded in enlisting only a small part of 
 the working class in the unions. 
 
158 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Mr. GoMPERS. The facts are, first- 
 
 Mr. London (interposing) . Is this a fact- 
 
 Mr. GoMPERS (interposing). One moment. I think that I have 
 some rights as a witness before this committee. I am perfectly 
 willing to try to answer questions as best I cam 
 
 This country, until 1864, was composed of part slave as well as 
 
 Eart free labor. Slavery and organization of labor with concepts of 
 berty are absolutely impossible m the same jurisdiction. Secondly, 
 this country was divided into sections which had practically different 
 civilizations, different interests, the one manufacturing and based on 
 free workers, and the other agricultural and based on slavery. 
 America, even up to date, is still largely agricultural, covering a 
 
 freater area than any other country on the face of the globe, except 
 lUssia, and the work of organization among wage earners in America 
 is of comparative recent times. 
 
 Mr. London. There were unions in 1804 in the United States, 
 were there not? 
 
 Mr. GoMPERS. There were a very few of them. 
 
 Mr. London. Yes; and this reasoning would not apply to Great 
 Britain, would it ? 
 
 Mr. GoMPERS. The reasoning? 
 
 Mr. London. Yes; I mean the explanation of the lack of devel- 
 opment. 
 
 Mr. GoMPERS. It wiU in so far as England is concerned. England 
 is an industrial country. 
 
 Mr. London. But in England they have succeeded in getting only 
 a smallportion of the working people organized into unions. 
 
 Mr. GOMPERS. No • not a small portion. 
 
 Mr. London. Well, 17 out of every 100. 
 
 Mr. GoMPERS. You must bear in mind, Mr. London, that the orga- 
 nized workers in trade-unions are the industrial militant army of the 
 workers. Just as in the field of government of a nation, so it is in 
 the industrial field. The government of a nation does not have aU 
 its citizens in the miUtant activity of its army; so the trade-unions 
 haven't the entire industrial workers engaged in the militant service 
 in the cause of labor. 
 
 Mr. London. Now, it requires a great deal of sacrifice to organize 
 a union, I assume. 
 
 Mr. GoMPERS. Sometimes; and at other times it is positively 
 thrust at us; in the case, for instance, of the street railway men of 
 Washington, and in the case of the Government employees of the 
 District of Columbia. These organizations grew practically over- 
 night. 
 
 Mr. London. I know; but organizations that grow overnight are 
 likely to collapse in a moment also. 
 
 Mr. GoMPERS. So is every field of human activity as well as Gov- 
 ernment institutions. 
 
 Mr. London. But in order to estabUsh a permanent union great 
 sacrifice is required on the part of organized labor; is not that so ? 
 
 Mr. GoMPERS. Not always. 
 
 Mr. London. Most of the time ? 
 
 Mr. GoMPERs. No. 
 
 Mr. London. So that no sacrifice of any kind is necessary in order 
 to build up a trade-union ? 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 159 
 
 Mr. GoMPERS. That is the same exaggeration on this point in 
 which you are indulging in so many others. 
 
 Mr. London. I am asking a question. 
 
 Mr. GoMPERs. I know you are, and predicating it on an exagger- 
 ated statement of facts. The fact is that sometimes there are great 
 sacrifices. 
 
 Mr. London. And at times only pleasure ? 
 
 Mr. GoMPERS. It is always a pleasure. 
 
 Mr. London. It is always a pleasure ? 
 
 Mr. GoMPERS. Sometimes an organization is nipped in the bud by 
 the employers, and then at times again the very eifort on the part of 
 the employers to prevent organization by, for instance, the discharge 
 of those who are engaged in the work of organizing or of thoge men 
 who have become recent converts to organization, has frequently 
 brought about a reaction and a resentment among the other workers 
 so that they also have been moved to organize, whereas they would 
 not have organized if the emploiyers had not discriminated and dis- 
 charged their shopmates and made them the victims of those who 
 tried to organize. 
 
 Mr. London. In other words, it is this very oppression that has 
 helped organize some of the unions. 
 
 Mr. GoMPERS. Yes; it has helped in some instances. 
 
 Mr. London. There has been a great deal of oppression of em- 
 ployees by capitalists. 
 
 Mr. GoMPERs. Yes. 
 
 Mr. London. And there is now. 
 
 Mr. GoMPERs. Too much. 
 
 Mr. London. And in spite of all these difiiculties, this oppression, 
 in spite of the fact that employers have been using strike breakers, 
 gangsters, and hired thugs, and despite the fact that they have been 
 obtaining injunctions against unions, the labor movement has been 
 slowly growing. 
 
 Mr. GoMPERS. It has been growing aU too slowly to suit the im- 
 patient souls of many of my fellows and myself, but it has grown 
 steadily and through some periods rapidly. The growth is rather in 
 geometrical progression at times. For instance, the organization of 
 the workers within this past year. During the past year there has 
 been a larger increase in the organization of workers than in any other 
 one year. When we started with the American Federation of" Labor 
 in 1881 , there were scarcely 200,000 workers organized. In 1877 there 
 were less than 50,000 organized workers in the United States and 
 Canada. Then the growth of the organization began and in 1881 we 
 had about 200,000 organized in the Federation 
 
 Mr. London. How old is the labor movement in England, Mr. 
 Gompers ? 
 
 Mr. Gompers. About 200 years. 
 
 Mr. London. And after 200 years of effort to organize the work- 
 ing class, there are not more than 17 out of every 100 people belonging 
 to the labor unions ? 
 
 Mr. Gompers. As a matter of fact, the modern trade-union move- 
 ment had its real active life in the last 25 or 30 years with the organ- 
 ization by Henry Broadhurst, John Burns, Ben Tillett, and Joe 
 Shipton and a few others of the organization of the dock laborers. 
 
160 SOCIAL INSURAKCE AND UNEMPLOYMENT. 
 
 That was the beginning of the organization of the modern trade- 
 Union movement there. 
 
 Before that, as I indicated in my testimony, the unions were 
 primarily benevolent friendly societies, and they had to follow that 
 policy in order to protect themselves against the old concepts of the 
 law. 
 
 Mr. London. In England unions simultaneously advocate the 
 need of action in the economical field as weU as political action. 
 
 Mr. GoMPEKS. Yes, sir; and in America also. 
 
 Mr. London. I asked you about the progress of the British trade- 
 Unions. The British trade-unions do believe in using their political 
 power for the purpose of improving the conditions of labor. 
 
 Mr. GoMPEKS. Yes; and so do the American trade-unions. 
 
 Mr. London. The trade-unionist realizes that it would be wrong 
 to leave the political power in the hands of his masters, in the hands 
 of capital. 
 
 Mr. GoMPEES. The American union man believes in the improve- 
 ment of the conditions of the wageworkers of America, and aims to 
 secure that improvement by every activity which he can call into 
 his command. There are phases that are economical and pohtical 
 
 Mr. London (interposing). Economical and political, exactly — 
 organizing unions and then using their pohtical power. 
 
 Mr. GoMPEES. As workers and citizens. 
 
 Mr. London. As workers and citizens. 
 
 Mr. GoMPERS. Yes, sip. 
 
 Mr. London. The labor movement, for instance, is responsible to 
 a great extent for the compulsory education law in many of the States 
 of the Union 1 
 
 Mr. GoMPEES. Yes, sir. 
 
 Mr. London. Organized labor was the first to urge the need of 
 compulsory education; isn't that so ? 
 
 Mr. GoMPEES. Yes, sir. 
 
 Mr. London. Organized labor did not take seriously the objection 
 of the greatest philosopher of England, Herbert Spencer, that com- 
 pulsory education was destructive of the liberty of the individual ? 
 
 Mr. GoMPEES. I very largely agree with Spencer in many, many 
 things. 
 
 Mr. London. But on the subject of compulsory — -— 
 
 Mr. GoMPEES (interposing). And if he said that which you say he 
 did, I think it was one of his mistakes. 
 
 Mr. London. Now, the right to educate one's children in one's own 
 way is certainly an elementary right, is it not ? 
 
 Mr. GoMPEES. Yes. 
 
 Mr. London An ahenable right? 
 
 Mr. GoMPEES. Largely so, sir. A right that concerns the child as 
 much if not more than the parent. 
 
 Mr. London. Still the organized labor movement considered it 
 necessary for the preservation of the State to compel people who did 
 not know enough to educate themselves and their children, to compel 
 them to educate their children, isn't that so? 
 
 Mr. GoMPEKS. Yes, sir; and the right of any parent to have the 
 children educated in any way is retained to the parent. 
 
 Mr. London. Exactly, except that 
 
 Mr. GoMPEES (interposing). That they be required to educate 
 them. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 161 
 
 Mr. LcNDON (continuing). Excef)t that every parent is required 
 to give a certain elementary education to the children. 
 
 Mr. GoMPEKS. It is reserved to the parent to educate the children, 
 and as to the method and course, it is simply within the power of the 
 parent. 
 
 Mr. London. And the only thing compulsory about it is that he 
 is compelled to educate his children. 
 
 Mr. GoMPERS. Yes, sir. Education is made compulsory in order 
 to protect the children and to assure them future opportunities. 
 
 Mr. London. Now, then, organized labor takes pride in the sea- 
 men's act, in the enactment of the seamen's act, does it not ? 
 
 Mr. GoMPERS. Justifiable pride; yes. 
 
 Mr. London. And in order to obtain the improvement which the 
 seamen's act guaranteed, organized labor has for a number of years, 
 some 22 years, urged Congress after Congress to lend the aid of the 
 Government to assist the seamen, isn't that so? 
 
 Mr. GoMPERs. No, sir. 
 
 Mr. London. To emancipate the seamen. 
 
 Mr. GoMPERS. To give the seamen the right of control over them- 
 selves. 
 
 Mr. London. Which they did not have before. 
 
 Mr. GoMPERS. Which under the law they were deprived of before, 
 the right of ownership in themselves. 
 
 Mr. London. Yes. 
 
 Mr. . GoMPERS. The right to leave their employment whenever 
 their vessels were in safe harbor. 
 
 Mr. London. Now aU methods in the labor movement are subject 
 to change, are they not ? 
 
 Mr. GoMPERS. Always. They would not be human institutions if 
 they were not subject to change. 
 
 Mr. London. The mere fact that the trade-unions have followed a 
 certain policy for 15, 20, or 25 years, does not mean that in the light 
 of a wider experience they will not change their methods. 
 
 Mr. GoMPERS. They are likely to change their methods when ex- 
 perience shall demonstrate to them that their experience and their 
 activities have been fruitless and unsuccessful. But in the case that 
 you mentioned, of the seamen's law, and to which I may add the 
 labor provisions of the Clayton antitrust law, they have secured these 
 improvements and these successes as the result of the methods which 
 they have pursued. 
 
 Mr. London. Now, unemployment is a very serious evil, is it not ? 
 
 Mr. GoMPERS. It is. 
 
 Mr. London. And you agree with that portion of my resolution 
 which recites the fact that "uncertainty and irregularity of employ- 
 ment are the scourge of the lives of millions of working men and 
 women" ? You agree with that statement? 
 
 Mr. GoMPERS. I agree with it in so far that it is a great wrong and 
 a great injury. .^ „ , 
 
 Mr. London. Do you agree with the statement that We luid 
 uneniployment under protective tariffs as well as under the system 
 of free trade" ? 
 
 Mr. GoMPERS. Yes, sir. 
 
 39501—16 11 
 
162 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 Mr. London. And you do agree that "in countries from which 
 there is a large emigration as well as in those to which there is immi- 
 gration" ? 
 
 Mr. GoMPERs. With this addition that in countries which receive 
 large immigration there is a larger degree of unemployment due to 
 that fact. 
 
 Mr. London. There may be at times. 
 
 Mr. GoMPERS. That is your interpolation. I am speaking of my 
 judgment and of common knowledge. I would say that there is a 
 larger number of unemployed by reason of this larger immigration. 
 
 Mr. London. Then with certain qualifications you agree in sub- 
 stance with the statements that there is unemployment in countries 
 from which there is a large emigration as well as in those to which 
 there is a large immigration? (See appendix F, page 303.) 
 
 Mr. GoMPERS. And larger in those countries in which there is a 
 larger immigration, such as for instance in the United States up to 
 the year 1914. 
 
 Mr. London. Now, Mr. Gompers, you spoke about three hours 
 without interruption, and I just want to lay the basis for a short 
 statement, and you wiU help us a great deal if you will try to answer 
 my questions as short as possible. I don't want to limit you. 
 
 Mr. Gompers. No, you can't limit me. I won't permit you to do 
 it. If you ask me questions that are predicated upon false assump- 
 tions and bases, I shall necessarily have to answer as my understand- 
 ing and judgment directs. 
 
 Mr. London. Let us see then. With certain qualificatioas you 
 agree that in countries that have immigration and emigration there 
 is unemployment, with certain qualifications? 
 
 Mr. Gompers. With the quaJincations I state. 
 
 Mr. London. You stated them a minute ago. 
 
 Mr. Gompers. With the qualifications I have stated, yes. 
 
 Mr. London. You agree that "the seasonal character of many 
 industries" is responsible for unemployment? 
 
 Mr. Gompers. 'They are in a' considerable degree subject to trade 
 union control. 
 
 Mr. London. I have not asked for that. I want to know whether 
 the seasonal character of many industries increases unemployment ? 
 
 Mr. Gompers. At certain seasons, but 
 
 Mr. London (interposing). At certain seasons. We will come to 
 the remedies later. 
 
 Mr. Gompers. But I prefer to inject my own answers. These are 
 subject to the control of trade-unions, for seasons have been not 
 only changed, but prolonged, so that trades which were formerly 
 seasonal occupations have now become permanent throughout the 
 year. 
 
 Mr. London. We shall come to that later. You agree that the 
 "constant changes in methods and processes of production" cause 
 temporary unemployment ? 
 
 Mr. Gompers. Yes, sir; frequently, not always. May I just 
 
 Mr. London (interposing). Permit me to continue my questions. 
 
 Mr. Gompers. I can not make stenographic notes, and if you wiU 
 give me a moment 
 
 Mr. London. Certainly. You spoke of the employment of millions 
 of children as being an exaggerated statement. Do you know the 
 
SOCIAL INSUKANCE AND -UNEMPLOYMENT. 163 
 
 exact number of children below the age of 16 that are employed in 
 industries ? 
 
 Mr. GoMPERS. I do not know the exact number, but I know that 
 there are not milUons. 
 
 Mr. London. Do you know that there are a million children 
 employed ? 
 
 Mr. GoMPERs. I do not. I think not. 
 
 Mr. London. Do you as president of the American Federation 
 of Labor, or does your office, maintam a bureau of labor statistics ? 
 
 Mr. GoMPERs. In a way, according to the best opportunity and 
 means we have at our hand. 
 
 Mr. London. And you can't give us any approximate idea of the 
 number of children below the age of 16 employed in industries in 
 America ? 
 
 Mr. GoMPERS. I know that there are not "millions." 
 
 Mr. London. Here we have before us the occupational statistics 
 of the Thirteenth Census of the United States, 1910, which gives 
 the following figures: Males between the ages of 10 and 13, 609,030; 
 between 14 and 15, 744,109. Females between 10 and 13, 286,946; 
 between the ages of 14 and 15, 350,140. Making a total number of 
 children below the age of 15, 1,990,225. 
 
 Have you ever had occasion to look up these figures ? 
 
 Mr. GoMPERS. Yes, sir. 
 
 Mr. London. And isn't it true that in a number of States they 
 have no system of registration of births in some of the Southern 
 States ? 
 
 Mr. GoMPERS. I know that that exists, but to a very limited 
 extent. 
 
 Mr. London. So that there are places where we really do not 
 know the exact number or ages of the children employed except 
 that we know that very young children are employed? 
 
 Mr. GoMPERs. Yes, sir; that is true. 
 
 Mr. London. According to these data the number of children 
 below the age of 16 is nearly 2,000,000, isn't that so? 
 
 Mr. GoMPERS. If there was but one child it would be a crime. 
 
 Mr. London. I entirely agree with you, but that is not the point. 
 1 want "to know whether the statement that millions of children are 
 employed has no basis in fact, in view of the statistical data to which 
 1 have attracted your attention. 
 
 Mr. GoMPERS. I would say that when one uses the term "milHons 
 of hum&,n beings," he has neither in mind one or even two. 
 
 Mr. London. In other words, it should have been about two million 
 children and then you would have no quarrel with me. 
 
 Mr. GoMPERS. It is not a question of quarrel with you. I have no 
 quarrel with you, Mr. London. 
 
 Mr. London. I know we haven't. 
 
 I come to the next statement in my resolution "The merciless 
 discarding of workers enfeebled by old age." Is that a true statement 
 of the condition prevailing in our industries? 
 
 Mr. GoMPERs. Speaking of merciless 
 
 Mr. London (interposing). Would jou change that to "merciful?" 
 
 Mr. GoMPERS. I would not. That is a condition of industry. 
 
 Mr. London. It is a condition of life. 
 
164 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. GoMPERS. It is a condition of industry. I have learned this 
 as the result of my observation of life, that the less characterization 
 there is, the stronger the statement is. 
 
 Mr. London. Now I want to know whether it is true that old men 
 Are being discarded in industries to-day. Is that true or not ? 
 
 Mr. GoMPERS. It is unquestionably true. 
 
 Mr. London. So I was wrong in using the expression "the merci- 
 less discarding of workers enfeebled by old age." 
 
 Mr. GoMPERS. If you will remember, I did not even refer to that 
 ■during my entire time of presenting my statement to the committee. 
 
 Mr. London. So that you indorse any means which will help the 
 person enfeebled by old age to obtain some means of existence ? 
 
 Mr. GoMPERS. I should employ every legitimate means to mitigate 
 this condition, of those who are discarded, consistent with freedom, 
 and the Hberty of the workers. 
 
 Mr. London. And in connection with this you favor a system of 
 old agepensions for civil service employees, don't you ? 
 
 Mr. Gi3MPERS. The Government being the employer. That is the 
 only way it can be done. 
 
 Mr. London. I am not speaking of how it shall be done. You 
 favor a system of old age pensions for the rehef of old age ? 
 
 Mr. GoMPERS. Of Government employees by the Government. 
 
 Mr. London. And of industrial workers by the industries, or in 
 some other way. 
 
 Mr. GoMPERS. By the voluntary action of the workers. I should 
 think that it would be welcome to have Government contributions, 
 loo. 
 
 Mr. London. Splendid. We are getting along nicely. 
 
 Mr. GoMPERS. I am glad you think so. 
 
 Mr. London. Now, coming to the next: "The frequently recurring 
 crises intensifying the distress." Now, it is true, isn't it, that every 
 crisis intensifies the evil of unemployment ? 
 
 Mr. GoMPERS. During that period, and it also is mitigated by the 
 trade union activity, part of which I mentioned this morning, as, for 
 instance, the benefits they brought about. During the crises that 
 occurred prior to 1907, ^^^ employers of labor took advantage of the 
 situation and their own power by reducing wages and thereby cur- 
 tailing the consuming power of the workers. They would lay off 
 workers and throw them on the street. In the crisis of 1907 the 
 American trade union men declared that that wasn't the way out of 
 an industrial or financial crisis and declared that they would resist 
 reductions in wages, and proposed to divide time among the em- 
 ployees, with those who would otherwise be unemployed, and as a 
 consequence the distress and acuteness of previous industrial crises 
 "Were mitigated and never in the history of America, since the first 
 industrial crisis of 1857, was the period of such short duration or such 
 a small amount of poverty as was the case in 1907, due alone to the 
 attitude of the trades unions. 
 
 Mr. London. Now, coming to the next portion of my resolution, 
 "which reads as follows : 
 
 Whereas the methods heretofore employed to mitigate the evil of unemployment, 
 Buch as spaamodic relief work, vagrancy laws, poor laws, public and private charities, 
 have tended only to degrade the unemployed into the unemployable, turning them 
 into a permanent burden to themselves and to the rest of the community. 
 
SOCIAL INSUBANCE AJv^D UNEMPLOYMENT. 165 
 
 Now, you don't believe that the problem for unemployment can 
 be solved by spasmodic relief work, by temporary reilief work ? 
 
 Mr. G©MPEKS. I agree with your statement. 
 
 Mr. London. And you also agree that our vagrancy laws and 
 poor laws are entirely inadequate to cope with the difficulty ? 
 
 Mr. GoMPEKS. Not only inadequate but frequently unjust. 
 
 Mr. London. You also agree that there is nothing more degrading 
 than public and private charities ? 
 
 Mr. GoMPEES. I won't say that there is nothing more degrading, 
 but it is exceedingly degrading. 
 
 Mr. London. It is exceedingly degrading and tends to degrade 
 the unemployed into the unemployable ? 
 
 Mr. GoMPERS. It degrades both the giver and the receiver. 
 
 Mr. London. Up to this point everything stated in my preamble 
 meets with your approval. 
 
 Mr. GoMPEES. Except those parts from which I dissent. 
 
 Mr. London. And you dissented only from one part and qualified 
 your dissent. 
 
 Mr. GoMPEES. I dissent from the expression in the preamble, the 
 part which you have just now read. 
 
 Mr. London. What expression ? 
 
 Mr. GoMPEES. .In this preamble you condenm all the methods. 
 
 Mr. London. I don't say all the methods. 
 
 Mr. GoMPEES. I know you don't, but where you use the language 
 "Whereas the methods heretofore employed" implies all meSiods. 
 
 Mr. London. Very well; you disagree with it because you believe 
 that the expression "Whereas the methods" means "Whereas all 
 the methods." 
 
 Mr. GoMPEES. There is no escape from that language. If you 
 had used the word "some," so that it would read, "Whereas some 
 of the methods heretofore employed to mitigate the evil of unem- 
 ployment, such as spasmodic relief, vagrancj^laws, poor laws, public 
 and private charities, have tended only to degrade the unemployed 
 into the unemployable," I would have entirely agreed with you on 
 that. 
 
 Mr. London. Now, I understand, you believe that by the wording 
 of this portion of the preamble I intended a veiled attack on the trade- 
 unions ? 
 
 Mr. GoMPEES. I believe it was unintentional on your part; that 
 you intended to say that some of the methods and the methods 
 which you described; those you have mentioned in this preamble. 
 
 Mr. London. Up to this point we have had no serious disagree- 
 ment? 
 
 Mr. GoMPEES. I regard the disagreement as quite serious. 
 
 Mr. London. As you have stated them now ? 
 
 Mr. GoMPEES. As I have stated them during my examination by 
 yourself. 
 
 Mr. London (reading) : 
 
 Whereas, while unemployment can not be completely done away with under the 
 present chaotic and anarchical system of production and distribution, the evil of 
 involuntary idleness can be mitigated by the adoption of a comprehensive national 
 system of social insurance, which is to. secure to the worker adequate means of sub- 
 sistence while involuntarily unemployed, whether the unemployment be caused by 
 lack of work, by sickness, or by old age. 
 
Missing Page 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 167 
 
 Mr. GoMPERS. What is that ? Read the question. 
 
 (The question was read by the stenographer, as follows:) 
 
 Mr. London. You want to know whether order means harmony or command. It 
 does not mean command. I speak of order in the sense of harmony. 
 
 Mr. GoMPEES. That would be harmony of production and dis- 
 tribution. The viewpoint of workers and employers would differ 
 greatly of what would constitute "order." 
 
 Mr. London. Is the present state of production and distribution 
 characterized by a state of order or by disorder? Is there any pro- 
 portion between the number of workers who look for jobs and the 
 number of jobs offered ? 
 
 Mr. GoMPERS. I did not get that. I have no desire to quibble. 
 
 Mr. London. I understand you have no desire to cfuibble. We will 
 get at an understanding with a little patience. \ou say that the 
 expression "unemployment can not be completely done away with" 
 does not meet your approval because you believe in the future it 
 will be done away with ? 
 
 Mr. GoMPERS. Yes, sir; and by trade-union action. 
 
 Mr. London. When I described the present situation of production 
 and distribution as chaotic and anarchical, you say you do not know 
 the meaning of the words "chaotic and anarchical." 
 
 Mr. GoMPERS. I said no such thing, sir. 
 
 Mr. London. What did you say ? 
 
 Mr. GoMPEES. I think I have a fai^ comprehension of the ordinary 
 terms of the English language. But I said that there were different 
 constructions and definitions of the terms "chaotic and anarchical." 
 
 Mr. London. Replace these two words by the words "disorderly 
 system." Would that be clear ? 
 
 Mr. GoMPERS. Disorderly? I think that wbuld be even a worse 
 expression to use in a matter of this kind than anything else you 
 have employed. 
 
 Mr. London. According to you the present system of production 
 is characterized by harmony between capital and labor, by harmony 
 between all groups of society, and by complete order ? 
 
 Mr. GoMPERS. I think, sir, that I understand the purpose of that 
 question, and that question I resent, because it has its basis in a 
 prejudiced and untruthful statement of my attitude. I have never 
 said, despite the repetition, that there is such a thing as harmony 
 between capital and labor, or an identity of interests between them. 
 As a matter of fact, the industries of the country are conducted to 
 meet what are deemed to be the present and future wants. There 
 are some who' have misconceptions as to what our future needs and 
 future wants are. These constantly change, and there is no device 
 that will entirely prevent these changes. 
 
 Mr. London. Mr. Gompers, in order to decrease unemployment 
 you favor the use of a complete network of unemployment agencies ? 
 
 Mr. Gompers. That too needs qualifying. 
 
 Mr.' London. How would you qualify it ? ' 
 
 Mr. Gompers. I should prefer exchanges established by trades- 
 union agencies rather than by governmental agencies. 
 
 Mr. London. You would favor the establishment of unemployment 
 agencies which would enable the working people in every section of 
 the country to know where there is a demand for labor? 
 
168 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Mr. GoMPERS. I should favor the governmental issuance by some 
 of its agencies of reports as to the state of the demand for labor in 
 different sections of the country, and where there would be a dearth 
 of labor, and I may say that in 1884, before the Senate Committee 
 on Education and Labor, I made a suggestion for the publication of 
 such bulletins, and I used the illustration of the Weather Bureau 
 giving their forecasts, - as well as the actual study of the weather. 
 
 Mr. London. And the Department of Commerce is giving now 
 daily consular reports for the accommodation of the commercial 
 world. 
 
 Mr. GoMPEKS. I think that would be a helpful instrumentality. 
 
 Mr. London. And that would help to establish order in industry 
 to some extent? 
 
 Mr. GoMPERS. Call it that if you please, it would help to establish 
 equilibrium whereby the workers might be advised to go. 
 
 Mr. London. Between supply and demand of labor to some ex- 
 tent 1 
 
 Mr. GoMPERS. For many years I have tried to avoid the use of the 
 words "supply and demand" because it refers to labor as a commod- 
 ity, to which I have been protesting for a number of years. 
 
 Mr. London. Let us sum up. The substance of our inquiry up 
 to the present moment shows this: That only 10 per cent of the work- 
 ers of the United States belong to unions; that the resolution has 
 stated more or less correctly the extent of the seriousness of the evil 
 of unemployment. This is so, 'is it not ? 
 
 Mr. GoMPERS. In addition, you predicate your resolution and the 
 preamble to your resolution upon a state of affairs which does not 
 exist and declarations of fact which are purely hypothetical. 
 
 Mr. London. Will you point them out? 
 
 Mr. GoMPERS. I have already pointed them out in my statement. 
 
 Mr. London. But we have been going over the preamble line by 
 line. 
 
 Mr. GoMPERS. I have taken the preambles of the resolution, any 
 fundamental features to which I desired to call attention, and from 
 which I dissented, and to endeavor to be helpful I have drafted a 
 tentative substitute for your resolution. 
 
 Mr. London. Very well, the preamble states the problem, does 
 it not? 
 
 Mr. GoMPERS. Which preamble ? 
 
 Mr. London. The preamble to my resolution. 
 
 Mr. GoMPERS. You have several preambles. 
 
 Mr. London. The resolution consists of two parts, .the preamble 
 and the enacting clause. That part which precedes the enacting 
 clause states the problem. 
 
 Mr. GoMPERS. Which problem ? 
 
 Mr. London. The problem of unemployment. 
 
 Mr. GoMPERS. In part. 
 
 Mr. London. Would you add more causes of unemployment than 
 those specified in 'the preamble ? 
 
 Mr. GoMPERs. Yes, sir. 
 
 Mr. London. Which are they? 
 
 Mr. (jrOMPERS. Immigration. 
 
 Mr. London. Which other causes ? 
 
 Mr. GoMPERS. None. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 169 
 
 Mr. London. Then the preamble really is a comprehensive state- 
 ment of the problem of unemployment. 
 
 Mr. GoMPERS. It is not comprehensive. It lacks that essential 
 of immigration. 
 
 Mr. London. But you spoke before of immigration as one of the 
 qualifications of the second part of the resolution. Now, we come to 
 the enacting clause. Let us see where we differ in that. You also 
 propose that a commission shall be created which is to be known as a 
 commission on social insurance. Then you propose that the com- 
 mission shall consist of five persons, two of whom shall be employers 
 of labor, two of them representatives of organized labor^ and that the 
 Secretary of Labor is to be the fifth member of the commission, and 
 the chairman thereof. This part meets with your approval? 
 
 Mr. GoMPERS. Yes, sir; with the addition that because of the 
 duties of the Secretary of Labor, I have tried to make provision so 
 that he may deputize someone to act in his place. 
 
 Mr. London. I understand, but the personnel of the commission 
 is the same as that proposed in my resolution ? Then we provide for 
 compensation of $15 per day, and that meets your approval; that 
 isn't too much, or is it too litt'e ? 
 
 Mr. GoMPERS. That is not too much, but I have made provision 
 in my submitted proposition that they be paid $15 per diem during 
 the life of the commission — that is, for two yeai's — rather than for such 
 time as they are employed in the work, implying that there is no 
 work. I have anticipated that if a commission of that character is 
 to be appointed to make a thorough inquiry, the}' ought to give 
 their entire time to it. 
 
 Mr. London. I see the point. 
 
 Mr. GoMPERS. And therefore I provided for an appropriation for 
 the life of the commission, for two years. 
 
 Mr. London. And you expect them to work every day of the two 
 years ? 
 
 Mr. GoMPERS. Undoubtedly. 
 
 Mr. London. The administrative details are about the same. 
 
 Mr. GoMPERS. Of the commission? 
 
 Mr. London. Of the commission. 
 
 Mr. GoMPERS. Except that the act I suggest will provide for the 
 commission to investigate, but not to prepare plans for social insur- 
 ance — to understand the problem and what can be done. 
 
 Mr. London. Now, we come then to the duties of the commission 
 and there is where there may be some slight difference between your 
 resolution and mine. Your resolution reads: 
 
 The commission shall also prepare and report upon the following: I. Shall the 
 Government of the United States create a fund to contribute toward insurance against 
 (a) unemployment, (h) invalidity, (c) sickness? 
 
 Mr. GoMpERs. May I ask that the words "occupational diseases" 
 be incorporated ? 
 
 Mr. London. Well, certainly. Would you have it stated as a 
 separate proposition — would it not be included under the general 
 term "sickness?" 
 
 Mr. GoMPEES. I would say that the words " occupational diseases," 
 were suggested to me rather than expressive of my own judgment. 
 My reply to the gentleman who suggested it was that the term would 
 
170 SOCTAT. TJfSURANCE AND UNEMPLOYMENT. 
 
 be included in the word "sickness," and I do' not know that I ought 
 to ask for the change. 
 
 Mr. London. Then you say: 
 
 If the commission shall recommend that such a fund shall be instituted by the 
 Government of the United States, the amount of said fund to meet the obligations 
 to carry out the plan recommended. 
 
 The commission shall also inquire into and report the regulations that would be 
 necessarj; in the successful administration of such unemployment, invalidity, and 
 siclcness insurance, if established, and what rights the wage earners now halve which 
 must be minimized or regulated in order to be entitled to the benefits of the insurance. 
 
 Is it not rather a dangerous thing to permit a commission to present 
 a plan which would minimize the rights of the wage earners ? 
 
 Mr. GoMPERs. It is incorporated in my suggestions so that the 
 people shall know — the wage earners shall know — what rights they 
 must be required to surrender, and what regulations they will have 
 to observe, if they favor that proposition, the proposition of social 
 insurance. 
 
 Mr. London. You don't want to prejudice the workers against it? 
 
 Mr. GoMPERs. I want them to know. 
 
 Mr. London. You want them to know that their rights are pro- 
 tected by the estabhshment of a system of social insurance. 
 
 Mr. GoMPERS. I want the workers to know that if social insurance 
 is inaugurated, what rights they will have ^to surrender, and what 
 regulations they will have to obey. 
 
 Mr. London. Now, Mr. Gompers, let's be frank. We are deaUng 
 with a big problem. If we were here in private conference, you and I, 
 to go over this resolution, the thing I would ask you and the thing 
 you would ask me, would be this : To what extent can the establish- 
 ment of a social insurance system receive the cooperation of organized 
 labor? Isn't that the real situation? You don't want any system 
 of insurance that may be devised to destroy the ability of the worker 
 to resist oppression in any way ? 
 
 Mr. GoMPEKs. In any way. 
 
 Mr. London. And that wUl be the problem of the United States 
 when we deal with the question of social insurance. 
 
 Mr. Gompers. And it would be necessary, and should be the fmic- 
 tion of such a commission to inquire into and to report on what rights 
 may be impaired or minimized and what regulations the workers 
 would have to obey in order to estabhsh compulsory social insurance. 
 If they are wiUing to submit, that is a matter for them to decide. 
 
 Mr. London. Mr. Gompers, isn't there some assurance that organ- 
 ized labor will have its rights secured by the fact that the resolution 
 provides that two out of the five commissioners shall be representa- 
 tives of organized labor, two the representatives of employers, and 
 that the chairman shall be the Secretary of Labor ? 
 
 Mr. Gompers. To-day the Secretary of Labor is a man who is m 
 entire sympathy with the wage earners, and he recognizes the neces- 
 sity of the organization of trade-unions to protect and advance the 
 interests of labor. To-morrow I do not know who is going to be 
 Secretary of Labor. 
 
 Mr. London. Then what we iieed is to have the commission con- 
 sist of men who understand the full meaning of the labor problem. 
 
 Mr. Gompers. Not only the full meaning of the problem, but be in 
 entire sympathy with it. 
 
SOCIAL Hs'SUKA^nXT AXD UNEMPLOYMENT. 171 
 
 Mr. London. Will you in a few words state wherein your resolution 
 differs from mine ? 
 
 Mr. GoMPEES. The tentative act which I have drawn differs from 
 yours in this fundamental fact. It assumes and takes nothing for 
 granted, and directs the commission to make an investigation of the 
 entire subject and report. Your preamble and resolution is a charac- 
 terization of all methods heretofore employed to mitigate the evils of 
 unemployment as tending to degrade the unemployed! Your resolu- 
 tion commands the commission regardless of the result of their inves- 
 tigations to prepare a detailed plan for the national insurance fund, 
 compulsory m character. Your resolution provides that the workers 
 may be aided from this insurance fund, leaving it discretionary with 
 those who have the administration of such a fund. 
 
 Your resolution provides for the agents of the Government to have 
 the discretion to determine what constitutes involuntary unemploy- 
 ment. Your resolution provides for compulsory regularization of 
 industry. Your resolution provides for the establishment of indus- 
 tries by the Government of the United States, to be maintained by- 
 the Government. 
 
 Mr. London. Does it provide for the establishment, or does it 
 provide for the study of the question ? 
 
 Mr. GoMPEES. Section 4 of your resolution reads as follows, and I 
 shall read that part of it up to the point at which wc seem to differ : 
 
 That it shall be the duty of the commission to gubmit and to report through the 
 President to Congress plans and recommendations tor the relief of unemployment by 
 the regularization of industry, by the employment of labor in the reclamation of arid 
 lands, reforestation, the exploitation of the natiu-al resources contained in the public 
 lands of the United States, and on work connected with the prevention of floods and 
 inundations, the reclamation of swamp lands, the building of public roads, canals, 
 and similar public undertakings, and by the establishment of industries which are 
 to be maintained by the Government of the United States. 
 
 Mr. London. Submit plans and recommendations. 
 
 Mr. GoMPEES. Regardless pi what their judgment may be, regard- 
 less of what the examination may disclose. 
 
 Mr. London. You believe that the language of that part of the bill 
 compels them to bring in plans and recommendations. 
 
 Mr. GoMPEBS. There can be no dissent from that. 
 
 Mr. London. And that it would be impossible for the commission 
 to perform its duty by reporting that they could not recommend 
 compulsory regularization. 
 
 Mr. GoMPEES. They have no discretion in the matter. They are 
 required by this resolution if enacted by Congress. They would have 
 no discretion regardless of their judgment. They would be required 
 to report plans and recommendations for the establishment of indus- 
 tries and their maintenance by the Government. 
 
 Mr. London. And it would meet your approval if the resolution 
 were to read that it shall be the duty of the commission to study the 
 question whether unemployment could be ndieved by the regulariza- 
 tion of industry ? 
 
 Mr. GoMPEES. Because of the dangers to liberty involved in the 
 rf gularization of industries by the Government. 
 
 Mr. London. You do not w^',nt them even to study the question? 
 
 Mr. GoJiPEES. I would not care if they study as individuids, but I 
 would not defend the authorization of such an investigation by the 
 authoritv of the Government. 
 
172 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 Mr. London. What would you have them investigate — to what 
 extent labor can be employed in the reclamation of and lands ? 
 
 Mr. GoMPEKS. That I have covered. 
 
 Mr. LoKDON. That you have covered. You have covered every- 
 thing except the regularization of industry and the establishment of 
 industries by the United States ? 
 
 Mr. GoMPEEs. Yes, sir. 
 
 Mr. London. Everything else is covered by your resolution? 
 
 Mr. GoMPERS. Yes, sir. 
 
 Mr. London. So if we eliminate that portion of your address which 
 consisted in criticizing certain statements or certain supposed state- 
 ments, the sum and substance of your statement is that you favor 
 the study and investigation of the question of social insurance? 
 
 Mr. GoMPERS. Yes. 
 
 Mr. London. Is that- the sum and substance of it? 
 
 Ml . GoMPERS. Yes; with a view of its being voluntarily established. 
 
 Mr. TjOndon. And you would limit that study to the establishment 
 of a plan for voluntary insurance ? 
 
 Mr. GoMPERS. Yes, sir. 
 
 Mr. I.1OKDON. You would exclude the possibility of establishing 
 compulsory insurance ? 
 
 Mr. GoMPERS. 1 would. 
 
 Mr. London. That is the main distinction between your plan and 
 mine? 
 
 Mr. GoMPERs. Yes, sir. 
 
 Mr. London. Well, mj^ plan provides that they may study volun- 
 tary and compulsory insurance. You would prevent them from 
 studying compulsory insurance. 
 
 Mr. GoMPERS. I would have them investigate the subject of social 
 insurance of a voluntary character and how far it can be established 
 in the United States with such aid as the Government can give. I 
 am more concerned, as I have tried to indicate, with the fundamental 
 principles of human liberty and refusal to surrender rights to govern- 
 mental agencies, than I am with social insurance. I propose to make 
 just two or three minor statements to the committee in regard to 
 what has been done in the way of social insurance by our organiza- 
 tions, and also what has been done by the great railroad brotherhoods 
 of America. I may say that in recent years one of the brotherhoods 
 has expended more than $30,000,000 in social insurance for their 
 members and their dependents. 
 
 Mr. Keating. It might be well, Mr. Gompers, to incorporate all 
 those findings in one statement, which wiU be very interesting, I 
 am sure. 
 
 Mr. Gompers. There are four representatives of the railroad 
 brotherhoods who haye been in attendance aU day, and while they 
 are not prepared to submit anj' statement at this moment, they 
 authorize me to say that they would be wiUing to submit it in the 
 course of a few days to the committee. 
 
 Mr. Keating. It will be understood that such statement as Mr. 
 Gompers and these other gentlemen want to submit will be incor- 
 porated by the clerk. 
 
 Mr. London. You are familiar with the report of the Commission 
 on Industrial Relations, are you not? 
 
 Mr. Gompers. Fairly so. 
 
SOCIAL INSUEANCE AND TJNEMPLOl'MENT. 173 
 
 Mr. London. Are you familiar with the fact that Frank P. Walsh, 
 John B. Lennon, James O'ConneU, and Austiii G. Garretson — the 
 last three named being representatives of organized labor — have 
 recommended the adoption of a governmental system of sickness 
 insurance, and in recommending it they say: 
 
 A governmental system of sickness insurance is preferable tecause: 
 (a) More democratic; the benefits would be regarded as rights, not charity. 
 (6) Compulsory features, obnoxious under private insurance, would le no longer 
 objectionable. 
 
 (c) On account of the reduction in overhead charges and duplication, higher effi- 
 ciency in administration would be secured at less cost. 
 
 (d) Cooperation with other public agencies is impracticable otherwise. 
 
 (e) European experience has proved the superiority of government systems to 
 private insurance. 
 
 (/) Taxation of industry by Federal Government in sickness insurance system is 
 thoroughly established by the Marine Hospital Service. Law taxing vessels for such 
 fund was passed in 1798, and its constitutionality has never been questioned. 
 
 So that representatives of organized labor, when the opportunity 
 presented itself to them, have passed favorably upon the question of 
 estabhshing compulsory sickness insurance, isn't that so ? 
 
 Mr. GoMPERS. That is in that report, sir; and I would say, Mr. 
 London, that while there are some things in that report of the Indus- 
 trial Commission with which I am in entire accord there are a few 
 things in that report from which I strongly dissent; that which you 
 have just read about compulsory insurance is one of them. 
 
 Mr. London. You disagree with Mr. Lennon, Mr. O'Connell, and 
 Mr. Garretson ? 
 
 Mr. GoMPERs. I do. 
 
 Mr. London. John B. Lennon is the treasurer of the American Fed- 
 eration of Labor ? 
 
 Mr. GoMPERS. He is. 
 
 Mr. London. Mr. O'Connell is a vice president ? 
 
 Mr. GoMPEES. He is. 
 
 Mr. London. Mr. Garretson is a vice president, also ? 
 
 Mr. GoMPEES. He is the president of the Order of Railway Con- 
 ductors. 
 
 Mr. London. That is a strong bona fide conservative union, isn't it ? 
 
 Mr.-GoMPERS. A strong union. I have the honor of sometimes dis- 
 senting from some of my feUow trade-unionists. 
 
 Mr. London. In other words, you are not pledged to think alike on 
 every proposition ? 
 
 Mr. GoMPEKS. I hope not; and I say this, too, that whenever in the 
 American Federation of Labor there has come up for determination 
 the question of compulsory governmental conditions, whether by the 
 establishment of the hours of labor by law, in private industry, or in 
 any other system of compulsion, whether in arbitration or in matters 
 of this character, the view that I have expressed here has prevailed. 
 I speak, therefore, by the authority of the conventions of the Ameri- 
 can Federation of Labor. 
 
 Mr. London. You know the name James A. Emery ? 
 
 Mr. GoMPERS. I have had the uncomfortable situation of being 
 thrown in confhct with the gentleman. 
 
 Mr. London. He represents the Manufacturers' Association, does 
 he? 
 
 Mr. GoMPEES. He has represented them, that discredited organiza- 
 tion. 
 
174 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mr. LoNDOx. May I draw your attention to the fact that in a letter 
 sent by Mr. James A. Emery, on the 30th of March, 1910, to Mr. Fer- 
 dinand C. Schwedtman, Mr. Emeiy opposed the estabhshment of a 
 system of sickness insurance and old-age pensions ? 
 
 Mr. GoMPERS. Will vou inform me of the purpose of your reading 
 that? : ■ f f ^ S 
 
 Mr. London. Well, all I wanted to point out was that the typical 
 representative of the Manufacturers' Association opposed the estab- 
 lisnment of a system of sickness insurance and old-age pensions for 
 the working people. I suppose that would imply also that he would 
 be opposed to the establishment of any form of social insurance. 
 
 Mr. GoMPERS. But now I ask what is the purpose of reading that? 
 
 Mr. London. Well, the question is simple. 
 
 Mr. GoMPERS; What question do you predicate upon your reading? 
 
 Mr. London. I am gomg over to the next point. 
 
 Mr. GoMPERs. You can't, because I understand the implication. 
 You are ashamed of your own question. You are ashamed to ask a 
 question. That is the thing. I know what the implication is. 
 You want to saddle me with James Emery, in the same category, 
 and you know that that is not true. 
 
 Mr. London. One moment. 
 
 Mr. GoMPERS. Mr. Chairman, I ask for a moment. 
 
 Mt. London. Let's have order. 
 
 Mr. Keating. I think Mr. Gompers has the right to make a 
 statement. 
 
 Mt. Gompers. Let me say that during the hearing last Thursday 
 the statement was made by Mr. London, afterwards declared by 
 him to be jocosely made^^that I undertook to control Congress. I 
 can show you cartoons in^ the American Industries and the same 
 statements made by Emery in the National Association of Manu:- 
 facturers, that "Gompers controls Congress." I can show you that. 
 It may have been "jocosely made," but only after I resiented it and 
 repudiated it. It had the same purpose — to show, or to make it 
 appear, that the American labor movement dominates Congress, 
 and not for a purpose to the credit of the labor movement, but to its 
 discredit, and also to reflect upon the Congress of the United States, 
 that it is tinder domination. I have declared time and again, over 
 and over again, and I do not have to make any professions of faith 
 here, that our movement stands for social insurance and Government 
 aid, but of a voluntary character and not compulsory. 
 
 Mr. London. You stand for voluntary insurance if it can be organ- 
 ized successfully upon a voluntary basis ? 
 
 Mr. Gompers. If the commission shall find that social insurance 
 can be instituted of a voluntray character in which the rights of the 
 workers secured after ages of struggle shall not be surrendered. 
 Not with my consent or without my protest will I permit the enact- 
 ment of regulations that will take away one right which the workers 
 have won. 
 
 Mr. London. Doesn't the existence of a well-disciplined union in- 
 volve the adoption of regulations which become binding upon every 
 member of the union ? 
 
 Mr. Gompers.. So long as he remains a member of the imion, and if 
 he doesn't want to obey the regulations he can leave, and he has the 
 legal right to leave. 
 
SOCIAL INStTEANCE AND UNEMPLOYMENT. 175 
 
 Mr. London. But if he is a member of the union, he must obey 
 the rules. 
 
 Mr. GoMPEES. But he can't get out of the obedience to the rules 
 and laws of the United States. He must obey the laws or go to jaD. 
 
 Mr. London. Exactly. So far as the laws and regulations of the 
 union are concerned, you justify the adoption of such rules and regu- 
 lations because they are necessary for the promotion of the interests 
 of the working people ? 
 
 Mr. GoMPEES. And they are voluntarily assumed, and there is no 
 governmental power to enforce punishment or denial of rights and 
 liberties. The unions can not send a man to jail. There is no police, 
 militia, or army to enforce the edict of the union. There is m the 
 Government. 
 
 Mr. London. I wiU not press that point. It will take us too far. 
 You haven't at the present moment any information as to how many 
 unions in America have adopted unemployment benefits ? 
 
 Mr. GoMPEES. No. 
 
 Mr. London. Did you know that 81 out of 100 principal imions in 
 England had iinemployment benefits at the time when the British 
 unemployment insurance was adopted ? 
 
 Mr. GoMPEES. Yes, sir. 
 
 Mr. London. And that the fact that the unions maintained such 
 unemployment funds did not prevent the working people of England 
 from welcoming the unemployment insurance act ? 
 
 Mr. GoMPEES. I would say that the unemployment insurance act 
 in Great Britain is stiU in an undeveloped state, and that further this 
 fact of governmental insurance in England has taken much of the 
 virility out .of the British trade unions ? 
 
 Mr. Keating. Five days will be granted Mr. Gompers in which to 
 submit a statement showing the work of the various labor imions 
 along the line of social insurance. 
 
 Mr. London. Mr. Rubinow desires to make a short statement. 
 
 Mr. GoMPEES. I just want to say in connection with the British 
 act that you must bear in mind also that there are but seven trades 
 to which the compulsory unemployment insurance act applies, and 
 as is known they are the seven trades in which loss by disease, in- 
 vaUdity, unemployment, and sickness is less than in the others. 
 There are about 700,000 of the workers who have availed themselves 
 of the voluntary insurance. 
 
 Mr. London. So that 2,400,000 people came under the act by com- 
 pulsory insurance and 600,000 voluntarily ? 
 
 Mr. Gompers. Seven hundred thousand. 
 
 Mr. Keating. Do you wish to ask Mr. Gompers any questions, Mr. 
 Nolan? 
 
 Mr. Nolan. Inasmuch as Mr. London did not pursue that inquiry 
 in regard to the volmitary character of the membership and organi- 
 zations of the American Federation of Labor, I do not think I want 
 to pursue that. 
 
 I might ask one question : In granting a charter, Mr. Gompers, to 
 a national or international union of the American Federation of Labor, 
 they have complete autonomy so far as their own affairs are concerned ? 
 
 Mr. Gompers. Absolute autonomy in the establishment of their 
 own rules and regulations, conduct, methods of administration, and 
 the establishment by the union of any system of benefits, advantages, 
 
176 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 social insurance — conduct of their own trade affairs just as their own 
 judgment or experience may warrant, without interference by the 
 American Federation of Labor, except in an advisory capacity. 
 
 Mr. Nolan. And in a general way the majority rules, whether it is 
 in the local union, or the national organization, or the international 
 organization in convention, either through the referendum or through 
 the vote of that convention ? 
 
 Mr. GoMPERS. Yes, sir. 
 
 Mr. Nolan. So that whenever they see fit by their own voluntary 
 action, they can make any rules that the majority approves? 
 
 Mr. GoMPERs. That is entirely within the domain and jurisdiction 
 of any national or international unit. 
 
 Mr. Nolan. That is all. 
 
 Mr: London. Dr. Rubinow desires to make a short statement on 
 an issue which is really a side issue and has really little to do with the 
 main issue before us. A great deal of time was spent this morning 
 on the subject of actual wages and nominal wages. We should not 
 spend any too much time on it now. 
 
 ADDITIONAL STATEMENT OF DR. I. M. RTJBINOW. 
 
 Mr, RuBiNow. I shall try to be as brief as possible; but in view of 
 the fact that a larger part of Mr. Gompers's statement was an attack 
 on the Socialist Party, which I had the honor to represent at the 
 earlier hearing, I do not think it would be fair to leave the subject 
 without further inquiry. 
 
 Mr. London. I do not think Mr. Gompers intended a political 
 discussion. 
 
 Mr. RuBiNOW. I do not intend to go into a political discussion of 
 socialism, and I hope the chairman will stop me if I do. 
 
 I have not been delegated to discuss socialism before this commit- 
 tee, but only to plead for social insurance and for Mr. London's reso- 
 lution. I was authorized to do that in my own way, and when I 
 had made my statement concerning the changes in xeal wages in this 
 coimtry during the last 10 years, I made that statement as a statis- 
 tician rather than a Socialist. There are Socialists who believe those 
 facts, and there are Socialists who do not. Statisticians who know 
 the facts can not help admitting them. 
 
 Mr. Gompers has done me the honor of quoting several of my 
 articles in the New York Call and the New Review and other publi- 
 cations. I am sorry that you did not take the trouble to obtain the 
 original article as it appeared in the New Review, since it was devoted 
 to the important problem of unemployment. I might have assumed 
 that the American Federation of Labor had obtained a copy of that 
 article. 
 
 The quotation which Mr. Gompers has made is taken verbatim, 
 including even the asterisk, from a disreputable broadside issued 
 against health insurance by the National Civic Federation. There 
 is absolutely no meaning to that quotation as it stands by itself, and 
 the only piu-pose of quoting it in that sheet was to indicate my politi- 
 cal beliefs in the hope that that might discredit my standing as an 
 advocate of social insurance; but the figures upon which my state- 
 ment as to wages were based and which has caUed forth this violent 
 denunciation from Mr. Gompers did not appear in the New Review 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 177 
 
 or in the New York Call or any other Socialist publication. They 
 appeared in the American Economic Review for December, 1914, a 
 highlj^ respectable publication issued by the American Economic 
 Association and edited by some of our most prominent economists 
 and statisticians, who are not supposed to have been contaminated 
 by the Socialist propaganda. 
 
 If my article in question was accepted for publication by that 
 magazine, it was evidently not taken as a bit of Socialist propaganda, 
 but as a piece of serious statistical work by a man who had devoted 
 some 16 years to a statistical study of labor and economic conditions 
 in this country. 
 
 Mr. Gompers has asked me whether he was quoting me correctly. 
 He was not; but I was not in a position to interrupt him at the time. 
 I shall read the statement which appeared in my article, but before 
 I do it I may add that if the American Federation of Labor is suffi- 
 ciently interested in the question of movement of wages and takes 
 such a grave view of the situation as Mr. Gompers did this afternoon, 
 they might have noticed the article at the time, because it was noticed 
 by every student of wage and price conditions in this country, and 
 they might have voiced their dissent a year and a half. ago. My 
 conclusions in the article are based upon the table constructed with 
 a great deal of care and showing that full-time weekly earnings 
 expressed in money have increased during the last two decades. 
 TaJdng the average full-time weekly earnings between 1890 and 1899 
 as 100 per cent, they have increased to 131.6 per cent by 1912. That 
 increase was undoubtedly due to a large extent to the active Work of 
 the American labor movement, and, of course, largely to the efforts 
 of the American Federation of Labor. The Socialists are not unaware 
 of the work of the American labor organizations; they need not be 
 told of the value of organized effort of labor on the economic as 
 well as the pohtical field. As a matter of fact, in my original state- 
 ment I have definitely announced that in so far as poverty and 
 destitution are due to a low wage level that was a condition for which 
 social insiu-ance had no remedy to offer; that it was a situation for the 
 labor organization to deal with, and I think that Mr. Gompers will 
 remember that statement very distinctly. Why, then, should any- 
 one read into that statement an attack on organized labor and devote 
 three hours in a counter attack, on the Soci^st Party ? 
 
 But let me proceed with the analysis of my table : Here is another 
 column showing the movement of retail prices of food, which con- 
 stitutes about one-half of what the working man has to purchase 
 with his wages, and the prices of food on the same basis have increased 
 from 100 per cent in the decade 1890 tol899 to 154 per cent in 1912, 
 so that the earning capacity of the individual wage earner in terms 
 of the purchasing value of his wages decreased from about 100 per 
 cent in the early part of the century to 85 per cent in 1912. On the 
 basis of these figures and other data I proceeded to derive the fol- 
 lowing conclusions: 
 
 With fewer children to support, with women young and old, married or unmarried 
 contributing to the family budget, or at least partially relieving it of a certain share of 
 the burden, the wageworkers of America were able to raise their standard of living, 
 to lead a somewhat easier life. But this does not mean a larger return for their labor. 
 As far as the purchasing value of their wages is concerned, it had probably increased 
 
 39501—16 12 
 
178 SOCIAL INSTJEANCE AND UNEMPLOYMENT. 
 
 slightly (though by no means as rapidly as is asserted) between 1870 and 1890. But 
 since 1900 it has been rapidly falling. The purchasing powers of wages in 1913 are 
 not much higher than they were in 1870. 
 
 The Chairman. May I ask you if in your statement the wages 
 paid organized and unorganized labor are differentiated ? 
 
 Mr. RuBiNOW. I want to say this: That the original statistical 
 data are not mine. They are taken from the Bureau of Labor 
 statistics, and they are largely trade-union wages. 
 
 The Chairman. Not entirely. 
 
 Mr. RuBiNOw. No. 
 
 The Chairman. So that the figures will not show any influence of 
 the trades-union on wages? 
 
 Mr. RuBiNOW. Except they have been increased through the 
 influence of trade-union wages. 
 
 The Chairman. But after the extent to which you have combined 
 the wages of unorganized labor and the wages of organized labor, 
 the result is not so definite. 
 
 Mr. Rubinow. Of course, and we have got to remember that we 
 are dealing with unorganized labor as weU as organized labor. 
 
 The Chairman. So it is possible that if you had confined your 
 work to organized labor the result might have been that the figures 
 would have shown an increase equal to the increased cost of living. 
 
 Mr. Rubinow. There is that possibility. 
 
 I have, however, another document here prepared by B. S. Warren, 
 surgeon of the United States Public Health Service, on "Health 
 insurance." "Comparison," he says, "of wage and retail food price 
 statistics indicate that the increase in food prices during the same 
 period — 1900 to 1913 — has been considerably greater than the 
 increase in wages." 
 
 He then gives my table and says; "Thus the tendency toward 
 exaggeration of the upward trend of wages is evident since a large 
 number of the purely skilled trades are included." In other words, 
 he is afraid that my figures do not state the case sufficiently strong, 
 because I have included skilled trades. 
 
 The Chairman. The theory is that the unions have forced up 
 wages higher than unorganized labor. 
 
 Mr. Rubinow. Oh, yes, sir. 
 
 Mr. London. When you speak of the cost of living, what elements 
 do you include ? 
 
 Mr. Rubinow. All the elements that the United States Labor 
 Bureau include. Fifty per cent of , the expenditure is for food, and 
 there is no reason to believe that other things have not increased 
 proportionately. 
 
 In a paper read before the twenty-seventh annual meeting of the 
 American Economic Association, the president of the organization, 
 not a socialist, Prof. John H. Gray, states as follows: 
 
 At the same time that this influx of women and children into industry is taking 
 place, real, as distinct from money wages, has constantly declined since 1906. 
 
 And Prof. Gray quotes my article. 
 
 Prof. Walter E. Clark, professor and head of the department of 
 political science in the College of the City of New York, in his book 
 on the "Cost of Living," published in 1915, says: 
 Wage increase is thus shown to have lagged behind food price increase. 
 
SOCIAL INSTJBANCE AND UNEMPLOYMENT. 179 
 
 And he reproduces my table. 
 
 Prof. Irving Fisher of Yale University, of whom I am sure you 
 have all heard, says in a letter to me: 
 
 I was very much interested in your valuable article in the American Economic 
 Review on Real Wages. 
 
 Prof. Walter Willcox, of Cornell University, who is the dean of the 
 statistical profession in this country, a gentleman whom I am sure 
 every one of you has heard of writes me as follows : 
 
 May I ask whether you have ajiy offprints of your valuable article, "The Recent 
 Trend of Real Wages," in the December issue of the American Economic Review? I 
 have been much impressed by it and would be glad to have a copy of it to file with 
 my notes on the subject. If it were possible for me to purchase from you a dozen 
 reprints, I should be glad to do so and to put it in the hands of my class in statistics. 
 
 Prof. Robert E. Chaddock, of Columbia University, says: 
 
 I have read with great interest your article on Wages in the recent Economic Review. 
 If convenient I should like two copies of the reprint in order that I may ask my class 
 in statistics to read it. 
 
 Now you will agree that those were not figments of my sick imagi- 
 nation. Let me conclude these quotations by reading a statement 
 of Prof. W. Jett Lauck. 
 
 Dr. Lauck, I understand, is a good friend of labor and represents 
 one of the large railroad brotherhoods. Surely he will not be sus- 
 pected of any desire to discredit the American labor movement or 
 the American Federation of Labor. Moreover, his statement is 
 printed in an article in the Locomotive Engineers' Monthly Journal. 
 If I am correct, the Locomotive Engineers' Brotherhood is as pow- 
 erful an organization in its own trade as is the American Federation 
 of Labor in the world of labor at large. Surely Mr. Gompers will not 
 suspect the Locomotive Engineers' Brotherhood of any desire to 
 minimize the importance of trade-union efforts, but here is what Mr. 
 Lauck, in the journal of that brotherhood has to say concerning the 
 recent changes in real wages of this country : 
 
 As a matter of fact, the higher price level has undoubtedly been brought about 
 through the interworking of both of these fundamental factors, as well as by other 
 rjinor ones. The point of main significance in this connection is that the increase in 
 money rates of wages has failed to keep pace with the upward trend in prices. The 
 net result, therefore, has been a decline in real wages. The increasing absorption of 
 real wages by an advance in prices has inevitably led to dissatisfaction and unrest 
 among wage earners, which has been the cause of constantly recurring demands for 
 increases in rates of pay, culminating frequently in serious industrial disputes. 
 Within the past decade the decline in real wages, of the American wage earner has 
 been very marked. One of the leading statisticians of the country, and a prominent 
 student of price and wage statistics, recently estimated the movement of real wages 
 in the following words: 
 
 And then he quotes from my work. 
 
 Now, there is no intention on the part of any student of labor 
 problems, nor any intention on the part of the Socialist Party to 
 deny the importance of the labor unions and its activities. We want 
 to recognize the fact that the question of the level of wages does not 
 enter into the question, into the situation at all. The question of 
 wages does not help the widow of the man whose wages have stopped 
 because he is dead, and the wife of a man whose husband's wages 
 have stopped because he is disabled through disease or unemploy- 
 ment, or old age or invalidity, because in social insurance wo are 
 dealing with the problem of the submerged ones. 
 
180 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 There is no wageworker who is not threatened with the danger of 
 being submerged. It might be wise for Mr. Gompers to have refused 
 to carry hfe insurance. I hate to think of the position of his wife 
 and children when he was young. 
 
 Mr. GoMPEES. Will you address the committee, not me. 
 
 Mr. EuBiNow. I apologize for doing it. It might be wise in his 
 case not to do so. It may have been wise for Mr. Gompers to em- 
 phasize his prejudice against social insurance by refusing to organize 
 the army of insurance agents as if they were responsible for the man- 
 agement of private insurance companies, but, of course, with the 
 same grace he might refuse to organize the workingmen of distil- 
 leries and breweries if he happened to be a temperance advocate; 
 or the workmen manufacturing shoddy clothing as if they were re- 
 sponsible for the quaUty of the material, but let us remember that 
 at the same time there are 30,000,000 people in this country who are 
 carrying industrial insurance at a very high expense, which goes far 
 to indicate that the mass of the working class want some form of 
 insurance, even if they have to pay exorbitant rates for it and their 
 sentiments concerning social insurance, which would relieve them 
 of a part of the burden and possibly return them $1 for 50 cents paid, 
 instead of 50 cents for |1 paid might be somewhat different from 
 the sentiments of Mr. Gompers. 
 
 I appreciate Mr. Gompers's sentiments against compulsion. Com- 
 pulsion must always be justified. The assumption is always against 
 it. It is only after failure in other methods that we are compelled 
 to use compulsion. It is somewhat naive for us to discuss the ques- 
 tion whether voluntary systems are better than compulsory sys- 
 tems. It sounds like a resurrection of the old ideas of 30 years ago. 
 That problem has been settled in almost every European country. 
 There were good reasons why so many of them were forced to abandorf _ 
 voluntary systems. 
 
 To save time will you permit me to read the conclusions concerning 
 the limitations of voluntary insurance which I have arrived at in ray 
 book: * 
 
 Except for the State subsidy, the whole burden of payment falls upon the insured 
 themselves. That is the greatest obstacle to the development of voluntary insurance, 
 and, moreover, this incidence of the cost is socially unjust if the principles of the in- 
 dustrial causation of most illness be recognized. Industry must in all justice bear a 
 portion of the cost of sick insurance. 
 
 This criticism of the results of subsidized systems naturally applies with greater 
 force to the voluntary systems without subsidy. It may be summarized thus: 
 
 The voluntary system is slow in extending; it never extends far enough; it is not 
 satisfactory as to services furnished ; it places too big a share of the burden upon the 
 wage-working class. 
 
 These shortcomings, or at least some of them, the compulsory system aims to 
 correct. 
 
 And again, as far as voluntary old-age insurance is concerned, I 
 state on page 344 : 
 
 1. Even a heavily subsidized system of voluntary old-age insurance attracts only a 
 small proportion of the working class, presumably of the better-paid strata. 
 
 2. Even of those who begin accounts a large and growing proportion fail to continue 
 to make the necesssary contributions with any regularity. 
 
 And I want to add that of this fact very interesting evidence is 
 furnished by foreign voluatary systems. In Italy, for instance, 
 where the system of voluntary old-age insurance is heavily subsidized 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 181 
 
 from the State Treasury, over 28 per cent of the accounts become 
 inactive after three or four years. 
 
 3. The pensions actually acquired are pitifully small. 
 
 A good deal has been said about voluntary activity of American 
 trade-unions in the line of benefit funds. 1 doubt whether the finan- 
 cial condition of the American Federation of Labor has improved 
 much in the last 10 years. In 1908 the United States Government, 
 through its Bureau of Labor, made some investigation of all its 
 matters. These figures are contained in the Twenty-third Annual 
 Report of the United States Bureau of Labor, a volume of some 
 700 pages, a copy of which is readily available to every member of 
 the committee and probably found in this very room. 1 have sum- 
 marized the results of that investigation in my book and have ascer- 
 tained that the \«oluntary sick benefits of the American trade-unions 
 at that time covered approximately less than one-half million persons, 
 and that even if a good many other types of voluntary insurance 
 organizations are included the total number of persons for whom 
 data were ascertained in 1908 did not exceed much over 1,100,000. 
 
 This is not in any criticism of labor unions. They had other 
 problems to deal with. The report states that in 1909 the total 
 amount of unemployment benefits paid out by the labor unions was 
 about 1536,000, and in 1910 it did not amount to more than $240,000. 
 
 It is always easy to go into ecstacies over what volimtary insurance 
 has accomplished. Two weeks ago before the State legislature in 
 Albany we were discussing the question of compulsory health insur- 
 ance, and the proposed oill was opposed by a representative of 
 American fraternal orders on the ground that compulsory insurance 
 was unnecessary; that voluntary insurance was sufficient because 
 'tfe.ousands already carried voluntary sickness insurance with fraternal 
 orders. I have no reason to doubt that statement, but the trouble 
 with it is that where thousands were covered by voluntary social 
 insurance there were 2,000,000 workingmen in the State of New York 
 who were not so covered and for whose benefit compulsory social 
 insurance is being advocated. 
 
 The European countries which have recently introduced com- 
 pulsory insurance could show much larger results with voluntary 
 efforts than we have ever been able to achieve or that we may be 
 able to achieve within the next 10 or 20 years on the voluntary basis. 
 
 France has over 5,000,000 persons carrying voluntary sickness 
 insurance in their benefit funds. 
 
 Great Britain had over 6,000,000 members of their fraternal 
 societies, but nevertheless Lloyd George says: 
 
 What is the explanation that only a portion of the working classes have made pro- 
 vision against sickness? Is it they consider it is not necessary? Quite the reverse; 
 in fact, those who stand most in need of it make up the bulk of the uninsured. Why? 
 Because very few can afford to pay the premiums continuously which enable a man 
 to provide against these contingencies. There are a multitude of the working classes 
 who can not spare that, and he ought not to be asked to spare it, because it involves a 
 deprivation to children of the necessities of life. 
 
 Here is the way in which voluntary systeilxs work : I know of a fairly 
 successful voluntary sick and death benefit organization in New York 
 City, with a membership of some forty to fifty thousand, but nearly 
 10,000 new members must be gained every year in order to compen- 
 sate for the withdrawals and keep the strength of the organization 
 
182 SOCIAL INSUKANCE AND UNEMPLOYMENT. 
 
 unimpaired. Think of the enormous waste of effort which this coii- 
 stant losing and finding of 10,000 members every year must represent." 
 
 A good deal has been said here about benefit funds of the railroad 
 employees' organization. 
 
 This problem is not the problem of railroad workers so much as it 
 is the problem of the 7,000,000 working girls who are working for 
 from 15 to $8 a week. The voluntary system has been tried and 
 found wanting. 
 
 The complaint about the compulsory system is that it does not 
 leave the worker any choice. But the compulsion is not really upon 
 the worker, but upon the manufacturer or the employer. Let the 
 employer complain against it. The employer considers it an addi- 
 tional charge. 
 
 I have no quarrel to pick with the employer who complains against 
 the compulsory system, though even he may be wrong in disregard- 
 ing the advantages that he may derive from the improved health of 
 the employees. 
 
 I have no quarrel to pick with the National Civic Federation for 
 its disreputable attacks about my efforts in the State of New York, 
 because it is only what I might have expected, but one of the saddest 
 sights to me was to see at Albany representatives of labor arguing 
 side by side with representatives of the employing capital against a 
 measure intended to protect the health and well-being of the wage- 
 workers. 
 
 Mr. London. The motives were different. 
 
 Mr. RuBiNOw. To be sure the motives were different, and I have 
 not yet lost hope that we may overcome this opposition of organized 
 labor, even if I have almost given up hope that I can convince the 
 official head of the American Federation of Labor. 
 
 The error he makes is in assuming that this is a party measure. 
 I think that the evidence during the two days' hearmgs before this 
 committee has demonstrated that social insurance has ceased to be a 
 party demand and has become a broad social movement. 
 
 I want to state here most emphatically that in my official position 
 as executive secretary of the social-insurance committee of the 
 American Medical Association I am authorized to state that the 
 American profession is heartUjr in support of Mr. London's resolu- 
 tion, and, furthermore, that it is committed to the general principle 
 of social sickness insurance in this country. 
 
 We need not fear compulsion such as Mr. Gompers fears. Com- 
 pulsion must be justified. But I do not know of any stronger justifi- 
 cation than the necessity of abolishing poverty and destitution, and 
 I want to plead for the millions upon millions who are starving be- 
 cause their fathers had scruples against compulsion. 
 
 Mr. GoMPEKS. I would like to have a few minutes, and in addition 
 I would like to ask that you give a few minutes to J. W. Sullivan, a 
 member of the International Typographical Union, a student, writer, 
 and traveler, and who is probably as familiar with the subject of 
 social insurance as any man in America, even though he is not an 
 actuary or statistician. 
 
 Mr. Keating. The committee will be glad to hear from Mr. Sullivan 
 and from you^. 
 
 Mr. GoMPEES. I want to call your attention to the fact that the 
 quotation which Dr. Rubinow read from his article, I submit, is essen- 
 
SOCIAL JNSUEANCE AND UNEMPLOYMENT. 183 
 
 tially the same as that which I gave this morning as an extract from 
 his statement. He repeated his contention just now, saying that in 
 12 years, despite trade-union action, the condition of the workers had 
 deteriorated; that is, there has been a loss of 15 per cent in the pur- 
 chasing power of the wages — in other words, that their condition has 
 deteriorated to that extent. If that is true, then trade-unionism is 
 afaUure. 
 
 Mr. London. Btit, Mr. Gompers, trade unions can not control the 
 cost of livmg, can they ? 
 
 Mr. Gompers. If trade-unions can not secure an improvement in the 
 condition of the workers they are a failure. If, despite the activity of 
 trade-unions, the workers are worse off after a period of 10 or 12 
 years, then trade-unions are failures. Now that is all there is to it. 
 Dr. Rubinow tried to say that this is so and then to say that he is " a 
 friend of trade-unions." It is inconsistent. Dr. Ruoinow said that 
 the only change that has occurred commensurate with the condition 
 of the wageworkers was the contribution to the family funds by other 
 members of the family. That may be true in a comparatively few 
 instances, but it has no basis in fact so far as the wageworkers of 
 America are concerned. 
 
 Dr. Rubinow has quoted a number of statisticians and has wound 
 up in each instance by calling attention to the fact that these statis- 
 ticians have quoted his article. This morning, during my statement, 
 I submitted correspondence between the Commissioner of Labor and 
 the Secretary of Labor on the one hand and Mr. J. W. Sullivan on 
 the other, in which the very table on which Dr. Rubinow founds all 
 his statements, and upon which all of these statisticians found theirs, 
 is questioned and successfully questioned. I commend the corre- 
 spondence to the consideration of the committee, and also to the other 
 ladies and gentlemen here who may be interested. 
 
 Now, I do not want to misquote a man or misstate his position, but 
 I understand Dr. Rubinow to say that all the activities of trade 
 unions can have no influence upon the girl who earns $6 to $8 a week. 
 
 Dr. Rubinow. No; I said upon the widow of the man who is dead. 
 
 Mr. Gompers. I am speaking of the girl who earns $6 to $8 a 
 week. And let me say this, that due to trade-union activities con- 
 ditions for working girls have improved, despite the fact that they 
 are not organized. Before Mr. London was Congressman London 
 he helped in the organization of the girls in the needle industries of 
 New York, and I doubt that he wOI say there has been no improve- 
 ment in the conditions of the working girls in the needle trade in the 
 past 12 years. I do not think he wUT substantiate- any such state- 
 ment. The conditions which have improved with the girls in the 
 needle trade are beyond conception in wages and hours and conditions 
 of labor. It is not half good enough, not half what it ought to be; Jbut 
 to say that these conditions have not improved in 12 years is to fly 
 in the face of evidence patent to any man who thinks and studies 
 and observes. 
 
 I want to say a word in regard to my insurance. I was not always 
 66 years of age. I was married when I was a very young man, or 
 rather a young boy. Before I was 19 years of age 1 was a father, 
 and I can scarcely remember the time when I did not have six 
 children. 
 
184 SOCIAL liSrSUBANCB AND UNEMPLOYMENT. 
 
 I refer to this fact simply to show that I have tried to lead a con- 
 sistent life. I have not mouthed principles and convictions, I have 
 tried to live them. I was opposed to this graft and the extraordinary 
 profits of these private insurance companies, and I would not be 
 msured. My wife and my children when they were young had to 
 take their chances, the same as the wife of every man and the children 
 of workers have to take their chances. And they haven't a blooming 
 thing now. When I die they will have $550 from' the organization 
 which I am so proud of having helped to established. There is not 
 much more than S550 that the "old girl" will have when I shuffle off. 
 She will have to get along as best she can to make her lot with the 
 women of America and the wages of wageworkers. 
 
 Mr. Chairman and gentlemen, let me say just this one thing and I 
 shall stop. It is so easy you know for others in other walks of life 
 to have so little underst^anding that they would be willing to take 
 away the liberty and the freedom of the wage earners. You must 
 bear this in mind too. I have not made any attack upon the Socialist 
 Party. I have no desire to make it now. I am merely calling atten- 
 tion to it, as it has been presented by the representatives of the party 
 and take that as a basis for my statem'ent. But this I want you to 
 bear in mind. , Our friends, the Socialists, have a concept of govern- 
 ment in which there is no individual liberty. The concept of govern- 
 ment of which the Socialist dream is a government of governmental 
 control, of governmental regulation. I will concede this fact that 
 they would have in mind that the people ought to be the government, 
 and hence the people should control throu^ the government. Now 
 I am not going to take your time with a discussion of this — I will 
 not dignify it by calling it a philosophy — let me say that it may be a 
 scheme, or it may be a dream, but whatever it is, that is the idea, 
 and everything that will tend toward governmental control and regu- 
 lation conforms to the philosophy or the ideal or the dream. They 
 advocate the doing by the Government to-day of the things that will 
 tend toward that ideal. 
 
 Now I am not the author of very many books, nor am I regarded 
 as a statistician or an economist, but I have studied socialism, and I 
 have studied socalism from its most profound and recognized writers 
 and spokesmen. During my early manhood 1 sacrificed much time 
 in trying to learn to read the German language in order that I might 
 read the German liteiature, the best contributions to the study of 
 socialism, in the original. That was before the time when rich men 
 endowed that school of philosophy, and, therefore, before these works 
 were translated into the Enghsh language. 
 
 I referred during the recess to certain books published by German 
 socialists that these present day socialists here it seems have never 
 read* and I suggest that they might read them. I know what the 
 philosophy means, I know what they have in mind. Socialists advo- 
 cate a theory of the co.operative commonwealth and government 
 ownership of all means of production and distribution; the govern- 
 ment to be the thing, the ideal. To strengthen the state as Frederick 
 Howe says, is to devitahze the individual. I am not a pessimist. 
 
 _ _ _ growing and persistent 
 
 demand for better conditions, for a more rightful situation in the 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 185 
 
 imkistrial, political, arid social affairs of this country and of the 
 world. I have faith that the working people will better their condi- 
 tioti far beyond that which is to-day. 
 
 The poistion of the organized labor movement is not based upon 
 misery and poverty, but upon the right of the workers to a larger and 
 a constantly growing share ot the production, and they will work out 
 these problems for themselves. If the government by aiding the 
 people can contribute and will contribute toward this voluntary 
 movement for social insurance for the workers, it will have done 
 nothing to place an obstacle in the way of initiative on the part of the 
 toilers; will take away nothing of their rights and their liberty, and 
 the worker.5 will keep within themselves the power and control over 
 their lives and their work. 
 
 I am apprehensive that the attempts of government under the guise 
 of compulsory social insurance for tne workers in cases of unemploy- 
 ment, sickness, and disability will result in every Government agent 
 going into the homes and the lives of the workers as a spy. We have 
 enough already of spies and detectives coming into the lives and 
 workshops of the toilers. After centuries of struggles, during the 
 past 20 years we concentrated our efforts in an agitation that has gone 
 through the whole comitry to secure from the hands of Congress a 
 larger liberty of action than has ever been accorded to the working 
 people of any country on the face of the globe in the entire history 
 of the world. After years of struggling to secure these things we are 
 not going to let go, we are not going to submit. As I live, upon the 
 honor of a man, and realizing the responsibility of my words, I 
 would rather help in tlie inauguration of a revolution against com- 
 pulsory insurance and the regmation than submit." As long as there 
 is one spark of life in me, of my mentality, whatever that may be, 
 of my spirit, I will help in crystallizing the spirit and sentiment of our 
 workers against the attempt to enslave them by the well-meaning 
 siren songs of philosophers, statisticians, and politicians. We propose 
 to work out our problems day after day, week after week, and year 
 after year. We are not afraid. We are not running away from the 
 struggle. Nor is it fair to say that the men and women of organized 
 labor are the aristocrats of labor. 
 
 Let me give you just this little thought. You will find that every- 
 one of our friends who are opponents of our point of view and our 
 movement are always saying that we have never given attention to 
 unskilled workers. Do you know why that is ? The fact of the mat- 
 ter is that there are as many if not more unskilled workers organized 
 and in the American Federation of Labor than there are really skilled 
 workers. The fact is, Mr. Chairman, that when workmen and work- 
 women organize they pass from the common concept of unskilled 
 workers into the ranks of the skilled, because they have manifested 
 some little skill in organizing. What are hodcarriers and common 
 laborers? Skilled workmen? What are laborers in machine shops 
 and in fouAdries but common laborers? What are street car men 
 and conductors but unskilled workmen? Some have a little more 
 skill than others in the operation of a car or the collection of fares. 
 But they have organized, and as a consequence they decrease their 
 hours of labor and increase their pay. You hardly regard them as 
 among the unskilled. 
 
186 SOCIAL INSUBANCE ^.ND UNEMPLOYMENT. 
 
 I have alreadj" said we are giving every ounce of energy within our 
 power to help the unorganized to organize so that they may help 
 themselves, and the effort of the organized labor movement to in- 
 crease wages, shorten hours, improve conditions has not only its advan- 
 tages to the organized, but it is bound to have its influence in improv- 
 ing the conditions of the unorganized. 
 
 1 trust that the committee will report a resolution or tentative act 
 which I submit, providing for an investigation of this entire subject, 
 and that the committee will have in mind, and that Congress will 
 have in mind, the necessity for helping in ascertaining the facts, so 
 that if voluntary social insurance shaU be inaugurated under the 
 assistance or guidance or administration of the Government it may 
 be inaugurated, but there will be safeguards for the fundamental 
 principles of liberty and freedom of the workers to obtain which 
 they have given so many, many years of hard work and struggle and 
 sacrifice to attain. 
 
 I would like to ask you to permit Mr. Sullivan to speak for about 
 five minutes. 
 
 Mr. Keating. I find it will be necessary to limit the witness, 
 because the hour is so late. You can, perhaps, make your statement 
 in 5 or 10 minutes. 
 
 STATEMENT OF MK. JAMES W. SULLIVAN, GENEEAL LEC- 
 TURER, AMERICAN FEDERATION OF LABOR. 
 
 Mr. Sullivan. I shall begin with an aside. It may have been in 
 1.889 or 1890, the headquarters of the American Federation of Labor 
 being at 14 Clinton Place, when Mr. Gompers and I were one day 
 walking on Broadway, and the question of insurance came up. I 
 had always thought that insurance was a pretty good scheme. Mr. 
 Gompers expressed the same views of it then that he did to-day. 
 We didn't argue it out, but on that occasion, as on many others, 
 we agreed on mutual toleration. I have always thought that, on 
 the whole, it was better to insure. But I can bear testimony that 
 it is no new thing for Mr. Gompers to declare he would not insure. 
 
 There are three points I wish to make which affect the essence of 
 Dr. Rubinow's statement. 
 
 I. The matter of statistical presentation of the voluntary social 
 insurance results in the American labor organizations is a point not 
 understood by European statisticians. In the usual comparative 
 national statistical tables on this subject, printed in Great Britain, 
 in Germany, in France, in Italy, the United States is quite at the 
 end of the list in trade union benefits. Not only when Mr. Gompers 
 and I were together in Europe, but on many occasions European 
 labor officials and statisticians have asked me about our backward- 
 ness in this respect. It is a matter of the facts against stating the facts. 
 For, example, you have heard Dr. Rubinow say that in the American 
 Federation of Labor annual report the tables show for the national 
 unions the social insurance receipts have been annually only slightly 
 more than $500,000, and yet our own International TypograpnicaJ 
 Union alone spends nearly $500,000 a year in old age pensions and 
 death benefits. The explanation of these American Federation of 
 Labor tables is twofold: First, our unions are not strong on general 
 statistical statement, and, secondly, the benefits work is done in 
 
SOCIAL INSURANCE AND UNEMPLOYMENJ. 187 
 
 local unions rather than through the international unions, the local 
 unions not reporting to the international unions. That is a thing 
 the Europeans do not understand, as their benefits are administered by 
 their national organizations. , 
 
 II. As to the cost of living. Dr. Rubinow asserts in his book that 
 the cost of living had increased 1.54 per cent from the level of 1890- 
 1900 to 1913, and he tells us that these figures came from the Federal 
 Bureau of Labor Statistics. That is true. When the bureau got 
 up into the sixties — if my memory is correct, it wtoS 68 per cent 
 advance — I thought it was time to call its director's attention to its 
 tables of prices. I wrote to Secretary Wilson giving facts to show 
 that the tables were much in error. The most striking pomt in the 
 reply of the ofhcicils of the bureau to me was that they had intended 
 to reform their methods; had so decided before I wrote them. 
 
 The 154 per cent of r.dvance in prices in America was made up 
 on the statement of the cost of 14 articles, 8 of which referred to meat. 
 Now, everybody knew that meat was to go up in the United vStates 
 progressively as the open-range system of raising cattle in the West 
 was abandoned. Mr. Armour wrote a book in 1906 foretelling that 
 course of the market and the newspaper writer on economic ques- 
 tions foresaw it. Now, meat was the factor that mainly caused the 
 biKcau's percentage to rise. 
 
 As the doctor has said, these 14 items probably referred to al)out 
 50 per cent of the cost. In figuring the cost of living, eveii of the 
 working classes, the bureau statisticians did not take into considera- 
 tion the whole 100 per cent, but only that probable 50 per cent, this 
 being more or less subject to error. All that is in my correspondence 
 with the bureau officials, which I hope will be printed. I do not want 
 the impression to go abroad from here that we admit that the alleged 
 154 per cent was anything near well founded. It was not. And the 
 Secretary of Labor knows to-day that those statistics were not correct, 
 and that the whole comparison was not based on facts — proven, cold 
 facts. That is the nub of that whole comparison and argximent, 
 which has crumbled to pieces. We have all these doctors and pro- 
 fessors who wrote complimentary letters to Dr. Rubinow in deep 
 error. Long ago the decision was made by the labor men in this 
 country not to wait for the pronouncements of academicians before 
 acting for themselves in the affairs of trade unionism. If we had 
 waited for their advice and support, there would never have been the 
 American Federation of Labor of to-day. Thirty to forty years ago 
 learned economists were telling us of the impossibility of considerably 
 raising wages in spite of the laws of supply and demand or in tlie 
 absence of sufficiently increased production. 
 
 III. Lastly, through the courtesy of the doctor, I have a copy of 
 his book in my hands. I wish to direct your attention here to the 
 extent to which voluntary social insurance prevails throughout the 
 the world, as stated in the doctor's own compactly drawn up summary. 
 
 1. Accident compensation or accident insurance has been established practically 
 throughout Europe and throughout many British colonies. 
 
 Compensation commonly stands quite apart from the other features 
 of social insurance. Compensation is a right that belongs to the 
 workers in the operation of industry. It has been so accepted 
 
188 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 thi'oughout the United States by all the predominant forces in our 
 political parties, and of course by the American Federation of Labor. 
 
 2. Compulsory sickness insurance has been introduced in about one-half of the 
 large countries of Europe, namely, Germany, Austria, Hungary, Norway, Great 
 Britain, Servia, and Russia, and voluntarily subsidized sickness insurance in 
 France, Belgium, Denmark, Sweden, and Switzerland. 
 
 Mr. London. That was written before the British law was adopted ? 
 
 Dr. KuBiNOW. Roumania, Holland, and Great Britain since then. 
 
 Mr. Sullivan. Observe that France, Belgium, Denmark, Sweden, 
 and Switzerland, those highly civilized countries, have not accepted 
 compulsory sickness insurance. 
 
 3. Compulsory old-age insurance exists in Germany, Luxemburg, and France, and 
 old-age pensions in Denmark, Iceland, Great Britain, France, Australia, and New 
 Zealand, and voluntary subsidized State systems of old-age insurance in Italy, Belgium, 
 Servia and Spain. 
 
 Mark you again, the coimtries which have the voluntary forms.. 
 It was not easily possible for the doctor to put in his summary the 
 comparative failures, especially in France, of compulsory old-age 
 insurance. He has it noticed in his book further on. 
 
 4. Unemployment insurance by means of subsidies to workingmen's voluntary 
 organizations is rapidly spreading in large European cities, exists by national law 
 in Norway and Denmark, and the first compulsory unemployment insurance system 
 has been established in Great Britain. 
 
 Only partially in Great Britain — only in seven trades. (That is 
 my addition.) To show how far we are in this country from unem- 
 ployment insurance, I may relate this experience: As a member of 
 the executive committee of the mayor's committee on unemployment 
 in New York, I several times brought up the point that in their 
 voluntary insurance of unemployment certain municipahties of 
 Belgium and some in France and a few in Germany paid to the trade- 
 unions a percentage of what the unions had given to their imem- 
 ployed members. This is called the Ghent system. If a union gives 
 a thousand dollars in insurance, the city of Ghent pays to its treas- 
 ury five hundred. 
 
 In Great Britain, with 600,000 or 700,000 union members under 
 the volunteer system, one dollar in six is the subsidy to the unions. 
 But when it came down to the solid matter of recognizing the enor- 
 mous social work in unemployment being done by the 400,000 mem- 
 bers of the unions of the city of New York, the community showed 
 no readiness to adopt even the Ghent voluntary principles. This 
 indicates how far this country is from adopting any system of unem- 
 ployment insurance and by what slow degree it is necessary to proceed. 
 
 5. The first beginnings of a national system of widows' and orphans' pensions have 
 been made in Germany. 
 
 To conclude, I have been benefited greatly by attending this 
 hearing, Mr. Chairman, and have been pleased to near the views of 
 the advocates of compulsory insurance. I have no doubt everyone 
 here hopes that an agreement may be arrived at by which a biU 
 which it will be possible to pass in Congress will be agreed upon by 
 the different parties. I hope to have the assistance of Dr. Rubinow 
 in devising a voluntary system. Let us practice toleration and give 
 recognition to whatever good and practical points may be brought 
 forward. We of the trade-unions believe that these gentlemen sup- 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 189 
 
 porting Mr. London's bill have tread on thin ice in their statements, 
 in the form of statistics or otherwise which reflect on the efficiency 
 of trade-unionism, and that such statements will bring them un- 
 doubtedly into deserved criticism. 
 
 Mr. London. Just one question. Do you contend that there is no 
 increase in the cost of Hving ? 
 
 Mr. Sullivan. I did not say that. 
 
 Mr. London. That is all. 
 
 Mr. Keating. It is appropriate that these hearings be closed by 
 affording a lady the opportunity to have the last word. 
 
 ADDITIONAL STATEMENT OF MISS JULIET STUART POYNTZ. 
 
 Miss PoYNTZ. I should simply like in conclusion to pour a little 
 oil upon the troubled waters that we have seen here to-day; to try 
 to see just where we stand on this subject. 
 
 In spite of the heat that has been in evidence at times here, it seems 
 that the situation is remarkably satisfactory. Everybody who has 
 appeared before this committee favors an investigation of social 
 insurance. There have been differences as to the type of social 
 insurance which might ultimately be put into operation. That only 
 goes to indicate the necessity of stiU more counsel and investigation 
 of the subject, and I believe that while Mr. Gompers expressed his 
 violent antipathy to the compulsorj^ insurance, he would be willing 
 to have the subject looked into, would you not, Mr. Gompers ? 
 
 Mr. GoMPEES. You are pouring oil splendidly on the troubled 
 waters. Proceed. 
 
 Miss PoYNTZ. What we want in this subject is liglit, and we don't 
 want to shut out light from any direction. I was to point out also 
 that while this bill is introduced by Mr. London, one of the dangerous 
 kind and undesirable kind of animals from the point of view of 
 various people, a Socialist, nevertheless, the people who have ap- 
 peared before the committee for the biU, for the idea of investigation 
 of social insurance, have been of all political and economical per- 
 suasions. You will find here a Republican like Mr. Miles Dawson, 
 and I believe there have been Democrats, have been SociaUsts, all 
 political parties represented, and all parts of the labor movement also. 
 
 I may say that while it is true that there have been those who are 
 identified with social work there have been those who have appeared 
 and spoken for labor. I spoke from that standpoint, for 1 am an 
 elected official of an organization comprising 50,000 workers, and my 
 sole interest is from the standpoint of labor. And I will say also for 
 the benefit of Mr. London and Dr. Rubinow and the other socialists 
 who are here, that they are here not to prove a theory, not to estab- 
 lish a dogma, but to work for labor, as the socialists always do work, 
 for labor. That is not always well understood, and it is just as well 
 to have it put in the record here. If the socialist movement meant 
 anything but the labor movement, I am sure that many people who 
 spoke here for this biU would not have spoken for it. I say that 
 with the hope that this revelation of my sympathies will not preju- 
 dice the committee against what I had to say, because I can assure 
 them that their ideas are not as trade-unionists or socialists, but as 
 general students of these phenomena. 
 
190 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 So that as a matter of fact we have had all elements in the com- 
 munity. We have had every different kind of political opinioti, 
 every different kind of labor opinion, united in a demand for an 
 investigation into social insurance. If Mr. Gompers does not approve 
 certain features in Mr. London's bill, and if Mr. Dawson does not 
 approve of certain features, those are after all matters of detail. 
 The principle of an investigation into social insurance is approved on 
 all sides, and it seems that if this bill comes up for hearing it would 
 have very strong support from all elements of the country, and you 
 would have a chance to pass it. 
 
 Therefore, in conclusion, I want to register my plea that the com- 
 mittee will consider this matter carefully, and that the matters that 
 have been brought up here as side issues will not be given a great 
 deal of importance. We have had discussion of matters that do not 
 enter into the question whether we shall have social insurance or not. 
 That is the primary question, and that is the essential point on which 
 I hope you will reach a decision. 
 
 Mr. Keating. The committee thanks the witnesses for their 
 attendance. 
 
 (The committee, at 6.15 o'clock p. m., adjourned subject to the 
 call of the chairman). 
 
 APPENDIX A. 
 
 Extracts from Preliminary Report to the Social Insurance Committee op 
 THE National Convention op Insurance Commissioners. 
 
 [By Rufus M. Potts, insurance superintendent, State of Illinois, chairman.] 
 
 PURPOSE OP THIS report. 
 
 Among the most important and widely discussed questions before the people of the 
 United States to-day are those concerning the adoption of various plans of social 
 insurance. The general subject of social insurance as well as its various branches has 
 been extensively studied and investigated in the United States by the Department 
 of Labor, by different private organizations, and by many different individuals, 
 particularly social workers and professors of sociology and policital economy in our 
 universities. A number of these have made more or less complete reports and other 
 publications giving the results of their investigations. Nevertheless, the knowledge 
 of the general public concerning social insurance is very meager, excepting in regard 
 to workmen's compensation. Before progress can be made toward solving the com- 
 plicated problems involved in social insurance, it is necessary that the general public 
 be interested in and educated concerning it, for, in the final analysis, it is only by the 
 public gaining a full and coiTect understanding of the subject that constructive 
 legislation thereon will be possible in the United States. Without such legislation, 
 nothing can be accomplished. Before our citizens and voters can be interested in 
 social insurance, they must know something about its fundamental principles. 
 
 A large number of European countries have had in operation different systems of 
 social insurance for varjdng periods of time. The records and results of these experi- 
 ments are chronicled in numerous Government documents, but these are diffuse and 
 voluminous and not easily obtainable by the ordinary reader. 
 
 PLAN OP REPORT. 
 
 I have, therefore, prepared in plain and simple language so that the average person 
 may easily read and understand it. and submit to the consideration of all citizens of 
 the United States the following brief review of the origin, progress, and present 
 status of social insurance. Ip this are treated, first, the economic and social condi- 
 tions which have brought about circumstances which gave rise to the demand for 
 different branches of social insurance. This is followed by condensed accounts of 
 
SOCIAL IXfe^UHANCE AND UNEMPLOYMENT. 191 
 
 the efforts made in different countries and by different methods to meet this demand. 
 From this I hope persona not familiar with this important subject may gain sufficient 
 knowledge to become earnestly interested in it, and also that it may lead them to 
 study it further in the more extensive books, Government reports, and other docu- 
 ments cited in which the details are more fully treated than is possible here. 
 
 DEFINITION OF SOCIAL INSURANCE. 
 
 The tenn ' ■ social insurance " is of comparatively recent origin and its meaning has 
 not yet become entirely definite, although it has almost entirely replaced the older 
 name, "workmen's insurance." It has been used by a few authors as including all 
 those forms of insurance relating to contingencies affecting persons as contrasted with 
 those affecting property, but such use would include common kinds of life insur- 
 ance as well as some other forms which are not usually considered social insurance. 
 
 The following probably states as clearly as is possible in a definition the idea intended 
 to be conveyed by most writers using the term : 
 
 Social insurance is a plan for making provision against the economic losses happening 
 to wage earners and other persons of moderate resources and their dependents by 
 reason of accident, sickness, maternity, disablement, old age, and unemployment by 
 means of funds made up of regular contributions, either voluntary or compulsory, 
 from the assured, their employers, and the State, or some of them, out of which in- 
 demnity for such losses are paid, and in this way distributing such losses throughout 
 the entire community instead of allowing them to crush the unfortunate individuals 
 to whom they happen. It may also include other social welfare features. 
 
 The following are other definitions given by different writers: 
 
 "Social insurance, in the American sense, may be said to comprehend all efforts, 
 methods, and means to provide, in conformity to insurance principles, a sufficient 
 pecuniary protection of wage earners and others in moderate circumstances against 
 the economic consequences of industrial accidents, disease, whether general or occu- 
 pational, incapacity for work, whether temporary or permanent, partial, or complete, 
 but the result of accident, disease, or physical infirmity, and finally, dependence in 
 old age resulting from sickness, infirmity, or even improvidence and personal neg- 
 lect." (Frederick L. Hoffman, in Conference of Charities and Corrections, 1914, 
 p. 349.) 
 
 "In brief, 'social insui'ance'may be defined as the method of organizing relief by 
 which wage earners or persons similarly situated and their dependents or survivors 
 become entitled to specified pecuniary or other benefits on the occurrence of certain 
 emergencies. The right to these benefits is secured by means of contributions from 
 wages or by the fact of the insured person's employment or by his citizenship or 
 residence in the country." (24th An. Rept. Com. Labor, 1909, vol. 1, p. 4.) 
 
 A recent writer gives the following: 
 
 "The term 'social insurance ' is as yet very little understood by the vast majority of 
 English-speaking nations. The first' necessary step, therefore, is not so much a tech- 
 nical definition as a description or, rather, circumscription of the term, and the dis- 
 tinction between social and ordinary commercial insurance may be best emphasized 
 by first indicating the characteristics common to both." * * * "There is the 
 comparatively small class of large and small property owners who are able not only to 
 appreciate all of the economic advantages of insurance but to pay for them . " * * * 
 "But there is the very much larger class of wage earners or persons in similar economic 
 conditions whose need of insurance is very much greater, because the hazards are many 
 and grave, but who, nevertheless, are unable to meet the true cost of insurance con- 
 ducted as a business. To provide them with such insurance or some equivalent form 
 of protection has become the concern of the modern progressive state, and this is 
 properly the field of social insurance." (Rubinow, Social Insurance, 1913, pp. 3 
 and 10.) 
 
 A very good description and definition of social insurance is gi^-en in a recent pub- 
 lication of the United States Public Health Service: 
 
 "As soon as certain economic risks have been recognized as menacing the wage- 
 worker and his family, the insurance method of meeting the risks has been used. 
 These economic risks may be generally classified as those causing the death of the 
 breadwinner in a family, the physical inability of the breadwinner to perform labor, 
 and his inability to find employment. For a large proportion of the wage earners 
 of any coustiy these risks arc too great to be provided for by individual effort and 
 too little appreciated to be provided for even if the individual were able to do so. 
 Hence, socialprovision through the distribution of loss has been found to be necessary. 
 This kind of social provision has come to be known as 'social insurance. '" (Bulletin 
 No. 76, Public Health Service, p. 48.) 
 
192 SOCIAL IKSUEANCE AND UNEMPLOYMENT. 
 
 NEW NAME PROPOSED. 
 
 I believe that it is very desirable to have a new name for the kinds of insurance which 
 are now collectively termed "social insurance." When considered collectively these 
 were at first called workmen's insurance, because originally devised to meet the 
 emergencies occurring in the life of working classes. The term workingman, however, 
 as commonly used, means one who works at manual labor for wages. But such insur- 
 ance as worfcingmen need is also needed and used by many others than manual wage 
 earners, such as farmers, independent shopkeepers, and artisans, and the great and 
 increasing classes of clerks and professional men and women. For these reasons the 
 term "workingmen's insurance" has dropped out of use, being rejjlaced by social in- 
 surance. But this is not a good name, because the association causing its use is vague 
 and far-fetched, and for the general public at least means something connected with 
 the doctrines of the political party known as "Socialists." 
 
 Every person's initial attitude toward any new thing is determined by what its 
 name ntieans to him. It this meaning is vague or something he is opposed to, it will 
 require much time and effort to educate him to a favorable consideration. But if 
 the name has a pleasant or attractive association, then he will himself investigate and 
 wish full information concerning it. What is desirable above all in relation to a uni- 
 versal system of insurance for the benefit of the whole people is that they should all 
 be led to carefully consider and investigate its uses and advantages. In no other way 
 can its successful adoption be secured under the popular government prevailing in 
 the United States. 
 
 For these and other reasjns I believe it is highly desirable to discard the term 
 "social insurance," and I propose instead the term "welfare insurance," which I 
 regard as much more desirable in every way. In the first place, it is accurate, for 
 it describes correctly and fully the aim of all kinds of insurance inrluded, which is 
 the maintenance of each individual member of our citizenship in the condition or 
 state of well-being. In the second place, it has no misleading associations. 
 
 The word "fare" has two meanings. One is "food" — good fare means good food; 
 the otlier (its signification in welfare) is state or condition. "Welfare insurance," 
 then, is the use of insurance principles or methods for the purpo.«e of furnishing the 
 pecuniary resources necessary to maintain each individual citizen of the United 
 States in a state of well-being throughout the various emergencies of life which' wo\ild 
 otherwise destroy their well-being and replace it by -poverty and suffering. It does 
 not mean the invention or discovery of any new kind or kinds .of insurance. It is 
 simply the use of old and well understood insurance methods for the purpose of mak- 
 ing preparation for the results of accidents, sickness, premature death, maternity, 
 disablement, old age, and involuntary unemployment. A single one of these is suf- 
 ficient to bring want and destitution into the life of any person who has no provision 
 against them either by an accumulation of property or by insurance. 
 
 I believe that the substitution of the term welfare insurance" instead of "social 
 insurance " would be of immense service in bringing about the adoption of this kind 
 of insurance and urge this change by all interested in making more secure the welfare 
 of all the people of t.he United States through insurance methods. 
 
 GENBHAL THEORY OP INSURANCE. 
 
 The general reader not familiar with the theory of insurance will better appreciate 
 the advantages and adequacy of insurance methods to make provision for the casual- 
 ties and emergencies of human life after a brief explanation of the fundamental theory 
 of insurance. It originated in the middle ages as a method of protecting merchants 
 and shipowners against banki'uptcy, by shipwreck, pirates, and other perils of the' 
 sea. This was accomplished by an agreement between the merchants and the adven- 
 turer, by which, in consideration of the payment by him of a part of the expected prof- 
 its the others agreed t« share any loss which might occur. The same principle was 
 subsequently employed to protect owners against loss by fire, lightning, hail, tornado, 
 or burglary, and individuals or their dependents against accident, sickness, or death, 
 as well as other contingencies. The mathematical basis of insurance can perhaps be 
 best understood from the example of fire insurance. 
 
 Experience extending over long periods of time has demonstrated that every year, 
 everywhere that men live, some of the buildings in which they live, together with 
 their contents, will be burned up by fire. When statistics are accumulated covering 
 large territories, it is found that, taking a certain area, the number of fires occurring 
 annually will be approximately the same. Suppose that t!ds approximate number 
 of annual fires is 1 house burned in each group of 300 houses and that each of these 
 houses was worth $3,000. Then if at the beginning of each year each house owner 
 
SOCIAL INSUKANOE AND UNEMPLOYMENT. 193 
 
 paid $10 intx) a common fund, there would be provided $3,000, which, paid to the 
 owner whose house happened to burn, would enable him to rebuild his house. Thus 
 by parting with $10 each householder would be rendered secure (or insured) against 
 a possible loss of the total value of his building by fire. The plan effects a distribu- 
 tion of loss. It substitutes for each owner a relatively small certain loss (payment) 
 of money for the ever-present chance or possibility of great loss bv fire, ternied the 
 "fire risk." 
 
 This is to the great advantage of all the property owners, for each can much better 
 endure parting entirely with a small sum than sustain the apprehension throughout 
 the whole year that he may suffer total loss of his house by fire. Exemption from the 
 resulting continual fear and dread is cheaply purchased by the relatively small con- 
 tribution to the fund out of which the individual victim of fire is indemnified. 
 
 This example does not take into account the absolutely necessary cost of collecting, 
 safekeeping, and disbursing the fund, nor is the number in the group mentioned 
 nearly large enough to bring into operation the "law of average" in relation to the 
 occurrence of fires, but it is sufficient to show clearly the very simple fundamental 
 principle on which fire insurance and all other insm-ance as well is based, which is 
 technically termed "distribution of risk," or better perhaps, "distribution of loss." 
 The plan of the theoretical example given above is the Isasis of all legitimate insurance . 
 
 The theory of insurance is sound on mathematical, scientific, psychological, and 
 social ground . Its enormous and constantly increasing use, in modern times, prove its 
 benefits even though it has unfortunately usually been carried on by commercial cor- 
 porations only, on a cumbersome competitive plan, so that the cost of the premiums 
 over and above the amount actually returned to the policyholders suffering loss has 
 been exceedingly and unjustifiably large. 
 
 It would be hard to frame a more impressive and correct statement of the usefulness 
 and scope of insurance under present-day conditions than that stated by the late Chief 
 Justice Ricks, of the supreme coiut of Illinois, in the course of a decision involving the 
 question of the interest of the public in the business of insurance.' 
 
 ' ' The business of insurance is the outgrowth of time and the demands and necessities 
 of the public. It extends into and covers almost every branch of business and all the 
 relations of life, and is applied to all the hazards of business in life where a basis of risk 
 and compensation can be estimated. In all the stages of life, from the cradle to the 
 grave, it asserts an interest and offers succor and aid. In the business enterprises, 
 whether by land or sea; in the possessions of men, from a pane of glass to the mansion 
 or the factory; in his undertakings involving every chance, misfortune, moral turpi- 
 tude, or the act of God, it demands admission and promises indemnity, reward, or gain. 
 It poses as the faithful and zealous trustee of the earnings and savings, and promises to 
 the widow and orphan a guaranty against misery and want. It intercedes between 
 principal and agent, master and servant, contractor and owner, and insures against 
 loss from almost any and every cause. It is a public necessity that deals in its own 
 credit for a cash consideration from the assured, and is stamped with public interest, 
 and must yield obedience to necessary and proper regulations by the State in the 
 exercise of it police power." 
 
 One of the main aims of social insurance is to replace charity, whose gifts to any man 
 able to work are morally and industrially harmful by a plan of assistance and relief 
 founded on self-help and social justice. 
 
 NEED FOR SOCIAL INSURANCE. 
 
 After one understands what social insurance is the question naturally arises in hie 
 miftd whether there is in the United States, at the present time, any need for such a 
 system, and if so, to what extent it is needed, and the best method by which it may 
 be put into practical operation. 
 
 The happiness and prosperity of the whole population of the Nation — the greatest 
 good of the greatest number — should be the sjipreme purpose of all political and social 
 institutions. Even from the mere financial standpoint the people of the Nation are 
 Its chief asset, and human efficiency is the basis of all industrial or financial achieve- 
 ments. 
 
 Any governmental institution, any social plan, such as social insurance, which gives 
 good promise of contributing to the welfare of the almost incomprehensibly great 
 number of men, women, and children composing our population is worth the most 
 careful and earnest consideration of every patriotic citizen. 
 
 Is then the condition of the mass of our people such that betterment is needed? 
 
 1 North American Ins. Co. «. Yates, 214 111. 272 (275). 
 39501—16- 13 
 
194 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 On the answer to this question depends our conclusions as to the necessity and 
 desirability of social insurance in the United States. It must be admitted that the 
 welfare of the masses of the population of the civilized nations of the world is (or rather 
 was, prior to the present great war) higher than ever before in the history of the world. 
 It is possible that there was a century or two in the so-called Augustinian golden age 
 of Rome, when the welfare of large numbers of the subjects of that Empire, then 
 aljnost universal, was relatively high: but when it is remembered that many, perhaps 
 a majority, of its populajtion were slaves, there is no comparison whatever of the welfare 
 of the masses of the people at the present day with even that of the golden age of the 
 greatest Empire of the past. At the present time (excluding again the great war) in 
 all civilized nations the life of the individual is safer, while food and clothing are more 
 abundant than ever before; many of the great infectious and contagious diseases have 
 been almost entirely eliminated and others are partially curbed, so that the average 
 span of human life is considerably lengthened; education is free and universal; oppor- 
 tunity to travel is open to greater numbers than ever before, and there are many 
 pleasures and even luxuries within the reach of the common people which were 
 unattainable even by the wealthy in former times. 
 
 There are no direct statistics in existence showing the extent of poverty in the dif- 
 ferent ages of the world's history. All that can be obtained are inferences drawn from 
 statistics on other subjects and the conclusions of students of economic history. These 
 agree that the poverty of to-day is less than it was a century ago in civilized nations, 
 and that of a century ago less than the previous age, and so on back to the time when 
 the common people were serfs bought and sold with the land. Those formerly main- 
 taining that povprty is increasing are now abandoning their contention, but only 
 make the complaint that the workers are not securing a fair share of the great increase 
 of wealth, on account the existence of an imperfect and inequitable system of dis- 
 tribution of the products of "labor. That the system of private property in land and 
 chattels and the capitalistic industriral system is not the cause of poverty, as some- 
 times alleged, is proven by the fact that in savage nations, where there is practically 
 no private property, the worst poverty exists, and that in India and China, where 
 the capitalistic industrial system is practically nonexistent, there is ten-fold worse 
 poverty than in nations where that system is in extensive operation.' 
 
 The best treatment of this subject which we have found is by Prof. Simkhovitch, of 
 Columbia University, in his work on "Marxism ■;;. Socialism" (1913). in which he 
 devotes Chapter VII to the subject of "increasing misery." He cites numerous 
 statistics ancl reports of commissions in the United States and other countries which 
 prove, beyond any doubt, that instead of poverty increasing among the masses during 
 the past century it has been decreasing. For example, wages in general in Great 
 Britain measured in goods that can be purchased rose from 45 in 1830 to 100 in 1900, 
 these proportions being those of an "index figure" made up of the combined prices 
 of ordinary foods and similar necessaries of life. The Massachusetts Bureau of Labor 
 Statistics (16th .An. Rept. (1885), pp. 454 and 455), show that wages in that State 
 increased from 1830 to 1860 52.3 per cent, while prices during the same period only 
 increased 9.6 per cent. This refutes the contention sometimes inade that although 
 wages measured in money have risen, that when measured in purchasing power they 
 have decreased. 
 
 See also report of Aldrich committee on retail prices and wages (Rept. 986, 52d 
 Cong., 1st sess., 1892). 
 
 "If we compare the poverty of to-day with that of one century ago, we find all 
 authorities agreeing that it has decreased both absolutely and relatively.' 
 
 A recent writer familiar with the socialistic propaganda ' referes to the socialists 
 abandonment of the claim that poverty is increasing, or that the poor are growing 
 poorer and the rich are growing richer, although this claim has been one of their 
 chief assets; 
 
 "Now, as ever, the leaders of the Socialist movement rely for propagandist success 
 upon two main factors — poverty and discqptent. It is impossible, however, to ignore, 
 much less to stem, the influences which are slowly but surely diminishing the sum 
 and degree of poverty, and this hope of Socialism is tacitly regarded as lost, though 
 the Marxian fiction of the accumulating penury of the masses is still used for con- 
 troversial purposes." 
 
 Viewing only these facts, one unacquainted with the actual conditions of life to-day 
 among the common people might imagine that there was little demand for improve- 
 ment, and that modem life was generally satisfactory, and that all the people at all 
 
 1 Sellgman, Economics, p. 687; G-unton, Wealth and Progress, p. 2. 
 
 ! Catholic Enc, Vol. XII; p. 328. 
 
 ' W. H. Dawson, Evolution of Modern Germany, p. 452. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 195 
 
 time enjoyed bountiful fare and an ample supply of other necessities. Any consider- 
 able observation and experience of real life, however, shows that unfortunately this 
 is not true, but that there unhappily prevails throughout every country of the civilized 
 world, at the present day, an immense amount of poverty and the bitter suffering 
 which results therefrom; and this is true even of the United States, the most favored 
 country in the world, both as to natural resources, the intelligence of its people, and 
 the freedom embodied in its system of government. This poverty and suffering and 
 the discouragement and despair which it causes, lower the vitality, and result in a 
 marked lessening of the working capacity and efficiency of all men and women 
 afflicted by it. This produces a reduction in the efficiency of the whole nation, the 
 same as vice and disease. Organized society should promote national efficiency not 
 only by battling against disease and vice, but also by preventing and relieving pov- 
 erty to the fullest extent possible. 
 
 Estimates of the actual numbers affected by poverty in the United States are very 
 widely divergent, ranging all the eay from one to ten million. This extraordinary 
 difference is due in the first place to the fact that little or no attention has been paid 
 to the collection of such statistics in the United States, and in the second place to the 
 fact that the estimates were made by persons of different temperament, having diver- 
 gent sympathies and holding different definitions of poverty. Without stopping to 
 define poverty or secure accurate figures, these estimates are at least sufficient to 
 show that there is much poverty; that there is suffering from it; that we should ear- 
 nestly endeavor to eliminate or at least lessen as far as possible this misery which af- 
 flicts great numbers of our people and lessens our economic and national efficiency. 
 
 Knowing then the existence of widespread poverty and resulting misery and eco- 
 nomic loss, before we can devise useful and effective remedies therefor we must con- 
 sider what are its sources and causes. Social workers find that there are many causes, 
 but they do not agree as to all of them, nor as to their relative importance. For our 
 purpose it is sufficient that they can be grouped into two general classes: 
 
 (1) Those which are the results of the imprudent or evil conduct of the individual 
 himself — such as idleness, drunkenness, vice. There are personal to each man and 
 can not be removed by any system of social insurance. So far as betterment of the 
 poverty resulting from these causes is concerned, it can only be accomplished by 
 rational charity and personal reform from religious teachings, or other means of regen- 
 erating the fallen. Indiscriminate financial aid from any soiu:ce furnished to those 
 whose poverty arises from these causes only tends to perpetuate such poverty. If 
 aid to such is attempted through compulsory insurance it is very unjust to the workers 
 and the thrifty, because it deprives them of a part of the proceeds of their labor to 
 feed and clothe idlers, drunkards, vicious, etc. 
 
 (2) The other broad division of the causes of poverty are those which occur without 
 the personal fault of the sufferer, such as accident, sickness, premature death of father 
 or husband, disablement, preventing ability to labor, involuntary unemployment, 
 old age, etc. The statistics which will be given below in the detailed consideration 
 of these various causes of poverty will show that the bitter sea of poverty which sub- 
 merges millions of our people is fed largely from these nonpersonal sources. 
 
 The almost immediate effect of these causes in producing want and suffering arises 
 in large part from the immense increase both relative and absolute in the number of 
 men employed in manufactures and other industries which has separated more than 
 half of the workers of the world from the soil and has herded them into industrial 
 towns and cities where, when any interruption of employment does come, since all 
 food must be brought from a distance and purchased at nigh prices, want and suffering 
 begin as soon as there is a cessation of income. In the ages preceding the industrial 
 revolution, when the masses of the population lived directly on the land, although 
 there was a greater percentage of population in a state of poverty, still actual suffer- 
 ing for food did not begin as quickly because there was nearly always some store of 
 food on hand, and the standard of living was not so high, so that the pinch of poverty 
 was not felt as quickly as at present, nor was its effect so severe. 
 
 It is only the poverty which is the result of causes unavoidable from the standpoint 
 of the individual and- occurring without his personal fault which can properly be 
 prevented or alleviated by social insurance. For this class of poverty financial 
 assistance through social insurance will not cause any debasement or degredation 
 of the recipient. But, on the other hand, by enabling him to meet the inevitable 
 emergencies and misfortunes of life, will upbuild and strengthen the character of the 
 recipient, because the provision is the just result of his own foresight and self-denial 
 in contributing to create at least a part of the fund out of which the insurance relief 
 is paid. 
 
 Upon a careful examination of the great mass of printed discussion on the subject of 
 social insurance it will be found that a large part of the conflict as to the benefits and 
 
196 SOCIAL IKSUKANCE AND UNEMPLOYMENT. 
 
 advisability of social insurance arises from the fact that there has been an unconscious 
 confusion of these two classes of causes of poverty. On the one hand, we have those 
 who, being strongly impressed with the effects of personal faults, believe that there is 
 little poverty except as the result of willful idleness, drunkenness, and indulgence in 
 vice and immorality, by the worker, and that, therefore, social insurance would be 
 unjustified if it was attempted to thereby relieve poverty in general. On the other 
 hand, there are many tender-hearted social workers and students who, being controlled 
 mostly by their emotions, when they see suffering from poverty, entirely lose gight of 
 the fact that much of it is only the inevitable result of the sufferer's conduct, and 
 strongly urge that this suffering must be relieved, whatever the cause may be. They 
 consequently demand that society as a whole, give this relief, by a complete system 
 of social insurance sufficient to afford instant and ample relief to every sufferer with- 
 out the mortification of an appeal to charity, basing their argument on the undeniable 
 fact that a considerable part of the existing misery is not due to the fault of the sufferer. 
 Although their motives are benevolent, it is contended that the social effect of the ful- 
 fillment of their plans would in the end be much worse than merely continuing present 
 agencies for relief, because it would result in the certain pauperization of additional 
 large numbers of our population who will inevitably become and remain miserable 
 degraded parasites; but that the suffering but honest worker will usually be abl§ to 
 struggle up again to the self-supporting state with such assistance as charity can furnish. 
 
 CAUSES OF MISERY. 
 
 Keeping these general considerations in mind, let us turn to a brief consideration of 
 the most important of the immediate causes of misfortune, see what their results are to 
 the honest worker under present-day conditions, and also examine the statistics to see 
 what the extent of each is and compare them with those of other countries, in an 
 effort to arrive at some conclusion as to what are the best methods of relieving or pre- 
 venting suffering, taking all things into account. 
 
 ACCIDENTS. 
 
 In order to know whether there is any need for accident insurance, it is necessary to 
 first obtain some idea of the total number of both fatal and nonfatal accidents in the 
 United States, and ascertain what proportion of these are industrial accidents, that is, 
 connected with the occupation of the sufferer, and what part result from other causes. 
 In relation to the nonfatal accidents we should know further what proportion pro- 
 duces total disablement, what partial disablement, and the total number of days' work 
 lost on account of those in which there was a recovery. 
 
 Although exact accident statistics are lacking for some parts of the United States, 
 much attention has recently been paid to information covering accidents, so that 
 there is now available reliable statistical information concerning accidents, from which 
 trustworthy estimates and deductions therefrom can be made for the whole United 
 States. 
 
 FATAL ACCIDENTS. 
 
 The latest general accident statistics available for the United States are those given 
 in Bulletin 157, United States Biueau of Labor Statistics, issued March, 1915. In 
 this it is estimated (p. 12), as the average of statistics covering several years, that in 
 the whole United States there occur annually about 82,520 accidental deaths, of 
 which 63,880 were males and 18,640 were females. 
 
 These tremendous totals immediately command the painful attention of every man 
 and woman who has had sufficient experience in life to realize what an enormous 
 amount of economic loss and of grief and suffering is caused to the victims and their 
 families, as well as to the community in general, by this immense number of fatal 
 accidents. Since these figures include all fatal accidents annually occurring in the 
 United States, it is, of course, true that some of these victims either had no dependents 
 or possessed sufficient means, so that their dependents were provided for by property 
 inherited from them, but the number of the latter is very small when compared with 
 the total. 
 
 The next question is. What part of these accidents were the result of the victim's 
 occupation? 
 
 This is a matter of estimate only. Said Bulletin 157 states that 25,000 of these fatal 
 accidents may be "safely assumed" (j). 17) to be occupational or industrial accidents. 
 Doubtless a part of these had no families to suffer on account of their death, and a 
 much smaller proportion had sufficient means so that their removal did not mean 
 poverty to dependents. Fortunately, there are some Illinois statistics which afford 
 
SOCIAL I^'SUEANCE AXD LTNEMPLOYMEKT. 197 
 
 means for a fairly reliable estimate of tlie surviving dependents of victims of industrial 
 accidents. In 3,084 fatal industrial accidents in Illinois, 1908 to 1912, inclusive, 
 there were 4,872 dependents.' Assuming the same ratio in the 25,000 estimated 
 annual fatal industriaraccidents, in the United States, there would be 39,500 depend- 
 ents left annually without means of support. 
 
 NONFATAL ACCIDEN'TS. 
 
 There are not at present available any complete statistics giving the nimaber of 
 nonfatal accidents for the whole United States, but a fair estimate may be gained by 
 using the ratio between fatal and nonfatal accidents found to exist in Illinois. This 
 proportion should apply fairly well to the whole United States, for practically all 
 kinds of industrial activity are found in Illinois, and general vital statistics show that, 
 under similar conditions, approximately the same ratio holds between fatal and 
 nonfatal accidents in different States and Nations. In that State, during the period 
 1908 to 1912, there occiured 3,084 fatal industrial accidents and 25,696 nonfatal acci- 
 dents, which caused the loss of seven days or more time, the fatal accidents amount- 
 ing to 1.2 per cent of the nonfatal. The latter affected 28,626 dependents.^ Applying 
 these proportions to the estimated 25,000 annual fatal industrial accidents in the 
 United States we obtain the estimate of 208,301 nonfatal accidents, each causing 
 more than seven days loss of time, affecting 232.050 dependents for the whole of the 
 United States. 
 
 It would be interesting and instructive to compare these figures ■with those of other 
 civihzed nations, but this can be done directly only in a few instances, for the reason 
 that the basis on which accidents are reported are usually entirely different. 
 
 The German statistics include only those accidents which cause the victims to lose 
 over 13 weeks; the French statistics those over 3 days' loss of time, while the Austrians 
 give only accidents causing 4 weeks' loss of time. The Russian figures are perhaps 
 nearest those of the United States, as from them can be obtained the accidents causing 
 more than 7 days' loss of time. The total of such industrial accidents in 1906 was 
 33,250, and in the same year there were 367 fatal industrial accidents.' Consequently, 
 the fatal accidents are 1.1 per cent of the nonfatal accidents as compared with 1.2 per 
 cent of accidents of the same severity in Ilhnois. In Italy for the year 1902 the total 
 number of industrial accidents causing over 5 days' loss of time was 57,617. During 
 the same period the number of industrial accidents resulting in death was 430, or 
 0.75 per cent of the nonfatal accidents.* When account is taken of the fact that the 
 nonfatal Italian accidents included all those of over 5 days' duration, as compared 
 with those of over 7 days' duration in Russia and UUnois, it will be seen that the 
 ratio in Italy between fatal and nonfatal accidents must approximate very closely 
 that in the United States and in Russia. Consequently, the Russian and Italian 
 accident statistics agreeing as nearly as can be expected with those in the United 
 States, confirm the trustworthiness of the estimates made above for the total number 
 of nonfatal industrial accidents annually occurring in the United States. 
 
 Some statistics for German accidents are given also in said.bulletin 157, Department 
 of Labor Statistics (p. 143). From these the following interesting comparison can be 
 made: In 1912 the total number of German workers insured under the compensation 
 laws of that nation was 10,178,577, among whom there occurred 6,594 fatal accidents, 
 which is in the proportion of 65 fatal accidents per 100,000 workers. Taking the esti- 
 mate of 25,000 fatal industrial accidents occurring annually among 33,500,000 workers 
 in the United States, we have a proportion of 74 fatal industrial accidents to 100,000 
 workers in the United States. These proportions are close enoi-ch to show that the 
 causes restilting in industrial accidents operate approximately the same throughout 
 the civilized world, but that among the German workers insured against accidents 
 the rate of fatal industrial accidents is somewhat lower than the general fatal industrial 
 accident rate in the United States. 
 
 CAUSES or INDUSTRIAL ACCIDENTS. 
 
 In order to arrive at an intelligent conclusion as to what is the most appropriate 
 and equitable method for affording relief to workers and their dependents from the 
 result of industrial accidents, it is necessary to consider the causes of such accidents. 
 
 1 Bulletin 157, U. S. Bureau of Labor Statistics, p. 59. 
 
 2 U. 8. Bureau of Labor Statistics, Bulletin 157, p. 59. 
 
 3 See Social Insurance, Rubinow, p. 67. 
 < lb., p. 67. 
 
198 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Very indefinite and conflicting ideas prevail among the general public as to the 
 causes of such an enormous number of accidents. Many dogmatic assertions are 
 frequently made, such as: "The sad but inevitable result of the use of machinery"; 
 "the carelessness and ignorance of workmen"; "the present-time capitalistic organ- 
 ization of industry"; "the negligence, selfishness, and heartlessneas of employers," 
 etc. Unfortunately, concerning this feature, the statistics are not yet extensive, so 
 that it is not impossible for honest differences of opinion to exist concerning it. The 
 following tables give the most recent figures concerning the causes of accidents: 
 
 Percentage distribution of industrial accidents according to causes. 
 [Social Insurance, Kubinow, p. 70.] 
 
 Motors 
 
 Transmiasion ot power 
 
 Machinery and implements 
 
 Elevators, cranes, etc 
 
 Steam boilers, etc 
 
 Explosives 
 
 Burning material, etc 
 
 Falling objects 
 
 FEklls from ladders, etc 
 
 Handling heavy oDjects 
 
 Driving animals, etc 
 
 Hand tools 
 
 Miscellaneous 
 
 Total 
 
 Trance. Germany. 
 
 Per 
 
 cent. 
 
 0.24 
 
 .74 
 
 8.07 
 
 .88 
 
 .12 
 
 .16 
 
 5.76 
 
 16.76 
 
 17.64 
 
 19.08 
 
 7.42 
 
 7.80 
 
 16.33 
 
 100. 00 
 
 Per 
 
 cent. 
 
 0.64 
 
 1.20 
 
 17.50 
 
 5.03 
 
 .18 
 
 .64 
 
 3.53 
 
 15.08 
 
 11.30 
 
 14.02 
 
 8.27 
 
 4.10 
 
 18.51 
 
 Italy. 
 
 Per cent. 
 
 0.42 
 
 .68 
 
 9.35 
 
 .38 
 
 .11 
 
 .14 
 
 6.09 
 
 17.95 
 
 14.64 
 
 100.00 
 
 7.52 
 42.72 
 
 Russia. 
 
 Per cent. 
 
 0.39 
 
 1.90 
 
 27.78 
 
 2.03 
 
 .62 
 
 .04 
 
 5.04 
 
 7.70 
 
 3.38 
 
 17.11 
 
 1.55 
 
 15.07 
 
 17.39 
 
 100.00 
 
 General causes of compensated industrial accidents, experience of German industrial 
 accident associations, 1885 to 1908. 
 
 [Bulletin 157, Bureau Labor Statistics, p. 145.] 
 
 Cause. 
 
 Motors and transmission of 
 power 
 
 Lifts, cranes, etc 
 
 Boiler and steam-pipe explo- 
 sions 
 
 Explosives 
 
 Heat, acids, steam, gases, etc. 
 
 Collapses or breakdowns 
 
 Falls from ladders, stairs, etc. 
 
 Compensated acci- 
 dents. 
 
 Number. 
 
 210, 5.58 
 36, 716 
 
 3,672 
 
 9,993 
 
 33, 689 
 
 16.i, 410 
 
 162, 074 
 
 Per 
 
 cent. 
 
 21.01 
 3. ,66 
 
 .36 
 
 1.00 
 
 3.36 
 
 16. 51 
 
 16.17 
 
 Cause. 
 
 Loading, lifting, and carrying 
 
 Teaming, vehicles, etc 
 
 Railways 
 
 Shipping 
 
 Animals 
 
 Tools 
 
 All other? 
 
 Total 
 
 Compensated acci- 
 dents. 
 
 Nurriber. 
 
 131,240 
 61, 808 
 40,355 
 10, 089 
 13,968 
 71,911 
 .61,792 
 
 1, 002, 174 
 
 Per 
 cent. 
 
 13.10 
 6.17 
 4.03 
 1.0! 
 1.39 
 7. IS 
 5.17 
 
 100. 00 
 
 Causes of fatal accidents., under the Massachusetts workmen's compensation act, July 1,. 
 
 1912, to June 30, 191S. 
 
 [Bulletin 157, Bureau Labor Statistics, p. 51.] 
 
 Cause. 
 
 Railroad equipment 
 
 Falls 
 
 Vehicles 
 
 Hand labor 
 
 Elevators 
 
 Electricity 
 
 Street railways 
 
 Boiler explosions and burns 
 
 Fatal ac- 
 cidents. 
 
 119 
 66 
 43 
 37 
 33 
 25 
 20 
 15 
 
 Cause. 
 
 Excavating 
 
 Cranes 
 
 Miscellaneous (unclassified) . 
 Asphyxiation, di'owning, etc 
 All otner causes 
 
 Total 
 
 Fatal ac- 
 cidents. 
 
 14 
 11 
 ~l\ 
 10 
 70 
 
 474 
 
SOCIAL INSUEAJSrOE AND UNEMPLOYMENT. 
 
 Causes of industrial accidents in Wisconsin, July 1, 1911, to June SO, 191S. 
 [Bulletin 1B7, Bureau of T.abor Statistics, p. 81.1 
 
 199 
 
 • 
 
 All injuries. 
 
 Fatal injuries. 
 
 
 Number. 
 
 Per 
 
 cent of 
 total. 
 
 Number. 
 
 Per cent 
 fatal in- 
 juries 
 were of 
 all inju- 
 ries. 
 
 Ihf otors — engines 
 
 12 
 24 
 67 
 62 
 29 
 35 
 29 
 13 
 14 
 59 
 
 11 
 
 75 
 49 
 32 
 14 
 51 
 49 
 29 
 
 175 
 65 
 14 
 
 247 
 12 
 16 
 22 
 
 308 
 39 
 26 
 30 
 11 
 22 
 36 
 39 
 
 293 
 
 1,102 
 
 29 
 
 78 
 
 128 
 38 
 15 
 59 
 
 337 
 
 600 
 
 182 
 42 
 
 381 
 
 192 
 21 
 
 0.23 
 .46 
 
 1.28 
 
 1.18 
 .55 
 .67 
 .55 
 .25 
 .27 
 
 1.13 
 .61 
 .27 
 
 1.43 
 .94 
 .61 
 .27 
 .97 
 .94 
 .55 
 
 3.34 
 
 1.05 
 .27 
 
 4.71 
 .23 
 .31 
 .41 
 
 5.8R 
 .74 
 .60 
 .57 
 .20 
 .41 
 .69 
 .74 
 
 b.m 
 
 21.03 
 
 .55 
 
 1.49 
 
 2.44 
 
 .73 
 
 .29 
 
 1.13 
 
 6.43 
 
 11.45 
 
 3.47 
 
 .80 
 
 7.33 
 
 3.66 
 
 .40 
 
 
 
 Shafting 
 
 3 
 
 , 1 
 
 2 
 
 12 5 
 
 Gears 
 
 
 Belts 
 
 3 2 
 
 Pulleys 
 
 
 Ropes and cables , 
 
 
 
 
 
 
 Barkers '. 
 
 
 
 Boring machines 
 
 
 
 Calenders — paper machines 
 
 1 
 
 ? 
 3 
 1 
 2 
 
 1 7 
 
 Conveyors 
 
 6 3 
 
 Drills 
 
 
 
 
 Com shredders . 
 
 2 
 
 
 6 3 
 
 Com huskers 
 
 
 
 
 
 Lathes 
 
 
 
 Planers 
 
 
 
 
 
 
 Rolls 
 
 
 
 Sanders 
 
 
 
 Saws 
 
 
 
 
 
 
 Shapers 
 
 
 
 
 
 
 
 5 
 2 
 
 1.6 
 
 
 6.1 
 
 Hoists 
 
 
 
 1 
 2 
 2 
 6 
 2 
 
 3.3 
 
 Boiler explosions 
 
 18 2 
 
 "Escape of steam from pipes 
 
 9.1 
 
 Electricity 
 
 16.7 
 
 
 5.1 
 
 T-nffamTnfi.'hlp.j hnf., oi" <^0""'^^i^'*i snhiataTipps 
 
 
 Collapse, fall, or hit by objects , 
 
 40 
 
 i" 
 
 s 
 
 6 
 2 
 4 
 2 
 1 
 5 
 1 
 1 
 5 
 1 
 
 3.6 
 
 
 
 Falls from ladders 
 
 -t.~3 
 
 
 6.3 
 
 
 13.2 
 
 
 13.3 
 
 Palls into excavations 
 
 6.8 
 
 Miscellaneous falls . . . 
 
 .6 
 
 
 .2 
 
 
 2.7 
 
 Animals — bite, kick, etc - 
 
 2.4 
 
 
 .3 
 
 
 2.6 
 
 Causes not specified 
 
 4.8 
 
 
 
 Total 
 
 5,241 
 
 100.00 
 
 112 
 
 2.1 
 
 
 
 These tables show that direct statement as to where the responsioility of accident 
 lies which is not usually attempted in statistics. This is because the question of 
 responsibility is very frequently in dispute, the decision depending on interest, 
 viewpoint, etc., of the various jjarties. This is the identical question which the 
 courts are called upon to determine in accident litigation. Consequently, it could 
 not be expected that mere compilers of statistics would be able to accomplish much 
 in this line. This lack of statistics is not as important as might seem on first thought, 
 because the workmen's compensation laws for the purpose of furnishing relief to the 
 victims of industrial accidents attach little importance to the question of locating 
 a responsibility for the accident. In most of them, as we shall see later, compensa- 
 tion is given the victim unless the accident happens from his deliberate act and 
 design, out the exception is sometimes also made of those accidents which occur 
 
200 
 
 SOCIAL INSURANCE AND TJlSrEMPLOYMENT. 
 
 through the serious or wilful misconduct of the employee. The only statistics bear- 
 ing directli- on the question of responsibility appear to be the following: 
 
 Analysis of 410 fatal accidents occurring in Pittsburgh.^ 
 
 Per cent. 
 
 Accidents in which — 
 
 Victim's fault was indicated 
 
 Fellow workman's fault was indicated 
 
 Foreman's fault was indicated 
 
 Employer's fault was indicated 
 
 None of these were indicated 
 
 > Crystal Eastman: Work Accidents and the Law, p. 86. 
 ResponsiMUty for industrial accidents in Germany.' 
 
 Cause. 
 
 Fault of employer 
 
 Fault of injured employee 
 
 Fault of both employer and employee . 
 
 Fault of fehow employee 
 
 General hazard of industry 
 
 Other causes (chance, etc.) 
 
 Percentage of all acci- 
 dents due to cause 
 specified in— 
 
 20.47 
 26. S6 
 4.61 
 3.40 
 44.96 
 
 1897 1907 
 
 17.30 
 29.74 
 4.83 
 5.31 
 41.55 
 1.27 
 
 12.06 
 
 41.26 
 
 .91 
 
 5.94 
 37.65 
 
 2.18 
 
 2 Social Insurance, Ruhinow, pp. 74 and 75. 
 
 Analysis showing in detail the meaning of the employer's fault and the employee's fault 
 
 in the abor.e tahle. 
 
 1897 
 
 Accidents due to the employer's fault: 
 
 Defective apparatus 
 
 Absence of safety appliances 
 
 Absence of proper regiilations 
 
 Per cent. 
 7.28 
 11.03 
 2.16 
 
 Fer cent. 
 7.15 
 7.82 
 1.84 
 
 10.47 
 
 Fer cent. 
 6.40 
 4.69 
 1.97 
 
 16.81 
 
 12.06 
 
 The various methods adopted and proposed for dealing with the results of industrial 
 accidents and the arguments for and against the same will be given fully in a subse- 
 quent part of the report. 
 
 NONINDUSTHIAL ACCIDENTS. 
 
 If, as stated above (p. 196), there are annually 82,520 fatal accidents in the United 
 States, and accepting the estimate of 25,000 of these as industrial, there must be 
 57,520 fatal nonindustrial accidents yearly. Some of these nonindustrial accidents, 
 of course, occur to the working men and women, who are exposed also to industrial 
 accidents. The working classes are at least as liable as the general population to 
 accidental death and injury on railroads and street cars, and froiQ automobiles, light- 
 ning, cyclones, fires, and other casualties in their homes, accidental falls, drownmg, 
 violence by law breakers, and other kinds of injuries which destroy mankind in 
 general. It is also evident that a fatal or disabling nonindustrial accident is just as 
 j)roductive of loss, suffering, and poverty to a worker and his or her dependents as a 
 similarly severe industrial accident, but that there exists no right to secure any 
 compensation from employers. Of course, some of these nonindustrial accidents 
 happen to children, to single or aged, or wealthy persons so that in such fatal accidents, 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 201 
 
 the legally recoverable iinancial loss is confined to medical and funeral expenses 
 and m nonfatal accidents is confined to the victim himself. 
 
 There are no statistics which afford an analysis of the 57,520 fatal nonindustrial 
 accidents, but -we can secure some particulars from the following: ' In the first place, 
 during the three years, 1910, 1911, and 1912, the average annual fatal accidents to 
 those under 15 years of age were 9,859, to those 15 to 19 years of age, 2,778, of which 
 it is safe to assume that not more than half or 1,389 were to persons earning wages or 
 a livelihood in other ways, but that few of them had others dependent on them for 
 support. The average annual fatal accidents to those over 65 years or of unknown 
 age were, 7,482, of whom, however, so few earned wages or livelihood that they can 
 all be considered as not supporting dependents. Of the remaining 37,401 it is not 
 unreasonable to assume that including all nonworkers, wealthy, paupers, insane, 
 defectives, criminals, women supported by their husbands, etc., that one-third of 
 the accidents were without economic effect. Consequently, we arrive at the estimate 
 that approximately 24,934 nonindustrial fatal accidents have economic effects which 
 require accident insurance to protect the fainilies of the victims, for such families 
 need protection as badly as the families of victims of fatal industrial accidents. 
 
 Owing to the absence of statisticSj the total number of nonindustrial accidents in 
 the United States not fatal in their results can only be estimated. Applying the 
 method used (p. 197) to estimate the number of nonfatal industrial accidents, we 
 obtain 479,258 as approximately the number of nonfatal, nonindustrial accidents pro- 
 ducing more than seven days disablement occurring annually in the Utited States. 
 Assuming that of this number the same proportion had ecoromic effects as in the case 
 of fatal norindustrial accidents, we get the immense rumber of approximately 
 530,018 dependents affected in the United States annually. Of course these figures 
 are only estimates, but they are conservative estimates and the truth is very probably 
 above rather than below them. They are lower than other estimates.^ 
 
 Unfortunately statistics concerning the amount ard results of sickness in the whole 
 of the United States do not exist, the collection of such figures having been neglected 
 by most of the States. By making estimates, however, based on the statistics of cer- 
 tain States, particularly Massachusetts, ■which has long collected«vital statistics, and 
 confirming these by the sickness statistics of certain other countries 'where they have 
 been carefully collected we find that the social problems arising out of sickness are 
 even greater than those from accidents. This is recognized by all students of sociology 
 and practical social workers, who agree that sickness is the greatest cause of poverty 
 and suffering in all civilized nations, including the United States. 
 
 Prof. Irving Fisher,' estimates on the basis of complete vital statistics collected in 
 England that for each death Tthich occurs annually there are, on the average, two 
 persons constantly sick. The indications are that the rate of sictness in the United 
 States is higher than in England, but applyirg the ratio found to exist in England to 
 the United States, where about 1,500,000 persons die every year, there must be about 
 3,000,000 persons seriously ill all of the time. This means an average of 13 days 
 sickness per annum for each inhabitant. He further estimates that in the United 
 States the number of persons constantly suffering from tuberculosis reaches 500,000, 
 of whom probably about half are totally incapacitated, -while the remainder are able 
 to earn only about half the ordinary wages. The Massachusetts health statistics 
 further show that at the present time 4 per cent of the population of Massachusetts is 
 on the sick list all the time, with an average loss each year to each individual in the 
 State equal to two weeks annually, amounting altogether to $50,000,000 annually. 
 
 A recent writer * estimates that the economic loss caused by tuberculosis is at least 
 $250,000,000 per annum in the United States. This writer also estimates that typhoid 
 fever, which, according to the census of 1900, causes 33,000 deaths annually, inflicts 
 a yearly loss of $212,000,000. These estimates are indorsed by Prof. Seager, a recog- 
 nized authority on social subjects. 
 
 ' Bulletin 167, tJ. S. Bureau Labor Stat., p. 18. 
 
 2 Eubinow, Social Insurance, p. 55, estimates the annual number of industrial accidents in the United 
 States at somewhere between one and .two million, but this estimate seems to include all accidents, bow- 
 ever trifling in character, and regardless whether any loss of time was caused or not. 
 
 3 National Vitality, Its Waste and Conservation, in the Report of National Conservation Commission 
 (Nov., 1908). 
 
 « Earl Mayo, Outlook, vol. 98, p. 3 (May 13, 1911). 
 
202 SOCIAL INSXJBANCE AND tTNEMPLOYMBNT. 
 
 Assuming that the amount of sickness at various ages corresponds with the number 
 ■of deaths at that age, then there must be more than 1,200,000 men and women between 
 25 and 65 years of age sick at all times. These estimates are confirmed by the elabo- 
 rate statistics on this subject which have been kept in Germany, where, among 
 13,000,000 persons insured against sickness, there were in 1908, over 4,200,000 cases 
 of sickness, and the number of days lost were 104,000,000 or eight days for each person 
 insured, or 20 days for each case of sickness.' 
 
 There were in the United States, according to the 1910 census, 33,500,000 occupied 
 men and women. Applying the proportions of sickness according to the German 
 ■statistics to our working population, we have the following results: 
 
 Estimated number of cases of sickness annually 13, 400, 000 
 
 Estimated total number of days of sickness 284, 750, 000 
 
 Estimated loss in wages at an average of $2 a day for six-sevenths of 
 
 the above number of days lost ''■ 488, 142, 852 
 
 Turning from the consideration of the ravages or particular diseases to the effect of 
 disease in general as a cause of premature death and thereby decreasing the average 
 length of life, we gain an idea from another standpoint of the unnecessary loss of 
 human life by disease. This conception is gained from the great lengthening of the 
 average span of human life which has been accomplished during the past century, 
 by the advances and improvements which have been made in the prevention of a 
 part only of the diseases which shorten human life. 
 
 In Geneva the records go back over three centuries, showing the following average 
 length of life: Sixteenth centiu-y, 21.2 years; seventeenth century, 25.7 years; eight- 
 ■eenth century, 33.6 years; 1801 to 1883, 39.7 years. It is impossible to obtain Amer- 
 »ican life tables that go far enough back to show an increase in the average length of 
 life equal or similar to those available in Eiu-opean countries. From available data, 
 however, It appears that in the States of Massachusetts and New Hampshire, there 
 has been an increase in the average length of life from 35 years in 1789 to 40 years in 
 1855, and to 45 in 1897.' According to a recent writer on the subject of "Prevention 
 of Disease,"* 42.3 per cent of deaths which occur could be postponed and 50 per cent 
 of cases of serious illness prevented. Accepting these estimates as reliable, the average 
 of human life is capable of being prolonged 12.3 years. 
 
 Because preventive measures have already accomplished considerable in the way of 
 lengthening life by partialljr preventing disease and because thfere is a reliable promise 
 of still more being accomplished in the future in this line, we must not jump at the 
 conclusion that by prevention alone can distress and destitution on account of disease 
 be wholly eliminated, so that insurance against the effects of sickness will no longer 
 be necessary. The remarkable results which have already been accomplished and 
 are at present in progress toward lengthening the average human life by preventive 
 measures have been effective mostly by lowering the. excessive death rate of infants, 
 among whom, owing to the use of impure milk and other improper food, the mortality 
 has in the past usually been enormous among the poorer classes. Education of mothers, 
 the supplying of better milk, the conquest of diphtheria and other infantile diseases, 
 and elementary hygienic measures have reduced the infant death rate immensely. 
 This reduction has been the chief factor in the great lengthening in the average period 
 of human life shown by the statistics. The favorable results which have been ob- 
 
 1 Memorial on Industrial Diseases prepared by a committee of experts and presented to the President of 
 the United States, Sept. 29, 1910, reprinted in American Labor Legislation Review, vol. 1, No. 1, p. 125. 
 This memorial was signed by eminent medical experts and is conservative and as reliable as any estimate 
 possibly can be. 
 
 2 A recent bulletin of the Public Health Service in which the estimate was made hi a different way is 
 nevertheless in close agreement with the estimate given above as to the total number of days sickness 
 aimually in the United States. An entirely different basis was used in relation to the amount of loss of 
 wages so that the figures for that feature are much larger than the above. 
 
 "It has been tentatively stated that each of the 30,000,000 workers in the United States loses on the average 
 about nine days every year on account of sickness alone. This does not take into consideration the effects 
 of sickness upon his own vigor and efficiency, or upon the welfare of his family, or upon the efficiency of 
 the industry in which he is engaged. The estimate of nine days is a preliminary one based upon an investi- 
 ^tion made for the United States Commission on Industrial Relations of nearly a million workers in repre- 
 sentative establishments and occupations in this country. While the more complete statistics that are 
 now being compiled may cause some revision of this estimate, it is interesting to note that it very nearly 
 coincides with the German and English figures for over 26,000,000 industrial workers, which show an average 
 of eight to nine days of wage at $2 and the cost of medical attention at SI per day, the annual loss to the 
 30,000,000 wage earners on account of the nine days of siokne.ss would be over $800,000,000. This leaves 
 out of consideration the losses due to death and to decrestse in efficiency which follows illness . It also leaves 
 out of consideration the effect upon the family when the breadwinner is disabled." (Bulletin No. 76, Pub- 
 lic Health Service, p. 6.) 
 
 ' Irving Fisher, National Vitality, Its Waste and Conservation, in the Report of the National Conserva- 
 tion Commission (Nov., 1908), p. 038, el seq. 
 
 < Sci. Am. Sup., vol. 75, p. 402. 
 
SOCIAL INSURANCE AND UNEMPLOyMENT. 203 
 
 tained by preventive measures agtainst typhoid fever, \-ellow fever, malaria, and 
 tuberculosis have also contributed llargely to this result. 
 
 On tlie other hand, there are certain diseases which show an increase under modern 
 conditions.' The statistics collected by the United States Census Bureau show that 
 while the number of deaths from tuberculosis, pneumonia, diarrhea, and enteritis 
 (under 2 years— infantile disorders), typhoid fever, diphtheria; and croup have been 
 decreasing, the number of deaths from whooping cough, scarlet fever, and measles 
 have remained about stationary during the past 12 jrears, but that the number of 
 deaths from organic heart diseases, endocarditis, nephritis (Bright's disease), cerebral 
 hemorrhage (apoplexy), cancer, and influenza have shown marked increases during 
 the same period. Furtherraore, the number of insane pei'sons in the United States, 
 who are sufferers from what is fundamentally a nervous disease, is estimated to exceed 
 250,000 constantly, and is on the increase. 
 
 "The death rate has been lowered and the average span of human life correspond- 
 ingly lengthened. Deaths from typhoid fever, smallpox, infectious diseases of 
 childhood, and tuberculosis have been reduced. The amount of sickness, on the 
 other hand, has not been controlled to any appreciable degree." ^ 
 
 SICKNESS FROM INDUSTRIAL DISEASES. 
 
 The most familiar and striking diseases which result from occupation are those 
 which occur in industries in which use is made of such deadly poisons as arsenic, 
 phosphorus, mercury, and lead. An industry using arsenic in any form is liable to 
 produce in the workers the well-known effects of this ancient and fatal poison. When 
 yellow phosphorus was used in matchmaking it produced a horrible necrosis, usually 
 in the bones of the face, commonly called "phossy jaw." Lead fumes in smelters 
 or extended contact with white lead and other lead pigments produce the painters' 
 colic, a serious disease if not properly treated. Some of the mercurial compounds, 
 such as corrosive sublimate_, are among the most deadly poisons known, while others 
 cause the teeth to fall out. Besides these there are other industrial substances, such 
 as ammonia, aniline dyes, carbon dioxid, carbon monoxid, calcium hypochlorite, 
 wood alcohol, oxalic acid, carbolic acid, turpentine oil, nitroglycerin, etc., which, 
 although not so deadly, are nevertheless capable of causing serious disorders among 
 workers in industries using them. It has been found that certain indi^'iduals are 
 much more susceptible than others to the effects of different poisons. What is com- 
 paratively harmless to one may make another seriously ill. • 
 
 Besides the effects of posions there are certain other diseases caused or at least 
 favored by certain industries, the most notable example of which is the influence of 
 dusty trades in "bringing on tuberculosis and also the bad effects suffered by workers 
 in brass foundries and some other metal industries, and the disease caused by working 
 in increased air pressure in submarine excavations, etc. There are other disorders, 
 such as those resulting to salesgirls on account of excessive standing; harmful results 
 of long-continued night work, etc. 
 
 It is very often difficult to determine whether a given disease should be held to be 
 the result of occupation or not. On the one side are those who would only admit as 
 occupational diseases those caused by well-known poisons such as phosphorus, arsenic, 
 and lead fumes, or the tuberculosis of some kinds of leather and stone workers, or 
 compressed-air disease. Extremists, on the other side, claim that modern industry is 
 responsible for nearly all of the illness among working men and women. Beginning 
 with those sicknesses where there is no question as to the effect of the occupation, the 
 possibilities of injury diminish until we come to those industries which have no 
 special effect in causing any particular kind of disease in the workers. 
 
 In regard to all occupational diseases the most important thing is pretention. In 
 a few instances it may be necessary to make radical changes in the industry, such 
 as the substitution of nonpoisonous red phosphorus in the manufacture of matches 
 for the dangerous yellow phosphorus. Usually, howe^-er, if thorough precautions are 
 taken as to cleanliness and removal of fumes and dust, by power ventilating systems 
 and the use of respirators in some cases, occupational diseases can be alinost wholly 
 avoided. There will ne\-ertheles6 remain a few instances, such as" the disease from 
 working in air under heavy presEure for which in the nature of things the only pre- 
 caution possible is the selecting of men physically hardy and as little susceptible as 
 possible to the effects of the conditions. 
 
 ' statistical Chart, U.S. Census Bureau, 1913. 
 
 2 Pamphlet "The Reporting of Disease,"— Louis I. Dublan (statistician ot the .Metropolitan Lite Insur- 
 ance Co., New York.) 
 
204 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Although no American statistics are available to show the influence of occupation 
 on sickness, still results can be demonstrated by statistics of other industrial nations, 
 because it is not likely that there would be great difference in the effect of a given 
 occupation causing industrial diseases in different nations. 
 
 The following figures taken from the records of the Leipzig sick insurance fund, 
 and which appear to be the most reliable detailed statistics available, show the fol- 
 lowing facts: 
 
 Industries, 
 
 MALES. 
 
 Stone- working 
 
 Cement and lime 
 
 Building trades 
 
 Metal working 
 
 Printing, pubTishing, etc '. 
 
 Glass, porcelain, and pottery. 
 
 Paper 
 
 Chemical industry 
 
 Leather and ."simifar products 
 
 Agriculture and forestry 
 
 Transportation 
 
 Food and drink 
 
 Wood and cut materials 
 
 JFats, oils, varnishes, etc 
 
 Gas works 
 
 Textiles 
 
 Hotels and restaurants 
 
 Cases of 
 sickness 
 per 100 
 persons 
 
 per 
 annum. 
 
 58.2 
 65.8 
 51.7 
 49.6 
 32.4 
 44. ,5 
 39.4 
 49.4 
 37.7 
 46.0 
 44.8 
 43.4 
 3S.8 
 41. T 
 59.9 
 40.6 
 32.5 
 
 Sick days 
 per one 
 person 
 
 per 
 annum. 
 
 17.5 
 
 13.6 
 
 11.7 
 
 11.1 
 
 11.1 
 
 10. S 
 
 10.9 
 
 10.7 
 
 10.7 
 
 10.2 
 
 9.S 
 
 9.6 
 
 9.2 
 
 9.1 
 
 9.0 
 
 8.9 
 
 Industries. 
 
 MALES— continued. 
 
 Clothing and cleaning 
 
 Musical and scientifif instru- 
 ments 
 
 Hides, leather, etc 
 
 Engineers and firemen 
 
 OJIice emjiloyees 
 
 FEM.MES. 
 
 Textiles 
 
 Parer 
 
 Printing and } ublishing 
 
 Agriculture and forestry 
 
 Clothing and cleaning 
 
 Hotels and restauisints 
 
 Office employees 
 
 Cases of 
 sickness 
 per 100 
 persons 
 
 per 
 annum. 
 
 31.7 
 36.0 
 35.3 
 
 .^5.2 
 50.4 
 60.8 
 41.0 
 40.9 
 21.4 
 
 Sick days 
 per one 
 person 
 
 per 
 annum. 
 
 8.1 
 7.7 
 7.4 
 5.8 
 
 19.3 
 16.3 
 l.i.8 
 14.2 
 12.4 
 12.2 
 7.0 
 
 According to Prof. Irving Fisher,' the following table gives the death rate of males 
 per 1,000, according to occupations for the year 1900: 
 
 Mercantile and trading 12. 1 
 
 Clerical and oflBLcial 13. 5 
 
 Professional 15. 3 
 
 Laboring and servant 20. 2 
 
 which indicates that the working class is most subject to disease, because the larger 
 number of accidents occurring to its members, does not account for nearly all of the 
 difference in the death rate. 
 
 LOSS TO WORKING CLASSES BY DISEASES OF ALL KINDS. 
 
 The Commission on Industrial Diseases estimates that the total loss to American 
 workingmen on account of all kinds of illness is $366,000,000 of lost wages and 
 $285,000,000 for medical aid, etc., making the enormous total of over $650,000,000 for 
 33,500,000 wage earners.^ This would be an average of about $20 per annum for each 
 wageworker. If we only consider the average for all workers, it would amount to 
 3 to 4 per cent of his annual earnings, but when we consider only the workers who are 
 actually sick during a year, and that the average<iuration of each case is about 20 days, 
 then the average loss to the working men actually sick is from 6 to 8 per cent of their 
 wages. 
 
 UNEMPLOYMENT. 
 
 In connection with unemployment, the all important question is as to the number 
 of workers unemployed and the reason for such unemployment. Unfortunately, 
 however, there is an almost entire lack of statistics in the United States concerning 
 unemployment. Even with all the facilities at the -command of the United States 
 
 1 National Vitality, Its Waste and Conservation, in the Report of the National Conservation Commission, 
 p. 645. 
 
 2 Reprinted in American' Labor Legislation Review, vol. 1, No. 1, p. 125. 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 205 
 
 Departmeiit of Commerce, including its separate Bureau of Labor Statistics, it is 
 obnged to say: ' 
 
 "To the frequent question as to the amount of unemployment in this country, 
 the. reply must be made that the statistics do not make possible any estimate of the 
 number of unemployed persons in the United States at any time." 
 
 And again: ^ 
 
 "Trustworthy unemployment statistics do not exist in the United States." 
 
 Owing to these conditions, all that can be done is to present such statistics of limited 
 areas as are available in the belief that these will give some indications of the condi- 
 tions in other parts of the United States. 
 
 In the State of New York, the labor unions have kept statistics of unemployment 
 aimong their members for a number of years. These have been combined and pub- 
 lished by the New; York Department of Labor, as shown in the following tables. It 
 wdU be noted that in the first table, which only gives the percentage unemployed on a 
 particular day shown, the percentages of unemployment are given both for all the 
 unions and for certain unions selected by the New York department as being repre- 
 sentative. In the second table the percentages gfven are the total amount of time lost 
 which is much more instructive than simply the numbers unemployed on certain 
 days: ' 
 
 Number and percentage of members of labor unions idle in the State of New York at end of 
 March and September , 1867 to 1911. 
 
 
 Idle at the end of March. 
 
 Idle at the end of September. 
 
 Year. 
 
 Number in 
 all unions. 
 
 Percentage 
 
 in all 
 
 unions. 
 
 Percentage 
 in repre- 
 sentative 
 unions. 
 
 Number in 
 all unions. 
 
 Percentage 
 
 in all 
 
 unions. 
 
 Percentage 
 in repre- 
 sentative 
 tuiions. 
 
 1897 
 
 43,654 
 38,857 
 31, 751 
 44,336 
 42, 244 
 36,710 
 41,941 
 
 101,886 
 54,916 
 37, 237 
 77,269 
 
 138, 131 
 74,643 
 62,851 
 96, 608 
 
 30.6 
 21.0 
 18.3 
 20.0 
 18.5 
 13.6 
 12.1 
 27.6 
 15.1 
 9.9 
 19.1 
 35.7 
 21.1 
 16.1 
 20.3 
 
 
 23,230 
 22,485 
 
 9,590 
 31,460 
 18, 617 
 18,377 
 33,063 
 36,605 
 17,903 
 21,673 
 42, 658 
 80,676 
 36,968 
 63,106 
 50,390 
 
 -* 
 
 13.8 
 
 10.3 
 
 4.7 
 
 13.3 
 
 6.9 
 
 5.7 
 
 9.0 
 
 9.8 
 
 4.8 
 
 6.7 
 
 10.5 
 
 22.5 
 
 10.3 
 
 13.6 
 
 10.8 
 
 
 1898 
 
 
 
 1899 
 
 
 
 1900 
 
 
 -^ . . . . ^ 
 
 1901 
 
 
 
 1902. . 
 
 17.3 
 17.6 
 27.1 
 19.2 
 11.6 
 18.3 
 37.5 
 23.0 
 22.6 
 25.6 
 
 6.3 
 9.4 
 12.0 
 6.9 
 6.3 
 12.3 
 24.6 
 14.5 
 12.5 
 11.2 
 
 1903 
 
 1904 
 
 1905. 
 
 1906 
 
 1907 
 
 1908 
 
 1909 
 
 1910 
 
 1911 
 
 Perdntage of members of labor unions idle throughout the quarter specified in the State of 
 New Yorh as reported by the secretaries of all unions in the State, 1897 to 1911. 
 
 Year. 
 
 During first 
 quarter. 
 
 During third 
 quarter. 
 
 Year. 
 
 During first 
 quarter. 
 
 During third 
 quarter. 
 
 Number. 
 
 Per 
 cent. 
 
 Number. 
 
 Per 
 cent. 
 
 Number. 
 
 Per 
 cent. 
 
 Number. 
 
 Per 
 cent. 
 
 1897 
 
 35,381 
 18,102 
 22,658 
 22,895 
 26,841 
 16,776 
 19,.S10 
 65,710 
 
 24.8 
 10.1 
 13.1 
 10.1 
 11.3 
 6.2 
 6.5 
 14.6 
 
 10,893 
 9,734 
 4,790 
 
 12,926 
 8,341 
 6,291 
 
 12,670 
 9,175 
 
 6.6 
 5.7 
 2.3 
 6.4 
 3.1 
 1.9 
 3.3 
 2.4 
 
 1906 
 
 31,638 
 22,746 
 55,624 
 101,466 
 50,477 
 28,411 
 46,021 
 
 8.7 
 6.5 
 13.8 
 26.3 
 14.3 
 7.3 
 9.8 
 
 7,491 
 7,364 
 10,490 
 46,117 
 15, 823 
 15,486 
 12,725 
 
 2 
 
 1898 
 
 1906 
 
 
 1899. 
 
 1907 
 
 2 5 
 
 1900 
 
 1908 
 
 12 8 
 
 1901 
 
 1909 
 
 4 4 
 
 1902 
 
 1910 
 
 3.3 
 
 1903.. . . 
 
 1911 
 
 2.7 
 
 1904 
 
 
 
 
 
 1 Bulletin 109, U. S. Bureau of Labor Statistics (1912), p. 6. 
 
 2 Bulletin 172, U. S. Bureau of Labor Statistics (1916), p. 6. 
 
 3 Bulletin 109, U.S. Bureau of Labor Statistics (1912), pp. 19, 21. 
 
206 
 
 SOCIAL INSTJBANCE AND XTlSrEMPLOYMENT. 
 
 The next table gives similar particulars as to unemployment in the State of Massa- 
 chusetts, and the last is a compilation of the reports of unemployment made to the 
 American Federationist, the official organ of the American Federation of Labor, the 
 data being from voluntary reports from all parte of the United States.' 
 
 Number and membership of labor organizations reporting and number of members and 
 percentage of membership idle at end of quarters specified, Massachusetts, 1908 to 1911. 
 
 Quarter ending- 
 
 Number reporting. 
 
 Unions. 
 
 Members. 
 
 Idle at end of quarter. 
 
 Members. 
 
 Percentages. 
 
 Mar. 31, 1908. 
 June 30, 1908. 
 Sept. 30, 1908. 
 Deo. 31, 1908. 
 Mar. 31, 1909. 
 June 30, 1909. 
 Sept. 30, 1909. 
 Dec. 31, 1909. 
 Mar. 31, 1910. 
 June 30, 1910. 
 Sept. 30, 1910. 
 Dec. 31, 1910. 
 Mar. 31, 1911. 
 June 30, 1911. 
 Sept. 30, 1911. 
 Dec. 30, 1911. 
 
 256 
 493 
 651 
 770 
 
 777 
 780 
 797 
 830 
 837 
 841 
 846 
 862 
 
 975 
 905 
 
 72,815 
 83,969 
 102,941 
 105,059 
 105,944 
 113,464 
 107,689 
 117,082 
 121,849 
 118,781 
 122,621 
 122,002 
 135,202 
 133,540 
 125,484 
 
 11,987 
 10,490 
 8,918 
 14,345 
 11,997 
 6,736 
 5,451 
 10,084 
 8,262 
 8,518 
 6,624 
 12,517 
 12,738 
 8,927 
 7,527 
 12, 167 
 
 17.90 
 14.41 
 10.62 
 13.94 
 11.42 
 6.36 
 4.80 
 9.36 
 7.06 
 6.99 
 5.68 
 10.21 
 10.44 
 6.60 
 5.64 
 9.70 
 
 Percentage of unemployment among organized workers reporting to the American Fed- 
 eration, by months, 1902 to 1909. 
 
 Month. 
 
 1902 
 
 January 
 
 February.. 
 
 March 
 
 April 
 
 MTay 
 
 Jime 
 
 July 
 
 August 
 
 September . 
 
 October 
 
 November: 
 December. . 
 
 6.9 
 1.8 
 1.3 
 
 Smallest number reporting. 
 Largest number reporting . . , 
 
 83,277 
 133,354 
 
 6.1 
 3.7 
 2.1 
 1.8 
 5.3 
 2.5 
 3.3 
 2.1 
 2.1 
 1.2 
 4.2 
 1.1 
 
 6.4 
 7.3 
 1.4 
 4.2 
 1.3 
 5.1 
 1.6 
 3.2 
 1.5 
 1.2 
 3.9 
 2.1 
 
 6.3 
 6.1 
 
 2.2 
 2.0 
 5.8 
 3.7 
 .9 
 1.2 
 1.3 
 
 7.8 
 4.6 
 1.9 
 2.3 
 
 .9 
 1.5 
 1.4 
 1.8 
 3.2 
 
 .8 
 1.8 
 4.1 
 
 2.3 
 3.2 
 1.3 
 
 .6 
 1.7 
 
 .2 
 1.7 
 5.8 
 2.2 
 1.4 
 2.3 
 1.2 
 
 8.2 
 8.6 
 6.6 
 7.1 
 4.1 
 6.4 
 9.6 
 8.4 
 6.9 
 
 135,626 
 
 44,870 
 115,406 
 
 41, 148 
 154, 118 
 
 28,300 
 165,671 
 
 26,680 
 131,050 
 
 42,700 
 134,720 
 
 9.8 
 7.4 
 8.6 
 5.6 
 6.7 
 5.3 
 5.7 
 5.6 
 4.8 
 1.2 
 
 56,418 
 139,830 
 
 The most important consideration in connection with statistics of unemployment 
 ic the cause of the unemployment. Again, the only United States statistics available 
 on this question are those of the States of New York and Massachusetts, whose general 
 unemployment statistics we have just given. The subjoined table shows the causes 
 of unemployment as stated in the reports of the bureaus of the respective States.' 
 
 ' Bulletin 109, V. S. Bureau of Labor Statistics, pp. 24 and 25. 
 
 ' Bulletin 109, United States Bureau Labor BtatMties, pp. 32 and 3 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 207 
 
 Causes of idleness among organized workers in New York at the end of March, 1907 to 191 L 
 
 
 Number. 
 
 Per cent. 
 
 
 1907 
 
 1908 
 
 1909 
 
 1910 
 
 1911 
 
 1907 
 
 1908 
 
 1909 
 
 1910 
 
 1911 
 
 Lack of work 
 
 52,031 
 1,819 
 15,472 
 3,970 
 3,563 
 100 
 315 
 
 123,706 
 
 576 
 
 8,064 
 
 1,573 
 
 3,811 
 
 127 
 
 274 
 
 60,585 
 
 804 
 
 7,890 
 
 1,498 
 
 3,467 
 
 148 
 
 161 
 
 42,010 
 2,667 
 7,329 
 6,864 
 3,838 
 87 
 56 
 
 79,866 
 
 548 
 
 8,544 
 
 3,289 
 
 3,752 
 
 159 
 
 450 
 
 67.3 
 2.4 
 20.0 
 6.2 
 4.6 
 .1 
 .4 
 
 89.6 
 .4 
 6.8 
 1.1 
 2.8 
 .1 
 6.2 
 
 81.3 
 1.1 
 10.6 
 2.0 
 4.6 
 .2 
 .2 
 
 66.8 
 
 4.2 
 
 11.7 
 
 10.9 
 
 6.1 
 
 .2 
 
 .1 
 
 82.7 
 
 .6 
 
 8.8 
 
 3.4 
 
 Lack of stock 
 
 Weather 
 
 Labor disputes 
 
 Disability 
 
 
 
 
 
 
 
 Total 
 
 77,270 
 
 138,131 
 
 74,543 
 
 62,811 
 
 96,608 
 
 100.0 
 
 100.0 
 
 100.0 
 
 100.0 
 
 100 
 
 
 
 Causes of idleness among organized workers in New Yoik at the end of Septtmber, 1907 to 
 
 1911. 
 
 Causes. 
 
 Number. 
 
 Per cent. 
 
 1907 
 
 1908 
 
 1909 
 
 1910 
 
 1911 
 
 1907 
 
 1908 
 
 1909 
 
 1910 
 
 1911 
 
 Lack of work 
 
 29,301 
 
 1,752 
 
 669 
 
 6,916 
 
 3,442 
 
 343 
 
 233 
 
 71,632 
 
 2,043 
 
 500 
 
 2,288 
 
 3,082 
 
 466 
 
 686 
 
 27,225 
 
 2,517 
 
 894 
 
 2,867 
 
 3,000 
 
 175 
 
 290 
 
 39,307 
 
 2,450 
 
 163 
 
 17,646 
 
 3,216 
 
 181 
 
 143 
 
 39,959 
 680 
 493 
 5,699 
 3,336 
 128 
 96 
 
 68.9 
 
 4.1 
 
 1.3 
 
 16.3 
 
 8.1 
 
 .8 
 
 .6 
 
 88.8 
 
 2.6 
 
 .6 
 
 2.8 
 
 3.8 
 
 .6 
 
 .8 
 
 73.6 
 6.8 
 2.4 
 7.8 
 8.1 
 .5 
 .8 
 
 62.3 
 
 3.9 
 
 .2 
 
 28.0 
 
 5.1 
 
 .3 
 
 .2 
 
 79.3 
 
 Lack of stock 
 
 1 3 
 
 Weather 
 
 1.0 
 
 Labor disputes 
 
 11.3 
 
 Disability . 
 
 6.6 
 
 
 .3 
 
 Reason not stated 
 
 .2 
 
 
 
 Total 
 
 42, 556 
 
 80, 676 
 
 36, 968 
 
 63, 106 
 
 50,390 
 
 100.0 
 
 100.0 
 
 100.0 
 
 100.0 
 
 100. 
 
 
 
 Cannes of Idleness ainong organized workers in Massachusetts on Mar. 31, 1909 to 1911. 
 
 Causes. 
 
 Number idle on Mar. 31 — 
 
 Per cent of membership 
 idle on Mar. SI- 
 
 
 1909 
 
 1910 
 
 1911 
 
 WOO 
 
 1910 
 
 1911 
 
 
 9,980 
 138 
 172 
 
 1,354 
 353 
 
 6,186 
 113 
 96 
 
 1,646 
 221 
 
 9,120 
 831 
 178 
 
 1,691 
 918 
 
 9.50 
 .13 
 .16 
 
 1.29 
 .34 
 
 9.28 
 .10 
 .08 
 
 1.41 
 .19 
 
 7.47 
 
 Unfavorable weather 
 
 .68 
 
 
 .15 
 
 Disability (sickness, accident, or old age) 
 
 Other causes 
 
 1.39 
 .75 
 
 
 
 Total 
 
 11,997 
 
 8,262 
 
 12, 738 
 
 11.42 
 
 7.06 
 
 10.44 
 
 
 
 Causes of idleness aiaong organized ujorkers in Massachusetts on Sept. SO, 1909 to 1911. 
 
 
 Number idle on Sept. 
 30- 
 
 Per cent of membership 
 idle on Sept. 30— 
 
 
 1909 
 
 1910 
 
 1911 
 
 1909 
 
 1910 
 
 1911 
 
 
 3,873 
 86 
 
 173 
 1,199 
 
 121 
 
 4,687 
 146 
 132 
 
 1,510 
 149 
 
 4,904 
 235 
 477 
 
 1,668 
 243 
 
 3.41 
 .07 
 .16 
 
 1.06 
 .11 
 
 3.95 
 .12 
 .11 
 
 1.27 
 .13 
 
 3.7 
 
 
 .2 
 
 Strikes or lockouts 
 
 .3 
 
 
 1.2 
 
 
 .2 
 
 
 
 Total 
 
 5,451 
 
 6,624 
 
 7,627 
 
 4.80 
 
 5.58 
 
 5.6 
 
 
 
208 
 
 SOCIAL INSUBANCB AND UNEMPLOYMENT. 
 
 The latest investigations of employment were these made in New York City in the 
 early part of 1915. In the first place the Bureau of Labor Statistics made a complete 
 census of 104 representative city blocks located in various sections of the city, the less 
 populated as well as the more congested sections, with the purpose of including a 
 representative number of families of the various nationalities and of all classes of 
 workers. In addition, there was a census of the families living in 3,703 individual 
 tenement houses and residences covering a still wider range of distribution. The 
 enumeration was made between January 30 and February 17, 1915. The results 
 were as follows: 
 
 Number of families scheduled , 54, 849 
 
 Number of families having unemployed wage earners 11, 723 
 
 Per cent of families having unemployed wage earners 21. 4 
 
 Number of persons in families 229, 428 
 
 Number of wage earners in families 95, 443 
 
 Number of unemployed wage earners •. 15, 417 
 
 Per cent of unemployed wage earners 16. 2 
 
 From these figures it was estimated that the total number of unemployed in the city 
 at that time would be approximately 398,000. • 
 
 Beginning in January, 1915, the Metropolitan Life Insurance Co. made a census of 
 all of the families which held industrial policies in that company in Greater New York. 
 This was made by the agents who made the weekly collections. The result of that 
 canvass is as follows: 
 
 Total number of families 155, 960 
 
 Number of families with unemployment 37, 064 
 
 Total number of wage earners in families 252, 912 
 
 Number of unemployed wage earners .45, 421 
 
 Per cent of wage earners unemployed 18 
 
 The Metropolitan Insurance Co. also made a similar canvass of its policyholders in 
 northeastern New Jersey, including Bayonne, Bloomfield, Newark, Hoboken, Irving- 
 ton, Jersey City, Orange, and Union Hill. The industries in this section being adja- 
 cent to New York City, the labor conditions would presumably be similar. The 
 results of this canvass were as follows: 
 
 Total number of families 61, 201 
 
 Number of families with unemployment 11, 821 
 
 Tptal number of wage earners in families 97, 026 
 
 Number of unemployed wage earners 14, 314 
 
 Per cent of wage earners unemployed 14. 8 
 
 The very great variation from year to year in the amount of unemployment depend- 
 ing on industrial conditions or in common language, the prevalence of "hard times" 
 or "good times" is shown by the statistics collected by the United States Bureau of 
 Labor Statistics comparing conditions in identical establishments in January, 1915, 
 and January, 1916.' 
 
 Comparison of employment of identical establishments in January, 1915, and January, 
 
 1916. 
 
 
 Estab- 
 lish- 
 ments 
 
 to 
 
 which 
 
 inquiries 
 
 were 
 
 sent. 
 
 Estab- 
 lish- 
 ments 
 report- 
 ing for 
 January 
 both 
 years. 
 
 Period 
 
 of 
 
 pay roll. 
 
 Employees. 
 
 Earnings. 
 
 Industry, 
 
 Number on pay 
 roll to— 
 
 Per 
 cent 
 of in- 
 crease 
 (+)or 
 
 de- 
 crease 
 
 Amoimt of pay 
 roll in— 
 
 Per 
 
 cent 
 of in- 
 
 
 Jan- 
 uary,* 
 1915. 
 
 Jan- 
 uary, 
 1916. 
 
 Jan- 
 uary, 
 1915. 
 
 Jan- 
 uary, 
 1916. 
 
 crease 
 (+)or 
 
 de- 
 crease 
 
 (-)■ 
 
 Boots and shoes . . . 
 Cotton manu- 
 
 factui'ing. 
 Cotton finishing . . . 
 Hosiery and 
 
 underwear. 
 
 Iron and steel 
 
 Silk 
 
 85 
 92 
 
 19 
 82 
 
 139 
 61 
 47 
 
 69 
 63 
 
 18 
 
 56 
 
 88 
 42 
 21 
 
 1 week 
 
 ...do., 
 
 ...do 
 
 ...do 
 
 J month... 
 
 2 weeks . . . 
 1 week 
 
 56,929 
 59, 694 
 
 12,597 
 27,467 
 
 100,792 
 17,033 
 17,057 
 
 65,097 
 58,847 
 
 14,863 
 31,526 
 
 135,831 
 18,642 
 19,462 
 
 + 14.3 
 - 1.4 
 
 -1-17.9 
 -H4.8 
 
 -1-34.8 
 -1- 9.4 
 + 14.1 
 
 690,080 
 496,349 
 
 132,768 
 217,736 
 
 2,625,977 
 306,260 
 165,421 
 
 859,181 
 504,515 
 
 164,249 
 286,756 
 
 4,257,314 
 367,560 
 204,400 
 
 +24,5 
 + 1.6 
 
 +23,7 
 +31,7 
 
 +62.1 
 +20,0 
 +23.6 
 
 
 
 1 Mo. Rey. TJ. S. Bilraail T,ahorStat Marnh 1Q1R n la 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 209 
 
 How far the unemployment statistics of Maasachusetts and New York given above 
 indicate unemployment conditions in the remainder of the United States must, of 
 course, be largely a matter of judgment. It is clear, however, that the industrial con- 
 ditions m the remainder of the United States must be sufficiently near those prevailing 
 in New York and Massachusetts; that conclusions concerning the extent of unemploy- 
 ment drawn from these statistics will apply fairly to the remainder of the United States. 
 Whatever the total number of the unemployed may be at any given time, they can 
 be divided into two distinct classes (1) those who are employable— that is, willing and 
 capable of doing work if they are afforded the opportunity; (2) the unemployable — 
 that is, paupers, beggars, bums, hoboes, aged, infirm, feeble-minded, and disabled, 
 who either will not work or are not capable of doing work, even when it is offered to 
 them. 
 
 _ The relative proportions of the unemployed, these two classes, of course, vary from 
 time to time. In "good times" the unemployed will practically be wholly made up 
 of the unemployable. On the other hand, in "hard times" there will be a large pro- 
 portion of employable men who are suffering from unemployment. It is only the 
 latter class which can be taken into account in any plan of social insurance. The 
 unemployable must be dealt with by charity, if disabled, and by workhouses, re- 
 formatories, farm colonies, etc., if able-bodied. 
 
 EFFECT OF UNEMPLOYMENT. 
 
 The effect of unemployment upon the worker is a matter which does not require any 
 extended description or explanation. The human- organism, unfortunately, is not 
 like an engine in which the fires can be extinguished and then stand cold without 
 expense until needed for work again. The human machine must run all of the time, 
 and consequently requires steady supplies of fuel in the form of food, as well as cloth- 
 ing, and other necessaries. If it once stops and grows cold, it never can be started 
 again. Unemployment can not fail to cause much distress and suffering, as well as 
 economic loss, and is, moreover, always followed by an increase in pauperism and 
 crime. 
 
 In those cases where the worker has been able to accumulate any money in a savings 
 bank or has it invested in a home, or otherwise, as long as such resources holds out, he 
 nor his family may not endure physical suffering. But there is a great number who 
 have no such accumulations, and such as do have them must exhaust them sooner or 
 later, so that poverty and hunger are inevitable unless some means of prevention or 
 rehef can be brought to bear. 
 
 Among the important things which must be taken account of in connection with 
 unemployment is the variations according to the seasons of the year of requirements 
 for workers. These seasonal fluctuations are particularly noticeable in such occupa- 
 tions as farming, building trades, and general construction work, where little can be 
 done in the winter season. To some extent different occupations dovetail or alteriiate 
 with each other, but this is not nearly sufficient under the present organization of 
 industry to prevent a great deal of unemplojrment during the winter season, by those 
 who have no difficulty in finding employment during the summer season. It is to be 
 hoped that this seasonal fluctuation will be gradually but constantly diminished in the 
 future, but immediate measures must be taken to 'provide for unemployment at the 
 present time from this as well as from other causes. These variations of unemployment 
 from time to time render its statistics of less value than accident, sickness, or mortality 
 statistics, so that beyond proving the actual existence of unemployment statistics are 
 not perhaps as necessary in relation to social insurance as in the other branches. 
 
 As with other emergencies which affect workers there are several ways of dealing 
 with unemployment. One of the most useful of these is a network of free labor agen- 
 cies covering the whole nation with complete records, so that the worker can easily 
 find the places where his services are in demand. Another is relief work — that is, 
 special work undertaken by municipalities or larger pohtical divisions for the express 
 purpose of furnishing support to the unemployed. A third method is the various 
 foi-ms of charitable relief, both public and private. The relief work methods and 
 charity, although sometimes necessary, are very burdensome to society, and besides, 
 if long continued, distinctly harmful to the workers, tending to cause them to lose 
 their self-reliance and self-respect and become hopeless paupers. The possibilities of 
 dealing with unemployment by insurance methods will be described later. 
 
 39501—16 14 
 
210 
 
 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 OLD-AGE HELPLESSNESS. 
 
 According to the United States census of 1910, the number of persons of the age of 
 65 years and over, was 3,949,524, of which 1,985,976 were men and 1,963,548 women. 
 The number of these in the United States who are not able to support themselves, is 
 a matter of estimate only. In a recent book,' the dependent aged population is 
 estimated at 1,123,000. This estimate was based on the statistics collected in the 
 State of Massachusetts, but a study of the author's method of arriving at this estimate, 
 shows that it is misleading. 
 
 Dependent population 65 years old and over. 
 
 Class 
 
 How provided for. 
 
 Massachu- 
 setts. 
 
 United 
 States. 
 
 Annual cost. 
 
 No. 
 
 Massachusetts. 
 
 United States. 
 
 1 
 
 In correctional institutions 
 
 556 
 1,961 
 3,480 
 2,598 
 3,075 
 2,312 
 27,230 
 
 15,180 
 53,544 
 95,128 
 71,024 
 83,996 
 63, 112 
 744,188 
 
 (') 
 
 $693,076.80 
 783,556.80 
 189,900.00 
 320,998.00 
 
 4,192,875.00 
 
 (^) 
 
 2 
 3 
 
 In insane asylums and liospitals 
 
 Tn almshnnsfts 
 
 J18,973,279.60 
 
 21,420,838.40 
 
 5,181,081.37 
 
 8,734,700.00 
 
 114,590,068.24 
 
 4 
 
 
 5 
 
 By public outdoor relief 
 
 6 
 
 By private outdoor relief 
 
 7 
 
 
 
 Totals 
 
 
 41, 212 
 
 1, 123, 172 
 
 6,180,406.60 
 
 178,899,968.41 
 
 
 
 ' Not given. 
 
 - No estimate. 
 
 An examination of this table shows that the classes Nos. 3, 4, 5, and 6 are the only 
 ones which include persons ordinarily included when pensions for the aged dependent 
 poor are mentioned. The total number comprised in these classes is 11,465. Apply- 
 ing these proportions to an estimate for the tjnited States, the correct estimate of the 
 number of aged indigent poor would be 312,462. This is the proper number to con- 
 sider in relation to the aged indigent poor because the other classes given in the table 
 are otherwise provided for. Criminals (class 1) in penal institutions; insane (class 2) 
 in hospitals; and United States pensioners (class 7) by the United States Government. 
 
 In relation to aged United States pensioners, attention is attracted to the fact that 
 their total number, 27,230, is 66 per cent of the total number, 41,212, of the aged 
 dependent poor in Massachusetts. This is an enormously larger percentage of the 
 total number of aged dependent poor than the total number of aged dependent poor 
 are of the total population of the State of Massachusetts of the same age. The ques- 
 tion naturally occurs whether a general system of old-age pensions might not have a 
 similar effect on the whole population. 
 
 The inability to do enough work to earn a livelihood that is certain to come with 
 old age and the entire helplessness of many aged persons inevitably give rise to con- 
 ditions of most pitiable poverty and destitution unless provision is some way made 
 for their adequate support. Few are able to earn a livelihood after the age of 65. 
 No one should be compelled to do so. Since there are nearly 4,000,000 persons in 
 the United States of the age of 65 and over, the question of provision for their old age 
 is an exceedingly important question for immediate consideration. There are a 
 number of ways in which this can be done. Perhaps the plan which will first occur 
 to the reader is that each person should, during his lifetime, accumulate sufficient 
 property to support himself and his wife during their old age. Fortunately in the 
 United States provision has been made by a large part of our population in this. way; 
 but, nevertheless, it must be admitted that in nearly all States are many who have 
 reached 65, but have not, from various reasons, made such provision. Perhaps the 
 method which would next occur to the reader is that aged persons should be provided 
 for by their descendants, and, again, it is happily true that a very large number of 
 the aged population of the United States who have not accumulated sufiicient prop- 
 erty to support themselves are well cared for by their children. This is entirely 
 natural and proper, being but a just return for the care, trouble, and expense which 
 the parents have had in the rearing of the children; but, unfortunately, a^ain, there 
 still remain a large number in the aggregate of aged persons who either have no chil- 
 dren, or if they do have, the children are unable, and even in a few disgraceful in- 
 stances are unwilling to support their aged parents even if they are able. 
 
 1 Old Age Dependency in the United States, Squier (1912), p. 6. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 211 
 
 Also, there are a great number of charitable old people's homes for both men and 
 women which afford those they are able to accommodate, support and comfort dm-ing 
 the remainder of their lives, but there still remain a large number of the not adequately- 
 provided tor. Instead of their being any decrease in the future of the number of aged 
 persons unprovided for, there is likely to be an increase, for we may reasonably antici- 
 pate that the methods making such provision enumerated above will be relatively 
 less sufficient in the futm-e than in the past. There are several reasons for this. 
 Although wages are increasing and absolutely poverty is diminishing, the standard of 
 living among the working classes is rising, so that, on account of rapidly multiplying 
 wants, desires, and aspirations of the citizens of our highly educated and ambitious 
 democracy, the margin available for making pro-vision for old age by the methods 
 which we have mentioned above will probably be smaller instead of larger. This may 
 not be wise or desirable, but it is liable to occur. In only too many instances, the 
 cost of modem "high living" absorbs all the earnings of workers, even those receiving 
 generous wages, leaving little or nothing for the everydajr emergencies of sickness and 
 unemployment, and consequently still less to make provision for old age. 
 
 Another reason is that it is now less possible for workers to own their own homes, 
 and as to those who must move from place to place in search of employment, it is less 
 desirable for them to do so. The possession of a home is one of the strongest incentives 
 to thrift and saving, and in proportion as this incentive is lessened by the impossi- 
 bility or the undesirabiUty of the worker owning his home, is the probability of at 
 least partial provision for old age in this way diminished. 
 
 There remains the accumulation of money by depositing the same in savings banks 
 or making investments, and there are in the aggregate very large sums of money so 
 deposited in the United States, the amount on June 30, 1914 (latest figures available), 
 as reported by the Comptroller of the Currency ' being .14,936,591,849, by 11,109,499 
 depositors, so that the average deposit was $444.35. But large as this sum is, it is 
 wholly inadequate to make provision for all of those who do make such deposits, while 
 there are many who fail to do so. Many of these fail on account of lack of thrift, but 
 there have unfortunately occmred in the past a good many bankruptcies of saving 
 banks and many more failures of other investments into which workers have been 
 tempted, resulting in loss of much hard-earned money. The cumulative result of 
 such losses have been a good deal of discouragement in the aggregate to the worker. 
 It is perfectly natural for him to have a desire to spend his money himself rather than 
 have this done for liim by the sporty president or the dishonest cashier of some savings 
 bank. 
 
 All of these things taken together have resulted in a great discoiu-agement to thrifty 
 habits by workers and caused many of them to form the reckless habit of spending all 
 their wages as fast as received. Since every worker is subject to interruptions by 
 sickness, accident, and unemployment, and consequent loss of income, the habit of 
 spending wages as fast as earned, will inevitably cause destitution and suffering in 
 old age. 
 
 SELr-PT.TRCHASED OLD-AGE PENSION.S. 
 
 There is no doubt that in the United States, considering the liberal wages paid, the 
 freedom to travel from one part of the country to the other in search of remunerative 
 employment, and the equal opportunities open to all, that if all able-bodied wage 
 earners, early in life and before they become responsible for the support of a family, 
 had the opportunity and a knowledge of the wonderful results which can be obtained 
 in the way of providing the payment of a small sum of money for a pension in old 
 age, and possessed also a degree of foresight above that of the Leasts which perish, 
 that they could and would provide against destitute old age in this way. We believe 
 that the main reason that the necessary institution has not been created and self- 
 pro-\dsion thus made universally,, is because the wonderful results which can be ob- 
 tained by depositing in an absolutely reliable institution a comparatively small sum 
 of money in early age are not generally known. This can be accomplished with 
 ease and at low cost if the necessary payments are made sufficiently early in life. 
 This is the result of the wonderful accumulations which occur when the effect of com- 
 pound interest and the lapses of a great number of years are taken into account. In 
 the second place, there have been heretofore no absolutely secure institutions in 
 which money could either be saved under ordinary renditions or in which insurance 
 could be effected, and the total returns for the individual instead of being absorbed 
 by the expenses of an exorbitantly expensive insurance organization or syBteni. 
 The discouragingly small returns received by wage earners for the money paid by 
 them for industrial insurance is fully set forth in another place (p. 215). 
 
 I Kept. Comptroller Currency, 1914, ])p. 690 and 706. 
 
212 
 
 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Before giving some tables showing the results of old-age insurance made at dif- 
 ferent ages, it should be explained that there are two plans of maMng payments for 
 old-age pensions, one is called the reserve-capital plan. In this, if deposits axe inade 
 and the person dies before the date at which the old-age pension would begin, his 
 heirs will receive back the money which he has paid. The other is known as aUen- 
 ated-capital plan, which is insurance in the full sense of the word. In this no money 
 is returned excepting to those persons who attain the given age. On this plan, of 
 coui'se, much higher pensions can be paid for the given deposit. 
 
 The following table ' shows the amount of annual pension beginning at the ages 
 stated which can be obtained by one deposit of $100, on both plans, and, of course, 
 in the same proportion for either larger or smaller sums. 
 
 Amount of annual pension payable for the deposit of flOO with the national old-age 
 retirement fund, by aye of depositor and plan of insurance. 
 
 Age of depositor. 
 
 3 years.. 
 5 years . . 
 10 years - 
 15 years. 
 20 years. 
 25 years. 
 30 years - 
 35 years . 
 40 years . 
 45 years. 
 50 years. 
 55 years . 
 60 years . 
 65 years . 
 
 Amount of annual pension payable for the deposit of SIOO. 
 
 Alienated-capital plan. 
 
 Age at which pension begins. 
 
 50 years. 56 years. 
 
 1 
 
 Sol. 22 
 47.15 
 38.95 
 32.15 
 26.18 
 21.16 
 17.15 
 13.89 
 11.22 
 9.00 
 7.13 
 
 S74.66 
 68.73 
 66.77 
 48.86 
 38.16 
 30.84 
 24.99 
 20.24 
 16. 35 
 13.11 
 10.40 
 8.05 
 
 60 years. 
 
 3114.77 
 105. 66 
 87.27 
 72.05 
 58.66 
 47.41 
 38.42 
 31.12 
 25.13 
 20.16 
 16. 98 
 12.37 
 9.31 
 
 65 years. 
 
 S190. 32 
 175. 22 
 144.72 
 119.47 
 97.27 
 78.62 
 63.71 
 51.61 
 41.67 
 33.42 
 26.50 
 20.51 
 15.43 
 11.13 
 
 Reserved-capital plan. 
 
 Age a^ which pension begins. 
 
 50 years. 
 
 $41. 15 
 
 37.72 
 
 30.26 
 
 24.07 
 
 18.99 
 
 14.88 
 
 11.65 
 
 8.86 
 
 6.68 
 
 4.92 
 
 3.52 
 
 65 years. 
 
 }.59. 
 
 54. 
 
 44. 
 
 35, 
 
 27. 
 
 21, 
 
 16, 
 
 12. 
 
 9, 
 
 7, 
 
 5, 
 
 S92.21 
 
 84.53 
 
 67.79 
 
 63.93 
 
 42.56 
 
 33.35 
 
 26.89 
 
 19. 85 
 
 14.96 
 
 11.02 
 
 7.88 
 
 5.41 
 
 3.53 
 
 65 years. 
 
 $152.91 
 
 140. 17 
 
 112.41 
 
 89.43 
 
 70.58 
 
 55.30 
 
 42.93 
 
 32.91 
 
 24.80 
 
 18.28 
 
 13.06 
 
 8.97 
 
 5.86 
 
 3.53 
 
 The following table '' of the United States Letter Carriers' Retirement Association 
 gives the monthly premium rates at various ages necessary to provide an annuity of 
 $100 per annum for life after arriving at the ages of G5 and 70 years. In this association, 
 if an annuity member does not live to make all of the premium payments agreed upon, 
 or in case he becomes mentally incompetent, all premiums which shall have been paid 
 by him, together with interest at 4 per cent per annum, are repaid to his estate or to 
 his legal representative. Consequently this is the reserve premium plan explained 
 above. 
 
 Monthly premium rates for annuities of flOO. 
 
 Age at entry. 
 
 20 years 
 25 years 
 30 years 
 35 years 
 40 years 
 
 Monthly premium rates 
 for annuity begin- 
 ning at age of — 
 
 65 years. 
 
 $0.66 
 
 .69 
 
 1.08 
 
 1.42 
 
 1.91 
 
 70 years. 
 
 %0. 45 
 .47 
 .72 
 .92 
 1.21 
 
 Age at entry. 
 
 46 years . 
 60 years - 
 55 years . 
 60 years . 
 66 years . 
 
 Monthly premium rates 
 for annuity begin- 
 ning at age of— 
 
 65 years. 70 years. 
 
 $2.66 
 
 6.63 
 14.62 
 
 $1.63 
 2.27 
 3.37 
 5.62 
 
 12.46 
 
 1 Social Insurance, Rubinow, p. 334. 
 
 ' 23d An. Rept. Commissioner of Labor, p. 120. 
 
SOCIAL INSUBANCK AND UNEMPLOYMENT. 
 
 213 
 
 INSURANCE FOR SURVIVING WIDOVfS AND CHILDRf;N. 
 
 One of the most serious possibilities confronling the dependent members of the fam- 
 ilies of workers and others without sufiicient property accumulated is that the husband 
 and father or other supporter of the family will be prematurely stricken down by 
 death, leaving the family exposed to poverty. How great the numbers are so exposed 
 may be realized by examining the statistics of the population in the United States, 
 
 The total number of persons in the United States in 1910, according to the census for 
 that year, between the ages of 15 and 65 was 58,354,551, of which the census further 
 shows that in round numbers 33,500,000 were workers. Assuming that the same pro- 
 portion of deaths occurred among the workers as among the general population between 
 the ages of 15 and 65, then the number of premature deaths which occurred in 1910 
 among workers at the various ages are as follows: 
 
 Ages; Deaths. Ages — Continued. Deaths. 
 
 15 to 19 33,396 45 to 49 64,559 
 
 l>0to24 50,247 50 to 54 73,432 
 
 25to29 54,519 55 to 59 73,673 
 
 30 to 34 54,358 60 to 64 81,398 
 
 35 to 39 61,000 ■ 
 
 40 to 44 61,657 Total 608,239 
 
 Of course, it is not true that at each one of these deaths there were dependents left 
 behind, but it is also true that this occurred in most cases. It is further true that 
 among dependents left by premature death of working pepple not all were left unpro- 
 vided for, but it is certain this occurred in much the larger number of instances. 
 
 Although doubtless much below the actual numbers, let us assume that there were 
 dependent families left in two-thirds of these premature deaths, and that two-thirds 
 of these families were left entirely unprovided for by the death of the worker, then 
 there would be 405,492 families left unprovided for in the one year 1910. These 
 figures will at least serve to show the great necessity there is for some form of life 
 insurance to enable workers to provide for their families after death. So far as these 
 necessities are satisfied at all, at the present time, is through one or the other of the 
 following institutions: Commercial life insurance companies; voluntary mutual life 
 insiuance companies; voluntary State life insurance; compulsory State life insurance. 
 The question then arises to what extent are these agencies capable of providing for 
 these pressing and widespread emergencies. Considering first the private commer- 
 cial life insurance companies, everyone familiar with the details of the life-insurance 
 business at the present time is aware of the tremendous amount of insurance carried 
 by these institutions, amounting on December 31, 1914, in the United States, to 
 $21,955,771,318 of insurance in force. When, however, we come to consider the 
 cost of such insurance, it becomes plain that it can not be used by ordinary workmen 
 to provide for their families. 
 
 A further fact why such insurance is often unavailable to the average wageworker 
 is the fact that the payments are made semiannually or quarterly, which renders it 
 impossible, as a practical proposition for the workman, because he can not accumu- 
 late sufficient sums to pay the relatively large installments. Although the attempt 
 has been, made by large numbers of working people to carry ordinary life insurance, 
 frequently when sickness, unemployment, or other emergencies occurred payments 
 could not be made, and what had previously been paid, subject to small equities in 
 some cases, was lost to the insiu'ed, which discouraged him , so that he ceased to attempt 
 to make any provision for the future of his family. 
 
 For the purpose of meeting these conditions as to time of payment necessary in 
 workingmen's insurance, the so-called "Industrial " plan of life insurance was devised 
 many years ago. Under this plan of life insurance the payments are made in weekly 
 installments to a collector who calls at the residence, which makes them much more 
 apt to be promptly met by the classes for whom they were designed. The great 
 drawback of this form of insurance is its immense cost by reason of the weekly col- 
 lection system, as well as the other expensive features which it shares with ordinary 
 life insurance. The poorest people pay the highest cost for life insurance. 
 
 According to a special report made to me by the life insurance companies doing 
 industrial life insurance business in Illinois the results are shown by the following 
 table. 
 
214 
 
 ■SOCIAL IXSUGAXCE AND UNEMPLOYMENT. 
 
 Comparison oj amounts paid and credited to "industrial" policyholders, with amounts oj 
 premium receipts and accumulation on policyholders' Junds for the combined experience 
 of the three largest "industrial", life insurance companies in the United States covering 
 the entire ' ' industrial ' ' business of each from beginning to Dec. SI, 1915. 
 
 Total premium receipts $1, 811, 843, 770 
 
 Total interest income, etc 195, 631, 582 
 
 Total receipts ---- 2,007,475,352 
 
 Total payments to policyholders 713, 477, 427 
 
 Reserves and other funds credited to policyholders 529, 765, 435 
 
 Total payments and credits 1, 243, 242, 862 
 
 Percentage of payments and credits to receipts ' 61. 9 
 
 This shows that after deducting from the total income received by these companies 
 during their entire business career, the amount necessary as a reserve to provide for 
 the payment of policies now in force and other apportioned funds, that the total amount 
 paid by policyholders for insurance and earned by their money is $2,007,475,352, but 
 that the sum of $1,243,242,862 only was returned to the policyholders, or 61.9 per cent. 
 Consequently on the average for each $100 that policyholders received from these 
 life insurance companies, they paid SI 61.39. This cost is prohibitive for an amount 
 sufficient to pro^'ide adequately for a dependent family. Although there were out- 
 standing in the year 1914 31,134,303 industrial life insurance policies, and the total 
 insurance in force under these policies was ?4, 170,071, 777, so that the average of the 
 industrial policies was only $133. Any rational person knows that this sum is abso- 
 lutely insufficient to make any provision whatever for the dependents of the policy- 
 holder in case of his death. As a matter of fact, this industrial insurance in the United 
 States only amounts to bui-ial instnance and it is kept up by the vast majority of wage 
 earners solely for that purpose. Consequently, it is plain that commercial life insur- 
 ance, either ordinary or industrial, can not provide adequate life insurance for the , 
 workers of the United States and others similarly situated, financially. 
 
 The question of the excessive cost of "industrial" life insurance has been quite 
 fully investigated in Bulletin 67, Bureau of Labor, page 781, et seq. This was pub- 
 lished in 1906, and the statistics are in most cases for the year 1903, but there has not 
 been any important change of rates or conditions since, so that the facts stated and the 
 conclusions drawn therein probably hold good at the present time also. One of the 
 most instructive tables presented gives the relative cost of "ordinary" life, "whole 
 life" insurance, and "industrial" lite insurance, as follows: 
 
 Amount of industrial or of ordinary nonpartidpating insurance purchasable for each $1 
 of the annual premium expenditure, and per cent of excess of ordinary over industrial 
 insurance. 
 
 (The Eull amount of the industrial insurance as stated below is paid only in case of death after the policy 
 
 has been in fofce for one year.] 
 
 Age of insured. 
 
 21 years 
 25 years 
 30 years 
 35 years 
 40 years 
 
 Insurance purchasable for 
 each $1 oi'the annual pre- 
 mium expenditure. 
 
 Indus- 
 trial 
 
 $32. 31 
 29.23 
 25.77 
 22.69 
 19.23 
 
 Ordi- 
 nary. 
 
 $65. 36 
 59.67 
 52.41 
 45.25 
 38.31 
 
 Per 
 cent of 
 excess of 
 ordinary 
 over in- 
 dustrial. 
 
 102 
 104 
 103 
 
 Agtf of insured. 
 
 41 years 
 45 years 
 50 years 
 55 years 
 60 years 
 
 Insurance purchasable for 
 each tl of the aimual pre- 
 mium expenditure. 
 
 Indus- 
 trial. 
 
 $18. 85 
 16.15 
 13.46 
 10.77 
 8.46 
 
 Ordi- 
 nary. 
 
 $36. 9S 
 31.78 
 25.75 
 20.42 
 15.83 
 
 Per 
 cent of 
 excess of 
 ordinary 
 over in- 
 dustrial. 
 
 97 • 
 91 
 90 
 87 
 
 I The percentages of amount paid and credited to policyholders varied in the various companies from 
 67.9 to 6i.5 per cent. The results for the last 10 years' business of these companies showed slightly better 
 
 results than for the whole period of the business of each given above. 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT. 
 
 215 
 
 "The foregoing table shows that the workingmaii of 30 years of age, for example, 
 who_ must purchase his insurance by weekly payments, obtains only $25.77 of pro- 
 tection for each dollar that he pays in, while the well-to-do policyholder of the same 
 age, who can purchase his insurance by annual payments, obtains $52.41 of protec- 
 tion, or more than twice as much" (p. 790). 
 
 A large part, however, of the "industrial" Ufe insurance carried in the District of 
 Columbia, as well as elsewhere, is in the form of "combination policies," which pro- 
 vide for three kinds of "benefits" — accident, sickness, and death. This kind of 
 policy is also issued by companies doing " ordinary" insurance business. The follow- 
 ing table gives the relative costs on tms combination insurance in the "industrial" 
 and the "ordinary" companies: 
 
 Accident {maximum), sick (maximum), and death benefits guaranteed for each $1 of pre- 
 mium on combination policies by assessment industrial companies and by an ordinary 
 company. 
 
 
 Accident benefits (maximum) 
 
 Sick benefits (maximum) 
 
 Death benefits guaranteed per 
 
 
 guaranteed per $1 otpremium. 
 
 guaranteed per $1 of premium. 
 
 •?1 of premium. 
 
 Ape. 
 
 Indus- 
 
 
 Per cent 
 
 Indus- 
 
 
 Per cent 
 
 Indus- 
 
 
 Per cent 
 
 
 trial 
 
 
 of excess 
 
 trial 
 
 
 of excess 
 
 trial 
 
 
 of excess 
 
 
 (average 
 
 Ordinary. 
 
 or ordi- 
 
 (average 
 
 Ordinary. 
 
 or ordi- 
 
 (average 
 
 Ordinary. 
 
 or ordi- 
 
 
 of 10 com- 
 
 
 nary over 
 
 of 10 com- 
 
 
 nary over 
 
 of 10 com- 
 
 
 nary over 
 
 
 panies). 
 
 
 indus- 
 trial. 
 
 panies). 
 
 
 indus- 
 trial. 
 
 panies). 
 
 
 indus- 
 trial. 
 
 20 years . . . 
 
 $3.39 
 
 $41.03 
 
 955 
 
 $4.62 
 
 $5.33 
 
 15 
 
 $5.35 
 
 $41. 03 
 
 667 
 
 30 years.. . 
 
 3.89 
 
 34.97 
 
 799 
 
 4.62 
 
 4.54 
 
 12 
 
 5.35 
 
 34.97 
 
 554 
 
 40 years . . - 
 
 3.70 
 
 27.94 
 
 656 
 
 4.42 
 
 3.63 
 
 122 
 
 5.17 
 
 27.94 
 
 440 
 
 50 years . . . 
 
 2.89 
 
 20.45 
 
 608 
 
 3.47 
 
 2.66 
 
 130 
 
 3.96 
 
 20.45 
 
 416 
 
 60 years . . . 
 
 2.45 
 
 13.55 
 
 463 
 
 2.69 
 
 1.76 
 
 163 
 
 3.53 
 
 13.55 
 
 284 
 
 1 Excess is in favor of industrial insurance. 
 
 The kinds of insurance business carried on by the "ordinary" and the ''industrial" 
 companies is also engaged in by another kind of organization called "assessment" 
 companies. In these the dues are not fixed, but vary according to the losses. For 
 want of space we will not attempt to describe fully their plan of operation or results, 
 except to say that the cost to the policyholders for insurance furnished by them is 
 less than that of the "industrial" but more than that of the "ordinary" insurance 
 companies. The bulletin quoted above gives the following total result of the inves- 
 tigations, which include the business of the assessment companies; 
 
 ' ' To sum up, then, the losses during the year 1903 in the District of Columbia result- 
 ing to the policyholders from the weekly payment or industrial plan of insurance, or 
 the additional amount of insurance which might have been carried for the same pre- 
 mium payments if they could have been paid in yearly payments in ordinary com- ' 
 panies, were in round numbers as follows: 
 
 Losses measured by amount of insurance carried: 
 
 (a) Regular industrial insurance $17, 250, 000 
 
 (b) Assessment industrial insurance 3, 375, 000 
 
 Total 20, 625, 000 
 
 ' • Or, if the losses be measured in premium payments made during the year in excess 
 of what would have been required to purchase the same amount of insurance if the 
 premiums could have been paid in yearly payments in ordinary companies, they 
 may be expressed as follows; 
 Losses measured by excessive premiums; 
 
 (a) Regular industrial insurance $370, 000 
 
 (6) Assessment industrial insurance 120, 000 
 
 Total 490,000 
 
 "Of course, the facts set forth above tell nothing about the reasonableness or um-ea- 
 sonableness of the cost of either ordinary insurance or of industrial insurance. They 
 simply show what the cost of industrial insurance is and how much greater that cost is 
 than the cost of ordinary insurance." 
 
216 SOCIAL INSUEANOE AND UNEMPLOYMEITT. 
 
 It should be kept in mind, when conaidering the figures above, that the "ordinary" 
 insurance includes- a heavy charge for agents' commissions and other expenses of con- 
 ducting the business, and that if insurance were furnished to the peoplOj the cost 
 would be much lower than the figures for the "ordinary" insurance, which is the 
 lowest given in the table above. 
 
 One careful investigator of the economic conditions of the workers of the United 
 States arrives at the following conclusion ' respecting industrial insurance for these 
 classes (p. 120): 
 
 "The form of insurance within the means of laborers, though it offers some super- 
 ficial advantages, is exorbitantly expensive and is perverted in use. Thus, indus- 
 trial insurance has probably been injurious to most of its supposed beneficiaries." 
 
 Another kind of life insurance which many have hoped would enable workers to 
 provide for their dependents of workers dying prematurely is voluntary cooperative 
 insurance, mostly in the form of so-called fraternal insurance. It is true that by means 
 of fraternal societies a very much larger number of the people of the United States 
 have been able to make adeijuate provision for their dependents as shown by the 
 following figures for 498 societies reporting for December 31, 1914: Number of policies 
 in force, 7,868,554; insurance in force, $9,171,284,227.2 
 
 The ' ' legal reserve " and the ' ' fraternals " combined only provide for a small fraction 
 of the total population of the United States. The "industrial" life insurance covers 
 a large part of the remainder, but, as shown on page 214, is wholly inadequate in amount 
 of average policy to provide for a dependent family. 
 
 HISTORY or SOCIAL INSURANCE. 
 
 The necessity for relief of the suffering caused by accident, sickness, disablement, 
 and old age, premature death, and unemployment have, of course, been felt in former 
 ages as well as at the present lime, but until civilization had attained a considerable 
 advance there was nothiug done toward relieving such suffering except the aid furnished 
 By friends and relatives and, at certain stages of Greek and Roman civilization as well 
 as in the Middle Ages, by the feudal lords to some extent. It is said, however, that in 
 Borne during the later periods of its history there were organizations among the crafts- 
 men and artificers in certain industries similar to the medieval guilds which cared 
 for their members suffering from any misfortune as a part of their functions. 
 
 Oermany. — During the latter part of the Middle Ages in Teutonic countries there 
 arose organizations for mutual aid, said to have originated among miners, which later 
 developed into the guilds. These gathered funds from which grants were made to 
 needy members in time of accident, sickness, and disablement, and to their widows 
 and orphans in case of death. These organizations in modified form have continued 
 to the present time and were recognized by law in Germany about the middle of the 
 nineteenth century. This law made compulsory the formation of provident funds 
 for men employed in mines, smelting works, and salt works, the cost of which was 
 defrayed out of contribntions by the workers and by the mine owners, the latter being 
 required to pay at least half as much as the men . It is stated that at the time this law 
 was passed (1854) it was estimated that these miners' funds protected' 80 per cent of 
 the miners in the Kingdom of Prussia. . 
 
 A few years earlier (1849), the laws of Prussia-empowered the local authorities- to 
 xequire factory owners and employers to insure their workmen against sickness and 
 to contribute to the cost of such insurance half as much as the men and also deduct 
 the men's contributions from their wages. Under these and subsequent laws, there 
 were formed great numbers of local organizations for insurance of workmen in Prussia 
 and also, though in less well-developed forms, in most of the other States of the present 
 German Empire. In addition to these institutions in which the public authorities 
 had some part, there also came into existence a large number of voluntary aid or bene- 
 fit societies somewhat on the model of the English friendly societies. 
 
 It is sometimes said that the present social insurance system of Germany was an 
 original invention by Bismarck as a device for repressing the growth of socialism 
 among the German people. The above brief outline, however, is sufficient to show 
 that all that Bismarck did was to build upon a foundation already existing and form a 
 system applicable throughout the whole of the German Empire. There is no doubt 
 his main motive for doing so was to discourage the growth of socialism. This appears 
 
 1 Standard oJ Living, F. H. StreigUthofl. 
 
 2 As one person may have more than one policy, it should be kept in mind that the number of policy 
 holders is less than the number of policies in force. 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT. 217 
 
 in the speech from the throne on this legislation which, no doubt, expressed Bismarck's 
 ideas, m which appeared the following: 
 
 ■'A remedy can not be sought merely in the repression of socialistic excess — it must 
 be simultaneously a positi\-e advancement of the welfare of the worliing classes. 
 * * , * . The care of those workpeople who are incapable of earning their li\-elihood 
 is of the first importance. In their interest, the Emperor has caused a bill for the insur- 
 ance of workpeople against the consequences of accidents to be sent to the federal 
 council — a bill which it is hoped will meet a need felt both by workpeople and em- 
 ployers His Majesty hopes that the measure will in principle receive the assent 
 of the federal gDvernments, and that it will be welcomed by the Reichstag as a com- 
 pliment of the legislation affording protection against the social democratic move- 
 ment." 
 
 It was said in a speech in the Reichstag by Bismarck himself, explaining the first 
 draft of the accident bill:' 
 
 "It is the duty of humanity and Christianity for the State to interest itself to a 
 great degree in those of its members who need help. It is the duty of the State to 
 cultivate beneficent institutions; this will be no novelty but a further solution of the 
 modern idea of the State, a result of Christian morality; in accordance with such, 
 the State should not merely discharge the duties of self-defense, but those also of a 
 positive character in promoting the welfare of all its members, and especially of the 
 weak and needy." 
 
 There is also little doubt that the fundamental ideas embodied in the social insur- 
 ance legislation enacted in Germany under the dominance of Bismarck were merely 
 practical applications of the conceptions of certain eminent German philosophers 
 living about the beginning of the nineteenth century, particularly Hegel, Fichte, 
 Sismondi, and Winkelblech. The original separate States of that Empire were, in 
 the beginning, absolute despotisms, and although now somewhat modified by the 
 general spread of the ideas of equality and democracy which have taken place through- 
 out the civilized world during the past two centuries, there still remain unchanged 
 many absolutistic institutions, so that individualism has little chance to develop in 
 Germa,ny and industrial freedom among the working classes was strangled. ^ With the 
 hope, no doubt, of securing some amelioration for the hard lot of the common people 
 of Germany under such a form of government, which government to these writers 
 seemed an eternal and unchangeable fact like a law of nature, these philosophers 
 worked out certain idealistic theories of the government toward its subjects. Accord- 
 ing to the conception of Fichte, the State "is not to be negative, not to have mere 
 police functions, but to be filled with Christian concern, especially for the weaker 
 members. The conceptions of property and contract are such as compel such inter- 
 vention on the part of the superior authority in order to realize the ends of justice 
 and equality among men." 
 
 This quotation plainly shows the source of Bismarck's ideas in the paragraph from 
 his speech quoted above. 
 
 Prof. Winkelblech maintained: "The necessity of a general obligatory assurance 
 as alone adequate to protect the laborers in their struggle with the conditions of the 
 great industries."^ 
 
 Another philosopher, Dr. SchaefHe, is called the father of compulsory State insur- 
 ance. He advanced this idea about 1867 in his work on Capitahsmus and Socialismus, 
 in which he maintained that even if State insurance was sociahstic, it was less harm- 
 fully so than the existing forms of charity which he held were only a vicious sort of 
 communism at its worst. In .place of this charity he demanded "a nationalized 
 general self-provision for the whole life." He believed that compulsory insurance is 
 closely analogous to compulsory education. 
 
 At first the Socialists of Germany if not openly opposed to the law were at least 
 indifferent. Of later years, however, it seems the system of social insurance has been 
 approved by the Socialist parties of Germany and its extension urged by them. 
 
 The first German accident insurance law was promulgated in 1883 and a sickness 
 insurance law was passed in the same year. These have been amended and the scope 
 of the same extended from time to time. In 1889 the law creating old-age and invalid- 
 ity pensions was enacted, to go into operation in 1891 . In 1911 there was a consolida- 
 tion of all the social insurance legislation of Germany, as the reeult of which, together 
 with some subsequent amendments, an extensive system of social insurance is now 
 in operation in Germany. 
 
 1 Boyds on Workmen's Compensation, p. 27. 
 "^ Boyd, Workmen's Ccmppnsalion. sec. 20. 
 ^ Or.£;anization of Labor, vol. 2, p. 328. 
 
218 SOCIAL TNSUEANCE AND UNEMPLOYMENT. 
 
 HISTORY OP SOCIAL INSURANCE IN ENGLAND AND UNITED STATES. 
 
 The earliest form of what is now called "social insurance" in England was that of 
 the friendly societies. It is stated by historians who have investigated ancient 
 records that the friendly or fraternal beneficiary societies of England developed from 
 the old English guilds. These guilds or brotherhoods are known to have existed in 
 great numbers before there was a king in England, and in the beginning had fpr their 
 main object conviviality and good fellowship, but gradually developed means for the 
 care of their associate members in time of sickness, or his family in the event of death. 
 Their income was derived from regular dues, but in addition to that, the members 
 often made donations or bequests by will. They also had ritualistic work or secret 
 rites for the purpose of binding the members closer together. Thus the ^eat friendly 
 societies of England were originated, and much later the fraternal societies of the 
 United States were organized on their model. This evolution covered a period of 
 1,200 years. 
 
 In the United States the first fraternal society originated in 1868, when John Up- 
 church formed the Ancient Order of United Workmen, an association for the purpose 
 of affording protection to the families of deceased members. His aim was to provide 
 some practical form of aid for the families of wage earners and men of moderate means. 
 Unfortunately, the men who organized these societies, both in England and the United 
 States, were unskilled in the principles of life insurance and knew little or nothing 
 about actuarial calculations, the use of mortality tables, or the actual cost of insurance 
 protection.' The natural result was numerous disastrous failures which in England 
 at last attracted the attention of the British Parliament so that laws were enacted pro- 
 viding for supervision and control of these societies with the aim of preventing as far 
 as possible such failures. Similar legislation with a similar purpose was also enacted 
 in the various States of the United States. 
 
 HISTORY OF workmen's COMPENSATION. 
 
 It will be worth while to give a rather complete history of workmen's compensation, 
 both on account of its present widespread existence and because it has in most coun- 
 tries been the first branch of social insurance created bj^ law. Consequently, in- 
 structive inferences concerning other branches of social insurance may be gained 
 from the history and methods of the workmen's compensation movement. 
 
 The provision by insurance methods for the victims of industrial accidents com- 
 monly called "workmen's compensation," is a branch of social insurance. The 
 fundamentals of this plan were first embodied in statutorjr law by the social insurance 
 legislation of Germany which, as we have seen, began in 1883. The principles of 
 workmen's compensation have since spread, so that, in somewhat different forms, it is 
 now in force in nearly all of the civilized nations of the world. 
 
 In order to understand the reason for this rapid advance, it will be necessary to 
 consider briefly the two main causes to which it has been due. These are: 
 
 (1) The inequitable legal principles fixing the liability or nonliability for accidents 
 suffered by men while worlang for an employer, and 
 
 (2) The rapid and radical change in industrial conditions on account of the develop- 
 ment of the factory system throughout the civilized world, commonly called the 
 "industrial revolution." 
 
 Originally in English speaking countries and also in most, if not all other civilized 
 countries, the fundamental legal principle controlliiig the question of accidents 
 occurring to employees was that he through whose fault an accident occurred could 
 be legally compelled to make compensation to the victim. There was no difference 
 in this respect between an accident occurring to an employee and to a stranger, and 
 there was no special rule respecting employers' liability. If an employee was injured 
 by the neglect of the employer and not by his own fault, such employer was legally 
 liable to pay damages to the employee under exactly the same conditions that he 
 would have been liable to pay damages to a stranger. By reason, however, of the 
 development of different economic conditions as the outcome of the growth of the 
 factory system and other great industrial enterprises which required great numbers of 
 workers so that each employee could no longer be immediately under the direction 
 of the employer, there originated from decisions of the higher courts certain legal rules 
 which made a distinction between the liability of an employer to the employee and 
 the same employers liability to strangers. The universal and rigid application of - 
 these rules by the courts of England and the United States governed by the "common 
 law" finally resulted in a system of law relating to industrial accident which, when 
 
 ' Bu.siness of Insurance, Dmiham, vol. 1, pp. 274-438. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 219 
 
 considered in connection with the altered conditions created by the factory system, 
 was harsh and essentially unjust and, moreover, so expensive and contained so many 
 possibilities of delay and appeal to higher courts that poor persons were often unable 
 to successfully cope with a powerful corporation defendant. These were consequently 
 often able to almost entirely escape just responsibility for accidents. The rules of 
 this system usually termed "employers' liability" can be most easily and fully 
 understood by going back to its origin. This was a decision by Lord Abinger in the 
 English Court of Exchequer in 1837, in the case of Priestly v. Fowler (3 M. & W., 1), 
 which involved the liability of a master for an accident caused by the negligence of a 
 fellow servant of the victim. In the decision the court remarks that there was no 
 precedent for such a case — that it must be decided on general principles and, con- 
 sequently, in doing so, they were at liberty to look at the Consequences of the decision 
 one way or the other. These consequences and the legal (fellow servant) rule 
 announced in relation thereto were vividly stated in the decision which became a 
 precedent for innumerably subsequent cases involving similar conditions. 
 
 The decision in the English case was followed 'by one in Massachusetts (Farwell v. 
 Boston & Worcester R. R. Co.. 4, Met., 49), deciding the question tlie same way. The 
 principle was finally settled in England by the House of Lords in 1858 in the case of 
 Barstonhill Coal Co. v. Reid (3 Macq. House of Lords cases, 266). 
 
 Although the above cases were usually the precedents actually follo-yed by the 
 courts of the United States, there was also in 1837 an independent decision rendered 
 in South Carolina on the same question, also decided in the same way (Murray v. South 
 Carolina Ry. Co.— McMuUens Law (S. C.), 385). 
 
 In Lord Abinger's decision of the Priestly case, in addition to the fellow-servant 
 rule, the rule of assumption of risk is also clearly stated. According to this rule, after 
 an employer has done everything he should do for the purpose of securing the safety 
 of his servants (including proper care in the employment of other servants), eacli 
 servant is held as a matter of law to have assumed every other risk of the employment. 
 These are the risks described as "ordinary," those the servant may reasonably be 
 presumed to foresee that he will be exposed to in the occupation in which he engages, 
 even though by reason of the nature of that occupation unusual or extraordinary 
 hazards may be involved. The other important rule of the employers' liability law 
 is that where the employee has been guilty of contributory negligence he can not 
 recover damages for any injury suffered by hi:n, and that the burden of proof isupon 
 him not only to establish the negligence of the employer, but also that he himself 
 was exercising ordinary care and caution and was free from negligence directly con- 
 tributing to the injury. 
 
 Under the operation of these three rules continually invoked by the able attorneys 
 of the great corporations, the ultimate result was that only a small proportion, of the 
 suHercrs from industrial accidents received any compensation whatever, and in those 
 cases in which compensation was recovered frequently half or more was consumed in 
 the costs of the litigation. It is stated by a recent legal writer ' that under the opera- 
 tion of these common-law rules injured employees have a theoretical cause of action 
 against their employers in only about 13 per cent of the cases of injuries to them, 
 while by various devices, actual recovery of damages was defeated in a considerable 
 part of this theoretical 13 per cent. This substantially amounted to a perversion of 
 justice and finally resulted in the commnn-law employers' liability being rapidly 
 replaced by the workmen's compensation system. 
 
 Germany. — The rules of the common law never were in force in any part of Germany. 
 Consequently, in that nation the main cause for the enactment of workmen's com- 
 pensation was the change in industrial conditions growing out of the industrial revolu- 
 tion which, although it began later in Germany than in England, had a more rapid 
 progress there after it was once begun. The result of the changes accompanying the 
 industrial revolution in relation to industrial accidents was that a large part of such 
 accidents could not be determined to be the result of the negligence of either party. 
 
 The statistics given show that in Germany the percentage due to "general hazards 
 of industry" at 10-year intervals was: 
 
 1887 44. 96 
 
 1897 4L 55 
 
 1907 37. 05 
 
 American estimates place the percentage of accidents due to the general hazard 
 of industry at 23.4 to 71.5 per cent.^ 
 
 T:^nder the legal system of Germany, in common with that of all civilized nations, 
 no person can be held liable for the results of the negligence of another. The German 
 
 1 Boyd, Workmen'.s Compensation, sec. 48 (p. 73). ' Social Insurance, Eubinow, p. 74. 
 
220 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 employer was not liable for accidenta which resulted from the negligence of the work- 
 man himself. • 
 
 After deducting from the total number of industrial accidents those as to \^hich: 
 the negligence could not be determined to belong to either party and those where the 
 accident was the result of the negligence of the workman himself, there remained 
 considerably less than half of the accidents in which there was a theoretical possibility 
 of the workman recovering compensation by law. However, as in England and 
 in the United States, employers were enabled by legal technicalities, delays, and 
 other means to defeat recovery of damages in a considerable number of these remain- 
 ing cases. The practical consequence was that in Germany the workman was, in 
 a majority of instances, not able to get any compensation for the industrial accidents 
 suffered by him, even though the three common-law rules which aided English and 
 American employers to escape were not in force there. The combined effect of this 
 injustice and the critical political conditions in Germany mentioned above was the 
 enactment into law not only of the principle of workmen's compensation, but also 
 of a fairly complete system of social insurance earlier than in anjr other country. 
 
 The German example was soon followed in those European nations whose system of 
 government closely resembled that in Germany. It is a noteworthy fact that England 
 and the United States, where individualism is the most highly developed, were among 
 the latest countries to enact such legislation. Among avowed Socialists this tardines 
 in enacting compensation legislation by those countries where the people govern 
 themselves has been a cause of reproach, but it must be remembered that there are 
 no written constitutions in European countries, but that such constitutions are univer- 
 sal in the United States and made radical legal changes slower and more difficult. 
 
 Other nnlionn. — The principle of workmen's compensation in different forms is now 
 in force in 41 European nations. 
 
 United States. — The industrial and legal conditions which produced reform in the laws 
 relating to industrial accidents in European nations also prevailed in the United 
 States, but better social conditions here^ade the effects less noticeable, so that the 
 question of the adoption of workmen's compensation laws did nqft attract much atten- 
 tion in the United States untU about 1903. ^^'hen, however, consideration of the sub- 
 ject was begun, interest was soon widespread, and numerous legislative commissions 
 were created to study the subject. The first State legislating was New York, which, 
 in 1910, enacted a workmen's compensation law. This, however, was declared un- 
 constitutional by the highest court of that State in 1911. ^ The result of this decision 
 was that, in 1913, a constitutional amendment expressly authorizing workmen's com- 
 pensation laws was submitted to a vote of the people of New York and adopted by a 
 large majority. In accordance therewith the New York Legislature in 1913 en- 
 acted a new workmen's compensation act which has successfully passed the ordeals 
 of the courts of that State. ^ The movement spread rapidly throughout the country, 
 and up to the present time workmen's compensation laws have been enacted in 31 
 of the 48 States of the Union, and Alaska, the Philippines, and the Canal Zone. 
 These laws may be arranged in three broad groups, according to certain fundamental 
 principles embodied therein, as follows: 
 
 New Jersey and Massachusetts plan: Acceptance of compensation principle op- 
 tional, bnt penalty of abrogation of three common-law defenses as to employers not 
 accepting. ~State specifies what the amount of the compensation shall be. In Mas- 
 sachusetts it is further required that if the employer accepts the compensation prin- 
 ciple he must furnish a guarantee (commercial insurance company or mutual em- 
 ployers' association) that the compensation will be paid. 
 
 Ohio plan: Acceptance of compensation principle optional, but penalty of abro- 
 gation of three common-law defenses as to emj)loyers not accepting. If employer 
 accepts compensation principle, he must insure in the Ohio State fund or give secu- 
 rity to carry his own risk. 
 
 Washington plan: This provides a complete system of compulsory State insurance 
 for enumerated industries covering nearly all those in the State. The State insti- 
 tution collects the insurance' premiums and adjusts and pays the losses directly. 
 
 CONSTITUTIONALITY OP WORKMEN'S COMPENSATION LAWS UNDER STATE AND FEDERAL 
 
 CONSTITUTIONS. 
 
 Most of the compensation statutes of the different States of the United States have 
 either been before the highest courts of appeal of such States and have been upheld 
 or are so similar to statiites which have been declared constitutional that there remains 
 no doubt as to their constitutionality so far as the State constitutions are concerned. 
 
 1 Ives V. South Buflalo Ey. Co., 201 N. Y., 271; 94 N. E., 431; 24 L. R. A. (N. S.), 162 n. 
 
 2 Jenson ». SDUthern Paoilic Co., 215 N. Y., 514; Walker v. Clyde Steamship Co., 216 N. Y., 529. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 221 
 
 There still remains, however, some question as to whether they or some o£ them may 
 ^^1?' c? i° conflict with the Constitution o£ the United States, and particularly with 
 the fifth and fourteenth amendments thereto, which prohibit property being taken 
 without due process of law." It is maintained by their opponents that the effect 
 of such law IS to compel an employer to pay directly or indirectly damages for injuries 
 from accidents where he was guilty of no negligence, and that this amounts to a tak- 
 ing of property without "due process of law." For the pui'pose of avoiding this 
 constitutional objection, most of the statutes have been so drawn as to make the 
 acceptance of the compensation principle optional with the employer, but with the 
 purpose of inducing him to accept this principle, penalizes him if he does not do so 
 by depriving him of the thi-ee common-law defenses of negligence of fellow servant, 
 contributory negligence, and assumption of risk. 
 
 The question whether or not a workmen's compensation law without any option in 
 this respect is in conflict with the Constitution of the United States and therefore 
 invalid has not yet been directly passed upon by the Supreme Court of the United 
 States. This court has, however, refused to declare unconstitutional the workmen's 
 compensation act of the State of Ohio, which leaves acceptance optional, but deprives 
 the employer of the three common-law defenses if it is not accepted.' The only 
 question, however, directly decided by the Supreme Com-t, in this case was that the 
 limitation therein of the application of the act to shops with five or more employees 
 was not an arbitrary and unreasonable classification. The Supreme Court has also 
 rendered decisions upholding the power of the State ^ and the Federal ' Governments 
 within their respective spheres to abrogate the fellow-servant and contributory- 
 negligence defenses, notwithstanding the "due-process" provisions of the fifth and 
 fourteenth amendments to the Constitution of the United States. Furthermore, it 
 does not appear that there are any decisions sustaining the conception that the crea- 
 tion of a civil liability requires that some one be found to be morally at fault. On 
 the other hand, the Supreme Court has rendered a decision upholding the power of 
 the States to compel railways, although not negligent, to pay for fires caused by their 
 locomotives.'' This decision, however, is claimed to be based on the rule that an 
 extraordinary liability has long been recognized against the harborer of fire. By 
 another decision it wa? held constitutional to compel a common carrier ebgaged in 
 interstate commerce receiving merchandise for interstate shipment beyond its line 
 to pay for damage to such merchandise, even though such original carrier was free 
 from negligence.^ The opinion of legal writers appears to be that when the question 
 is squarely presented to the United States Supreme Court the workmen's compensa- 
 tion statutes containing the optional provision will not be held to be in conflict with 
 the fifth and fourteenth amendments to the Constitution of the United States, and 
 that there is considerable probability that even those statutes, such as the State of 
 Washington without the optional feature, may also be sustained.'^ 
 
 HISTORY OF SICKNESS IXSURANCE. 
 
 The first nation to create by law a system of public sickness insurance was Ger- 
 many, but its statutes did not originate the idea. Sickness insurance in Germany 
 began in the form of numerous voluntary associations long prior to the enactment of 
 the social insurance laws about 1883, by which, however, these voluntary organiza- 
 tions were largely preserved. In the 1911 revision of the social insurance system of 
 Germany, the same policy was continued. At the present time, the law provides 
 almost universal compulsory sickness insurance for working people, as well as certain 
 other classes of population, receiving less than a certain income (|750 annually for 
 teachers, oflBcials, foremen, etc.). 
 
 _ Sickness insurance is effected by means of several separate funds. There are local 
 sickness funds, rural sickness funds, establishment sickness funds, guild sickness 
 funds, miner's sickness funds, and substitute sickness funds, formed separately for 
 each particular branch of employment and restricted to small districts. The sick- 
 ness insurance is compulsory for all persons employed in the field of industry, trade, 
 and commerce, for miners, for agricultural workmen, while for oflficials and clerks 
 only with yearly salaries up to 2,000 marks. Since 1911 compulsory furthermore 
 
 'Jeffrey Manufacturing Co. v. Blagg, 235 U. S., 571. The case of Jenssn ». Southern Pacific To., 215 
 N. Y., 514, is now in the Supreme Court. 
 
 = Missouri Pacific RaUway Co. v. Machie, 127 U. S., 205; Tollis v. Lake Erie & Western E. E. Co., 175 
 U. S., 340. 
 
 ' EI Paso & North Eastern Railway Co. v. Guiterrez, 125 U. S., S7. 
 
 < St. Louis & San Francisco Ry. Co. v. Mathews, 165 U. S., 1. 
 
 '' Atlantic Coast Lines R. R. Co. v. Riverside Mills, 219 V. S., ISff. 
 
 ' See articles by Eugene Wombaugh, 25 Harvard I/aw Review, 129; and by Miles M. Dawson, 22 Case 
 and Comment, 275. 
 
222 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 for household servants, teachers, and tutors, persons engaged in home-working indus- 
 tries, ship's crews of German seagoing vessels, and the crews of vessels engaged in 
 inland navigation. Besides that, voluntary insurance is permitted under liberal 
 conditions to persons who do not belong to those mentioned above. 
 
 Such funds are administered jointly by emplojrers and employed under the super- 
 vision of the State. Of the entire cost of such insurance employers pay one-third 
 and employed two-thirds. 
 
 Benefits granted to an employee falling sick; gratuitous medical care, including 
 the provision of spectacles, trusses for rupture, sickness pay amounting to at least 
 one-half of the average daily wages for a period of 26 weeks — the funds are authorized 
 by law to extend the sickness pay for an entire year — hospital care, care in the home, 
 together with an allowance for the family in the case of hospital treatment; a pecuniary 
 benefit is paid in maternity cases for a period of 8 weeks. In case of death funeral 
 benefit amounting to 20 times the average daily wages is allowed to the family. 
 
 1912: 
 
 Insured men 11, 049, 275 
 
 Insured women 4, 061, 573 
 
 Together 15, 110, 848 
 
 Sickness fund (average) 22, 838 
 
 Cases of sickness (insured unable to work): 
 
 1912 6, 525, 858 
 
 1885-1912 105, 416, 186 
 
 Days of sickness (insured unable to work): 
 
 1912 128, 381, 213 
 
 1885-1912 .1, 932, 306, 719 
 
 Sickness funds paid (1,000 marks) for — 
 
 Doctor 
 
 Medicine .' 
 
 Sickness pay to insured 
 Sickness pa.y to family. 
 
 Cliildbed benefit 
 
 Hospital 
 
 Funeral benefit 
 
 Other benefits 
 
 1912 
 
 95,249.7 
 61,467.1 
 171, 647. 9 
 8, 873. 5 
 7,241.9 
 64, 994. 1 
 9, 508. 5 
 8, 613. 3 
 
 425, 596. 
 
 1,109,264.3 
 785,963.4 
 2,217,767.3 
 58,618.9 
 84,225.3 
 688,750.6 
 149,234.0 
 82,024.0 
 
 5, 176, 737. 8 
 
 England. — In England one of the main functions of the long established friendly 
 societies was sickness insurance. These organizations are, no doubt, descended from 
 the medieval guilds and have been preserved by recent social insurance regulation 
 in England. 
 
 Under the British national insurance act of 1911, insurance against sickness is 
 called health insurance, and is combined with invalidity or disablement insurance. 
 Under its provisions, health insurance is compulsory on all employed persons aged 16 
 and upward, excepting those in the naval or military service, or other employment 
 of the nation, or under local public authorities for whom adequate sickness or disable- 
 ment provision has been made. A special provision is made under other acts for 
 railroad employees and teachers. Those not subject to compulsory insurance may 
 insure voluntarily if they are engaged in some regular occupation and are wholly or 
 mainly dependent for their livelihoods for their earnings in such occupation, or have 
 been insured persons for a period of five years or upward and do not have an annual 
 income from all sources exceeding $778. All insured persons must be residents of the 
 United Kingdom, but there is no discrimination in respect to citizenship. 
 
 The weekly health insurance dues in England are in amounts as follows: 
 
 Paid by- 
 
 Insured . . 
 Employer 
 State 
 
 For male 
 persons. 
 
 4d. 
 3d. 
 2d. 
 
 (8 cents) 
 (6 cents) 
 (4 cents) 
 
 Female 
 persons. 
 
 3d. (6 cents) 
 3d. (6 cents) 
 2d. (4 cents) 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. ' 223 
 
 But for woiiers earning less than 15s. ($3.75) a week, the part of the dues paid by 
 him are reduced aa follows: 
 
 If earning 2is. (67i cents) a day or less, 3d. (6 cents). 
 If earning 2s. (50 cents) a day or less. Id. (2 cents). 
 If earning IJs. (STJ cents) a day or less, nothing. 
 
 Employers are authorized to make payments for their employees and deduct these 
 from wages. No payments are required after 70 years of age. 
 
 The benefits given under the health insurance consists of medical treatment and 
 attendance, medicines and such medical and surgical appliances as may be prescribed 
 by the conamission. Also treatment in sanitariums or otherwise for persons suffering 
 from tuberculosis or other diseases designated by the local government board, and sick- 
 ness benefits during incapacity for work for a period not exceeding 26 weeks as follows: 
 Men, 10s. ($2.43); women, 7s.6d. ($1.83). 
 
 Where incapacity for work from disease or any disablement continues for a period 
 longer than 26 weeks, a disablement benefit of 5s. ($1.22) a week is allowed to both 
 men and women which continues during the whole of the incapacity. 
 
 Maternity benefits and certain additional benefits are also provided under the 
 workmen's compensation act, or otherwise, and theiT benefits reduced so that the 
 total shall not exceed the amount provided by the insurance act, or if the benefit 
 from the other source is greater than that provided by the health insurance act, no 
 benefit from this is paid, nor are benefits paid when the beneficiaries or inmates of 
 any workhouse, hospital, asylum, etc., supported out of public funds. 
 
 These funds are administered by approved societies, where the insured person is a 
 member of such society including friendly societies, trade unions, provident societies, 
 etc. But persons not members of an approved society may pay their contributions 
 to the post ofiice . The general administration of the law is caiTied on by a body known 
 as the insurance commissioners, and an insurance committee with a membership of 
 not less than 40 or more than 80 persons, some of whom must be women, is consti- 
 tuted for every county and borough. 
 
 SOCIAL INSURANCE DESIRABLE FOR THE UNITED STATES. 
 
 A large majority of the population of civilized countries (from 50 to 75 per cent) 
 are dependent for the support of themselves, and their families, upon wages, salaries, 
 or other income from their work. On the average these wages or income are hardly 
 sufficient to enable working people, and in particular those of the working people 
 who have families, to support themselves and their famiUes and secure the enjoy- 
 ment of proper housing, food, clothing, and the other necessities of life in civilized 
 countries, so that there is little possibility of there remaining any surplus income 
 from which suflBcient accumulations can be made to provide for emergencies. 
 
 When accidents, sickness, disablement, or involuntary unemployment afflict par- 
 ticular individuals, the cases are referred to as misfortunes. As regards any one 
 individual it may iDe that he will entirely escape them during his entire life, and, 
 perhaps the majority go through life without being seriously afELicted by any of these 
 misfortunes. Every normal himian being hopes for the best for himself and for his 
 family and believes that he and his loved ones will be immune from the afflictions 
 of misfortune. For the great majority this hope becomes so strong a belief that it 
 controls the conduct of their lives and they entirely fail to make provision for any 
 of these misfortunes, even when they are well able so to do. 
 
 If, however, the viewpoint is changed from that of the individual to that of the com- 
 munity in its widest sense as embracing the entire Nation, then the outlook is en- 
 tirely different. It is absolutely certain that, considering the whole Nation, that 
 there will annually occur a very large number of fatal accidents; that there will be a 
 still larger number of accidents leaving the victim alive, but partially or wholly 
 disabled; that there will be millions of people sick during a year; that there will be 
 an enormous amount of wages lost on account of sickness aiid spent in attempting 
 to be cured of sickness; that there will be a large number of men not able to gain 
 employment, even though they honestly and persistently seek it. The statistics 
 we have heretofore given prove all this beyond any doubt. 
 
 These misfortunes recur with absolute certainty and surprising re|ularity as to the 
 total number affected by each kind of misfortune in each year. It is true that there 
 have been rather gradual changes, either of increase or decrease, such as the decrease 
 which has occurred in some kinds of diseases as the result of preventive efforts, and 
 the decrease in some kinds of accidents as the result of various preventive measures 
 and greater care taken to guard against such accidents. It is, of course, the hope of 
 every lover of humanity that still more can be done along these lines, but it is abso- 
 lutely impossible that recurrence of these misfortunes can be entirely prevented or 
 
224 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 reduced to negligible proportions. As long as the constitution of human nature 
 remains what it is and the organization of industries continues along present lines and 
 includes the widesjsread use of powerful and complicated machinery, at high speed, 
 many accidents are inevi table. Much sickness and other misfortunes as well as feeble- 
 ness in old age are likewise inevitable. 
 
 When once the conception is fully grasped that a considerable, although varying 
 number of accidents, that a large amount of sickness, that many other misfortunes are 
 certain to occur each day, each week, each month, and each year in the life of the 
 Nation; that these are an inseparable part of life under modern conditions and abso- 
 lutely no other conclusion can be reached by any rational being acquainted with the 
 undenied statistics, then it becomes equally clear that provision should be made a 
 against these emergencies just as provision is made for food, clothing, housing, and 
 other things absolutely sure to be demanded by living human beings. That is the 
 only rational, the only humane plan. Considering the communities' interests, that 
 is from the social standpoint, the failure to make provision against the result of mis- 
 fortunes, which are absolutely certain to occur in the* community, is as bad as Ihe 
 failure of the ignorant savage to make any provision for the future while he blindly 
 feasts in the present. The individual is imbued with optimism and is deluded by 
 the whisper of hope that an accident may not happen to him, so he yields to the insist- 
 ent demands of immediate pleasure; but the mind of the community, the soul of the 
 Nation, should be free from such frailties and adequate plans and systems should be 
 devised and put into operation whereby provision will be made for the misfortunes 
 certain to occur constantly in the community. A single catastrophe may not only 
 destroy the earning power of one or many workmen, but if the loss is borne by a single 
 employer alone, his business may be wrecked. 
 
 By means of a social insurance fund security in life and business is substituted for 
 uncertainty, by each contributing a small part of his income to a common insurance 
 fund. Uncertainty has a depressing effect upon the human mind, while certainty 
 gives hope and confidence to all phases of human industry, and enhances ability to 
 work. Therefore, a social insurance system which will replace uncertainty by 
 security, is of great economic value, because it increases productive capacity and 
 gives a solid basis upon which business can be conducted. Commercial enterprises 
 will not be entered upon unless there is a fair prospect of security. This security 
 should be given to the employee and his family, as well as to the employer's property. 
 
 As life becomes more complex, we become more dependent upon each other for 
 production and transportation and distribution of food, clothing, and the other neces- 
 sities, as well as the pleasures and luxuries of life. A high national standard can only 
 be attained through a high standard of family and home life. High home Ufe for all 
 can not be maintained without social insurance which equalizes burdens and renders 
 the securing of adequate subsistance certain. The stahdard of the comfort and happi- 
 ness of its citizens is the first test of a Nation's civilization. We must have greater 
 certainty, of comfort and less poasibiUty of want. We need conditions which will 
 increase happiness and decrease misery. Justice is the essence of government; 
 happiness is the end of government; misery is a condition to be decreased by govern- 
 ment, else civilization is a failure. 
 
 There can be no progress without pleasure and spirit, and no pleasure without 
 leisure, and no leisure without a stable income. We must have better and more 
 equitable distribution of wealth. We must have higher wages for workers. We must 
 have cheaper production for consumers. Both can be accomplished by the increased 
 power of production, and the prevention of needless duplications and burdens which 
 now affect industry. We have an abundance to supply comforts to all, if properly 
 distributed. Society should be soorganized as to provide incomes for all industrious, 
 honest, law-abiding wo^'kers, sufficient for their entire life, including the dependency 
 of youth, the uncertainties of maturity and the infirmities of old age. Otherwise their 
 income is not a living wage. 
 
 Social insurance will result in a more just distribution of the means of subsistence 
 to all at all times and also in a more equal distributiqn of the burdens to which every 
 one is liable. It is a plan whereby all, by the operation of the law of average, help to 
 bear the heavy burdens that befall the few. It encourages self-help, but recognizes 
 that some may not take advantage of the opportunities by which they could make 
 pirovision for accidents, sickness, disablement, unemployment, and old age, and 
 therefore must comprise as an integral part of the plan means to compel those to do so 
 who do not voluntarily take advantage of the opportunities afforded. 
 
 It is absolutely impossible for all these provisions to be made as was largely done in 
 past ages by charity, either public or private. The total demands are so overwhelming 
 that charity which, contrary to the opinion sometimes held, is more active in this age 
 than in past ages, is totally unable to adequately care for the suffering resulting from 
 all misfortunes. Moreover, the effects of charity are unfortunately destructive and 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 225 
 
 degrading to the recipients in a majority of cases. A large proportion of the hopeless 
 paupers now burdening society are the result of too free charity. , 
 
 Tne only rational and effective method of providing- for misfortunes is by a distribur 
 tion of the burdens resulting from them throughout the whole community by means of 
 a universal and properly devised system of social insurance. Every person owning 
 property, particularly houses, is familiar with and takes advantage of the idea of dis- 
 tributing the large annual loss occasioned by fire misfortunes to property through a 
 system of fire insurance, although unfortunately, by reason of the unnecessarily 
 expensive competitive commercial system by which this is carried out, it costs approxi- 
 mately $2 to secure a return of $1 to the actual victim of a fire. The same idea of dis- 
 tribution of loss is taken advantage of in ordinary life-insurance, although unfortu- 
 nately there, too, the cost of effecting this distribution is inexcusably excessive. 
 
 The community at large, however, has not grasped the conception or realized the 
 fact that it is po.ssible by means of a proper system of social insurance to distribute 
 the losses occasioned by all of the greater misfortunes which afflict humanity in such 
 a way that they will be easily borne by all, because the cost to each individual of the 
 community will be very moderate. It is true that beginnings have been made along 
 this line by the various fraternal organizations for providing against the effects of 
 accidents, sickness, and premature death, but usually such organizations are concerned, 
 at most with but one or two of the total number of misfortunes to which every person 
 is liable. By the vast majority of the people of the United States, the idea of general 
 insurance against all harmful contingencies has not yet been grasped. 
 
 That social insurance is possible and practical, is proven by the fact that systems of 
 such insurance making fairly complete provision for nearly all misfortunes have been 
 in actual operation in several European countries for longer or shorter periods, notably 
 Germany and England. Most fair-minded men who have studied the results of the 
 systems of social insurance now in operation in European countries admit that they 
 lave accomplished a great deal toward the amelioration of the hard conditions of life 
 of the workers in those countries. 
 
 Aside, however, from the presumption in its favor on account of its establishment 
 and successful operations in these countries, the plan of a general system of social 
 insurance is inherently reasonable. Furthermore, it is the only system which holds 
 out any substantial hope of making provision for these emergencies. It is true that 
 there are a few extreme socialists as well as communists and anarchists who maintain 
 that the present industrial and economic system is responsible for all of these things, 
 and that if this system was destroyed and some plan of their own substituted, that all 
 kinds of poverty and destitution would bs forever banished from the world. Careful 
 consideration, however, will show the foolishness and absurdity of such contentions. 
 As long as machinery is us d. as long as sickness and dis.ase have power upon hu- 
 manity; as long as liability to disablement in earlier years and certainty of incapacity 
 to work in old age exists, no change, however radical, of our industrial system, or of 
 the scope of governmental operations, or even the destruction of private property 
 could prevent the results of misfortune from being heavy burdens to those numerous 
 and unfortunate members of society who happen to be the victims on which misfor- 
 tune falls. Nothing short of the miraculous and universal interposition of Divine 
 Power to render human natuve perfect, to cause the operation of vast and complicated 
 industrial interprises with its attendant machinery to become absolutely free from 
 danger, and to prevent all disaese, would be sufficient to avert the certain recurrence 
 of these misfortunes day by day and year by year. It is possible that a considerable 
 part of them might be escaped bv going back to a savage state of society in which there 
 being no machinery, there would be no industrial accidents, and where the unmiti- 
 gated forces of nature would produce such an elimination of the weak and unfit, that 
 there would be less disease, and because there was nothing to work for, unemployment 
 would not be an evil. No sane man expects that any miracles will be wrought in this 
 age, nor does he desire a return to the savage stage of society; neither can he reconcile 
 himself and his ideas of justice to a continuation of present conditions in which, 
 although it can be foreseen with absolute certainty that misfortune in various forms 
 will inflict cruel suffering upon a considerable proportion of the community each year, 
 no provision is made against the effects of such misfortune. 
 
 It is impossible for a large part of the working classes and others similarly situated 
 to accumulate sufficient saving in any form to provide for the emergencies liable to 
 happen to them. Although a great deal has been accomplished by means of volun- 
 tary insurance organizations, there is a considerable portion of the laboring class 
 comprising those which most need relief who are either unable or unwilling to take 
 advantage of the voluntary insurance features. Moreover, these are excessively 
 expensive, from 30 to 60 per cent of money paid by policyholders being consumed 
 
 39501—16 15 
 
226 SOCIAL INSUBANCE AND UNEMPLOYMENT. • 
 
 ill expeBsea and profits of eompanies or organizations operating the business. For 
 tliesB reasons a system of compulsory social insurance carried on by the State at itj 
 own expense and with substantial aabsidies from the State, and also in some of its 
 branches with compulsory contributions from employers, is the only practical plan 
 to provide social insurance for all those needing it. 
 
 It is doubtless true that even the most attractive and secure plan that could be 
 devised would fail to induce a certain residue of reckless spendthrifts to make pro- 
 visions for tlis furuie of their families, but in relation to persons so devoid of every 
 parental instinct, and so wanting in- foresight and responsibility as to refuse to take 
 advantage of such opportunities, there should be little or no reluctance for the State 
 to apply compulsion with a strong hand. If such compulsion were only applied to 
 those able-bodied men who failed to voluntarily make provision for their families or 
 their own helplessness in old age, if there existed an absolutely secure State life insur- 
 ance institution ready to serve them without cost, such course would not offend 
 strong individualistic characteristics of our people. It could not be regarded as objec- 
 tionable paternalism, to compel everyone to do what he should have done voluntarily, • 
 but failed to do, in order that the State might be exempted from the necessity of 
 supporting by charity, in the future, .such spendthrift or his helpless dependents. 
 Such action by the state would only be the exercise of a prudent public policy and 
 being in the interest of the whole Nation should, and we believe would be supported 
 by a great majority of the people of the Nation, provided the plan was properly placed 
 before them and sufficient time be allowed to lapse for them to fully understand its 
 benevolent purpose and realize its immense benefits. Mere exhortations to the 
 thriftless are wholly ineffective, and nothing can be accomplished in this way. 
 
 "Subsidized health insurance, experience has shown, has also failed to meet the 
 situation, because its good results are not universal. Voluntary health insurance, 
 whether subsidized or not, does not reach the low-paid workers, the very group who 
 are in the greatest n3ed of protection. State systems of health insurance which pro- 
 vide that all workers are entitled to benefits are the only systems which have reached 
 all groups and provided universal protection." ' 
 
 Sof iai insurance is the only r-'asonable hope of preventing the results of misfortune 
 to all except shirk rs and criminals. For the latter classes B6ci^?ty should institute 
 eff.''ctiv.^ m. asur.^s to protect itself, and also to provide for such classes by their com- 
 pulsory labor. For its d's >rvirg members afflicted with misfortune it should provide 
 by a univ- rsal syet'^m of social insurance. 
 
 One of the strorg st objections is that the cost of a complete system of social insur- 
 ance would be so high as to ba prohibitive. It need not and should not be higher 
 than th.3 b.m.^fits which, if commensurat?, would justify the cost. If compulsory 
 systems of social insurance are enacted, the expanse of conducting the business can 
 be reduC'^d to a v ^ry low, almost n- gligible, amount, because under the present 
 syst'^m of comp ;titiv ? commercial and mutual insurance the great part of the expense 
 is cans d by the employment of great numbers of competitive solicitors, who would 
 be imn.^C''ssary und. r compr.lgory system, which would also dispense with the costly 
 drplif ations of higher officials of the very numerous competitive organizations. The 
 elimination of this vs less and unnecessary expense, together with contributions in 
 some branch. B of social insurance, such as accident and sickness, of substantial sub- 
 sidi '8 by the State, which it would be justified in paying, because it would thereby- 
 be r li ved of the necessity of much public charity, would be sufficient to make 
 adequat ; provision for every workingman and others similarly situated and their 
 dependants at a cost whi'h would not be prohibitive or unduly burdensome upon 
 those insur d, particularly if the payments required from the worker were allowed, 
 encourag d, and "V-.>n comp 'lied to be made in large amounts early in life before the 
 support of a fan:ily r. st d upon him, and at other times as the worker was receiving 
 ample income until his insurance was fully paid up for life and a pension provided for 
 old ag ;. 
 
 If th^'re was created a State or national insurance institution (preferably national,, 
 althorgh it may take a constitutional amendment to render this possible) which 
 would be conduct d without expense to the insured, so that his dependents would 
 r'''c ive the total amount due by actuarial calculation from the payments made hy 
 the d"C as'd, it would go far toward making life insurance serviceable to the hum- 
 blest wage earner. The State or Nation would be justified in paying the expenses of, 
 Buch an institution out of the public funds, because it would prevent many dependr. 
 ents of workers from becoming charges on public charity. Such a public-insurance 
 institution should allow and encourage large payments at any time the insured had a 
 surplus. By a worker starting young and paying in a few hundred dollars rapidly,-, 
 
 1 Bulietin 76, Public Health Service, p. 49. 
 
SOCIAL INSUHANCE AND UNEMPLOYMENT. 227 
 
 before he had a family requiring for its support all or nearly all of his wagrs he would 
 be able to make an adequate provision for his future family, which he would prob- 
 ably be unabl^ to do if r gular paym-^nts must be made throughout his whol ■ lif >. 
 If there existed a State-insurance institution, the policies of which were as certain 
 to be paid as the bonds ci the National Government, there would be no hesitation 
 on the part of wage earners when young to make large payments, which, on account 
 of the large amount of insurance pi-rchaseable with a given sum when he is young, 
 would enable all workers to provide adequat ly by insurance for th.^ir dependent 
 families even if after they actually had a family they were able to make few or no 
 payments for insurance. 
 
 With present enormous and unnecessary expenses of commercial forms of insurance 
 eliminated and the distribution of risks carried on at cost and without the enor- 
 mous waste involved in competitive commercial methods, the actual cost, although 
 large, would not be such as should prevent the creation of such system at the present 
 time. Fire, life, accident, sickness, and other existing forms of insurance cost the 
 people of the United States approximately $1,500,000 000 annually. The liberally 
 estimated total annual cost of a complete system of social insurance in the United 
 States would not exceed 12,000,000,000. This would include a considerable part of 
 the cost of the present insurance in the United States, because it would include most 
 present accidents, sickness, and fraternal, as well as industrial life insurance. Con- 
 sequently, it is probable that the placing in operation of a complete system of social 
 insurajQce would not more than double the present insurance bill of the United .States, 
 which is little felt by anyone. Even if thus doubled, the cost of insurance would not 
 Laconvenience the people of the United States, particularly as the distribution of 
 the cost, as well as the benefits, would be much wider and more uniform. 
 
 "Under an efficient health insurance system a contribution of approximately 50 
 cents per week per insured person (25 cents by employees, 20 cents by employers, 
 and 5 cents by Government) should enable the insured person to receive: (a) $7 per 
 week when disabled on account of sickness or nonindustrial accident for a period as 
 lor^ as 26 weeks in one year; (b) adequate medical and surgical care during disa- 
 bility; (c) medical and surgical care. of wife of insured person during confinement; 
 (d) a death benefit of $100. Budgetary studies of large numbers of workingmen's: 
 families show that many workers pay as high as 90 cents per week and receive little- 
 more than actual funeral expenses." ' 
 
 By increasine; the efficiency of workers, promoting the prevention of accident and 
 disease and reducing unemployment, there would be a gradual and continuous de- 
 crease in the total cost of social insurance. But the chief and sufficient recompense 
 will be the immeasurable economic advancement, general social upbuilding and im- 
 provement of the condition of humanity through the prevention and mitigation of 
 suffering from poverty and the consequent increase of contentment and human 
 pleasure. The enormous advance in civilization and the accompanying unquestioned 
 betterment of the conditions of life and happiness of the average worker is but an 
 earnest of what is possible in the future if prudence and wisdom are exercised in 
 directing the future course of social development, and among other things inaugu- 
 rating a complete system of social insurance. The mere economic loss sustained by 
 societjr each year caused by inefficiency resulting from human disablement, poverty, 
 and misery is many fold greater than the total cost of complete social insurance. 
 
 Social irsura'^ce is a scierce or method adnrittirg of almost irfirite variety in 
 respect to the character of the orgarizalior ar d the prartii es ■? hit h iray be impUed 
 to attain the desired result. Urder the presert Federal orgai i?atior of (he Kation 
 into separate States concrete action in most Ut-cb corcerrs primarily (he ir dividual 
 State. The problems involved, however, are Nation wide in their sigrificatce, ard 
 we need a national opirion on the subject. 
 
 The value of irsura'^ce is ir'dicated by the extorsive manner in vhich the excess 
 sively costly commercial insurance agairst loss by fire, death, ard accidents, and 
 sickness have been taken advantage of by the wealthier classes. This may be ovirg 
 to superior foresieht of these classes or the better financial ability to pay the cost, or 
 both. However this may be, it is urdeT-iable that ir surance is more seeded by v age- 
 workers and others in like situation than by the wealthier classes, and should be 
 carried by them universally. In order (hat this may be acrompliEhed, hoTi ever, it ia 
 necessary to pro\'ide a system or systems by t» hie h sue h insurance can be sec tired at a 
 very low cost of maT>agement, and (he advantages so strongly presented that even 
 those with little foresight or thrift will be led to take advantage of them, ard including 
 compulsion to be applied to those v holly not having suflBcient foresight to take 
 advantage of a good system, once created. 
 
 1 Bulletin No. 76, Public Health Service, pp. 67-68. 
 
228 SOCIAL INSUKAKCE ANI> UNEMPLOYMENT. 
 
 Tkere is liable to be some prejudice caused in the minds of those unfamiliar with 
 insurauce matters by the name, social insurance, on account of the implication that 
 it is primarily a part of the creed of the socialistic and communistic parties. This 
 idea is baseless. Historically, in Germany, where it originated, the Socialists opposed 
 what we now term social insurance. In fact it was devised by Bismarck as a means 
 of defeating the Socialist movement, while it ia now accepted by many Socialists in 
 the same way that they accept vaccination against spwllpox and typhoid fever as 
 beneficial. This does not render it a distinctively socialistic measure, nor should 
 it be included in any prejudice in the minds of the general public against the doc- 
 trine of the Socialists and Communists political parties 
 
 It ia admitted that the compulsory element of the social insurance system implies 
 that there is a considerable proportion of the people who do not have sufficient self- 
 control, foresight, and thrift to voluntarily take advantage of the benefits of social 
 insurance, even when the plan included large contributions from employers and 
 substantial subsidies from the Government. This is sad and discreditable, but is an 
 unalterable fact, which must be taken into account in considering social plans, because 
 under modem times even the thriftless and reckless can not be abandoned to perish 
 by starvation and disease when unable to earn their own support. Therefore, com- 
 pulsion should be applied to the thriftless, to make them at least assist in making 
 provision for the emergencies which will certainly later occur to some of them. 
 
 It is coming to be generally admitted by those most competent to judge that, for 
 any branch of social insurance to even approximately fulfill its purpose by furnish- 
 ing protection to the classes most needing the same, that it must be made compulsory 
 on all who can not furnish proof that they have otherwise made provision for theix 
 •dependents and themselves against all the emergencies which bring disaster to those 
 without money. Among these, one of the most recent is Dr. S. S. Huebner, professor 
 of insurance and commerce in the University of Pennsylvania, who, in a recent 
 address, advanced this idea, saying in substance: 
 
 The evidence abundantly shows that a comprehensive plan of insurance jjrotection 
 for wage earners can not be left to voluntary aetion. The success of ordinary life 
 insurance companies has been due primarily to the agency system, but these have 
 not and can not succeed in reaching the majority of wage earners. The voluntary 
 
 Elans of life insurance undertaken by Governments have also been failures, as shown 
 y the results in England, Massachusetts, and Wisconsin; His conclusion is that if 
 the benefits of life insurance are to be generally applied, it will be necessary for society 
 to use the principle of compulsion. Compulsory education is already accepted as a 
 matter of course, and the principle is rapidly being extended as a preventative of the 
 evils arising from the extensive alcohol habit, within the social insurance field, a 
 considerable number of States have made industrial accident compensation avowedly 
 compulsory, and in effect, it is compulsory in all. Life insurance against premature 
 death, and also insurance against sickness and disablement are many times more 
 important than industrial accident co^npensation, and it is just as fair to apply the 
 eompulsory principle to these as to insurance against industrial accidents. 
 
 The averse working family needs support just as badly in case the income producer 
 dies, or is disabled from other causes tnan when this occurs while engaged in his 
 industrial pursuits. Any comprehensive plan must contain the element of compulsion 
 if general social insurance is to be .universally applied among wage earners and is to 
 iulfill its great mission to this class. But in the application of compulsion^ emphasis 
 should be placed on the fact of insurance rather than the method of insurance. There 
 riiould be a compulsory requirement of a minimum protection but no conapulsion as 
 to the insurer from whom the insurance must be purchased. The insurance should 
 be compulsory and the insurer optional. 
 
 The compulsory insurance plan should be supported for the reason that if life insur- 
 ance is required of all workers with dependents, the present level of wages must rise 
 sufficiently to pay the required insurance, thus placing the insured in as favorable a. 
 position as he previoilsly was when he carried no insurance at all. Then the required 
 insurance will help to cause the policyholder to realize its great benefits and bring 
 him in to the market for additional insurajice, or promote savings for other purposes. 
 
 Still another consideration, and one which should have great weight with those 
 desiring social progress, is that a system of social insurance would be the best practical 
 school in cooperation possible and should help to soon bring about the era of universal 
 production and exchange through a complete system of cooperation which would give 
 to the workers the entire results of their toil apportioned to each according to the 
 demands of justice instead of the present capitalistic and monopolistic system in which 
 the managers appropriate all of the products, of labor excepting only such pittanc.^ as 
 may be necessary to hire the workers to perform the labor necessary in production. 
 This is possible by reason of the pressing necessities for food, clothing, and other requi- 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 229 
 
 Bites of life which operate ceaselessly and relentlessly upon the worker, while the 
 capitalist 18 largely free from their coercive influence. The only escape is by universal 
 cooperation and whatever hastens its coming is worthy of the support of every lover 
 of humanity. 
 
 In addition to the general considerations in relation to social insurance as a whole, 
 there are certain considerations concerning various branches which ran be best 
 apprehended by arranging them separately for each branch, 
 
 workmen's accident compensation. 
 
 Under the modern industrial methods involving the use of powerful and compli- 
 cated machinery in great factories, accidents occur with much regularity when the 
 different industries are considered in the aggregate. This continual occurrence of 
 accidents can only be partially prevented by the most careful measures on the part 
 of both the employer and the employee. Thi. means that there is a certain propor- 
 tion of accidents which are inherent in the different trades and indudtries. This is 
 often called the "trade risk," to distinguish it from the accidents which are caused 
 by negligence of either employer or employee. The proportion varies in different 
 industries and at different times, but in the best managed industries, where most of 
 the accidents due to negligence are eliminated, the proportion of "trade risk" acci- 
 dents, are high. Under the common-law system of employers' liability compensation 
 could not be recovered by the workingmen who suffered accidents occurring without 
 fault on the part of the employer. Nevertheless, such accidents of course caused 
 suffering and loss of time and wages just as effectually as though caused by the 
 negligence of the employer. 
 
 Workmen's compensation distributes such losses, causing them to be paid by the 
 industry, and ultimately by all the consumers of the product of that industry, which 
 is simple justice, because, on account of the modem division of labor, all share in the 
 fruits of the workmen's labors. Therefore, all should as a part of the price of man- 
 ufactured goods make such contribution that the burdens and losses occurring to 
 workers from inevitable accidents in the industry can be compensated. 
 
 Laws requiring compulsory compensation to be paid by the employer or insurance 
 carried for that purpose excites in him a direct and strong interest in measures of 
 prevention, and in this way workmen's comjjensation becomes an important aid to 
 the prevention of accidents which, of course, is even more desirable than mere com- 
 pensation, which seldom fully reimburse., the worier for the money he actually lost 
 through the accident, and never affords compensation for the suffering. In this 
 way, through the employer, workmen's compenjatlon exerts a constant economic 
 pressure toward prevention, which has more influence toward reducing accidents 
 than the laws requiring occasional factory inspection. 
 
 Another important benefit of workmen's compensation is that it prevents many 
 of the serious antagonisms which develop between employers and the employees,' 
 which have tended to cause them to indulge in mutual recriminations, instead of 
 both exerting themselves earnestly and constantly to reduce accidents. It effectively 
 promotes mutual understanding and cooperation, and causes the employees to take 
 a deeper interest in the business of the employer and work earnestly tor the pros-" 
 perity of his enterprise. It relieves the employers from the Iocs of time and heavy 
 expense incident to long and bitter lawsuits about accidents. 
 
 The fact that none of the 31 States of the Union which have passed workmen's com-' 
 pensation laws, or of the 41 European nations which have enacted different forms 
 of workmen's compensation laws, have seen fit to return to the old system, is strong 
 proof that the compensation principle is just and promotes the welfare of society. 
 If the contrary were true, experience would by this time have disclosed it, and some 
 at least of the States and nations concerned would have retiu'ned to the old system.' 
 That this has not been done, is conclusive proof that workmen's compensation works 
 for the greatest good to the greatest number, which is the highest criterion which can 
 be applied to any law. 
 
 It is not improper for the State to operate a State institution for industrial accident 
 insurance, because, under private commercial accident insurance the expenses are 
 excessive, usually amounting to half and sometimes to more than half of the premiums 
 collected from the employers. This throws an unjust burden upon society in the 
 form of the higher prices which must be charged by the employers to pay the exces- 
 sive expense of this insurance. In the end, all the cost, including useless expenses,; 
 is paid by the consumer. In a compulsory, exclusive State fund, the expenses would 
 either be very low, or paid altogether by the State. 
 
 By the passage of workmen's compensation laws, all of which in practical effect 
 compel nearly all employers to take out accident insurance for their workingmen, the 
 
230 SOCIAL INSUKANCE AND TINEMPLOYMENT. 
 
 State has created a vast insurance business. TKis business is carried on by private 
 companies in an exceedingly and needlessly expensive and cumbersome manner, 
 and they are able to charge such rates that they make immense profits besides. 
 Instead of thus by law favoring the accident insurance companies, at the expense of 
 everybody concerned, the State should do -this insurance businees itself through a 
 State fund as in Washington and Ohio, and thereby render it as little burdensome as 
 possible to the consumers who ultimately bear the burden of such insurance, 
 
 INDUSTMAL DISEASE COMPEIJSATION . 
 
 When once the principle is admitted that workmen should be compensated out of 
 the proceeds of the industry, for injuries by accidents arising out of and in the course 
 of their employment as is now generally done, it is entirely inconsistent not to like- 
 wise provide compensation for disease arising out of and due to occupation. 
 
 In the industries of the Nation there are men who, because they believe it is neces-, 
 aary to support their families or themselves enter occupations which involve much 
 danger to health or life. When a man under the accident compensation law begins 
 his work, he knows that only a small fraction of 1 per cent of the men so occupied will 
 meet with an accident, and is willing to take a chance, because he and all of us believe 
 deep down in our hearts, that accidents will not happen to us, but when a man goes 
 down into a caisson, beneath the river bed, and works in short shifts under heavy air 
 pressure, he is doing work which is very liable to result in disease or death, and those 
 who profit by his heroism should compensate that man and his family for what he has 
 suffered and sacjificed. In occupations in which lead is used, lead poisoning is a^ 
 certainly to ensue to some workers asTiight is to follow day. Out of 7,400 employed 
 in smelting and refining works, ] ,769 cases of lead poisoning were discovered in the 
 year ] 9] 2 ; while out of 1 , 600 employed in white and red lead industry, 388 developed 
 lead poisoning in 18 months.' 
 
 Other well-known poisons such as phcsphorus and arsenic also produce very dele- 
 terious effects to the workers in the industries using them. Other less well-known 
 poisons such as ammonia, aniline dyes, carbon monoxide, calcium hypochloride, 
 wood alcohol, oxalic acid, carbolic acid, and turpentine oil may also be iniurious. 
 There is also a possibility of contracting anthrax and glanders from handling hides or 
 animals infected with those diseases. 
 
 The effect of other occupations toward producing disease is plainly shown by the 
 statistics already given (p. 204). If a council of doct"'rs had framed the first workmen's 
 compensat'on act, it is probable they would have chi^isen occupational diseases instead 
 of accidents for compensai'^n, if only one class could have been obtained. The reason 
 that accident compensation was considered first is that they are more dramatic. 
 The blood flows, the limb is broken, the man is suddenly stricken into helplessnes 
 and carried to a hospital or to his home. Occupational diseases are entirely dif- 
 ferent. There is nothing dramatic about them. Slowly and insidiously the poison 
 , works upon the system of the victim: anemia, weakness, and helplessness crawl on 
 so slowly that even the sufferer himself is not aware when thev begaa. 
 
 Every consideration of social justice demands that occupational diseases be com- 
 pensated by contributions wholly from the employers in the same way that industrial 
 accidents are now generally compensated. It is very probable and strongly to be 
 hoped that compensations for industrial diseases will result in the wider and more 
 thorough application of preventive measures against occupational diseases which 
 would be a much more valuable result than mere compensation. Furthermore, 
 these preventive measures if carefully planned and thoroughly carried out by both 
 employer and employee, can prevent a much larger proportion of occupational diseases 
 than it is possible in the case of preventive measures against accidents which always 
 involve more of the unforeseen than the effect of poisons. An occupational disease 
 compensation system would strongly direct the attention of all parties to and so 
 disclose the effect of poisons, etc., which is now little realized by either employer or. 
 employees, and in this way promote preventive measures. 
 
 GBNEKAL SICKNESS INSUBANCB. 
 
 In relation to general sickness insurance, the arguments in favor of social insurance 
 as a whole apply so fully that there is no need for repeating these arguments which 
 have already been given. The statistics we have reprinted show that there is at all 
 times an immense amount of sickness in every part of the United States, and that 
 this results in immense loss of working ability, expense for medical treatment among 
 
 ' Bureau of Labor Statistics, Bulletin 141, p. 13, 
 
SOCIAL llSrSUEANCE AND UNEMPLOYMENT. 231 
 
 workers and others of like financial means. Keeping in mind that from various 
 causes a very large part of the workers are not able to accumulate any property, 
 then when sickness comes, want and suffering follow immediately. The fact that 
 the disease itself, as well as the lack of any accumulations of property are frequently 
 only the inevitable result of the ignorance, negligence, and the shortsightedness of 
 the sufferer, does not diminish his misery. 
 
 For such a universal need charity is both an inadequate and improper remedy. 
 A systemof compulsory sickness insurance is the best means for dealing with sick- 
 ness and its consequences. The State is justified in making a contribution because 
 this will prevent it from becoming liable to support the sufferer by public charity, 
 while a contribution from the employer is justified on the grounds of the greater 
 efficiency and better supply of labor in his industry, as well as on other more altruistic 
 grounds. Unless some compulsory method is adopted, there will always be large 
 numbers who will fail to make provision for sickness, and for the benefit of this class 
 it should not be considered a burden for those who would make provision for them- 
 selves to be obliged to make a contribution, provided they also when sick share in 
 the benefits of such insurance. 
 
 As we have seen (p. 196), the yearly total number of fatal accidents is 82,520 and of 
 nonfatal accidents causing more than seven days loss, is 208,301 . 1 his is justly regarded 
 as terrible, but comparing these figures with those of sickness, ordinary and industrial, 
 and the loss occasioned thereby (pp. 202 and 203), we find that sickness is still worse and 
 beginto realize as well as it is possible for the human mind to comprehend such enor- 
 mous numbers, the vast loss suffered by the workers on account of sickness. These 
 statistics show conclusively that sickness is a greater cause of suffering and destitution 
 than all kinds of accidents combined. 
 
 We believe that this judgment will be confirmed by the personal experience of 
 every reader who on thinking the matter over will invariably, we believe, remember 
 that in the circle of his or her acquaintance, very much more suffering and loss of 
 time has been caused by sickness than by accidents. This holds good even in mining 
 or manufacturing districts, where the largest number of accidents occur. Conse- 
 quently, even though there is lack of complete sickness statistics for the whole of the 
 United States, the indisputable information available and the uncontrovertible con- 
 clusions drawn therefrom, render it entirely unnecessary to wait until complete 
 statistics concerning sickness in the United States are collected before we consider 
 what steps should be taken to provide means for alleviating the enormous and appalling 
 amount of destitution and suffering annually caused by it in the United States. 
 -Owing partly to the immense amount of sickness always prevalent in the United 
 States, and partly to the incorrigible improvidence of a grear part of the classes whi( h 
 suffer most from this sicknesss. it is now and always will be wholly impossible for 
 voluntary insurance to protect more than a part of our population against sickness. 
 This is proven by the following undisputed facts regarding existing voluntary 
 sickness insurance funds: 
 
 "1. The funds of the trade-unions affiliated with the American Federation of Labor 
 cover only a fraction of their members. 
 
 "2. The establishment funds although constantly including more workers never 
 embrace more than those in the large establsihments controlled by enlightened 
 employers. 
 
 "3. Even the fraternal societies are not likely to reach any great number even if it 
 is desirable to extend this unscientific method of insurance. 
 
 "4. Moreover, it does not seem possible that the commercial health insurance can 
 develop to meet this need since it ha^ taken the companies 25 years to build up a busi- 
 ness, not yet including a million policies. 
 
 "5. Nor can the industrial life insurance companies do very much in this field, 
 according to the testimony of Mr. John Dryden, president of the Frudential Life 
 Insurance Co."' 
 
 Moreover, by means of a system of sickness insurance, provision can be made for 
 giving the necessary medical treatment much more cheaply and effectively than can 
 otherwise be done, and, above all, preventive measures will be effectively encouraged 
 and made universal. This alone would be worth all sickness insurance would cost. 
 A system of sickness insurance to which all contribute should and would give each 
 contributor a direct and personal intere8l>in keeping down sickness in the community 
 in every way possible. Many diseases depend either partially or wholly upon the 
 neglect or absence of adequate precautions by each member of the community against 
 them. 
 
 > Private letter Mar. 31, 1916, from secretary of the American Association for Labor Legislation to Hon. 
 Eofus M. Potts, insurance superintendent of Illinois. , 
 
232 SOCIAL INSURANCE AND UNRMPLOYMENT. 
 
 The most generous indemnity can not fully compensate any person or his dependents 
 for the loss and suffering occasioned by sickness. The favorable results which we have 
 mentioned as attending the preventive measures which have been so far applied, 
 render us confident that, as the science of preventive medicine is still further devel- 
 oped and the benefits of its methods become more and more generally understood by 
 the masses of our population, that the ravages of disease will be (ionstantly lessened, 
 particularly as relates to the contagious and infectious diseases. Perhaps even in 
 respect to those diseases which are on the increase more profound study may discover 
 means and develop methods by wliich prevention can accomplish much toward the 
 lessening of these. In relation also to this class of diseases, there is strong hope that 
 the new science of eugenics will be able to accomplish much toward their prevention 
 when its principles become more generally understood and acted upon both by the 
 individual and by society in its corporate capacity t^ing measures to prevent the re- 
 production of defectives, degenerates, and those with vitiated blood and impaired 
 vitality. From this class come the great majority of those afflicted with insanity, 
 epilepsy, as well as many chronic and constitutional diseases, which directly and in- 
 directly constitute an immense and needless burden. Society should not cease for a 
 moment its contest against disease by preventive measures of every kind, but this 
 struggle does not mean that we should not at the same time encourage and extend 
 sickness insm-ance, and thereby mitigate so far as may be the suffering and destitution 
 caused by disease and consequent economic loss. 
 
 ' ' Any system of health insurance for the United States or any State should at its 
 inception have preyention of sickness as one of its fundamental purposes. This 
 country should profit by the experience of European countries, where after a long pe- 
 riod of evolution, prevention is being recognized as the central idea necessary if health 
 insurance is to attain its greatest success in improving the health and efficiency of the 
 industrial population. * * * To obtain the highest degree of success in America, 
 it would appear that health insurance systems should be very closely correlated with 
 National, State, and local health agencies. If these agencies are at present inade- 
 quate, they should be enlarged and strengthened instead of attempting to create new 
 and independent health agencies." ' 
 
 OLD-AGE PENSIONS. 
 
 A very large number of the people of the United States over 65 years of age are de- 
 pendent upon public and private charity to the estimated amount of about $250,000,000 
 annually, and the indications are that the proportion of dependent aged persons is 
 increasing.'' 
 
 The active causes — misfortune, unemployment, low wages, sickness, and disable- 
 ment are increasing. Present efforts at relief, although widespread, are remedial but 
 not curative, only making provision for perhaps one-third of the old-age necessities of 
 •the workers of America, leaving two-thirds unprovided for otherwise than through the 
 operation of the poor laws. 
 
 We must not fail to remember also that not nearly all people who make their living 
 by labor will survive to a time when they will be helpless on account of old age. In 
 fact, taking the whole population, there is only a comparatively small number who will 
 do so. The individual workingman has the excuse that he is not certain that he will 
 live to a time when old age will render him unable to work and that a saving out of his 
 wages, a sufficient sum to support him during old 9,ge, is an unnecessary deprivation of 
 pleasures which he could have enjoyed through' life. In this view of the case, the 
 reasonable thing is that the individual should provide for a possible old age by cooper- 
 ating with other workingmen in some plan of old-age insurance. 
 
 UNEMPLOYMENT INSURANCE. 
 
 The great problems of unemployment are largely due, in last analysis, to the inability 
 of employers and governments to adjust production to demand. The organization of 
 industry IS still crude, awkward, and full of defects, and the result is widespread misery 
 caused by irregularities in work from these defects. 
 
 The best and most numerous customers for the products of manufactories and farms, 
 as well as the main supporters of commerce are the working people, but hundreds of 
 thousands of them are frequently deprived of means to purchase the commodities 
 they need because they have been discharged from employment for one reason or an- 
 other, and thus the whole industrial system suffers and the irregularities are increased" 
 until theybecome so pronounced that theyare called "hard times." The individual, 
 
 1 Bull tin 76, Public Health Serrtoe, p. 61. 
 
 » Old Age Dependency in the United States, Squier, p. 324. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 233 
 
 or even organizations, such as labor unions or lederations, are entirely helpless to either 
 prevent these continuously recurring industrial crises or save the workers from the dire 
 effect of a cessation of their daily income . It is a problem that only society as a whole 
 can have even a reasonable hope of solving. 
 
 The best method available for society in its attempt to deal with the problem of 
 unemployment is unemployment insurance. This may be organized in two ways, 
 the voluntary and the compulsory. The voluntary form is carried out by associations 
 or organizations of workers in a particular industry or trade, and usually is a part of the 
 ordinary trade union which has many other functions. Many of these collect benefit 
 funds which are paid out to the members when out of employment. A common 
 modification of this plan is where these voluntary associations are subsidized or given 
 aid by the State, the city, or other political di\'ision. This subsidy is usually in the 
 form of a certain percentage of the contribution made by the organization. This 
 modification is usually known as the Ghent system, because it was first used in the 
 Belgian city of that name. The contributions by that municipality is 60 per cent 
 of the amount contributed by the union. The city also maintains a municipal labor 
 exchange in the management of which the unions and the employers have equal 
 representatives. Any workman desiring to obtain the unemployment benefit must 
 report at the labor exchange that he is unemployed, and it endeavors to find work 
 for him. Not until the bureau has failed to obtain work for him is the workman 
 eligible to the unemployment benefit. Various modifications of this plan have 
 been adopted in practically all of the cities of Belgium and 25 cities in Holland, 
 20 in France, 10 in Germany, 3 in Italy, and 2 in Switzerland. There is also a national 
 provision for unemployment on substantially the Ghent plan in Belgium, France, 
 Denmark, and Norway. In France the local organizations receive a subsidy of 20 
 per cent of their unemployment benefits paid to workmen, but the idea of unemploy- 
 ment insurance does not appeal to French workmen-. Although Germany has the 
 most complete system of social insurance in Europe, there is no national provision 
 for unemployment insurance. C ertain German cities,.however, as already mentioned, 
 have subsidized unions which pay unemployment benefits on the general plan of the 
 Ghent system. 
 
 In favor of the Ghent system are the ease with which it can be administered through 
 
 existing agencies of labor unions, and the fact that all claims go through the hands of 
 
 officials who are familiar with all the features of the labor market in the trade in 
 
 which the applicant works, and that it results in encouragement of individual thrift 
 
 . and initiative because it only helps those who are willing to help themselves. 
 
 The successful operation in these countries of unemployment insurance should 
 secure for it favorable consideration for the United States. A recent writer on the 
 subject of unemployiment ' makes the following recommendations concerning unem- 
 ployment insurance here: 
 
 ' ' The unemployment insurance systems in use i n foreign countries are not especially 
 adaptable to this country. They would need careful mcdification, based upon a 
 thorough study of conditions here, with due reference to city and State limitations 
 and to the great areas over which labor is distributed. The successful administration 
 of unemployment insurance is logically dependent upon an efiicient system of public 
 labor exchanges which should precede its adoption, or upon the thorough organization 
 of labor and the willingness of capital to have funds to which it contributes paid out 
 through unions. Neither of these conditions prevails to an extent assuring success 
 by this method. Insurance against unemployment should be begun in America in an 
 experimental way by urging unions to increase out-of-work benefits to members; by 
 having industries adopt a system applying to their own plants; by providing State 
 funds to be administered in connection with public employment exchanges, with 
 committees representing employers, the public, and employees, to safeguard their 
 disposition. We shall then be ready to formulate a national policy. 
 
 The argument that social insurance forces the thrifty and unthiifty into a single 
 class and takes away a part of the earnings of the thrifty to be spent for the benefit 
 of the idle and thriftless would perhaps be justified if all of the money which goes 
 into the social insurance fund was collected from the workers; but, as is explained 
 in the description of the various branches of social insurance already given, only a 
 part of the money which makes up the insurance fund is collected from the workers. 
 The proportion of the workers' contribution is different in the various branches of 
 social insurance, ranging from none at all in accident compensation to two-thirds in 
 general sickness insurance in some countries. 
 
 Taking into account the contribution made by the employer and the contribution 
 made by the State in the different nations, the thrifty, healthy, careful worker gets 
 
 1 " Out of Work," a study or unemployment, Frances A. Kellor (1916), p. 483. 
 
234 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 a larger return from the money which he pays into a social insurance fund than he 
 would In any private insuranoe institution, even a mutual, in which the members 
 were most carefully selested in respect to health, morality, and nonhazardous occu- 
 pation. This being true, it is entirely unjustifiable to claim that compulsory social 
 msuranoe would be inequitable to the best workers. The most that can be claimed 
 is thit the more reckless, diseised, or defective receive more of the contribution made 
 by the emjiloyer and the Stite thin the thrifty, healthy, careful workers. The 
 results of negliMnce and improvidence are painful and disciplinary and undesired 
 by anyone. The fact that a larger part of the contributions of other interests to the 
 social insurance fund happens to go to those beneficiaries having these unfortunate 
 personal qualities is not a valid argument against social insurance. 
 
 "He maketh his sun to rise on the evil and on the good, and sendeth rain on the 
 just and on the unjust." ' 
 
 The fact that the sun shines on the evil as well as on the good and that the rain 
 falls on the unjust as well as on the just is not an argument against the liffl -giving sun 
 or rain. Neither should the fact that social insurance benefits even in a higher degree 
 the thriftless, the defective, and the careless be regarded as an argument against 
 so2ial insurance. A system of social insurance need not interfere with the mobility 
 of labor. It would not be difficult if there were a national social insurance system 
 to work out a transfer system which would permit the worker to go wherever condi- 
 tions were most favorable and at the same time retain his place and standing in the 
 syste-ji. 
 
 While the immigration of excessive numbers of workers, such as has occiirred in 
 the past, would give rise to difficulties, these should not be allowed to deprive our 
 people of the beneSts of SDcial insurance. Requirements should and could be made 
 as to a certain period of residence and probably the attainment of citizenship before 
 the benelts, or at least the full benefits, of social insurance would be extended to 
 immigrants. Moreover, owing to the effects of the present great war, as well as the 
 fact that the population of the United States has now increased to the point where our 
 own citizens are sufficient in numbers to do the work of the Nation, it is highly prob- 
 able that never again will immigration bring into the country any such flood of workers 
 as in the past, so that difficulties from immigration are not likely to be serious here- 
 after. 
 
 BLIND COPYING OP SYSTEMS OF OTHEB NATIONS NOT INTENDED'. 
 
 There is no necessity and there is no intention of bhndly copying the social-insurance , 
 system of any other nation, and particularly of those nations whose systems of govern- 
 ment and social organization are not democratic, but despotic and autocratic in prin- 
 ciple. There is no reason why plans f(5r all branches of social" insurance can hot be 
 worked out for the United States which will be adapted to our free democratic Gov^ 
 emment and our accompanying social organization. These will not interfere with ths 
 individualism of our people, but, by affording them protection from the inevitable 
 and crushing emergencies of Ufe, will enable them to more fully enjoy life and Uberty. 
 Social insvLrance should not be condemned because unfavorable reports have been 
 made on the particular plans in use in some of the European countries. These plana 
 are changed from time to time in the countries in which they are in force as their 
 weaknesses and defects are discovered from experience. What we should do is to 
 consider carefully their experience and avoid such defects as have been-found to exist: 
 However, these defects are not nearly so serious or widespread as the opponents of 
 social insurance would have us believe. 
 
 PREJUDICED REPORTS. 
 
 Enrjland. — The recent report of the committee on preliminary foreigh inquiry of the 
 social insurance department of the National Civic Federation on the recently created 
 social insurance system of England, which is frequently quoted by opponents of 
 social insurance, is decidedly one-sided. It was evidently written by some one 
 violently opposed to the idea of compulsory social insurance of any kind, and who 
 was consequently unable to see anything good in the English system on the compulsory 
 plan. The entire report is strongly colored with prejudice.^ Itis'well knOwn that one 
 of the members of this committee submitted lengthy briefs to the New York cbBsli- 
 tutional convention of 1915 strongly opposing any authorization of social insurance 
 by that body, and has elsewhere vigorously and continually opposed any kind of 
 insurance by the State. Not being made by impa,rtial men, litue weight shoiild be 
 
 1 Matthew: V, -fS. 2 Survey 33:696. 
 
SOCIAL INSURAOsrOE AND UNEMPLOYMENT. 235 
 
 ^7t^ ^ *''^^ statements made in this report. Moreover, the social insurance system 
 of England has been in operation tooshortatimefortrustworthy results to be attained. 
 
 Oermany. — ^The unfavorable results charged against the social insurance system of 
 Germany are greatly exaggerated. Prof. Hugo Munsterberg, the eminent psycholo- 
 gist of Harvard University, who, being a native and still a citizen of Germany, is 
 .intimately acquainted with the social conditions in that nation, says: 
 
 "Of course, you hear in Germany the critical remarks about some features of the 
 insurance system, but the common ground on which all these criticisms are placed 
 is the enthusiastic satisfaction with the system as a whole. I have never met an 
 educated German who would think it better that no such insurance system should 
 exist in Germany. Every criticism is meant as a contribution to possible improve- 
 ments in detail, but never as a negation of the principle itself. The German nation 
 knows that the introduction of the system was the greatest social reform which has 
 ever been carried through in the German Empire, and compared with the general 
 success the complaints are almost trivial. There is a hundred times more complaint 
 both in Germany and in America about the system of private capital; and yet the 
 fact that you can eaeiljr bring together some radical socialistic utterances about the 
 maUciousness of capitalism would not indicate that America or Germany fundamen- 
 tally disapprove of the institution of private capital." ' 
 
 Impartial writers who have investigated the social insurance system of Germany 
 have formed favorable opinions of its results. W. H. Dawson, an English writer, 
 thoroughly acquainted with German conditions and who has published several books 
 on Germany, says in his Evolution of Modern Germany (pp. 156-157): 
 
 "The effect of the triple system of. insurance is to secure workpeople in times of 
 fflcknesa or accident complete medical treatment, either at home or in hospital, with 
 such monetary benefits that the home can be maintained at the usual level of com- 
 fort without any serious depletion of family savings, where such exist, while pensions 
 are granted in the event of premature invalidity and in old age. By this provision 
 the weight of uncertainty and apprehension, which presses so heavily on the lives of 
 worMngmen concerned to meet their responsibilities as heads of families, is sensibly 
 relieved, for, should the worst come, absolute want need not be. feared. Of all the 
 measures passed in the interest of the working classes during the past quarter of a 
 century, the insurance laws are not merely the most beneficent; they are also un- 
 questionalbly the most popular. They are still criticized freely, but only on points 
 of detail and methods of administration; the workman would sacrifice any laws rather 
 than these." 
 
 Frederic C. Howe, a competent student of social conditiors in various countries, 
 in his recent book, Socialized Germany, says: 
 
 "The insurance laws have been in force for 30 years ard to-day Germany is a urit 
 in approval of the legislation which has been enacted. There is no protest from 
 manufacturers or employers. Every one seems to realize the value of these meas- 
 ures in the increased efficiency of the workpeople, tihose health ard well-beirg is 
 greatly improved by virtue of the protection afforded them. * * * Ard a ger or- 
 ation's experience has amply justified the wisdom of Bismarck's prograra. It has 
 in a measure softened the relation of employer ard employee, although it did rot 
 check the growth of the Social Democratic party or weaken its requests for further 
 concessions to its political and social demards. But it has contributed greatly to 
 the efiiciency and well beirg of the v. orkirg classes. It has relieved them of the 
 haunting fear of sickness, old age, aiid destitution. It has completely checked the 
 tendency to emigrate." 
 
 ■The objection that old-age pensiors would force the hardworkirg ard provident to 
 pay for the support of shirkers ard crimiEals, should rot be allowed to turn the Bca,le8 
 against social insurance, because this is already done under the present system which 
 taxes the thrifty to support paupers and also lawbreakers when confined. There is 
 little if any difference between the effects of the two systems in this respect. 
 
 "There is no fundamental reason why compulsory State or National social insurarce 
 would be impossible .under our form of government. It is not irharmorious with 
 republican form of government because it exists in France, in Switzerland, and New 
 Zealand, which have such forms, neither is it inconsistent wi1h our Federal system, 
 because-Germany and Switzerland which have federal systems have successful systems 
 of compulsory State social insurance. 
 
 The old idea of government was that it was an oppressive and repressive force 
 exercised from above upon the people. Remnants of this idea, which was only too 
 correct, still survive in the thoughts of man. The truth of the new Democratic idea 
 
 1 PrivatP Iptter of Prof. Hugo Munsterberg' o Hon. Eufus M . Potts, insurance superintendent, Stiito 
 of Illinois. 
 
236 SOCIAL INSUEANCE AND tJNEMPLOYMEN X. 
 
 of government is that the government is simply the agency through which the people 
 carry out their own will. Government, in mis country, i9 simply a vast' cooperative 
 organization through which the people do cooperatively all those things they can 
 do better that way than they could individually. There is no more pafernalisni iii 
 the Government handling social insurance than there is in the Government buildiJlg 
 and maintainingroads arid' schools. ' • 
 
 The wonderful industrial progress and advance of civilization during fjie past 
 most marvelous century of the world's history has not stopped the occurrence of 
 accidents, sickness, and other misfortunes, nor destroyed their power to bring bitter 
 and undeserved suffering to immense numbers of our citizens. On the contrary it 
 appears to have multiplied their number and augmented their potency so that the 
 nght Bolutibn is more urgently demanded than ever before in the matory of the United 
 States. 
 
 Short Bibliography of Socjal Insurance and Related Sobjectb. 
 
 SOCIAL insurance — BOOKS AND PAMPHLETS. 
 
 Social Insurance, Prof. H. R. Seager. 
 ^ Social Insurance, Dr. I. M. Rubinow. 
 
 Industrial Insurance in the United States, Pfof, 0. R. Henderson. 
 Industrial Insurance, John W. Hegeman. ; 
 
 Workingmen's Insurance, W. F. Willoughby. 
 Workmen's Insurance in Biirope, Prankel &. Dawson. 
 Old Age Dependency in the United States, L. W. Squier. 
 
 Practical Results of Workingmen's Insurance in (Germany, Ferdinand Friedfeifibui'g. 
 Undesirable Results of German Social Legislation, Prof. Xiudwig Bernhatd. 
 Social Insurance in Germany, W. Harbtitt Dawson. 
 
 Memoranda in Opposition to Constitutional Amendment Authorizing Social Insu- 
 rance, P. "f Bcumseh Sherman. ,' 
 Compulsory Insurance, Edna D. Bullock. 
 Insurance and the State, W. F. Gephart. 
 State Insurance, F. W. Lewis- 
 State Insurance, Arthur I. Vorys. 
 R6sum^ of Arguments Against Sta,te Insurance, Anon. 
 The Business of Insurance, H. P. Dunham. 
 Yale Readings in Insurance, Life. Prof. L. W. Zartman. 
 Life Insurance and Other Subjects, J. F. Dryden. 
 Life Insurance, Prof. S. S. Huebner. 
 
 ARTICLES IN PERIODICALS. 
 
 American Problems in Social Insurance. Conference Charities and Correctiohs, 1914 : 
 
 346-55. 
 American Report on British Social Insurance, Review by O. S. Halsey. Survey 
 
 33:695 (Mar. 27, 1915.) 
 1/ P's and Q's of Social Insurance, I. M. Rubinow. Survey 34:183 (May 22, 1915). 
 Right of the Worker to Social Protection, C. R. Henderson. Conference Charitiea 
 
 and Corrections, 1914: 355-9. 
 Social Insurance in Great Britain. Survey 34:177 (May 22, 1915). 
 Group Disability Insurance. Survey 32:475 (Aug. 8, 1914). 
 
 Social Insurance Congress to meet in America in 1915. Survey 31^465 (Jan. 7, 1914). 
 Social Insurance, Pensions and Poor Relief . Survey, 32:187 (May 9, 1914). 
 i/ First American Conference on Social Insurance (Abstract). Rubinow, Survey, 
 
 30:478 (July 5, 1913). 
 New Commentary on Social Insurance. Survey, 29:827 (Mar. 15, 1913). 
 Organized Effort by Employees. Tatman & Kendall, Safety, 210. 
 Social Insurance, Meaning, Rubinow. Survey, 31:269 (Dec. 6,«1913). 
 Social Insurance in England and Germany, a Comparison. Fortnightly, 92:304 
 
 (August, 1912). 
 German Social Insurance and Poor Relief (Relief of General Poor Improved by SociftI 
 
 Insurance), Dawson. Contemp., 101:669 (May, 1912). 
 Social Insurance in Germany, 1883-1911, Dawson. Nation, 95:236 (Dee. 21, 1911). 
 Industrial and Social Insurance in Great Britain. Chautauqua, 68:256 (NovBrnber, 
 
 1912). 
 Brandeis: Road to Social Efficiency. Outlook,' 98:291 (Jnne 10, 1911). 
 Insurance and Democracy. Nation, 92:595 (June 15, 1911). 
 Old Age and Invalidity Pension Laws of Germany, France, and Australia, U. S; 
 
 Bureau of Labor, Bulletin, 21:965 (November, 1910). 
 
SOCIAL INStJKANCE AND UNEMPLOYMENT. 237 
 
 British Natioml Insurance Bill, Seager. Survey, 26:882 (Sept. 23, 1911). 
 
 Socialism and the Insurance Bill, Baldie. Western, 176:209 (August, 1911). 
 
 State Insurance as a Business Proposition, McDermott. Western, 176:379 (October, 
 1911). 
 
 Problem of Sick and Accident Insurance in Switzerland. Jenny Yale Review, 
 . 19:234 (November, 1910). 
 
 Problem of Social Insiu-ance, WiUoughby. American Labor Legislation Review, 
 3:153 (June, 1913). 
 
 Systems of Wage Earners Insiirance, Hoffman. American Labor Legislation Review, 
 3:213 (June, 1913). 
 
 Insurance and the State (Review), Rephart. Economics Journal, 24:441 (September, 
 1914). 
 
 Permanent International Committee on Social Insurance. American Labor Legis- 
 lation Review, 4:165 (March, 1914). 
 
 Social Insxuance, Bibliography. American Labor Legislation Review, 4:575 (Decem- 
 ber, 1914). 
 y'^ocial Insurance (Review), I. M. Rubinow. American Economic Review, 4:424 
 (June, 1914). 
 
 Social Insurance, G. R. Henderson. Charities, 21:1203 (Mar. 13, 1909). 
 
 Disease Statistics. American Labor Legislation Review, 6:26 (January, 1916). 
 
 Dangers of State Insurance, Hastings. North American Review, 98:630 (May, 1912). 
 
 Human Wear and Tear, S. H. Wolfe. Everybody's, 27:758 (December, 1912). 
 
 Workingm^'s Compensation Laws. World's Work, 24:620 (October, 1912). 
 
 Worknaan's Compensation. American Journal of Sociology, 17:540 (January, 1912). 
 
 Employers Liability Laws and their Breakdown. Annals American Academy, 
 .J. 15:487 (May, 1900). 
 
 Workmen's Compensation. Act, What it was to be and What it is. Fortnightly, 74:67 
 (July 4, i900). 
 
 System Best Adapted to United States, M. M. Dawson. Annals American Academy, 
 38:175 (July, 1911). Survey, 26:671 (Aug. 5, 1911). 
 
 History of Employers Liability, P. W. Lewis. Atlantic, 103:57 (January, 1909). 
 
 History of Labor Legislation, Great Britain Law. U. S. Biureau of Labor Statistics, 
 Bulletin 14, p. 574 (May, 1907); also Bulletin 16:121 and 7:549. 
 
 BOOKS AND PAMPHLETS ON WORKMEN'S ACCrDENT COMPENSATION. 
 
 23d Annual Report, U. S. Bureau of Labor Statistics. 
 24th Annual Report, U. S. Biireau of Labor Statistics. 
 German Experience in Acciden.t Prevention, Harold G. ViUard and P. Tecumseh 
 
 Sherman. 
 Workmen's, Accident Insurance in Germany, Harold G. Villard. 
 Workmen's Compensation and Insurance in Prance, Holland, and Switzerland, Har- 
 . old G. Villard. 
 
 Austrian Accident Compensation Law, Harold G. Villard. 
 History and Operation of Workmen's Compensation in Great Britain, Launcelot 
 
 Packer. 
 Bulletins 126, 109, 157^172, 185, U. S. Bureau of Labor Statistics. 
 Reports of the lUinoisTiureau of Labor Statistics. 
 Report of Pennsylvania Industrial Accident Commission (1915). 
 Report of Workmen's Compensation Commission of Missouri (1914). 
 Report of Connecticut State Commission for Compensation of Industrial Accidents 
 
 (1912). 
 Work, Accidents, and the Law, Crystal Eastman. 
 16th Annual Report, Massachusetts Bureau of Labor Statistics. 
 Workmen's Compensation, Boyd. 
 
 ARTICLES IN PERIODICALS. 
 
 Acts of 1915. American Economic Review, 5:671 (September, 1915). New, etc., 
 
 Survey, 35:423. 
 Defects m Workmen's Compensation, S. H. Wolfe. New Repubhc, 1:25 (Jan. 9, 1915). 
 tJiiemploymrait and Compensation in a Pennsylvania Setting. Survey, 33:402 (Jan. 
 
 ,9,1915). ,, . . ^ 
 
 Compensation for Industrial Diseases, T. L. Hoffman. Conference, Chanties, and 
 
 Corrections, 1913, p. 264; see also p. 248. 
 Workmen's Compensation in the United States. A Review, Journal of Pohtical 
 
 Economy, 21:913 (December, 1913). 4 
 
238 SOCIAL INSUJBANCE AND TJITEMPLOYMBNT. 
 
 Compensation Laws in 20 States. Survey, 30:212 (May 10, 1913). 
 
 Nation-wide Movement for Industrial Safety, Scnwedtmen. Survey, 30:102 (Apr. 
 
 19, 1912). 
 
 Workmen's Compensation in Europe and America. Engineering Magazine, 43:577 
 (July, 1912). 
 
 BOOKS AND PAMPHLETS ON UNEMPLOYMENT INSURANCE. 
 
 Out of Work, Frances A. Kellor. 
 
 Unemployment Insurance, I. G. Gibbons. 
 
 Unemployment, Bulletin 172, United States Bureau of Labor Statistics. 
 
 ARTICLES IN PERIODICALS. 
 
 Great Britain's Experiment in Compulsory Unemployment Insurance, K. Coman. 
 
 Survey, 31:799 (Mar. 28, 1914). 
 Insurance Against Unemployment in Norway and Denmark, K. Coman. Surveyj 
 
 31:742 (Mar. 14, 1914). 
 Unemployment Insurance in Prance, K. Coman. Survey, 32: 281 (June 6, 1914). 
 Sharing load of unemployment by means of Insurance, Seager, Survey, 33; 553 (Feb. 
 
 20, 1915). 
 
 Unemployment Insurance. Outlook, 109:55 (Jan. 13, 1915). 
 Unemployment Insurance, the Winter's Lesson. Survey, 34: 265 (June 19, 19155. ^ 
 Union, Out-of-Work, Benefits in Waj Times. Survey, 33: 549 (Feb. 20, 1915). 
 Insurance Against Unemployment in England. Independent, 74: 707 (Mar. 27, 1913)i. 
 National Insurance and Labor Unrest, Kennedy. Fortnightly, 99:465 (March, 1913), 
 •^ Subsidized Unemployment Insurance and the Ghent System, I. M. Bubinow. Jour- 
 nal Political Economy, 21:412 (May, 1913). 
 British Unemployment and Health Insurance. Survey, 27:1622 (Jan. 20, 1912). 
 Employment and Unemployment, latest phase, Davidson. Westminster Keview, 
 
 178:270 (September, 1912). 
 British National Insurance Act, Foerster, Quarterly Journal Economy, 26:298 
 
 (February, 1912). 
 Insurance Against Unemployment in France — Scientific American Supplement, 
 
 72:394 (Dec. 16, 1911). 
 Unemployment Insurance, Gibbon. (Review) Journal Political Economy, 20:197 
 
 (February, 1912). 
 Experience with Unemployment in Germany. Scribners Magazine, 49:116 (January, 
 
 1911). 
 Insurance Against Unemployment. Living Age, 268:443 (Feb. 18, 1911). 
 Insurance Against Unemployment, Beauchamp. Western, 175:257 (March, 1911). 
 Insurance and Training for the Unemployed, Jevons. Contemporary Review, 99:415 
 
 (April, 1911). 
 Compulsory Insurance Against Unemployment, a Swiss Scheme, Sellers. Nine- 
 teenth Century, 67:882; Living Age, 265: 587 (June 4, 1900). 
 Unemployment Insurance, Municipal Affairs, 4:410 (June, 1900). 
 »/ Compulsory Insurance of Workingmen, I. M. Rubinow. Annals American Academy, 
 
 24:331 (September, 1904). 
 Ghent System for Unemployed, W. D. P. Bliss, U. S. Bureau Labor. Bulletin, 
 
 16:822-9 (May, 1908). 
 How Switzerland deals with her Unemployed, E. Sellers. Nineteenth Century, 
 
 64:769-74 (November, 1908). 
 Insurance Against Unemployment. Independent, 64: 647 (Mar. 19, 1908). 
 Insurance Against Unemployment Apart from Trade-Union Benefits, W, D. P. Bliss, 
 
 U. S. Bureau Labor. Bulletin 16: 829-43 (May, 1908). 
 Insurance Against Unemployment Scheme, Bosle System, E. Sellers. Nineteenth 
 
 Century, 65: 272-82 (February, 1909). 
 Municipal Insurance Against Idleness. Charities, 20: 608 (Aug. 22, 1908). 
 Poverty and Insurance for the Unemployed, B. L. Israels. Charities, 20:343-7 (June 
 
 6, 1908). 
 Unemployment Insurance, H. Spender. Contemporary Review, 92:24-36 (January, 
 
 1909). 
 Unemployment Insurance and Labor Exchanges, T. Good. Westminster, 171:544-51 
 
 (May, 1909). 
 Unemployment Insurance in Cologne, Germany. Independent, 67:267-8 (July 29» 
 
 1909). 
 Compulsory Unemployment Insurance in Great Britain, O. L. Halsey. American 
 
 Labor Legislation Review, 5:265-78 (June, 1915). 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 239 
 
 BOOKS AND PHAMPLETS ON HEALTH INSURANCE. 
 
 Materiiity Insurance, Dr. Lee K. Frankel. 
 
 Eeport on National VLtaUty, its Wastes and Conservation, Irving Fisher 
 
 Sickness in Dutchess County, New York State Charities Aid Association. 
 
 ARTICLES IN PERIODICALS. 
 
 Maternity Insurance in Europe, Borosini, Survey, 31 : 744 (Mar. 14, 1914). 
 /^Maternity Benefits, Rubinow, Journal Political Economy, 23 : 356 (April, 1915). 
 
 BOOKS ON SOCIOLOGY. 
 
 The Fate of Empires, A. J. Hubbard. 
 
 The Futui-e Social Policy in Germany, Ludwig Bernhard. 
 
 Heredity and Progress, W. Duncan McKim. 
 
 Heredity, J. Arthur Thompson. 
 
 Social Diseases and Worse Remedies, Thomas Huxley. 
 
 The Evolution of Sex, Geddes & Thompson. 
 
 BOOKS AND PAMPHLETS ON ECONOMICS. 
 
 Principles of Economics, Prof. R. H. Seligman. 
 
 The Economic Interpr -station of History, R. H. Seligman. 
 
 Problems of To-day, Richard T. Ely. 
 
 Social Reform, W. H. Mallock. 
 
 Life aiid-Labors of the People of London, Gen. William Booth. 
 
 Citizens in Industry, Prof. Charles R. Henderson. 
 
 Misery and its Causes, by Dr. Edward T. Devine. 
 
 Marxism Vs. Socialism, Prof. Simkhovitch. 
 
 Principles of Economics, F. W. Taussig: 
 
 Organization of Labor. 
 
 Bulletin Des Assurance Sociales, 1910. 
 
 Between Eras from Capitalism to Democracy, Prof. A. W. Small. 
 
 Problems of Community Life, Selba Eldridge. 
 
 Wealth and Progress, George Gunton. 
 
 Cyclopedia of Political Science and Political Economy, edited by John J. Lalor. 
 
 New Encyclopedia of Social Reform, edited by William D. P. Bliss. 
 
 Cyclopedia of American Government, edited by McLaughlin & Hart. 
 
 The Catholic Encyclopedia. 
 
 The Jewish Encyclopedia. 
 
 Ninth Annual Report Carnegie Foundation (1914). 
 
 Report Comptroller of Currency (1914). 
 
 Report of Thirteenth Census United States (1913). 
 
 APPENDIX B.' 
 
 The Recent Trend of Real Wages. 
 
 [I. M. Rubinow.] 
 
 ^The rapid increase in the cost of living within recent years has given special sig- 
 mflcance to the study of fluctuations of prices and wages. For necessary data Amer- 
 ican economists have learned to look to the Federal Bureau of Labor Statistics^to use 
 the present official designation so frequently changed since its estarbUshment in the 
 early eighties. Early studies were made in the sixth and sev^enth annual reports pub- 
 lished in 1890 and 1891; but most important is the eighteenth annual report in 1903, 
 efltitled " Cost of living and retail prices of food." The first half of this document 
 presented the results of a comprehensive investigation as to the coat of living of a large, 
 number of families, mainly those of wageworkers. The second and smaller part con- 
 tained an equally comprehensive study of retail prices of food in the same localities in 
 whicli the cost of living was studied. The number of localities studied was scattered 
 
 ^Reprinted from the American Economic Review, Vol. P', No. 4, Tecember, 1914, published by the 
 American Economic Association. Inquiries in regard to membership should be made to 1 rof. A. A. Young, 
 ConfeUIJnlversity, Ithaca. N. Y. 
 
240 
 
 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 over 33 States, so that the material was sufficiently represeatative. Prices were 
 studied for 30 articles of food, while the number of different grades for which prices 
 were obtained substantially increased the statistical material. In all over 5,000 
 schedules were obtained. 
 
 The most noteworthy feature of this investigation, however, was the collectioji of 
 retail price quotations, not only for the year of investigation, b\it for a series of years 
 preceding it, namely, 1890-1903. Material was thus obtained for gauging not only the 
 fluctuations in price of any one article of food, but of food prices in general. In this 
 manner an index number of food prices was secured. For the purpose of weighting 
 the price fluctuations of the 30 different articles, use was made of the cost of living 
 investigations, the relative price of each article being weighted by the relative impor- 
 tance of the article as measured by the average conaumptioffof 2,567 families. 
 
 The accuracy 6f this method of weighting was often questioned , especially its adapta- 
 bility to a long series of years in view of the changes in the consumption habits of a 
 shifting population. The difference between the weights ascribed to individual arti- 
 cles of food was great, from 1,531 units (out of a total of 10,000) in the case of fresh beef 
 and down to 80 for cheese; but in accordance with well-recognized rules of statistical 
 practice,' the weighting influenced the general average but little, as is shown by a 
 comparison of the following two series: 
 
 Table 1. — Relative retail prices of food. 
 [Simple and weighted averages compared.] 
 
 Year. 
 
 Simple 
 average. 
 
 Weighted 
 average. 
 
 Difference. 
 
 Year. 
 
 Simple 
 average. 
 
 Weighted 
 average. 
 
 Difference. 
 
 1890 
 
 102.1 
 103.4 
 101.8 
 104.1 
 10D.3 
 98.2 
 95.8 
 
 102.4 
 103.8 
 101.9 
 104.4 
 99.7 
 97.8 
 95.5 
 
 +0.3 
 + .4 
 + .1 
 + .3 
 
 - .6 
 
 - .4 
 
 - .3 
 
 1897 
 
 96.3 
 98.5 
 99.6 
 101.5 
 105.5 
 110.9 
 110.9 
 
 96.3 
 98.7 
 99.5 
 101.1 
 105.2 
 110.9 
 110.3 
 
 
 1891 
 
 1898 
 
 -1-0.2 
 
 1892 
 
 1899 
 
 - .1 
 
 1893 
 
 1900 
 
 - .4 
 
 1894 
 
 1901 
 
 - .3 
 
 1895 
 
 1902 
 
 1903 
 
 
 1896 
 
 - .6 
 
 
 
 The margin of variation between the two methods of weighting for 14 years amounted 
 to 1 point. As a greater degree of accuracy could not, in all reason, be claimed for 
 the computation, this comparison shows that for all practical purposes the weighting 
 of the 30 articles of food was an unnecessary refinement, and a simple averaging of the 
 30 price items was fully as reliable.^ 
 
 This investigation furnished a basis for a study of the cost of living and its fluctua- 
 tions during a period of great economic changes in the United States, embracing, as 
 did the last decade of the nineteenth century, two economic crises and the Spanish- 
 American War; but of itself it was not complete. In a study of budgets, both expendi- 
 tures and incomes are of equal importance. Simultaneously with the study of prices 
 and cost of living, the bureau therefore conducted a study of wages, the results of which 
 were published as the nineteenth annual report. Wages and Hours of Labor. It cov- 
 ered 67 industries, with data for 519 distinctive occupations and 3,475 establishments. 
 
 Here again the bureau made a praiseworthy effort to compute a general index, both 
 for wages par hour and for hours per week, so as to construct the most important curve 
 of changes in weekly earnings. Again the question of proper weights presented itself. 
 The method finally selected was that of a simple average for all occupations in each 
 industry, and a weighting of the industries according to the aggregate wages paid in 
 each industry as reported by the census of 1900. 
 
 The accuracy of this method has been criticized,' but it is impossible to devise any 
 method of weighting thit might not be criticized by emphasizing qualifying con- 
 ditions. As alreldy indicated in connection with the ratail prices, all reasonable 
 methods of weighting, as in fact the method of simple averages, give substantially 
 the same result. The bureau pointed this out in its report (p. 23) by comparing 
 four methods of computing the index number. 
 
 ' Compare J. Lam'ence Laughlin, Principles of Money, pp. ISO, 166; A. L. Bowley, Elements of Statistics, 
 pp. 113, 117. 
 
 'Compare, for instance, W. C. Mitchell, who in most of his studies of index numbers has "dropped the 
 decimal places. Decimals make comparisons between different figures somewhat less easy, and the appear- 
 ance of greater accuracy which they give to index numbers is delusive. The margin of error in the original 
 data makes vain the pretension to accuracy within one-tenth of 1 per cent." (Business Cycles, p. 94, note.) 
 
 1 See W. C. Mitchell, Business Cycles, p. 131. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 241 
 
 (1) Weighting according to aggregate wages paid in each industry as reported by 
 the census of 1900. 
 
 (2) Simple averages of all occupations' 
 
 (3) Simple averages of all industries. 
 
 (4) Weighting according to the number of employees in each industry as reported 
 by the census of 1900. 
 
 The results of this comparison are shown in the following table: 
 
 Table 2. — Compari:on of the index numbern of wages per how in the United States, as 
 
 avei'aged by four methods. 
 
 Year. 
 
 1 
 
 2 
 
 3 
 
 i 
 
 Greatest 
 variation. 
 
 Year. 
 
 1 
 
 2 
 
 3 
 
 4 
 
 Greatest 
 variation. 
 
 1890... 
 
 100.3 
 
 100.3 
 
 100.5 
 
 100.4 
 
 0.2 
 
 1897...' 
 
 99.6 
 
 99.5 
 
 99.3 
 
 99.6 
 
 0.3 
 
 1891... 
 
 100.3 
 
 100.3 
 
 100.5 
 
 100.2 
 
 .3 
 
 1898... 
 
 100.2 
 
 100.1 
 
 100.2 
 
 100.1 
 
 .1 
 
 1892... 
 
 100.8 
 
 100.6 
 
 100.7 
 
 100.7 
 
 .2 
 
 1899... 
 
 102.0 
 
 101.9 
 
 102.1 
 
 101.8 
 
 .3 
 
 1893... 
 
 100.9 
 
 100.5 
 
 100.4 
 
 100.9 
 
 .5 
 
 1900... 
 
 105.5 
 
 101.8 
 
 106.0 
 
 106.4 
 
 .7 
 
 1894... 
 
 97.9 
 
 98. 
 
 98.0 
 
 98.0 
 
 .1 
 
 1901... 
 
 108.0 
 
 107.2 
 
 107.8 
 
 107.9 
 
 .8 
 
 1895... 
 
 98.3 
 
 98.7 
 
 98.7 
 
 98.4 
 
 .4 
 
 1902... 
 
 112.2 
 
 111. 2 
 
 111.6 
 
 111.9 
 
 .7 
 
 1896... 
 
 99.7 
 
 99.6 
 
 99.6 
 
 ■99.9 
 
 .3 
 
 1903... 
 
 116.3 
 
 114.8 
 
 114.6 
 
 116.0 
 
 1.7 
 
 Only in one year, then, was the difference between any two of the four methods 
 as much as 1.7 points; but with the exception of that one year it never exceeded 0.8 
 point; and in 10 out of 14 years it was between 0.1 and 0.5 point. The comparison 
 seems to indicate that for the purpose of giving a general i)icture of the trend of wages, 
 any differences in the method of weighting are of little importance, and that there- 
 fore any criticism of the method of weighting leaves the usefulness of the index 
 unifflpaired. Of course', this still leaves open the question as to the representative 
 character of the material itself, upon which some cloud of doubt was thrown by the 
 different results obtained by Prof. Davis R. Dewey in his census rejiort on employees 
 and wages, and by Prof. H. L. Moore's conclusions as to changes in wages between 
 1890-1900 as deducted from the census material. But it has been shown recently 
 by Prof. Mitchell that the "apparent discrepancy" between Prof. Moore's and the 
 bureau's tables "is due almost wholly to differences in scope and method of con- 
 struction,"' and that the trustworthiness of the bureau's figures is confirmed, not 
 discredited, by proper comparison with the data gathered by Prof. Dewey for the 
 Census Office. 
 
 The results of the study of hourly wages seemed to indicate a rise of 16 points in 
 the period of 13 years covered, 1890-1903. But within the same period a slight reduc- 
 tion in the average hours of labor had taken place (about 4 per cent), which affected 
 to the same extent the weekly earnings. A correction was made for this influence, 
 and the final index of weekly earnings appeared as follows: 
 
 Table 3— Index of weekly earnings in the United States, 1890-190S (1890-1899=100) 
 
 Year. 
 
 Index. 
 
 Year, 
 
 Index. 
 
 
 101.0 
 100.8 
 101.3 
 101.2 
 97.7 
 98.4 
 99.6 
 
 1897 
 
 99.2 
 99.9 
 101.2 
 104.1 
 106.9 
 109.2 
 112.3 
 
 1891 
 
 1898 
 
 1892 
 
 1899 
 
 
 1900 
 
 
 1901 
 
 1895 
 
 1902 
 
 
 1903 
 
 
 
 The two large volumes of official statistics referred to stood isolated, pregnant of 
 rich results for the study of true wages, but barren until brought .together. With the 
 two indexes before him, anyone was at liberty to draw his own conclusions, but 
 these would lack official sanction, and therefore would fail to be thoroughly con- 
 vincing. . . 
 
 In the special report of the Bureau of Labor prepared for the Louisiana Exposition, 
 and known as Bulletin 54, the three curves were brought together: (1) The relative 
 
 1 Business Cycles, p. 131; Quarterly Journal of Economics, May, 1911, p. 615. 
 39501—16 16 
 
242 
 
 SOCIAL INSUEAlSrCE . AND , UNEMPLOYMENT. 
 
 hours of labor, (2) the relative wages per hour, wd (3) the relative retail prices of food 
 (p. 1128') ; but the next logical step was not taken, and the bearing of the indexes upon 
 each other was not discussed. And yet, even a superficial glance at the diagram 
 disclosed the significant fact that while the green line fhours of labor) showed a gradual 
 feeble slope downward, the black and red lines. (indicating; relative wages per hour 
 and relative retail prices of food, respectively) ran a remarkably parallel and close 
 course. 
 
 The final synthesis was ventured for the first lime in 1905 in Bulletin 57, soon after 
 the two reports were published. It was done without much ostentation — one might 
 even say, without sufficient emphasis. In a small table the index numbers for TS90- 
 1904 for all the economic categories (hour^ per week, wages per hour, and retail prices 
 of food, etc.) were placed in juxtaposition; and, iiji the official language of the report, 
 "in addition two columns computed therefrom! showing the relative purchasing 
 power of wages * * * as measured by retail' prices of food," the two columns 
 showing this relation for (1) hourly wages and (2) weekly earnings per employee. 
 The process of computation was simple and consisted in dividing the index of retail 
 prices of food into the index of weekly earnings per employee. 
 
 After 1905, similar annual investigations and Computations were made and pub- 
 lished for several years. The index of the purchasing power of wa^es was brought 
 forward for a year at a time, including 1907, in Bulletins 59, 65, 71, and 77, so that for 
 a series of 1 S years a convenient measurement of the economic condition of the A meri- 
 can wageworker is available. The series of indexrnumbers is quoted here: 
 
 Table 4. — Index number of the purchasing power of v:ages as measured by retail prices 
 
 of food, 1890 -1907. ' "^ 
 
 Year. 
 
 Index. 
 
 Year. 
 
 Index. 
 
 Year. 
 
 Index.. 
 
 1890 . . 
 
 98.6 
 97.1 
 99.4 
 96.8 
 98. Q 
 100,6 
 
 1896 
 
 104.2 
 103.0 
 101.2 
 ■ 101. 7 
 103.0 
 100.7 
 
 1902. 
 
 98.5 
 
 1891 
 
 1897 
 
 1903 
 
 101.8 
 
 1882 
 
 1898. . 
 
 1904. ... 
 
 100.4 
 
 1893 
 
 1899 
 
 1906 
 
 101.4 
 
 1894 
 
 1900 
 
 1906 
 
 102.4 
 
 1895 
 
 1901 
 
 1907 
 
 101. 5 
 
 
 
 
 
 This series has attained great popularity in American economic literature. Curi- 
 ously enough, it owes a large part of its popularity to a peculiar opinion that it pro- 
 duces evidence of a growing prosperity of the American wage earner. The period 
 covered is largely one of recoveiy from a dsitressing financial crisis and of subsequent 
 triumph of the "stand-pat" attitude in politics as well as in economic policy. It 
 was assiimed that the ssries quoted furnished corroboration for the justice of this 
 attitude. Scarcely any American elementary or popular book on economics pub- 
 lished during this period failed to quote these figures as evidence of the continued 
 progress of the wageworker. Even tbe official Bulletin of Labor (No. 71, July, 1907) 
 fails to escape this attitude, and triumphantly states that "in 1906 the purchasing 
 power of an hour's wages as expended for food was 1 .4 per cent greater than in 1905" 
 and "a full week's wages in 1906 would purchaf^e 1 per cent more food than a full 
 week's wages in 1905" (p. 2). The use repeatedly made of this index for purposes 
 of political argument can readily bo imagined. Says.the Republican campaign 
 textbook for 1904: "Considering Hoth wages and cost of living, the workingman has 
 benefited to a measurable degree from the increase in wages despite the increase in 
 cost of living and shortening of working hours" (p. 216). Similar quotations may be 
 found in any of the subsequent "textbooks." In fact, it is this use of the index that 
 has, perhaps, tended to throw some discredit upon the very figures. It was even 
 charged in the heat of political controversy that the figures were not trustworthy, 
 because they were compiled by a Republican Bureau of Labor, for the use of a Repub- 
 lican administration. 
 
 How utterly unjust any such charge must be, the figures themselves amply demon- 
 strate. A continuous iijcrea^e in the piu-chasing power of wages from year to year, 
 be it ever so slight, would not fail to show a cumulative effect of some importance. 
 But the figures quite plainly fail to show any such regularity. On the contrary, 
 they indicate a tendency to fluctuate, evidently through faulty adjustment of wages 
 to cost of living, but, on the whole, the fluctuations from year to year do not obscure 
 the tendency of the line to remain on the same level.' 
 
 1 This argument has been stated briefly by the author in his Social Insurance, p. 38. 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 243 
 
 Tins can easily be shown by the method of smonthing the curve through the use 
 ol five-year averages. (See Table 5.) 
 
 •^^^^yi^'^S' ''?^1 wages during the' latter part of the period show a tendency down- 
 ward. Pui-chaaing power seems to have been highest just toward the close of the 
 mneteenlh century, when the level of wages ran a little ahead of the price level. 
 
 Table 5.— Index numbers of purchasing power of wages by five-year periods, 1890-1901, 
 
 Five-year period. 
 
 Index. 
 
 Five-year period. 
 
 Index. 
 
 1890-1894 
 
 98.0 
 98.4 
 99.8 
 100. h 
 101.4 
 102.1 
 102.6 
 
 1897 1901 ... 
 
 101.9 
 101.0 
 101.1 
 100.8 
 100.8 
 100.7 
 100.8 
 
 1891-189.5 
 
 1898 1902 
 
 1892-1896 
 
 
 1893-1.897 
 
 1900-1904 
 
 1894-1898 
 
 
 1895-1899 
 
 1902-1906 
 
 1895-19i)0 
 
 1903 1007 
 
 
 
 Of course, the price level of foodstuffs alone may not furnish a sound basis of judg- 
 ment as to real wages, i. e., the purchasing value of jnoney wages; and, unfortunately, 
 there are not sufficient data as to the fluctuations in the retail price level of other 
 items of the wageworker's consumption, such as clothing, rent, etc. The bureau has 
 . always been careful to specify that its index represents only "purchasing power meas- 
 ured by retail prices of food." Nevertheless, since food represented according to the 
 investigation of the bureau (covering 11,156 families) over 43 per -cent of the total 
 expandituies, it may serve as a useful basis, for lack of a more complete one. More- 
 over, since Chapin's study of The Standard of Living in New York City, referring to 
 a period five years later than that of the Bureau of Labor, shows exactly the same per- 
 centage of income (43.5 per cent) expended for food, though the price level of food 
 has materially increased during the intervening five years, it may be assumed that 
 there must have been approximately the same rise in all other prices. 
 
 As a matter of fact, the general agitation for tariff revision wasicalled forth largely 
 by prices other than of food materials. Schedule K may have been the true cause 
 of the Republican downfall — it did not refer to food. And while opinions may differ 
 as to the final effect of the Democratic tariff upon the general price level, it is quite 
 certaili that until it was enacted the trend of jjrices of textiles, leather, fuel, and paper 
 had been upward, as a study of wholesale prices will readily demonstrate. 
 
 Bulletin 77, dated July, 1908, and containing data for 1907, was the last in which 
 the index of real wages was given. For a time the studies of both retail prices and 
 wages were suspended by the bureau. As far as the writer is aware, no official explana- 
 tion of the discontinuance of these two investigations was ever made. Statements 
 were current in Washington that the decision to discontinue these studies was due to 
 severe criticisms by noted economists of the statistical methods used by the bureau 
 in its computation. But a more plausible explanation was the extreme overcrowding 
 of the bureau with work upon the voluminous Report on Condition of Women and 
 . Child Wage Earners, which was ordered by Congress in January, 1907, and was not 
 comi)leted until late in 1911. For £i while it was feared that both lines of p?riodicaI 
 inquiry were to be discarded altogether. Evidently, however, the demand for more 
 recent data showed itself as soon as those of 1907 became obsolete. The unusual rise- 
 in the cost of living, which began to be felt at that time, underscored the importance 
 of more recent data; and as soon as the pressure of the woman and child labor investi- 
 gation abatod, the work was resumed, and the first results of the new series appeared 
 toward the close of 1912 as Bulletin 105. 
 
 To the disappointment of many students, this bulletin contains only one-half of the 
 'complete story, namely, the study of retail prices. It contains the data for the entire 
 four-year period, 1907-1911, thus completing the series from 1890 to 1907. The impor- 
 tance of a continuous series was thus recognized. Furthermore, a special effort has 
 been made since then, not only to publish the figures regularly, but expeditiously, 
 and bimonthly reports have appeared on retail prices.' 
 
 The five-year interruption m the preparation of this series did not fail to cause 
 certain difficulties. It was not always easy to obtain price quotations for the entire 
 period. Besides, considerations of sp^ed and cost may have had some weight. But 
 the new series is very much more restricted than the older one. Instead of 30 articles 
 of food only 15 are now quoted; instead of 68 localities, only 39 of the most important 
 
 I Bulletins 105, 106, 108, 110, 113, 116, 121, li.';, 130, 132, 136, 138, 140. 
 
244 
 
 SOCI.\[. I^'SURANCi) -VND tlNEMPI-OYMGN'T. 
 
 industrial cities; instead of over 1,000 dealers, as in 1907, only about 675 are now 
 furnishing quotations. Of these changes, that reducing the number of articles quoted 
 is perhaps the most important one. 
 (a) Articles quoted up to 1907, and also for 1907-1913: 
 
 1. Sugar, granulated. 
 
 6. Lard, pure. 
 
 11. 
 
 Sirloin steak. 
 
 2. Wheat flour. 
 
 7. Corn meal. 
 
 12. 
 
 Ham, smoked. 
 
 3. Butter, creamery. 
 
 8. Eggs, strictly fresh. 
 
 13. 
 
 Pork chops. 
 
 4. Milk, fresh. 
 
 9. Hens. 
 
 14. 
 
 Bacon, smoked. 
 
 5. Rib roast. , 
 
 10. Round steak. 
 
 15. 
 
 Potatoes, Irish. 
 
 (b) Articles quoted up to 1907, but omitted for 1907-1913: 
 
 
 1. Coffee: 
 
 6. Molasses. 
 
 11. 
 
 Prunes. 
 
 2. Tea. 
 
 7. Beef, salt. 
 
 12. 
 
 Fish, salt. 
 
 3. Veal. 
 
 8. Beans, dry. 
 
 13. 
 
 Mutton. 
 
 4. Vinegar. 
 
 9. Pork, salt. 
 
 14. 
 
 Apples, evaporated 
 
 5. Bread, wheat. 
 
 10. Fish, freSh. 
 
 15. 
 
 Rice. 
 
 It is possible that the omitted articles are those which have not risen in price quite 
 s,a violently as some of those retained. The prices of coffee, tea, molasses, rice, prunes, 
 salt beef or pork, etc., have surely not been so sensitive to price increase as were 
 sirloin steak, pork chops, or strictly fresh eggs. It may be questioned how far any 
 changes in the price of such luxuries as sirloirl steak, pork chops, and eggs "strictly 
 fresh," would affect the status of the wageworker's family. From this point of view 
 the earlier figures would appear to be somewhat more reliable, yet we have the official 
 statement of the bureau (Bulletin 105, p. 6) that "these 15 articles represent approxi. 
 mately two-thirds of the expenditures for food by the average workingman's family." 
 One can only assume that some of the terms may have a trade meaning of a somewhat 
 restricted character.' 
 
 Because of the many changes, the bureau found it necessary to recompute the 
 earlier index number for the entire series 1890-1907 on the basis of the smaller num- 
 her of articles. (See Table 6.) 
 
 Table 6.- 
 
 -Comparison of the old and new index numbers of retail prices of food in the 
 United States. 
 
 
 Weighted 
 averages. 
 
 Simple 
 averages. 
 
 year. 
 
 Weighted 
 
 averages. 
 
 Simple 
 averages. 
 
 Year. 
 
 Old. 
 index, 
 30 ar- 
 ticles. 
 
 New- 
 index, 
 
 15 ar- 
 ticles. 
 
 Old 
 
 series, 
 30 ar- 
 ticles. 
 
 New 
 series, 
 15 ar- 
 ticles. 
 
 Old 
 index, 
 30 ar- 
 ticles. 
 
 New 
 index, 
 15 ar- 
 ticles. 
 
 Old 
 
 series, 
 
 30 ar- 
 
 . tides. 
 
 New 
 series, 
 War- 
 tides. 
 
 1890 . 
 
 102.4 
 103.3 
 101.9 
 104.4 
 99.7 
 97.8 
 95.5 
 96.3 
 98.7 
 99.5 
 101.1 
 105.2 
 
 101.9 
 103.4 
 101.6 
 104.1 
 99.2 
 97.1 
 95.2 
 96.7 
 99.7 
 100.8 
 103.0 
 108.5 
 
 102.1 
 103.4 
 101.8 
 104.1 
 100.3 
 98.2 
 95.8 
 96.3 
 98.5 
 99.6 
 101.5 
 105.5 
 
 102.0 
 103.6 
 101.7 
 104.6 
 99.5 
 97.2 
 94.9 
 96.4 
 99.4 
 100.6 
 102.9 
 109.5 
 
 1902 
 
 110.9 
 110.3 
 111.7 
 112.4 
 115.7 
 120.6 
 
 114.6 
 114.7 
 116.2 
 116.4 
 120.3 
 125.9 
 130.1 
 137.2 
 144.1 
 143.0 
 154.2 
 163.4 
 
 110.9 
 110.9 
 111.6 
 112.5 
 116.2 
 120.6 
 
 116.8 
 
 1891 
 
 1903 
 
 116.9 
 
 1892 
 
 1904 
 
 118.3 
 
 1893 
 
 1905 . 
 
 118. 3 
 
 1894 
 
 1906 ■. . . 
 
 122.4 
 
 1895 . . 
 
 1907 
 
 128.0 
 
 1896 
 
 1908 
 
 132.5 
 
 1897 
 
 1909 
 
 140.3 
 
 1898 . . 
 
 1910. 
 
 148.5 
 
 1899 
 
 1911 1 
 
 146.9 
 
 1900 
 
 1912 . . 1 
 
 157.9 
 
 1901 
 
 1913 
 
 167.0 
 
 
 1 
 
 
 A comparison of the old and new weighted index numbers for the period 1890- 
 1907 indicates that for the last decade the divergence has become quite important, 
 and that the new index, based upon a smaller number of articles, shows a greater rise 
 than the old index. This comparison corroborates the suspicion, expressed above, 
 that the new index number is somewhat less trustworthy, not only.because it is based 
 upon a smaller number of articles and quotations, but also because these happen to 
 be articles especially sensitive to the upward movement of prices. For 1907, the 
 last year for which a comparison is possibfe^ the difference is 5.3 points. 
 
 Another evidence of the same tendency is obtained when the weighted average is 
 compared with the simple average. -It was shown above that the differences between 
 the two averages for the old series never exceeded 0.6 points and that the average 
 difference for 18 years was only 0.2 points. In the new series the differences between 
 
 1 See Mitchell's criticisms on the same point, Business Cycles, p. 96, 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 245' 
 
 the two averages are very much greater, especially in later years. For 1890-1900 the 
 difference averages 0.25, for 1901-1907 nearly 2 points, and for 1908-1913 as much aa 
 3.5 points, rising in 1911 to 3.9 and in 1910 to 4.4 points. To the second series of data 
 the rule therefore does not apply that the weighted average and the simple average 
 give about the same results. This alone throws some doubt upon the degree of accu- 
 racy of the revised index number, although even then the difference is not sufficiently 
 great to make it altogether unreliable in gauging the tendency to higher prices. 
 
 While the change 'in the methods of the bureau has, unfortunately, somewhat 
 reduced the accuracy of the results, nevertheless the resumption of the publication 
 has been welcomed by American students. The evidence as to the increase in prices 
 (even if possibly it be somewhat exaggerated) is conclusive. From 1907 to 1913 the 
 prices of food rose from 125.9 to 163.4, or 37.5 points, equal to nearly 30 per cent of 
 the prices of 1907. For a decade the increase was 48.7 points, or 42 per cent. For 
 the period of 17 jrears the increase was 68.2 points, or 72 per cent. 
 
 Expressing it in a different way, on a 17-year basis the annual increase was 4.2 
 per cent; on a 10-year basis the increase was 4.8 per cent; on a 7-year basis, 5.3 per 
 cent. Within the last two years (1911-1913) the increase was 20.4 points, or 14.3 per 
 cent — over 7 per cent per annum. Not only have prices risen, but the speed of the 
 upward movement h9& been increasing. 
 
 These figures as to the retail prices of food did not constitute a new discovery. The 
 country, even without any exact measurement, was fully aware of the situation, 
 Not only was there general complaint of the "high cost of li-ving " (with its correspond- 
 ing efforts to silence the .inevitable, to obscure the self-evident, by noisy attacks 
 upon the "cost of high living"), but strenuous efforts were made by millions of wa^e- 
 workers to adjust their incomes to these new price conditions. How much of the 
 strike movements of the last 5 or 10 years, of the "disorder and anarch;^," of sabotage, 
 and I. W. W.-ism may direc tly be traced to the stimulus of high prices is a problem for 
 the future investigator, which need not be discussed here. As a result of all these 
 efforts, peaceful and otherwise, there has undoubtedly been an increase in wa^es, 
 whether granted voluntarily, or by arbitration, or grudgingly under pressure of strikes 
 or governmental investigations. Frequently this very increase of wages is being 
 urged as an argument for further increase in prices. 
 
 For all these reasons the question as to how far the adjustment between prices 
 and wages has been preserved is growing in importance, After the publication of the 
 price index had been resumed, statistic ians naturally looked forward to the com- 
 pletion of the picture by the publication of the wage index and the resultant index 
 of real wages. Another year elapsed after the publication of Bulletin 105, containing 
 prices for 1907-1912; and only in August, 1913, did the first bulletin containing new 
 data in regard to wages appear. Up to the date of this writing (June, 1914), -i. e., 
 within seven or eight months, seven bulletins, dealing with wage data had appeared 
 (Bulletins 128, 129, 131, 134, 135, 137, 143). No complaint can be made, therefore, 
 aa to the quantity of statistical material published. 
 
 Unfortunately, the method of study and preparation of this material has been 
 greatly changed. As was shown above, this was true of price statistics as well. But 
 while in the latter case the differences were such as not to interfere greatly with a com- 
 parison with earlier years, the changes in the study of wage statistics were very much 
 greater and the comparisons made very much more difficult. In fact, at first glance 
 such comparisons appear impossible. This seems to be the viewpoint of the present 
 Bureau of Labor Statistics, inasmuch as the index number of real wages (in terms of 
 the food-purchasing power of weekly earnings) has been discontinued, and, as it seema 
 at present, permanently. It is proper, nevertheless, to inquire whether, notwith- 
 standing the many changes in the presentation of the wage statistics, they may not 
 be utiUzed, after all, for the reconstruction of the real wage index by private effort. 
 
 Of the seven bulletins referred to, five deal with statistics of wages and hours of 
 labor in separate industries: 
 
 Bulletin 128. Cotton, Woolen, and Silk Industries. 
 
 Bulletin 129. Lumber, Millwork, and Furniture Industries. 
 
 Bulletin 134. Boot and Shoe and Hosiery and Knit Goods Industries. 
 
 Bulletin 135. Cigar and Clothing Industries. 
 
 Bulletin 137. Building and Repairing of Steam Railroad Cars. 
 
 Altogether, 11 industries have thus been covered. With the exception of the cigar 
 and clothing industries, all the studies fill in the gap left by the discontinuance of the 
 old series in 1907. 
 
 These 11 special investigations are much more comprehensive and go into much 
 greater detail than did the earlier reports. The presumption, therefore, is necessarily 
 of greater accuracy in favor of the recent data, or just the opposite of what we found 
 to be the case in regard to retail price statistics. Not only average hours and average- 
 
246 SOCIAL INSUKANCE AND UNEMPLOYMKXT. 
 
 wages are given, but also the distribution by a large number of hour and wa^e groups,. 
 A somewhat larger number of separate occupaticftis in each industry is studied and a 
 very much larger number of establishments is drawn upon. Thus, in the railroad-car 
 industry, 70 establishments supplied data for 1911-12 as against 49 for 1890-1903; 
 inthelumberindustry, 301 against 56; in the furniture industry, 199 as against 58, etc. 
 For each of the 9 large industries, therefore, a comparison for the entire period is 
 possible, and, as a matter of fact,, is contained in the bulletins enjinierated. 
 
 How far are these 9 industries characteristic of the wage movement as a whole? 
 A statistical test of this will be made presently. At this place it is necessary to point 
 Gut the following: 
 
 The 9 industries in the series of 1890-1907 were represented by 93 occupations; 
 in 1911-12, 151 occupations were studied. Of these, 68 were identical for the entire 
 23-year period. It is reasonable to assume that most of the 25 occupations for which 
 wage quotations were discontinued are found under different technical designations 
 »motig the 73 occupatuons added, 
 
 The original series in 1907 contained wage data concerning 41 industries, and, 
 within those, concerning 333 occupations. 'Ihus the 9 special industries covered by 
 the reports issued since 1933 cover about 30 per cent of the occupations included in 
 1890-1907. This does not complete the sources available of material. Bulletin 131, 
 also dated August 15, 1913, is entitled "Union Scale of Wages and Hours of Labor, 
 1907 to 1912." It contains the data for the entire 6-year period for over 40 trades 
 (practically 50, counting in closely related trades), within 6 industries: (1) baking; 
 (2) building; (3) marble and stone; (4) metal trades; (5) printing, book and job;; 
 (6) printing, newspaper. For these trades, 39 cities in 32 States were studied. 
 
 The peculiarity of the method used in this bulletin is that in constructing an index 
 number a new basis, namely, the year 1907, was taken. In all the index numbers 
 referred to, the base (100), as is well known, is the average for 1890-1899. It is possible 
 to criticize tliis base and to question its advantage over the simpler method of taking 
 the stfrtirg point (1890) as 100. But, as the results would not in the least be affected ' 
 thereby, it is not worth while to argue the point. Any base for the index number is 
 equally gDod provided it is adhered to. As a matter of fact, the same base was used 
 not only for all investigations (wages, hours of labor, retail prices, wholesale prices, 
 number of persons employed, and true wages) in 1890-1907, but in the later studies 
 for 1937-1913 for prices as well. 
 
 - The charg3 is probably explained by the fact that the quotations for 1907-1912 
 are for union wages and hours, while those for 1890-1907 are not limited to union labor. 
 No explanationof the change of method is made, but data of the earlier investigations 
 are reproduced, and in microscopic type — a note to the heading of the table — ^it is 
 stated" that it was "computed from the pay rolls of employers of union labor and also 
 ef employers of nonunion labor." 
 
 No apology for this lack of a basis for a comparison is made, but since the year 1907 
 is included in both series it would seem not altcg3ther impossible to obtain such a 
 basis. I have checked up half a dozen trades, comparirg the actual wag3s for 1907 
 as given in the older report of 1908 for union and nonunion labor tcgether, and in the 
 new report for union labor only, and found the results to be practically identical. 
 In the case of bricklayers, the average W3,ge per hour for union and nonunion labor 
 together was $0.6313 and for union labor only, $0.6280 (sic!); for carpenters, 
 $0,4338 and $0.4384; for stonecutters, $0,547 and $0,538; for blacksmiths, $0,329 
 and $0 343." 
 
 In other words, as far as the enumerated trades are concerned, either the union scale 
 of wpg3 is practically the scale of wages for the entire trade, or in the earlier investi- 
 
 fitions union shops largely predominated in the material gathered by the bureau, 
 n any case, the practical conclusion is that it was quite safe to retain the old base 
 for the index, and that a comparison for the entire period of 23 years is possible for 
 the trades treated in Bulletin 131 .^ 
 
 To sum up the discussion of the last few pages, we have no figures giving the change 
 of wages since 1907 to 1912 for all the 41 industries (and 333 occupations) upon which 
 the old index number of wages in general was based. But we do have data for l^in- 
 
 1 Even these slight diflerences are probably due' to the different methods ol computing the average. 
 Ihave used the simple averages of all quotations given— the only course possible with &e material at hand 
 to Bulletin 131. 
 
 » As the purpose of wage statistics is primarily to permit comparisons and to study fluctuations, the 
 recent tendency of the bureau to change the base in the computation of wage indexes is to be regretted. 
 A recent bulletin (No. 143) issued Mar. 4, 1914, intends to brmg forward the date of Bulletin 131 for one 
 year. It contains statistics regardmg the union scale of wages and hours of labor for 1912 and 1913 for. 
 63 trades. Of these, 50 are contained in Bulletta 131, where the figures are given for 1907-1912. A compari- 
 son for the 7 years 1907-1913 is given on pages 7-13. But the base for the indexes is again a new one— 
 namely, the wages, respectively hours of labor, for 1913. Nothing is gained and a good deal is lost through 
 juch constant changes m the base of computation of relative figures. 
 
SOCIAL INSFEANCE AND UNEMPLOYMENT. 247 
 
 dustries, covering 241 occupations, of which 141 are identical with those of the early 
 series. 
 
 The situation, therefore, is somewhat similar to that in the study of the retail prices, 
 where instead of 30 articles only 15 are studied at present. This reduction in the 
 number of articles studied did not prevent the bureau from continuing to build up 
 its retail price index. It has been shown that while this change did somewhat inter- 
 fere with the accuracy, it did not altogether destroy the usefulness of the final results. 
 Why does not the same reasoning apply to the study of weges? 
 
 For certain purposes averages and indexes may be absolutely useless. An average 
 or an index number can not be used when the exact wage conditions of an industry 
 or. a locality must be ascertained. But for the study of broad tendencies, an average 
 still represents a very convenient method, and when the tendency studied applies 
 to many industries and many localities, nothing can supplant an index number. In 
 any case, it can not be held consistently that averages and index numbers are appli- 
 cable to the study of prices and not applicable to the study of wages and hours of labor. 
 It can not be held consistently that an average and index number is applicable to the 
 study of wages in one industry and not for industry as a whole. For, truly, the fluctu- 
 ations of wages in any of our large industries as betwe'en one occupation and the other, 
 are nearly as great as they are for wages in the world of labor as a whole. 
 
 It seems, therefore, quite a justifiable statistical step to endeavor to obtain an index 
 of wage fluctuations in general from the material available for 1907-1912. 
 
 The effort to do so creates certain difficulties. The private statistician has not at 
 at his disposal the facilities for making lengthy computations which the bureau ha s 
 omitted in many cases. Thus the studies up to and including 1907 have always in- 
 cluded not only the index of wages per hour and hours per week, but also that for 
 earnings per week. This is a simple operation requiring a multiplication of one 
 index by the other. It is the method used up to 1907 and there seems to be no good 
 reason why these computations were discarded. The theoretical objection may be 
 advanced that the hours given are "normal full time, hours per week," and not actual 
 hours. But if the method is used in Bulletin 137 for wages in railroad car building, 
 then why not in all other bulletins? In Bulletin 131, where the "union scale of 
 wages and hours of labor 1907-1912 " is studied, there are no such derivative columns 
 tor "earnings per week," whUe they may be found in Bulletin 143 for 1907-1913. 
 But as the latter bulletin uses an entirely new base (wages of 1913 instead of wages 
 1890-1899) a recomputation of the index becomes necessary. AH of this may succeed 
 in preventing any large use of the various figures recently published. 
 
 In the following tabffi all the material available at present has been brought together. 
 For the nine industries enumerated the indexes were taken as published (weighted 
 averages of the occupational indexes). These differ, for 1890-1907, from the indexes 
 published in Bulletin 77 (pp. 126-132) because in the earlier bulletin the industry 
 indexes were simple averages of occupational indexes, while in the recent investi- 
 gation weighted averages were computed. In the car-building bulletin (No. 137) for 
 some reason no industry index was published. Therefore, the simple average was 
 taken for 1890-1907 from Bulletin 77 and for 1908-1912 similar simple averages were 
 computed. The same process was used for the six trade groups, and the quotations 
 for 1908-1912 obtained from Bulletin 131 reconverted to the older basis. For com- 
 parative purposes the old index was included, and, by simple averaging of the 15 
 columns, a new index was obtained for the entire period. 
 
 The material may be admitted to be fragmentary and incomplete, no'r are all the 
 averages uniformly computed. The nature of the material was such that two or three 
 different methods had to be used in obtaining averages. The question may be raised 
 as to whether the juxtaposition of the 15 indexes serves any purpose at all. An answer 
 is found in a comparison between the last column, which is a simple average of the 15 
 industrial indexes and the old wage index as printed in the first column. Such a 
 comparison is possible for 18 years (1890-1907). In only two years out of the 18 is the 
 difference as great as one point; and the average difference is less than 0.5 point. Of 
 course, no one would claim for any wage index a greater accuracy than that. We are 
 j ustified, therefore, in drawing the conclusion that the fluctuations of wages in 1907-1912 
 m the 15 industries and trade groups for which material is available, are a proper 
 measure of the fluctuations of wages in American manufacturing industry in generEl. 
 
 On this assumption the wages per hour index during these six years has fluctuated as 
 follows; 
 
 1907 129.3 
 
 1908 - 128.5 
 
 1909 129.8 
 
 1-910 134.0 
 
 1911 136.3 
 
 1912 141,5 
 
 Showing an increase of 12.2 pomts, oi; 9.4 per cent in five years. 
 
^48 
 
 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 A correction, however, is necessary for the changes in the average hours of -labor. 
 The general index of hours of labor was also discontinued in 1907. This- index is 
 brought up to 1912 in Table 8 from the same material and by the same methods as 
 used in the study of wages. 
 
 Table 7. — Index of wages per hour. 
 
 Year. 
 
 Old 
 
 index 
 
 number. 
 
 Cotton 
 goods. 
 
 Woolen 
 goods. 
 
 Silk 
 goods. 
 
 Boots 
 
 and 
 
 shoes. 
 
 Knit 
 goods. 
 
 Lum- 
 ber. 
 
 Mill- 
 work. 
 
 Fur- 
 niture. 
 
 1890 
 
 100.3 
 100.3 
 100.8 
 100.9 
 97.9 
 98.3 
 99.7 
 99.6 
 100.2 
 102.0 
 105.6 
 108.0 
 112.2 
 116.3 
 117.0 
 118.9 
 124.2 
 128.8 
 
 101.6 
 99.4 
 99.2 
 105.0 
 98.9 
 98.2 
 104.1 
 100.4 
 96.7 
 95.8 
 108.4 
 108.8 
 113.3 
 117.5 
 117.1 
 118.7 
 131.3 
 149.8 
 148.4 
 143.0 
 147.7 
 149.1 
 164.1 
 
 99.6 
 99.3 
 100.7 
 105.7 
 94.9 
 95.3 
 98.1 
 100.4 
 103.3 
 102.3 
 1)1.3 
 111.9 
 114.9 
 118.7 
 
 lis; 4 
 
 119.3 
 127.1 
 135.3 
 128.1 
 129.0 
 132.5 
 133.3 
 149.1 
 
 98.6 
 93.2 
 98.6 
 102.0 
 102.9 
 101.5 
 106.5 
 99.1 
 98.4 
 97.4 
 98.4 
 98.1 
 101.4 
 102.6 
 101.8 
 102.5 
 106.1 
 112.1 
 109.2 
 110.5 
 112.5 
 113.3 
 117.1 
 
 98.5 
 97.5 
 99.3 
 100.6 
 99.8 
 101.4 
 100.5 
 100.7 
 100.5 
 101.8 
 104.1 
 104.1 
 108.0 
 113.2 
 116.9 
 119:9 
 121.8 
 128.0 
 125.5 
 130.4 
 129.6 
 131.7 
 132.8 
 
 105.6 
 106.9 
 100.3 
 100.1 
 96.7 
 102.8 
 99.3 
 96.1 
 96.4 
 93.2 
 95.4 
 102.0 
 111.0 
 117.6 
 114.8 
 119.9 
 126.9 
 133.4 
 133.7 
 134.1 
 135.5 
 135.8 
 143.7 
 
 101.9 
 101.4 
 101.5 
 99.9 
 96.7 
 97.0 
 97.4 
 97.7 
 101.5 
 104.5 
 105.4 
 108.6 
 112.1 
 114.2 
 112.3 
 116.3 
 124.4 
 129.6 
 118.7 
 121.6 
 130.0 
 129.9 
 131.5 
 
 99.2 
 100.4 
 100.1 
 100.0 
 97.0 
 98.1 
 99.3 
 ,100.0 
 101.7 
 104.1 
 105.9 
 108.6 
 112.5 
 116.5 
 116.7 
 116.7 
 120.6 
 124.5 
 123.4 
 124.9 
 127.8 
 129.0 
 132.3 
 
 100.5 
 
 1891 
 
 101.5 
 
 1892 
 
 102.5 
 
 1893 
 
 101.1 
 
 1894 
 
 99,4 
 
 1895 
 
 97,9 
 
 1896 
 
 97,9 
 
 l,i!97 
 
 100,2 
 
 1898 
 
 98,0 
 
 1899 
 
 102,0 
 
 1900 
 
 102,4 
 
 1901 
 
 107.3 
 
 1902 
 
 114.1 
 
 1903 
 
 115.2 
 
 1904 
 
 117.5 
 
 1905 
 
 121:0 
 
 1906...., 
 
 125.7 
 
 1907 
 
 127.3 
 
 1908 
 
 127.5 
 
 1909 
 
 
 126.7 
 
 1910 
 
 
 130.5 
 
 1911 
 
 
 132.1 
 
 1912 
 
 
 135.1 
 
 ■ 
 
 
 
 Year. 
 
 Car 
 build- 
 ing. 
 
 Build- 
 ing 
 trades. 
 
 Bilkers. 
 
 Marble 
 and 
 stone 
 
 cutters. 
 
 ■ 
 Foun- 
 dry 
 and 
 ma- 
 chine 
 shops. 
 
 Print- 
 ing, 
 book 
 and 
 job. 
 
 ■print- 
 ing, 
 news- 
 papers. 
 
 Aver- 
 age 
 new 
 Index. 
 
 Differ- 
 ence 
 between 
 
 old and 
 new 
 
 index. 
 
 1890 
 
 102.9 
 102.4 
 101.5 
 104.0 
 97.8 
 97.8 
 97.6 
 98.2 
 98.0 
 99.8 
 100.7 
 101.7 
 105.7 
 111.5 
 116.2 
 114.9 
 118.5 
 124.4 
 122.8 
 120.5 
 132.3 
 13.'). 2 
 135.9 
 
 97.0 
 97.9 
 99.9 
 100.0 
 97.6 
 98.4 
 99.9 
 101.3 
 102.8 
 105.3 
 109.9 
 114.5 
 121.1 
 126.8 
 129.7 
 132.2 
 140.2 
 144.6 
 146.9 
 150.2 
 153.1 
 167.6 
 159.4 
 
 99.3 
 99.9 
 100.3 
 100.2 
 98.4 
 98.7 
 99.6 
 99.8 
 100.6 
 103.1 
 106.6 
 108.8 
 113.9 
 118.9 
 121.1 
 123.5 
 127.4 
 128 9 
 133.9 
 140.0 
 147.6 
 155.6 
 167.3 
 
 • 98.5 
 99.5 
 100.3 
 99.7 
 98.0 
 97.0 
 101,0 
 101.6 
 101.2 
 103.2 
 104.9 
 109.0 
 113.5 
 118.6 
 118.9 
 119.3 
 121.3 
 125.7 
 126.1 
 127 1 
 128.1 
 129.0 
 133.9. 
 
 99.2 
 100.3 
 102.7 
 101.6 
 98.7 
 99.1 
 100.5 
 99.7 
 99.0 
 99.1 
 101.5 
 104.7 
 108.2 
 112.3 
 113.9 
 114.0 
 117.9 
 121.4 
 122. 9 
 124.4 
 130.0 
 133.8 
 136.3 
 
 97.8 
 99.6 
 99.2 
 100.2 
 99.6 
 99.5 
 100.3 
 99.2 
 101.2 
 103.6 
 109.3 
 110.7 
 114.3 
 116.1 
 118.9 
 120.6 
 125.9 
 131.0 
 136.0 
 139.3 
 143.4 
 148.2 
 150.6 
 
 103.0 
 99.6 
 98.8 
 98.0 
 97.4 
 96.3 
 98.6 
 99.2 
 102.8 
 106.1 
 1C6.3 
 106.3 
 109.3 
 113.4 
 114.1 
 116.1 
 118.4 
 122.6 
 124.7 
 126.0 
 129.2 
 130.9 
 133.4 
 
 100.2 
 99.9 
 100.3 
 101.2 
 98.9 
 98.6 
 100.0 
 99.6 
 100.2 
 101.4 
 104.7 
 107.0 
 112.0 
 115.5 
 116.3 
 119.6 
 123.6 
 129.3 
 128.5 
 129.9 
 134.0 
 136.3 
 141.5 
 
 0.1 
 
 1891 
 
 .4 
 
 1892 
 
 ,5 
 
 1893 
 
 ,3 
 
 1894 
 
 1,0 
 
 1895 
 
 .3 
 
 1806 
 
 ,3 
 
 1897 
 
 
 1898 
 
 
 1809 
 
 ,6 
 
 1900 
 
 ,8 
 
 
 1,0 
 
 1902 
 
 .2 
 
 
 .8 
 
 1904 
 
 ,7 
 
 
 .7 
 
 1906 
 
 .6 
 
 
 .5 
 
 1908 
 
 
 
 
 1910 
 
 
 
 
 1912 
 
 
 
 
SOCIAL IjSTSUEANCE AND UNEMPLOYMENT. 
 Table 8. — Index of hours per week. 
 
 249 
 
 Year. 
 
 Old 
 
 index. 
 
 Cotton 
 goods. 
 
 Woolen 
 goods. 
 
 Silk. 
 
 Boots 
 
 and 
 
 shoes. 
 
 Knit 
 goods. 
 
 Lum- 
 ber. 
 
 MiU- 
 work. 
 
 Fur- 
 niture, 
 
 1890 .. 
 
 100.7 
 
 100.5 
 
 100.5 
 
 100.3 
 
 99,8 
 
 100.1 
 
 99.8 
 
 99.6 
 
 99.7 
 
 99.2 
 
 98.7 
 
 98.1 
 
 97.3 
 
 96.6 
 
 95.9 
 
 95.9 
 
 95.4 
 
 95,0 
 
 100.5 
 
 101.2 
 
 101.6 
 
 100.0 
 
 97.5 
 
 99.8 
 
 99.5 
 
 99.1 
 
 100.3 
 
 100.3 
 
 100.1 
 
 99.9 
 
 99.5 
 
 99.3 
 
 99.2 
 
 99.2 
 
 98.7 
 
 97.5 
 
 96.3 
 
 96.4 
 
 94.1 
 
 94.1 
 
 92.4 
 
 101.0 
 
 101.0 
 
 101.0 
 
 99.5 
 
 99.0 
 
 100.1 
 
 100.1 
 
 98.4 
 
 98.9 
 
 100.0 
 
 99.8 
 
 99.9 
 
 99.8 
 
 98.7 
 
 97.9 
 
 98.5 
 
 98.4 
 
 97.9 
 
 97.7 
 
 97.8 
 
 96.1 
 
 96.2 
 
 94.6 
 
 102.6 
 102.9 
 101.9 
 98.8 
 98.6 
 98.5 
 99.0 
 99.1 
 99.3 
 99.5 
 99.6 
 99.2 
 98.7 
 98.8 
 97.2 
 98.2 
 98.4 
 98.0 
 97.6 
 97.5 
 97.4 
 97.4 
 96.6 
 
 100.3 
 
 100.6 
 
 100.2 
 
 100.0 
 
 100.0 
 
 100.0 
 
 100.0 
 
 99.8 
 
 99.7 
 
 99.6 
 
 99.3 
 
 99.6 
 
 98.4 
 
 97.0 
 
 97.1 
 
 96.8 
 
 96.3 
 
 96.0 
 
 95.9 
 
 95.7 
 
 95.1 
 
 95.3 
 
 93.9 
 
 101.1 
 
 101.1 
 
 101.2 
 
 100.5 
 
 94.8 
 
 100.4 
 
 100.3 
 
 100.3 
 
 100.3 
 
 100.2 
 
 98.9 
 
 98.8 
 
 98.9 
 
 97.9 
 
 97.8 
 
 97.7 
 
 97.2 
 
 96.8 
 
 96.5 
 
 96.6 
 
 94.8 
 
 94.7 
 
 93.1 
 
 100.4 
 
 100.2 
 
 100.2 
 
 100.0 
 
 100.0 
 
 99.9 
 
 100.1 
 
 99.9 
 
 99.6 
 
 99.8 
 
 99.5 
 
 99.3 
 
 98.7 
 
 98.3 
 
 97.8 
 
 97.6 
 
 96.6 
 
 96.4 
 
 96.6 
 
 96.5 
 
 96.5 
 
 96.5 
 
 96.6 
 
 101.3 
 100.6 
 100.7 
 100.1 
 100.3 
 99.7 
 99.0 
 99.6 
 99.4 
 99.2 
 98.9 
 98.7 
 97.7 
 97.2 
 97.9 
 98.1 
 96.9 
 96.7 
 96.7 
 96.7 
 96.9 
 96.8 
 96.2 
 
 101.3 
 100.7 
 99.8 
 99.9 
 98 2 
 
 1891 
 
 1892 
 
 1R93 
 
 1894 
 
 1895 
 
 
 1896 
 
 100 
 
 1897 
 
 
 1R9S 
 
 100.4 
 
 1899 
 
 100.3 
 
 1900 
 
 100.2 
 
 1901 
 
 99 3 
 
 1902 :. 
 
 98.3 
 
 1903 
 
 98.1 
 
 190J 
 
 97.3 
 
 
 96.6 
 
 1906 
 
 95.8 
 
 1907 
 
 95.7 
 
 1908 
 
 95.9 
 
 1909 
 
 
 95.5 
 
 1910 
 
 
 95.1 
 
 1911 
 
 
 94.5 
 
 1912 
 
 
 93.9 
 
 
 
 
 Year. 
 
 Car 
 build- 
 ing. 
 
 Build- 
 ing 
 
 trades. 
 
 Bakers. 
 
 Marble 
 and 
 
 stone 
 cutters. 
 
 Foun- 
 dry 
 and 
 ma- 
 cbiue 
 shops. 
 
 Print- 
 boot 
 and 
 job. 
 
 Print- 
 ing, 
 news- 
 papers. 
 
 Aver- 
 age of 
 preced- 
 ing in- 
 dexes. 
 
 Differ- 
 ence 
 between 
 
 old and 
 now. 
 
 index. 
 
 
 101.6 
 
 101.1 
 
 101.6 
 
 101.2 
 
 97.1 
 
 98.9 
 
 98.8 
 
 98.0 
 
 "100.8 
 
 101.1 
 
 101.4 
 
 100.6 
 
 100.6 
 
 98.1 
 
 98.8 
 
 96.2 
 
 95.9 
 
 95.9 
 
 94.9 
 
 95.4 
 
 95. » 
 
 94.6 
 
 94.4 
 
 102.5 
 
 101.8 
 
 100.7 
 
 100.5 
 
 100.7 
 
 100.3 
 
 99.2 
 
 98.6 
 
 98.1 
 
 97.5 
 
 95.5 
 
 94.4 
 
 92.6 
 
 91.8 
 
 91.3 
 
 91.2 
 
 90.9 
 
 90.6 
 
 90.4 
 
 90.2 
 
 89.7 
 
 89.4 
 
 89.2 
 
 100.8 
 
 100.8 
 
 100.9 
 
 100.5 
 
 100.4 
 
 99.9 
 
 99.6 
 
 100.2 
 
 99.1 
 
 97.8 
 
 96.9 
 
 96.3 
 
 95.8 
 
 93.9 
 
 93.6 
 
 92.5 
 
 91.8 
 
 91.6 
 
 89.7 
 
 88.6 
 
 86.8 
 
 85.1 
 
 81.2 
 
 101.5 
 
 100.1 
 
 100.2 
 
 101.0 
 
 100.5 
 
 100.1 
 
 99.9 
 
 99.4 
 
 99.2 
 
 98.1 
 
 97.2 
 
 96.0 
 
 95.5 
 
 94.0 
 
 94.0 
 
 94.2 
 
 93.6 
 
 63.4 
 
 93.3 
 
 93.2 
 
 93.0 
 
 92.9 
 
 91.8 
 
 100.5 
 , 100.'4 
 
 100.2 
 
 100.0 
 99.9 
 
 100.1 
 99.8 
 99.7 
 99.9 
 99.4 
 99.2 
 98.1 
 96.6 
 95.4 
 94.6 
 94.8 
 94.8 
 94.6 
 94.5 
 93.8 
 93.4 
 92.8 
 92.8 
 
 101.0 
 
 101.0 
 
 100.5 
 
 100.4 
 
 100.1 
 
 100.2 
 
 100.1 
 
 100.2 
 
 99.4 
 
 97.2 
 
 95.1 
 
 94.4 
 
 93.2 
 
 93.1 
 
 92.4 
 
 92.0 
 
 90.7 
 
 •90.1 
 
 87.4 
 
 86.8 
 
 86.0 
 
 85.5 
 
 85.5 
 
 ■ 100.2 
 
 100.1 
 
 100.6 
 
 101.3 
 
 100.5 
 
 100.4 
 
 100.2 
 
 100.0 
 
 99.1 
 
 97.9 
 
 97.6 
 
 97.4 
 
 97.1 
 
 96.2 
 
 95.7 
 
 96.2 
 
 95.4 
 
 94.8 
 
 94.5 
 
 94.4 
 
 94.0 
 
 93.9 
 
 93.8 
 
 101.1 
 100.9 
 100.7 
 100.4 
 99.2 
 99.8 
 99.7 
 99.5 
 99.6 
 99.2 
 98.6 
 98.1 
 97.4 
 96.7 
 96.0 
 96.0 
 95.4 
 95.1 
 94.5 
 94.4 
 93.8 
 93.3 
 93.0 
 
 0.6 
 
 1891 
 
 .4 
 
 1892 
 
 .2 
 
 1S93 
 
 .1 
 
 
 .6 
 
 1895 
 
 .3 
 
 1896 
 
 .1 
 
 1897 
 
 .1 
 
 
 .1 
 
 1899 
 
 
 1900 
 
 .1 
 
 1901 
 
 
 1902 
 
 .1 
 
 1903 
 
 .1 
 
 
 .1 
 
 1905. . 
 
 .1 
 
 1906 
 
 
 1907 
 
 .1 
 
 1908.. 
 
 
 1909 
 
 
 1910 
 
 
 1911 
 
 
 1612 
 
 
 
 
 
 
 The correspondence between the two indexes here is still greater. The changes in 
 hours of labor may therefore be characterized during the last six years as follows (a 
 decrease of 2.2 per cent in five years): 
 
 1910 :.. 93.8 
 
 1907 
 1908 
 1909 
 
 95.1 
 94.5 
 94.4 
 
 1911. 
 1912. 
 
 93.3 
 93.0 
 
 With the aid of these important facts, the important index of the movement of real 
 wages may be reconstructed and brought down to 1912, which is done in Table 9. 
 
250 SOCIAL INSUKANCE AND - UNEMPLOYMElfT. ' 
 
 Table ^.--C(miputation of index of real ijoages, 1890-1912-. .■■ 
 
 Year. 
 
 Houra 
 per week. 
 
 Wages 
 per hour. 
 
 Full time 
 wee ly 
 earnings 
 per em- 
 ployees. 
 
 Retail 
 
 prices of 
 
 food. 
 
 Purchasi* power 
 
 measure^, by re- 
 
 - lail prices of food. 
 
 
 Hourly 
 wages. 
 
 Wee-Jy 
 earnings. 
 
 1890 
 
 101.1 
 100.9 
 100.7 
 100.4 
 99.2 
 99.8 
 99.7 
 99.5 
 99.6 
 99.2- 
 98.6 
 98.1 
 97.4 
 96.7 
 96.0 
 96.0 
 95.4 
 95.1 
 94.5 
 94.4 
 93.8 
 93.3 
 93.0 
 
 100.2 
 99.9 
 100.3 
 101.2 
 - 98.9 
 -98.6 
 100.0 
 99.6 
 ^ 100 2 
 101.4 
 104.7 
 107. 
 112.0 
 116.6 
 116. 3 
 119.6 
 123.6 
 129.3 
 128.6 
 129.9 
 134.0 
 136.3 
 141.5 
 
 101.3 
 100.8 
 101. d 
 101.6 
 98.1 
 99.2 
 99.7 
 99.1 
 99.8 
 100.6 
 103.2 
 105.0 
 109.1 
 111.7 
 111.6 
 114.8 
 117.9 
 123.0 
 121.4 
 122.6 
 125.7 
 127.2 
 131.6 
 
 101.9 
 
 103.4 
 
 101.6 
 
 104.1 
 
 99.2 
 
 97.1 
 
 95.2 
 
 96.7 
 
 99.7 
 
 100.8 
 
 103.0 
 
 108.5 
 
 114.6 
 
 114.7 
 
 116.2 
 
 116.4 
 
 120.3 
 
 125.9 
 
 130.1 
 
 137.2 
 
 144.1 
 
 143.0 
 
 154.2 
 
 fl8.3 
 -96.6- 
 98.7 
 97.2 
 09.7 
 101.5- 
 105.0 
 103.0 
 100.5 
 100.6 
 101.6 
 98.6 
 97.7 
 100.7 
 100.0 
 102.8 
 102.7 
 102.7 
 98.8 
 94.7 
 93.0 
 95.3 
 91.8 
 
 99.4 
 
 1891 
 
 - 97 5 
 
 1892 
 
 99.4 
 
 1893 
 
 97.6 
 
 1894 
 
 98 9 
 
 1895. 
 
 102 2 
 
 1896 
 
 104. 7 
 
 1897 . ... 
 
 - 102 5 
 
 1898 
 
 100.1 
 
 1899 
 
 99.8 
 
 1900 
 
 100 2 
 
 1901 
 
 96.8 
 
 1902 
 
 
 1903 
 
 
 1904 
 
 96 
 
 1905 
 
 98 6 
 
 1906 
 
 98.0 
 
 1907. . . 
 
 97 7 
 
 1908 
 
 93.0 
 
 1909 
 
 89 4 
 
 
 87 2 
 
 1911 
 
 8a9 
 
 1912 
 
 85 3 
 
 
 
 In brief, the salient features of the results of the economic development during the 
 last five years, as thej^ appear in the preceding table, may be summarized thus, aa 
 far as the figures combined and computed here may be relied upon: 
 
 (1) From 1907 to 1912, the wages per hour rose from 129.3 to 141.5, 12.2 points on 
 the recognized scale or 9.4 per cent. 
 
 • (2) During the same time the hours of labor declined from 95.1 to 93, 2.1 points or' 
 2.2 per cent. 
 
 (3) The weekly earnings increased from 123 to 131.6, only 8.6 points or 7 per cent. 
 
 (4) The retail prices of food increased from 125.9 to 154.2^ 28.3 points or 22.5^ per 
 cent. 
 
 (5) The purchasing power of an hour's wages (as expressed in cost of food) decreased 
 from 102.7 to 91.8, 10.9 points or 10.6 per cent. 
 
 (6) The purchasing power of weekly wages, or the true weekly wages, have de- 
 creased still faster, from 97.7 to 85.3, 12.4 points or 12.7 per cent. 
 
 Before these sweeping conclusions may be accepted, their general trustworthiness 
 should be carefully scrutinized. It will be arguea with justice that they are based 
 upon an indifferent assortment of statistical data. Even up to 1907 the "index of 
 real wages" derived from the above table is much more gloomy than the official index 
 
 Eublished in Bulletin 77 for the last time. The official index showed the real wages 
 olding their own up to 1907, with even a slight increase over the standard 1890-1899, 
 while the index here computed shows a loss of 2 per cent by 1907. With such fluctu- 
 ations due to different methods of computation, what may the whole statistical fabric, 
 here so carefully woven, be worth? 
 
 It is necessary, therefore, to examine the table critically, comparing it column by 
 column with the similar table published in Bulletin 77 (p. 7). Such an examination 
 will show that the index of "hours of labor," although independently computed here, 
 is practically identical with the official index (in 1907, 95.1 against 95). The same is 
 true of the index of wages per hour (129.3 as against 128.8 in 1907); and as a result the 
 derivative indexes of "full time weekly wages" are not very far apart (in 1907, 123 
 against 122.4). 
 
 The real difference is found in the "retail prices of food" (in 1907, 125.9 against 
 120.6 in the old index). This difference, however, it will be remembered, has not 
 been introduced by the writer. It is the new "official " index of Bulletin 105 as com- 
 pared with the old "official" index of Bulletin 77. TheTeasoH for the difference has 
 already been indicated here (see p. 801), and the suggestion was made that because 
 of a limited, and perhaps one-sided, selection of the list of foodstu" 
 
 may somewhat exaggerate the upward trend of prices. 
 
 ■ foodstuffs, the new index 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 251 
 
 . But, even allowing some 5 or 6 per cent lor this possible exaggeration, it still remains 
 true that the los^ of real wages within the last five years was about 7 or 8 per cent, 
 and ^ithin the last twelveyears some 10 per cent. . This is siirely a grave statistical 
 Cpnclu8ion.\ It makes the continuing of annual study of both wages and prices still 
 more necessary, the discontinuance of the annual reports still more regrettalile. Par- 
 ticularly unfortunate is the discontinuance of these reports just at th^ time the tide 
 is turned. 
 
 - Over and above the cold statistical results, is the light which these figures throw 
 iipon economic problems of great magnitude. Many professional economists have 
 complacently assumed that the charges of radical critics of modern industrial organiza- 
 tion have been greatly exaggerated. Hundreds of writers have .stoutly maintained 
 that while the rich may be getting richer, the "poor" are also getting a constantly' 
 growing return for their labor. And yet, the analysis of a large volume of statistical 
 observations carried on for over 10 years leads to the following inevitable conclusion. 
 In years of falling or even slowly rising prices, the American wageworker was able 
 to hold his own or to improve his condition to a slight extent. But when confronted 
 with a rapidly rising price movement (accompanied as it was by a violent growth of 
 profits), the American wageworker, notwithstanding his strenuous efforts to adjust 
 wages to these new price conditions, notwithstanding all his strikes, boycotts, and 
 riots, notwithstanding all the picturesque I. W. W.-ism, new unionism, and the 
 modish sabotage, has been losing surely and not even slowly, so that the sum total 
 of economic progi-ess of this country for the last quarter of a century appears to be a 
 loss of from 10 to 15 per cent in his earning power.' 
 
 1 1t inay be argued that this result is due to the abnormal conditions of the price level. 
 But after all, the changes in prices are as characteristic of the general economic condi- 
 tions as arexhanges in wages. Insofar as the quarter of a century intervening between 
 the end of the Civil War and the period covered in this study witnessed a substantial 
 iilcrease in the real wages of the American wageworker,^ it was also largely due to 
 the changes (downward) of the price level. The last half century seems therefore 
 to divide itself-into two -well-defined periods, as far as the changes in real wages are 
 concerned. 
 
 They increased in the seventies and eighties,, largely because of a falling price level. 
 But as this increase occurred during a period of almost continuous business depression, 
 it could scarcely result in a material improvement of the condition of the working 
 class. The crisis of 1873 was followed by business depression which lasted in the 
 United States until 1879. A very brief period of prosperity due to harvest failures in 
 Europe quickly culminated in 1882, and by 1884 another crisis arrived. 
 
 ,: During the period of increasing prosperity after the Spanish War, wages rose, but 
 retail prices rose so much faster that the real wage level has materially suffered. The 
 wage tendencies, therefore, seem to follow the price levels, though not perfectly. 
 Instead of a continuous increase in the purchasing power of wages, so loudly pro- 
 claimed, we find falling prices increasing their purchasing power theoretically, but 
 falling prices usually goliand in hand with business depression and unemployment. 
 "Prosperity" brings higher wages, but still higher prices, so that the purchasing power 
 of wages frequently falls in periods of prosperity. 
 
 ■ There is a compensating factor in the bettor conditions of employment in 
 "prosperous" times, just as increased unemployment largely nullifies the effect of 
 increased piurchasing power of wages in years of industrial depression. Very little 
 American statistical material is available for an accurate measurement of the increase 
 of annual earnings due to better conditions of the labor market. But it seems proper 
 to point out that this factor must not be overestimated. The conditions of the 
 American labor market find a natural corrective in years of prosperity in a rapid use 
 of inunigration. In so far as the data of the twelfth census concerning unemploy- 
 ment are at all reliable, they-show a larger volume of it for 1899, when the wave of - 
 prosperity had begun, than in 1889. 
 
 ■ "The deductions made above may be branded as extreme. It will be pointed out 
 that common observation does not fail to furnish evidence of an increased standard of 
 living among the wageworkers. A hundred articles and services may be mentioned 
 which were luxuries altogether unknown 50 years ago, and are now in everyday use 
 by the wageworkers. It is enough to refer to bathtubs, gas, and electricity, phono- 
 graphs, pianolas, movies, etc. The modern American wageworker is better dressed 
 and better housed than 50 years ago. The statement is often made that he is better 
 
 i The' above analysis was carried only to the end of 1912. But it is equally significant that the food-price ■ 
 level has increased from 164.2 in 1912 to 163.4, 9.2 points or 6 per cent, while, from Bulletin 143 it may be 
 gathered that the average increase of wages in 63 trade.-union occupations equalled only 2.5 per cent. 
 
 ' This increase was, by far, not so large as is generally assumed— which the writer expects to demonstrate 
 In another article, now in preparation. 
 
252 
 
 SOCIAL ^INSURANCE AND' UNEMPLOYMENT. 
 
 fed, but that does not seem to be cjuite as certain. Does not all that o|' itself argue 
 that earnings at present must be higher than they were 30 to 40 years ago? 
 
 Most emphatically it does not. Many factors have served to increase the inconleor 
 decrease the expenditure of the wagework6r's family without increasing the- return for 
 the labor of the individual wageworker. ' . 
 
 (1) Smaller families: For each 1,000 population, there were, in 1880, 381 children 
 under 15; in 1890, 355^ in 1900, 345; and in 1910, 321. Thus in" 30 years only the pro- 
 portionate number of children requiring support has decreased from 381 to 321, a 
 decline of nearly 16 per cent. Taking children under 5 years only, the decrease was 
 from 138 to 116; of children under 1 year only, there were, in 1880, 33 per 1,000, and in 
 1910, 24 only, a decrease of 30 per cent. A further analysis of these figures would show 
 that the decrease took place largely among native-born white families, and it is among 
 just these families that an increased standard of living is to be found. 
 
 (2) Eapid development of woman labor: The percentage of women "gainftjUy em- 
 ployed " to the total number of persons gainfully employed, in 1870, was 13; in 1880, 
 16.6; in 1890, 18.1; in 1900, 18.5; and in 1910, according to the latest statistics of occu- 
 pations, 21.2. Widle the latest figure seems somewhat exaggerated by an. evident 
 change of the method of enumerating woman agricultural laborers, ' nevertheless, even 
 if the entire increase in this class be discounted from the total number of "women 
 gainfully employed," the proportion of women gainfully employed still shows a sub- 
 stantial increase to 19.3 per cent.^ 
 
 This increase is especially strong in the industrial population. The tendeacy to 
 utilize cheap female labor in mercantile establishments and large offices has grown by 
 leaps and bounds, and the rate of increase is also growing, as the following figures- will 
 demonstrate; ! , 
 
 Table 10. — Number of women employed in certain clerkal and commercial occupatiom 
 
 (000 omitted). 
 
 Occupation. 
 
 1870 
 
 1880 
 
 1890 
 
 1900 
 
 1910 
 
 Bookkeepers and accountants 
 
 Clerks and copyists ; . . . 
 
 Stenographers 
 
 Saleswomen 
 
 Telegraph and telephone operators.. 
 
 Five occupations . 
 
 30 
 
 179 
 
 149 
 
 417 
 
 18S 
 233 
 283 
 250- 
 
 (3) Increase in employment of married women. In 1890 they numbered 515,260 or 
 4.6 per cent of all married women, and in 1900, 769,471, or 5.6 per cent. Similar data 
 as to the distribution of employed persons by marital conditions were omitted from the 
 Thirteenth Census, so that it is impossible to ascertain accurately the increase in the 
 number of employed married women during the last decade. But that such an in- 
 crease has taken pla'ce is strongly indicated by the data in regard to occupations in 
 which married women of the working class are to be found earning a subsidiary income. 
 
 TabIiE 11. — Number of women employed in certain occupations in which employment of 
 married women is common (000 omitted). 
 
 Occupation. 
 
 i 1870 
 
 1880 
 
 1890 
 
 1800 
 
 19W 
 
 
 56 
 11 
 
 188 
 
 108 
 14 
 
 282 
 
 216 
 41 
 293 
 { 61 
 146 
 
 33S 
 109, 
 345 
 86 
 146 
 
 697' 
 
 Nurses and midwives 
 
 193 
 
 
 343. 
 
 
 128 
 
 
 167 
 
 
 
 Five occupations 
 
 255 
 
 404 
 
 757 
 
 1,021 
 
 11,428: 
 
 
 
 ' The nnmber of female agricultural laborers enumerated for the last four censuses was- as follows: 1880 
 634,900; 1890, 63S,G«5; 1900, 663,209; 1910, 1,522,133. 
 
 ' 1.522,133—663,209=858,924 (limit of possible overestlmatlon In the number of female a^icultuial labor- 
 ers). 
 
 8,075,772—858,924=7,216,848 (corrected number of women gainfully employed). 
 
 3§,16^,336—85^.924~^7,3i)8,412 (corrected total of persona gainfully employed); 
 
 7y216,848-i-37,308,412= 19.3 per cent (ratio of women to the total number, of'perdonsgaiiifnMy, employed). 
 
SOCIAL INSURANCi; . AND UNEMPLOYMENT. 25j3 
 
 i. l**£^" °°* ^^ claimed that all or a majority of these 1,428,000 women are married, 
 but there IS no doubt that a very considerable proportion of them are. ' Wives of wage- 
 workers do not go to work out of theoretical conaiderationB as to the economic inde- 
 pendence of women, or because of a sentimental longing for "self-expression." They 
 do it either because they must, under pressure of a rising cost of living, or becau se they 
 may thus improve the standard of the family, since improved conditions of house- 
 keeping as well as the reduction in the size of families enable them to sell their leisure 
 hours m the labor market. 
 
 With fewer children to support, with women young and old, married or unmarried, 
 tontributing to the family budget, or at least partially relieving it of a certain share of 
 the burden, the wageworkers of America were able to raise their standard of living, to 
 lead a somewhat easier life. But this does not mean a larger return for their labor. 
 As far as the purchasing value of their wages is concerned, it had probably increased 
 slightly (though by no means as rapidly as is asserted) between 1870 and 1890. But 
 since 1900 it has been rapidly falling. The purchasing powers of wages in 1913 are 
 not much. higher than they were in 1870. Even assuming the correctness of the 
 figures derived from the Aldrich report, the increase for the last three decades was nil. 
 
 And yet the increase in the productivity of labor during the last three decades, 
 especially as measured in consumer's values, was enormous. It is not at all necessary 
 to auote figures to prove this contention. 
 
 ._ The conclusion is inevitable that, a much smaller share of the valUe reaches the 
 wageworker now than did 20 or 30 years ago. 
 
 OBJECTIONS TO A COMPENSATED DOLLAR ANSWERED. ' ; 
 
 In The Purchasii^ Aw^ of Money (1911) I sketched a plan for cijntxolling the 
 price level, i. e., standardizing the pm-chasing power of monetary units. This plan 
 was presented more briefly^ but-in more popular language, before the International 
 Congress of Chambers of CoWierce, at Boston, September, 1912. The details were 
 most fully elaborated in the %iarterly Journal of Economics, February, 1913. Fol- 
 lowing these and various other presentations of the subject, especially the discussion 
 at the meeting of the American Economic Association in Dedember, 1912, the plan 
 was widely criticized by economists, both favorably and unfavorably, as well as by 
 the general public. The bibUograiSiy at the end of this article is selected from a list 
 of 344 references (of which 305 are'<^ewspapers), and I there include references to 
 anticipations of the plan by Prof. Sii^n Newcomb and Aneurin Williams, M. P.* 
 
 On the whole the plan has been received with far more favor than I had dared to 
 hope, and even the adverse criticism ha^usually been tempered by a certain degree 
 of approval. \ 
 
 The objecttrf the present paper is to answer briefly the more important and tech- 
 nical objections which have been raised. Th^hief popular objections and misunder- 
 standings were answered by an article in th^Jfew York Times, December 22, 1912. 
 Only one of these is included in this article. AnHwjers to the more popular objections, 
 oinitted from this article through lack of space, ■s^l appear in a book. Standardizing 
 the Dollar, which I hope to publish in 1915. 
 
 > In 1900^ 19.7 per cent were married and 22.1 per cent widowed. 
 
 ' Mr. Williams's plan, described in 1892, was first brought to my attention after tbe American Economic 
 Association discussion. That of Simon Newcomb, the famous astronomer (and economist), appeared in 
 1879. , I came upon it by accident, after the present article Was in type, in searching for data on the allied 
 subject of an absolute standard of value. Newcomb's and Williams's plans are so nearly identical with mine 
 as to. leave not'alng vital.whioh 1 can still claim as original and unanticipated except the proviso against 
 gold speculation. Among others who have anticipated the general idea of changing the weight of the 
 dollar are WiiliamG. Foster, of Watertown,- Mass. ; Henry Heaton, of / tlantie, Iowa; Prof. Alfred Marshall 
 (Contemporary Review, Mar., lS87^ p. 371, footnote); and President Woodrow Wilson. In.a book which 
 I hope to publish on this subject m a few months I shall include references to several other, though less 
 aimiiE^, anticipations which have come to light, one being by AUred Russell Wallace. 
 
254 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 APPENDIX C. 
 
 Unemployed Insurance Under the British National Istburancb AEt. 
 
 [Prepared by the TJ. S. Bureau of Labor Statistios.J ' 
 
 The British scheme of insurance against unemployment under the national insur- 
 ance act, 1911, Part II, and the amendment act of 1914 is administered by the board 
 of trade and came into operation July 15, 1912. The objects of the scheme are: 
 
 1. Compulsory insurance against unemployment in certain trades described as 
 "Insured trades." This involves contributions from all employers and workmen in 
 the insured trades, which are designated below, contributions from the State, and 
 the payments of benefits to the work people when unemployed. 
 
 2. Encouragement of voluntary insurance against unemployment by money grants 
 from State funds to associations of persons, in all trades and occupations; which pay 
 out-of-work benefits. 
 
 COMPULSORILr INSURED TRAOBS. 
 
 The insured trades are: 
 
 1. Building im&s.^Gonstruction, alteration, repair, decoration, or demolition of 
 buildings, including manufacture of wood fittings commonly made in builders' 
 workshops. 
 
 2. Construction of worhs. — Construction, reconstruction, or alteration of railroads^ 
 docks, harbors, canals, embankments, bridges, piers, or other works of construction. 
 
 3. SMpbidlding. — Construction, alteration^ repair or decoration of ships, boats, or 
 other craft by persons other than members of ship crews, and manufacture of -wod 
 fittings commonly made in ship yards. • ', ' ' 
 
 4. Mechanical engineering. — Including manufacture of ordnan'ce and firearms. 
 
 5. Iron founding, whether included under foregoing headings or not. 
 
 6. Constniction o/ tia'iides.^-Construction, repair, and decoration of vehicles. 
 
 7. Sawmilling (including machine woodwort); carried on in' connection with any 
 other insured trade or of a kind commonly so carried on. 
 
 toremen, other than manual workmen, clerks, apprentices, and persons under 16 
 years of age are excluded. The nature of his work rather than the business of his ein- 
 . ployer determines whether a workman is or has been in an insured trade. No ein- 
 
 Eloyer may employ a workman who does not have an unemployment book. These 
 ooks ca;n be obtained from labor exchanges .or other local offices of the unemploy- 
 ment fund and are current only for such period not exceeding 53' weeks as is speci- 
 fied thereon. .. 
 
 Umpire to decide doubtful cases. — If there is doubt whether any workman is included 
 in an insured trade, information can be obtained from a labor exchange or other 
 local office of the unemployment fund, and if the employer or workman desires he 
 may apply for a definite decision to an umpire appointed by the crown and acting 
 independently of the board of trade. 
 
 Worhmen only partly in an insured trade. — ^Workmen employed by the same em- 
 ployer partly in and partly not in an_ insured trade may arrange with the employer 
 to have contributions paid on their account as if they were wholly employed in an 
 insured trade, and will be entitled to benefits accordingly. > . 
 
 Contributions. — As stated above, contributions are required from all employers and 
 workmen in insured trades, and also from the State. 
 
 When the workman is 18 years of age or over contributions of 2Jd. (5.07 cents) each 
 are required from theemployer and the workman, or 5d. (10.14 cents) from both, 
 for every pariod of employment lasting more than two days but not over a week; 
 2di (4.06 cents) from each or 4d. (8.11 cents) from both for«very employment period 
 of over one but not over two days; and Id. (2.03 cents) each or 2d. (4.06 cents) froni 
 both for every employment pariod of nor over one day. If the workman is under 
 18 years of age, the contributions required are Id. (2.03 cents) each or 2d. (4.06 cents) 
 from both for every employment period not exceeding a week. 
 
 The state contributions must be paid each year and are fixed by the law at one- 
 third of the total receipts from employers and Workmen in insured trades during 
 that year. .The treasury may determine the manner and the time such contributions 
 are to be paid. 
 
 Collection of contributions from employers and workmen.- — Contributions of em- 
 ployers and workmen are paid in the first instance by the employers, who are required 
 to purchase and affix to ths -workpien^s unemployment books unemployment insur- 
 ance' stamps to the value of the joint contributiSifs of both 'enSpioyer=and workman.' 
 The unemployment insurance stamps are obtainable at post offices, but are entirely ' 
 
SOCIAL INSTJKAKCE . AND UNEMPJ(.OYMENT. 255 
 
 distinct from postage stamps or from the health insurance stamps issued under Part I 
 °j^^j °^'^'^"*^® ^'^^- Three ordinary "denominations of stamps are on sale, namely, 
 5d., 4d., and 2d:, though higher denominations may be obtained from the board of 
 trade. 
 
 After having affixed the stamps the employer may deduqt from the workman's 
 wages one-half the value of such stamps. No contributions are required while the 
 workman- IS out of work or engaged in any other than an insured trade. 
 
 Am employer or. workman who fails to pay his contributions or refuses to comply 
 with the act or regulations thereunder is liable for each offense to a fine to £10 ($48.67), 
 and in addition, where the offense is failure to pay any contribution, he is liable to the 
 unemployment fund for three times the amount he has refused to pay, not exceeding 
 £.5 ($24.33).- If an employer so convicted is further convicted of failure to pay other 
 contributions during the year preceding the date information was laid, he is liable 
 to the unemployment fund for the total of such other contributions , and can not recover 
 the workman's portion thereof. 
 
 Custody of unemployment books. — ^While the workman is employed Ms unemploy- 
 ment book is kept by the employer, who must give him reasonable opportunity to 
 inspect the book. When the workman loses his employment the employer must 
 return his book, which the workman must then deposit with a labor exchange or 
 other local office of the unemployment, fund. 
 
 Conpribuiions from casual workm^ni^-In ordinary cases, as has been stated, a con- 
 tribution of 2Jd. (5.07 cents) each is required from the employer and the workman 
 for every separate employment period lasting over two days but not over a week. 
 Under this rule a workman having two separate periods of employment in a week, 
 each lasting three days, under different employers, for example, is subject to two 
 contributions — ^that is, 5d. (10.14 cents) altogether — ^and his employers would also 
 have to pay the same amount. On the other hand, if he had been continuously 
 employed for one week by one employer, he and the employer would each have had 
 to pay only 2Jd. (5.07 cents). . 
 
 This -to some extent automatically adjusts the premium tor insurance to greater 
 riskj in so far as casual workmen and their employers must pay greater contributions 
 than regular workmen and their employers, though it may be noted that the casual 
 employee.under Such circumstances gets a proportionately increased claim on the fund. 
 , By a special provision in section 99 of the act, however, casual workmen and their 
 emplojrers may. escape the higher contributions and the employer be relieved of the 
 pbhgation of keeping and stamping unemployment books. This provision authorizes 
 the employer, through the board of trade, to make an arrangement with a labor exchange 
 whereby the latter undertakes to keep and stamp on the employer's behalf the unem- 
 ployment books of workmen engaged through the labor exchange, and whereby all 
 .the employment periods of the same or different workmen engaged by that employer 
 through the labor exchange may be treated as a single continuous period of employ- 
 - ment of one person. In other words, the employer who uses the labor exchange in 
 this way may pay according to the amount of labor helias, though the employment has 
 been discontinuous and he has not had the same man, and the workman engaged through 
 the Jabor exchange may pay at the rate -of a single contribution tor each week of work 
 he does, regardless o{ the number of separate engagements he may have had. 
 - Employers who thus arrange for a labor exchange to keep and stamp the unemploy- 
 ment books are required to deposit with the board of trade a sum sufficient to cover the 
 estimated contributions of both employers and workmen for three months, or such lesser 
 period as may be agreed upon between them and the board of trade. 
 _ - Unemployment fund. — The unemployment fund is made up of the contributions of 
 employers, workmen, and the State, as above described. From it are paid all claims 
 for unemployment benefit and any other payments authorized under Part II of the 
 -act. . g'he fund is controlled and managed by the board of trade. 
 
 Benefits. — Benefits may be obtained by workmen in insured trades either (1) direct 
 from the unemployment fund through a labor exchange or other local branch of the 
 fund or (2) through an association of workmen which pays unemployment benefits 
 and has arranged with the board of trade for a refund under section 105 of the act. In 
 the latter, case the members of the association instead of drawing unemployment 
 ^benefits from a local office under the rules of the unemployment fund may draw bene- 
 fits from the association,, and the association may thereafter recover from the unem- 
 ployment fund the amount which the workmen would have been entitled to had they 
 .made direct claim. The word "association" as here used includes trade-unions 
 paying unemployment benefits. \ . 
 
 'According to the amendment act of:1914 the board of trade shall not make or continue 
 an arrangement such as that just described unless they are satisfied that the total 
 
256 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 benefit authorized by the association is at least one-third greater than the benefit 
 provided to be paid from the unemployment fund under the original act. 
 
 Whether the workman seeks benefits direct from the unemployment fund or through 
 an association, he must, on losing his employment, get his unemployment book from 
 the employer and leave it at a labor exchange or other local ofiice of the fund. Notice 
 that the book has been lodged and claim made will be given in every case to the last 
 employer. 
 
 if the workman makes direct claim to the fund he must, if living withing 3 miles 
 of the local office, go to that office daily and sign a register during working hours as 
 • evidence of unemployment. If, however, he lives over 3 but not over 5 miles from 
 the office, he is required to attend only on alternate days, and may then sign both for 
 the actual day of attendance and the preceding day. If the distance exceeds 5 miles 
 he may attend at longer intervals or give such evidence of unemployment as the 
 board of trade may direct. 
 
 When the workman makes claim through an association he must get a receipt for 
 his book, take it to the association, and give such evidence of unemployment as is 
 required by his arrangement with the association. He thereafter draws benefits from 
 the association in accordance with its rules and subsequent settlement of claim is made 
 between the asociation and the board of trade. 
 
 In accordance with its provisions no benefits were paid during the first six months 
 after the law went into effect, that is, until January 15, 1913, but the unemployment 
 benefit to be paid after that date was placed at 78. ($1.70) a week for workmen 18 years 
 of age or over, and 3s. 6d. (85 cents) a week for workmen between 17 and 18, while 
 those under 17 can not claim benefits. Benefits can not be obtained for more than 15 
 weeks in any insurance year or for less than one day, nor can a workman receive more 
 than the proportion of one week's benefit for five contributions paid by him.- 
 
 Waiting period. — No benefit is allowed for the first week of employment. This 
 ''waiting period" plays an important part in the working of the system. If the rule 
 stood by itself it would mean that every time a workman obtained employment, even 
 for a day, he would on again losing employment be disqualified from receiving unem- 
 ployment benefit for a whole week. 
 
 A paragraph in section 107 provides, however, that when two periods of employ- 
 ment of not less than two days each are separated by a period of not more than two 
 days involving employment of not more than 24 hours, the two unemployment 
 periods are together treated as a continuous period of unemployment. 
 
 The meaning of this can be explained best by an illustration. If a workman has 
 been unemployed four days, then gets work for two days, and again is unemployed 
 four days, he can get benefit for the last two days of the second period. In this case 
 the first two days of the second unemployment period are run together with the first 
 unemployment period of four days to make up the waiting week. 
 
 Section 107 also provides that when there are two periods of unemployment of not 
 less than a week each, separated by an interval of not more than six weeks, the two 
 unemployment periods are treated as a continuous period of unemployment. Thus, 
 if a workman has been unemployed six days, then gets work for six weeks, and is 
 again unemployed for six days he can receive benefit for the whole of the second six 
 days, the first unemployment period of six days being con3idered.as the waiting period. 
 
 A workman is not considered to be unemployed while employed at a remunerative 
 occupation in an insured trade or while following any other occupation from which he 
 gets pay or profit greater than he would derive from unemployment benefit under the 
 act, unless he has ordinarily followed the other occupation in addition to his employ- 
 ment in an insured trade and outside his working hours in that trade, and his pay from 
 such other occupation is not over £1 ($4.87) a week. 
 
 Conditions ofheufftl. — In order to receive benefits, a workman must prove that not 
 less than 10 contributions have been paid by him; that he has made application for 
 unemployment benefit in the prescribed manner, and since the date of the application 
 has been continuously unemployed ; that he is capable of work but unable to obtain 
 suitable employment; and that he has not exhausted his right to unemployment 
 benefit. He is not considered to have failed to meet these conditions if he has declined 
 to accept: (1) a situation vacant because of stoppage of work due to a trade dispute; 
 (2) an offer of employment in a district where he was last ordinarily employed, at a 
 lower rate or less favorable conditions than those he ordinarily obtained in his usual 
 employment in that district or would have obtained had he continued to be so em- 
 ployed; (3) or an offer of employment in any other district at a lower rate or on less 
 favoraole conditions than those generally observed in such district by agreements 
 betr/een associations of employers and of workmen, or if there is no such agreeipent, 
 than those generally recognized by good employers. 
 
SOCIAL INSURANCE! AND UNEMPLOYMENT. 257 
 
 On the other hand , workmen are not paid unemployment b enefit if they unreasonably 
 refuse offers of suitable situations. The situation must, however, be in their own 
 trade and the wages must not be lower and the conditions not worse than those usually 
 prevailing in the trade in the locality where the work is to be done. 
 
 Disqualification for unemployment benefit. — ^The following are disqualified from 
 receiving unemployment benefits: (1) A workman who has lost employment by reason 
 of a stoppage of work due to a trade dispute at his place of employment for so long as 
 such stoppage continues or until he gets work elsewhere in an insured trade; (2) 
 a workman who has lost employment through misconduct or voluntarily leaving 
 employment without just cause, for six weeks after so losing employment; (3) a work- 
 man while an inmate of any prison, workhouse, or other institution supported by 
 public funds, or while residing temporarily or permanently outside the Umted King- 
 dom; (4) a workman receiving sickness or disablement benefit or disablement allow- 
 ance under Part I of the national insurance act. 
 
 IXsputed claims. — The decision as to whether a workman is entitled to benefit or 
 not is made in the first instance by an insurance officer appointed by the board of 
 trade, subject to the workman's right to appeal to a court of referees, consisting of an 
 "impartial chairman" and one representative each of employers and workmen. 
 From the decision of the court of referees the workman has no appeal, but if the in- 
 surance officer disagrees with the recommendation of the court he may carry the 
 matter to the umpire, an officer appointed by, but independent of the board of trade, 
 whose decision is final. 
 
 Sffund of contributions. — The insurance act originally provided that an employer, 
 in oidar to get a refund on contributions paid by him in behalf of any workman, must 
 have paid at least 45 such contributions and have had the workman continuously in 
 his service for 'one year. Under this provision refunds were lost in many cases owing 
 to circumstances over which the employer had no control; for example, when work- 
 men went on strike. The amendment act of 1914 changed this provision so that all 
 that is necessary for the employer to do to get a refund in respect to any workman is 
 to pay 45 contributions or more during the insurance year. This entitles him to a 
 refund of 3s. (73 cents) for each workman for whom he has paid such contributions 
 whether or not the workman has been continuously employed by him. 
 
 The board of trade may apply this provision to any period less than an insurance 
 year, subject to proportionate reduction in the number of contributions and the sum 
 to be refunded. 
 
 A workman who has made 500 contributions is entitled on reaching the age of 60 
 to a refund of the whole of his contributions (but not what his employer and the State 
 have paid over for him), less the amount he may have received as unemployment 
 benefit, with compound imterest at 2^ per cent. If he was over 55 years of age when 
 his contributions became payable, the number of weekly contributions required to 
 entitle him to repayment is reduced by 50 for every year or part of a year by which his 
 age at that time exceeded 55. . , i ^ 
 
 When it appears to the board of trade that there is exceptional unemployment, 
 workmen systematically workiiig short time and their employers may be exempted 
 entirely from paying contributions. . 
 
 Encouragement of voluntary insurance against unemployment.— An important feature 
 of the law is founi in section 106 relating to money grants from the State (not from 
 the unemployment fund) to aid voluntary insurance against unemployment. By 
 these grants part of the expenditure actually incurred on account of unemployment: 
 may be repaid to associations paying benefits to unemployed persons, whether m an- 
 insured trade or not. These grants apply only to insurance through associations and 
 no provision is made for direct voluntary insurance of individual workmen. Repay- 
 ments may not exceed one-sixth of the amount of benefit paid. 
 
 The original act provided that any amount by which benefit payments exceeded 
 12a. a week should be excluded in calculating repayments under the one-sixth rule. 
 This provision was repealed by the amendment act of 1914 and the limit of benefits 
 on which such repayments can be calculated raised to 17s. ($4.14). On benelits 
 exceeding this amount repayments are subject to reduction by the board of trade 
 from what they would otherwise amount to under the one-sixth rule. 
 
 In the case of associations of workmen in "insured trades" the refund of one-sixth 
 is calculated, not on the whole amount of the benefit paid, but on what remaans after 
 deducting the amount recoverable by the association from the unemployment fund, 
 according to section 105 of the act, as described above under the heading Benefits. ^^ 
 
 Thus for example, if an association of workmen belonging to the "insured trades 
 pays a total benefit of 13s. ($3.16) per week, of which 7s. ($1.70) is allowed by the 
 State and is recovered from the unemployment fund, the refund it would get under 
 
 39501—16 17 
 
258 SOCIAL INSUEAETOE AND UNEMPLOYMENTi 
 
 the one-sixth rule would not be one-sixthof 138., but one-sixth of the balance of 
 6s., or la. (24.33 cents), per week. This, with the 7a. recovered from the unemploy- 
 ment fund, would amount to a total of 8s. ($1.95) recovered per week. 
 
 On the other hand, an association of workmen not belonging to the insured trades, 
 which gives a benefit of ISs., for example, can recover nothing from the unemploy- 
 ment fund, but can recover from the State one-sixth of 13s., or 28. 2d. (52.73 cents),- 
 a week. •^ 
 
 The amendment act of 1914 further provides that in associations of workmen in 
 inaured tradea if the highest weekly benefit authorized is less than IBs. ($3.16) the 
 whole amount recovered from the unemployment fund is not excluded in calculating 
 repayments by State grants, but rather such proportion of the amount recovered as, 
 the highest weekly payment is of 138. 
 
 Suppose, for example, an association authorizea unemployment benefits of only 12s. 
 ($2.92^ per week. The amount recovered by this association from the unemployment 
 fund in respect to a workman receiving such benefit would be 7s. ($1.70) per week. 
 Under the 1914 amendment just mentioned, however, the additional amount to be 
 repaid by State grant according to the one-sixth rule would not be calculated on the 
 balance of 58. remaining after deducting the 78. recovered from 12s., but rather on the 
 amount remaining after deducting twelve-thirteenths of 7s., or 6s. 5Jd. from 12b. 
 The remaining amount would thua be 5a. 6id., and one-sixth of this, or ll-^d. (22 cents), 
 would be the amount repaid by State grant. This with the 7a. recovered from the un- 
 einployment fund would amount to a total of 7s. 11-^d. ($1.92) recovered per week. 
 
 Soon after the outbreak of the European war the Government authorized emergency 
 grants to associations in addition to the one-aixth allowed under section 106. To aecure 
 these extra grants extra levies in addition to regular contributions are required from 
 members who are 21 years of age and over and are fully employed. Emergency grants 
 may amount to one-sixth or one-third of the expenditures for unemployment benefit 
 depending on the amount of the levy. The rate of the levy also varies according to 
 the benefit paid. If the weekly unemployment benefit is 13s. or less per week a weekly 
 levy of Id. is required to obtain an emergency grant of one-sixth, and a levy of 2d, to 
 obtain a grant of one-third; if the benefit is over ISs. but not over 15s. a levy of 2d. is 
 required to aecure a grant of one-sixth and a levy of 4d. to aecure a grant of one-third; 
 if the benefit exceeds 15s. but does not exceed 17a. a levy of 3d. ia required to obtain 
 an emergency grant of one-sixth and 6d. to obtain a grant of one-third. Thus an asso- 
 ciation paying an unemployment benefit of 178. ($4.14) per week and levying 6d. 
 (12.17 cents) per week on its members who are fully employed will obtain an emergency 
 ^ant of one-third of its expenditure on unemployment benefit, which with the one- 
 sixth ordinarily obtainable under section 106 will equal one-half of the association's 
 expenditure. If it levies only 3d. (6.08 cents) per week it will obtain an emergency 
 grant of one-sixth, which with the one-aixth ordinarily obtainable will amount to one- 
 third of its expenditure. Emergency grants are allowed only when associations are 
 suffering from abnormal unemployment and do not pay unemployment benefit of 
 over 17s. ($4.14) a week, and on condition that they agree while receiving such grants 
 to make levies over and above the ordinary contributiona on members remaining fuUy 
 employed. 
 
 The following tables, compiled from statements in the Board of Trade Labor Gazette, 
 show, first, the number of workmen insured against unemployment in each group of 
 insured trades at apecified datea since the law went into effect, and, aecond, the total 
 number of claims made and the amount of behefita paid from month to month. The 
 figurea in these tables are necessarily incomplete, because of lack of oflBicial information. 
 
SOCIAL lifSTJBANCE AND UNEMPLOYMENT. 
 
 259 
 
 Ny,mber of persons insured against unemployment under part II of the British national 
 insurance act of 1911, at specified dates, by trades, July 21, 1912, to Feb. 29, 1916. 
 
 Date. 
 
 July 27. . 
 Aug. 31 . 
 Sept. 2S. 
 Oct. 26-. 
 Nov. 30. 
 Dec. 2S.. 
 
 1913. 
 
 Feb. 1 . . 
 Mar. 1.. 
 Mar. 29. 
 Apr. 26. 
 Mav3!.. 
 June 28. 
 July 12. . 
 
 Jan. 17.. 
 May 31. . 
 June 30. . 
 Julv 31. . 
 -Mij. 31.. 
 Sept. 30. 
 Oct. 31.. 
 Nov. 30. . 
 Deo. 31... 
 
 1916. 
 
 Jan. 31 
 
 Feb. 23 
 
 Mar. 31 
 
 Apr. 30 
 
 Way 31 
 
 June 30 
 
 Julv 31 
 
 .lug. 31 
 
 Sept. 30.... 
 
 Oct. 31 
 
 Nov. 30 
 
 Dec. 31 
 
 Persons insured in — 
 
 Building 
 trades. 
 
 1 740, 624 
 1 806, 867 
 1845,030 
 1 893, 617 
 ' 918, 026 
 
 792, .663 
 
 1967,321 
 
 1 983, 164 
 
 1 1, 002, 141 
 
 ' 1,024.,S48 
 
 1 1, 046; 698 
 
 861, 408 
 
 775, 755 
 1 927, 117 
 1947,686 
 ■956,890 
 1 967, 374 
 1976,921 
 1 985, 383 
 1926,660 
 1889,976 
 
 Works 
 of con- 
 struc- 
 tion. 
 
 896, 
 895, 
 826, 
 825, 
 640, 
 640 
 640; 
 640, 
 577, 
 577, 
 
 1,975 
 1,976 
 029 
 029 
 073 
 073 
 947 
 947 
 947 
 947 
 92S 
 
 Jan. 31 . . 
 Feb. 29. 
 
 550,973 
 6.60,973 
 
 168,308 
 
 m 
 m 
 
 P) 
 186, 260 
 
 161, 168 
 
 SMp- 
 buildmg. 
 
 (=) 
 m 
 
 h 
 
 P) 
 (?) 
 
 m 
 m 
 p) 
 p) 
 p) 
 
 C) 
 
 150,974 
 160,974 
 150,974 
 1.50,974 
 114, 156 
 114, 155 
 
 113, 427 
 113,427 
 
 204, 672 
 217,377 
 224, 669 
 230, 724 
 237, 3W 
 240, .567 
 
 248,221 
 ■254,860 
 269, 394 
 264,021 
 269, 749 
 273,278 
 274,228 
 
 260,820 
 260,996 
 262, 130 
 264,217 
 266,584 
 272,996 
 276, 143 
 266,203 
 242, 790 
 
 242, 790 
 242, 790 
 246,027 
 246, 027 
 
 247. 745 
 
 247. 746 
 242, 963 
 242,963 
 242,963 
 242,963 
 226, 048 
 226, 048 
 
 222,870 
 222,870 
 
 En^i- 
 neermg 
 andiron 
 founding. 
 
 696, 7(9 
 731, 619 
 746, 762 
 763, 031 
 779,114 
 787, 962 
 
 802,094 
 814,930 
 824,691 
 836,683 
 860,696 
 862, 672 
 866, 563 
 
 804, 627 
 807, 169 
 811,288 
 ■817,931 
 820,8.50 
 828,988 
 838, 186 
 771, 758 
 730, 785 
 
 730,-785 
 730, 786 
 741,855 
 741,865 
 763, 731 
 .763, 731 
 758, 093 
 768, 093 
 76.8,093 
 768, 093 
 804,002 
 804,002 
 
 846,009 
 846, 009 
 
 Construc- 
 tion of 
 vehicles. 
 
 .171,056 
 179,779 
 183,440 
 187, 674 
 191,290 
 193, 550 
 
 198,060 
 20.1, 994 
 206, 009 
 208, 470 
 212,026 
 214, 718 
 216, 028 
 
 204,672 
 206, 170 
 208, 130 
 209, 986 
 210, 869 
 211,471 
 212,370 
 196, 326 
 184, 720 
 
 184, 720 
 184, 720 
 186, 291 
 186,291 
 183,033 
 183, 033 
 174,275 
 174,276 
 174,275 
 174,275 
 174,'139 
 174, 139 
 
 167,076 
 167,076 
 
 Saw- 
 milling. 
 
 17, 192 
 17, 6iq 
 18,047 
 18,218 
 18, 48(1 
 18, 061 
 
 IS, 7S.5 
 18,864 
 18, 778 
 18,867 
 18,973 
 19, 080 
 19, 118 
 
 11,819 
 11, 776 
 11, 922 
 12, 029 
 12, 123 
 12, 192 
 12,294 
 11,618 
 11, 166 
 
 11, 168 
 11, 166 
 11, 267 
 11,267 
 10,246 
 10,246 
 9, 433 
 9,433 
 9,433 
 9,433 
 8, fj66 
 .8,666 
 
 8,239 
 8,239 
 
 Other 
 indus- 
 tries. 
 
 71, 608 
 76, 298 
 76, 730 
 77, 487 
 78, 146 
 7,S, 622 
 
 79,306 
 80, 760 
 82, 217 
 83, 400 
 84, 727 
 86, 046 
 86,334 
 
 63, 663 
 63, 030 
 63, 744 
 64, 646 
 64, 718 
 64,743 
 64, 446 
 .59, 410 
 66, 101 
 
 .56, 101 
 66, 101 
 65,668 
 66,668 
 47,897 
 47,897 
 42,998 
 42,998 
 42,998 
 42,998 
 47,222 
 47, 222 
 
 43, 224 
 43,224 
 
 Total. 
 
 1,901,830 
 2,029,646 
 2. 094, 574 
 2, 170. 661 
 2, 222; 368 
 2,260,031 
 
 2,297,326 
 2,338,699 
 2,373,273 
 2, 413. 682 
 2, 401; 018 
 2,601,492 
 2,608,939 
 
 2,282,324 
 2,276,258 
 2,304,899 
 2,325,698 
 2,341,608 
 2,367,311 
 2,388,821 
 2,219,980 
 2,1]5,\536 
 
 2,116,636 
 2,115,636 
 2,136,027 
 2,136,027 
 2,077,725 
 2,077,725 
 2,019,683 
 2,019,683 
 2, 019, 683 
 2,019,683 
 1,952,060 
 1,952,060 
 
 1,951,817 
 1,851,817 
 
 ' Including those in works of construction. 
 
 > Included in building trades. 
 
260 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Persons insured against unemployment, claims made, and benefits paid under Part II oj 
 the British National Insurance Act of 1911, at specified periods, Jan. 31, 191S, to Feb. 
 Z5, 1916. 
 
 Four weeks euding- 
 
 Number 
 insured 
 (at end of 
 specified 
 month). 
 
 Claims 
 made.i 
 
 Benefits paid. 
 
 Number, 
 
 Amount. 
 
 Jan. 31>. 
 Feb. 28.. 
 Mar. 28.. 
 Apr. 26.. 
 May 30<. 
 June 27.. 
 July 25. . . 
 Aug. 29 « , 
 Sept. 26.. 
 Oct.31". 
 Nov. 28.. 
 Dec. 26... 
 
 Jan. 30<.. 
 Feb. 27... 
 Mar. 27... 
 Apr. 24... 
 May 29'.. 
 June 26... 
 July31i.. 
 Aug. 28.. 
 Sept. 25.. 
 Oct. 30«.. 
 Nov. 27.. 
 Dec. 24... 
 
 Jan.29<.. 
 Ftfb. 26... 
 Mar. 26... 
 Apr. 30<. 
 May 28. . . 
 June 25... 
 July 30«.. 
 Aug. 27.. 
 Sept. 24.. 
 Oct. 29 i.. 
 Nov. 26.. 
 Deo.31<.. 
 
 Jan. 28.. 
 Feb. 25.. 
 
 1913. 
 
 1914. 
 
 1915. 
 
 1910. 
 
 2,297,326 
 2, 
 
 373,273 
 413,582 
 431,018 
 501,492 
 508,939 
 
 (=) 
 
 (") 
 
 0) 
 
 (=) 
 
 (') 
 
 m 
 m 
 
 h 
 
 276,258 
 304,899 
 325,598 
 341, 508 
 367,311 
 388,821 
 219,980 
 115, 536 
 
 115,536 
 115, 536 
 136,027 
 136,027 
 077, 725 
 077,725 
 019,683 
 109,683 
 109, 683 
 019, 683 
 952,060 
 952,060 
 
 1,951,817 
 1,951,817 
 
 165, 642 
 87,646 
 65,577 
 63,447 
 74, 186 
 68,058 
 68,806 
 78,229 
 77,266 
 
 110,242 
 92, 106 
 90, 615 
 
 163,300 
 86,465 
 75,183 
 63,794 
 83,884 
 73,743 
 103,730 
 180,233 
 133,692 
 124,730 
 76, 656 
 56,049 
 
 73,395 
 43,113 
 32,916 
 33,538 
 23, 434 
 22,867 
 31,179 
 21, 663 
 22,329 
 27, 195 
 21,316 
 27,765 
 
 20,359 
 16,959 
 
 8 64,522 
 
 s 185, 222 
 
 8 111, 161 
 
 8 68,043 
 
 8 63,639 
 
 8 47,379 
 
 8 57,372 
 
 8 70,081 
 
 85,897 
 
 145,856 
 
 154,079 
 
 168, 651 
 
 317,704 
 211, 664 
 147,226 
 120, 535 
 127,925 
 
 P) 
 
 (') 
 
 (*) 
 
 h) 
 
 (.<■) 
 (=■) 
 
 (0 
 W 
 (=) 
 
 h 
 m 
 
 8 $120,572 
 
 8 288,287 
 
 8 173,033 
 
 8 106,389 
 
 8 95,763 
 
 8 71,095 
 
 8 85,295 
 
 8 104,425 
 
 125, 176 
 
 206,281 
 
 220,671 
 
 245,247 
 
 466,965 
 301,903 
 206,807 
 167,442 
 174,367 
 166,390 
 213,966 
 229, 164 
 384, 142 
 345,278 
 196,373 
 151,445 
 
 200,743 
 106,635 
 61,240 
 48,844 
 30,599 
 26,824 
 33,871 
 29,024 
 26,883 
 33,703 
 28,634 
 46,767 
 
 50,806 
 34,221 
 
 1 Including back claims for direct payment of benefits and claims tor payment through associations which 
 
 ^jirs ?o''JIn"ir "^ "' ^'^^ """^^^ '*"■ ^"^ °f the nSnal tasScfact 191l! 
 
 8 Not incldding benoats due through associations 
 
 * 5 weeks. 
 
 ' Not reported. 
 
 Of the total benefits the larger amount iu paid directly from the unemployment fund. 
 Ihus in 1914 the per cent of benefit paid directly ranged from 63 per cent in June 
 and October to 71 per cent m February. The corresponding benefits paid through 
 associations m 1914 and repayable to them from the unemployment fund ranged from 
 37 to 29 per cent of the total. In 1915 the proportionate amount of benefits paid 
 directly from the unemployment fund was somewhat smaller than in 1914, ranging 
 from 53 per cent in June to 64 per cent in March. In January and February, 1916! 
 53 per cent of the total amount of benefits wa,s paid directly from the unemployment 
 fund, and 47 per cent through associations. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 261 
 
 APPENDIX D. 
 
 The Present Status of Unemployment Insurance on the Basis op Official 
 
 bOURCES AND OF REPORTS PREPARED FOR THE GENERAL CONVENTION AT GhBNT 
 
 OP THE International Association on Unemployment. 
 
 (Special supplement to Reiohs-Arbeitsblatt, No. 12, December, 1913.] 
 
 Cf. previous memoir. Die beatehenden Einrichtungnen zur Versicherung geeer 
 die Folgen der Arbeitslosigkeit in Deutschland und im Deutschen Reich Berlin 
 1906; as also, in connection with legislation discussed below, for Denmark: Dr Zacher 
 Die Arbeiterversicherung im Ausland, No. la, p. 30; No. lb, pp. 49, 47* 69* ff • 
 Reichs-Arbeitsblatt, 1911, p. 182; 1912, p. 190 ff.; 1913, p. 590. For Norway' 
 cf. Zacher, ibid., No. Illb, pp. 43, 19*, 23* ff.; and Reichs-Arbeitsblatt, 1911, p. 
 276 ff. For Great Britain, cf. Zacher, ibid., No. Va, p. 51; No. "Vb, pp. 6, 84, 91 ff, 
 and Reichs-Arbeitsblatt, 1909, p. 830; 1910, p. 357; 1911, pp. 448, 560, -702, 860; 1912, 
 pp. 55, 140, 160. : f ' ' Fi' , , , , , 
 
 [Prepared by the German Imperial Statistical Bureau, Division of Labor Statistics, Berlin. Tran-slated 
 by the statistical bureau, Metropolitan Life Insurance Co., for the American Association for Labor 
 Legislation, 131 East Twenty-third Street, New York City.] 
 
 EXPLANATORY NOTE. 
 
 A number of reports of progress in the field of unemployment insurance have been 
 published in the German Reichs-Arbeitsblatt.' The reports prepared for the General 
 Convention at Ghent of the International Association on Unemployment, in Septem- 
 ber, 1913, furnish a new occasion to issue a statement with regard to the present status 
 of unemployment insurance. In order to facilitate a summary view of the situation, 
 an attempt has been made to arrange the most important information in the compara- 
 tive tables which follow, on the basis of the r^sum^ of social insurance in Europe. ^ 
 Use has been made of official publications, as well as of the reports prepared for the 
 meeting at Ghent.^ 
 
 Attention has been paid solely to the arrangements made by public bodies (States, 
 Provinces, communities), leaving out of consideration measures for self-help on the 
 part of workmen. The latter will be treated in detail for Germany and briefly for 
 other countries in Special No. 8 of the Reichs-Arbeitsblatt.* This will appear shortly, 
 aB-d will be devoted to the status of unions of employers, salaried employees, and 
 workmen in 1912. Moreover, we have left out of consideration the philanthropic 
 work of employers, as well as that of funds and societies having no governmental aid. 
 
 In the arrangement of the tables Germany has been placed at the end of the series. 
 
 Interpreting the term "insurance" in its broadest sense, the systems of unemploy- 
 ment insurance through public bodies which have thus far found application are 
 three in number, as follows: 
 
 I. — The system, of subsidies paid by public bodies to the unemployment insurance funds 
 of trade-unions. — This is usually called the "Ghent system," after the city in which 
 it was first applied. It has been introduced more generally than any other. In 
 this connection it is important to determine whether the payment of subsidies is left 
 entirely to the communes or other public bodies, or whether additional sums are 
 given by the State, and in the latter case, whether these sums are' dependent upon 
 the budget or are determined by law. 
 
 The system of subsidization is left entirely to the communes (or Provinces) in Ger- 
 many, in Belgium (where its development is oldest and greatest), in Holland, in 
 France (where besides a numbsr of communes and departments, the State has set 
 aside the sum of 100,000 franca in ita budgst, which amount has never been fully 
 Utilized, as the alight importance of the trade-union benefit system in that country 
 does not seem to have been influenced by sub3idization), in Luxemburg, and in a 
 number of Cantons of Switzerland (in the form of cantonal subsidies). 
 
 Legal regulation for the whole country has been instituted in Norway, in Denmark, 
 in Great Britain (besides the compulsory insurance which has been introduced into 
 some induatries), and, if we take the Swisa Cantona into consideration, in Geneva and 
 
 ' Cf. Supplement to No. t, Apri', 1913 (Index for 19n:i-1912), p. in. 
 
 ' Supplement to No. 12, December, 1912, of the Reichs-.'\ rbeitsblatt. 
 
 3 For German'/, cf. Der gegenwartiTe Stand der Arbeitslosenfiirsorge und-Versichening in Deutschland, 
 publications of the German Association on Unemployment, No. 2, rrepared by Dr. F. Bernhard. The 
 reports tor other countries are at hand in xhe form of publications of the conference; they will appear in 
 the Bulletins Trimestriel de I'A ssociation Internationale pour la Lutte contre Je Chomage. 
 
 ' Cf. StatKtischcs Material zur Frage, der A rbeitsl isigkelt, prepared by the Imperial Ministry of the Inte- 
 rior (November., 19131, p. .52 fl. For foreign countrias, cf. Statistisohes Jahrhuch fiir das Deutsche Reich, 
 1913, p. Ifi* f. 
 
262 SOCIAL INSXJEANCE AND UNEMPLOYMENT. 
 
 in the city of Basel (besides the voluntary unemployment insurance fund). It is 
 noteworthy that in Norway, Denmark, and Great Britain the system of labor exchanges 
 has been regulated by law hand in hand with insurance. (Of. the Norwegian law of 
 June 12, 1906, the English law of Sept. 20, 1909, the Danish law of Apr. 29, 1913, 
 and the international report to the Ghent conference, September, 1913, printed in 
 the Eeichs-Arbeitsblatt, 1913, p. 761 ff.) 
 
 The results of the Ghent system must, in general, be designated as slight. Its pur- 
 pose, "training in self-help," has been fulfilled almost nowhere, either in the sense 
 that the trade-unions have received a greater -influx of members because of the sub- 
 sidies, or in the sense that they have introduced or further developed unemployment 
 benefit. Only this has been attained — the benefits given by the unions have been 
 increased. However, those who have received them constitute a comparatively 
 small portion of the total number of unemployed, even where, as in Denmark, the 
 organization of workmen was far advanced before the introduction of the subsidy sys- 
 tem . In Belgium, moreover — in the mother country of the system — comparatively few 
 workmen reap its benefits. It is true that the organization movement has forged 
 ahead in Germany much farther than in Belgium or in France, and that unemploy- 
 ment benefit has attained a much greater development there than in other countries. 
 (Of. Special No. 8, Reichs-Arbeitsblatt.) Yet it has thus far been impossible to deter- 
 mine the existence of any effect upon the strength of organization and upon the devel- 
 opment of unemployment insurance in the cities which have introduced the Ghent 
 system. Furthermore, it can not be denied that conditions are less favorable to 
 success in Germany than anywhere else. While in other countries trade-unions are 
 preponderantly organized on a local basis, the German bodies are invariably strongly 
 centralized. Moreover, their benefit system is, in general, unified and adapted to 
 the entire Empire. 
 
 The slight financial burdens which, according to the tables, are necessitated by the 
 Ghent system (in nine German cities for which we know at least the amount of the 
 annual grants, they add up to only a little more than 40,000 marks) have aided its 
 adoption greatly, but have at the same time shown its insignificance in the campaign 
 against the consequences of unemployment. Hence, its ardent champions have 
 become convinced that at least a partially compulsory insurance system should be 
 instituted. 
 
 The subsidization of trade-unions is frequently, as in Ghent, associated with the 
 subsidization of savings societies or of individual savers, which, however, has almost 
 universally tiuned out to be a failure. We have still to consider the payment of 
 subsidies to voluntary unemployment funds. 
 
 IIj The system of State or communal voluntary unemployment funds. — The best- 
 known funds of this class are those of the city of Berne, of the Canton of Basel, and of 
 the city of Cologne (formerly a free society with a considerable municipal subsidy). 
 Recently, on the basis of the model regulations drafted by the Bavarian Government, 
 the cities of Kaiaerslautern, Bavaria, and Schwabisch Gmund, Wurttemberg, have 
 associated with the subsidy system the institution of voluntary unemployment 
 insurance funds. However, we have no reports as yet concerning their experience. 
 
 In general, the voluntary unemployment funds are hampered by the fact that 
 only a comparatively small number of workiagmen join them. In the case of almost 
 all of these the danger of unemployment is especially great, or lack of work is a 
 regularly recurring phenomenon especially true of the building trades. The greatest 
 number of voluntary insured belonged to the Cologne fund in its earlier form. Since 
 its modern reconstruction, with increased dues it has been able to obtain but few 
 members. 
 
 Greater success has been experienced by the Cologne fund in its new activity, the 
 reinsurance of trade unions. This is akin to the Ghent system, but is distinguished 
 from it by requiring payment from the unions in return for subsidization. Further- 
 more, from the viewpoint of advancing self-help, Cologne has obtained better results 
 than other cities by means of the Ghent system. It has been able to win over four trade 
 unions to the introduction of unemployment benefit on the basis of reinsurance. It 
 is true that the unions in the building trades, upon whom the greatest reliance had been 
 placed, have thus far declined to participate — the free trade unions for the reason that 
 they are militant organizations and not mutual benefit associations, and the Christian 
 unions because they feel no need. 
 
 III. The system of compulsory insurance. — Aside from the unfortunate and rapidly 
 abandoned experiment of 1894, in the city of St. Gall, there has never, as yet, been a 
 system of compulsory insurance for all workmen, nor was there such an institution for 
 particular industries until the enactment of the English national insurance act of 
 1911. So short a time has elapsed since the enactment of this law, which extends 
 compulsory insurance to about 2,500,000 workmen and its enforcement was begun 
 
SOCIAL INSTJBANOE AND UNEMPLOYMENT. 263 
 
 in a period so favorable from a commercial point of view, that no final judgment can 
 be given. This fact has been recognized by the convention at Ghent of the Inter- 
 national Association on Unemployment, in agreement with the report of the English 
 section. 
 
 The plan for compulsory insurance of workers in the watch and clock industry in 
 the Swiss Canton of Neuenburg is still in the preliminary stage. 
 
 :{i * :{« 4: * H: * 
 
 Tables I, II, and III refer to arrangements outside the German Empire. The first 
 treats of the three countries which have legal regulation. The second table contains 
 the data for those countries in which state subsidies are provided for in the budget, 
 and for those in which there is no state subsidy (or, in Switzerland, no federal subsidy). 
 The third is devoted to the two voluntary unemployment insurance funds of Switzer- 
 land. 
 
 The tables for Germany are so arranged that Table IV concerns subsidies to trade 
 unions; Table V, subsidies to savers and to savings societies; and Table VI, public 
 voluntary unemployment insurance funds. Thus some cities occur in two tables; 
 they are those wtich associate subsidies to trade unions with similar payments to 
 individual savers or to voluntary unemployment funds (Berlin-Schoenberg, Stuttgart, 
 Feuerbach, Freiburg, i. B., Kaiserslautem, Schwabisch Gmund). Those cities are 
 not included which give free unemployment benefit, which differs from poor relief 
 only in the fact that it has been regulated by special legislation, the local ordinances 
 declaring that it is not to be considered as such relief. Where benefits are paid to 
 those who are not included in the subsidy system, particularly the unorganized, this 
 has been especially indicated (Berlin-Schoneberg, where meal tickets are given, 
 Erlangen, Mannheim). 
 
264 
 
 SOCIAL INSURANCE AND UNEMPLOYJIBNT. 
 
 A. Unemployment Instt^ancb 
 I. COUNTEIES with; 
 
 Nature. 
 
 Scope. 
 
 Form. 
 
 
 (a) Compulsory insur- 
 
 All wageworlrers (above 
 
 National unemployment' fimd, with national 
 system of labor exchanges (Law of Oct. 20, 
 
 
 ance. 
 
 age 16) In: 
 
 
 (Law of Dee. 16, 1911, 
 
 Building trades. 
 
 1909): 
 
 
 in force beguming July 
 
 Machine manufac- 
 
 1,066 agents. 
 
 
 IS, 1912.) 
 
 turing. 
 
 430 local labor bureaus (2,500 .officials). 
 8 district bureaus (749 oincials). 
 
 
 
 Ship building and 
 wagon building. 
 
 
 
 1 central bureau '287 officials). 
 
 
 
 Iron molding. 
 
 
 
 
 Sawmill industry. 
 
 
 § 
 
 (b) Voluntary insurance 
 
 All industrial societies 
 
 July 12, 1913: 275 societies with 1,100,000 mem- 
 bers (including 600,000 subject to compulsory 
 
 1 
 
 (article 106). 
 
 the statutes of which 
 
 
 call for unemploy- 
 
 insurance). 
 
 
 
 ment benefit. 
 
 
 
 •Statistics of compulsory 
 
 45,200,000 i:ihabitants; 
 
 2,500,000 compulsorily insured (03 per cent skilled 
 
 
 irourance" (July 12, 
 
 14,000,000 wagework- 
 
 laborers)_, as opposed to about 500,000 formerly 
 
 
 1913). 
 
 ers. 
 
 voluntarily insured. 
 Unemployment fund: £1,600,000. 
 
 
 Voluntary insurance for 
 
 All industrial societies 
 
 • "Recognized unemployment funds" in cottn6> 
 
 
 (Laws of June 12, 
 
 the statutes of which 
 
 tion with public labor exchanges (Law of Juno 
 
 
 1906-Dec. 31, 1911, 
 
 call tor unemploy- 
 
 12, 1906). 
 
 
 and Aug. 15, 1911- 
 
 ment benefit. 
 
 Requirements for State recognition: 
 
 
 "Deo. 31, 1914.) 
 
 
 1. Administration of fund independently of 
 
 trade society. 
 
 2. At least half of income of fund must con- 
 
 si.it of members' due.s. 
 
 3. Benefits must be so regulated by statuto 
 
 that: 
 (a) No benefit is paid in case of unem- 
 ployment when there is informa- 
 
 
 
 
 
 
 
 
 
 
 tion of suitable worlc or through 
 
 
 
 
 the fault of the insured (including 
 
 
 
 
 strllv-es and loclrouts); no double 
 
 ^ 
 
 
 
 insurance or insurance for the first 
 
 s 
 
 
 
 three days of unemployment is 
 
 g 
 
 
 
 permitted; 
 
 z 
 
 
 
 (b) Benefit is not paid until the insured 
 
 has been a contributing member 
 for 6 months, the maximum being 
 half of 1 he normal daily wage in his 
 occupation, and the maximum 
 period being 90 days per annum; 
 and 
 
 (c) There will be a special assessment, or 
 
 reduction in the rates of benefit. 
 
 
 
 
 
 
 
 
 
 
 in case of Insufucient resources. , 
 
 
 Statistics (1912) 
 
 2,400,000 Inhabitants; 
 
 19 funds (17 workmen's funds, 2 emuloyees' 
 funds), with 27,000 members (about 50% of 
 
 
 
 400,000 wageworters. 
 
 
 
 
 the organized workmen). 
 
 1 Under Article 105 of the law, trade-unions may take over payment instead of the labor bureaus, receiv- 
 ing jfrom the unemployment fund a maximum of three-quarters of their expenditures. (One hundred and 
 five organizations, with 6.19,775 members, have thus far availed themselves of this clause, including 21 
 societies, with about 86,000 members— most of them in the building trades— which formerly paid no unom- 
 plovment benefit.) 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 265 
 
 Otttside of Germany, 
 legal regulation. 
 
 iiili ■ ■ ■ ■ -^ 
 
 Dues. 
 
 Beneflts. 
 
 Appeal. 
 
 Regular weeily dues, 5 pence (2i pence 
 paid by employer, 2J peiloe by em- 
 ployee). Furthermore, there is a 
 State subsidy amounting to one- 
 third of the anntial receipts from 
 dues. 
 
 State subsidy by repayment to the soci- 
 ety of a maximum of one-aixth of the 
 annual ei^enditure for wee'.dy beae- 
 flt, notin excess of 12 shillings. (The 
 budget of 1913-1914 provides for an 
 e.-P>enditure of £70, 000.) 
 
 Annual dues, £1,700,000. 
 
 State subsidy, £000,000. 
 
 Total income, £2,300,000. 
 
 7 shillings per week (through the labor 
 bureaui),from the second to the fif- 
 teenth week of unemployment in 
 each year, provided that— 
 
 (a) Theinsuredhasworkedat least 
 
 26 weeks in the year, for the 
 last 5 years, in an occupation 
 subject to compulsory insur- 
 ance; 
 
 (b) Hehasnotbecome unemployed 
 
 through strike or through 
 his own fault; and 
 
 (c) He has not been directed by 
 
 the labor bureau to work of 
 equal value. (Persons aged 
 17-18 receive half benefit; 
 persons below age 17 receive 
 none.) 
 
 Expenditures: 236,458 pounds for 
 about 400,000 cases (an average per 
 case of about 10 shillings for 10 days, 
 with 16 days of unemployment, as 
 almost one-third of the cases were 
 disposed of during the waiting period 
 of one week). 
 
 Average rate of unemployment: 3.5 
 per cent (building trades, 5.0 per 
 cent; shipbuilding, 3.1 percent). 
 
 Appeal may be 
 made, without 
 expense, to; 
 (a) Insurance 
 official; 
 (b)Court of 
 arbitra- 
 tion; and 
 (c) Nonparti- 
 san arbi- 
 trator. 
 
 Of 420,802 appli- 
 cations, 37,424 
 (8.9%) were re- 
 ferred: to (a); 
 2,907 (8.0% of 
 the previous 
 number) to (b); 
 and 49 cases to 
 (c). 
 
 1 
 
 1 
 
 Dues vary according to the statutes of 
 the fund. 
 ; Accordim' to section 6 of the law, the 
 unemployment fimd must admit un- 
 organized members of the occupation 
 (without the necessity of giving them 
 the risht to vote); however, their 
 dues may beincreased by 10%-15% in 
 consideration of the administrative 
 expenses borne by the trade society. 
 
 State subsidy amounting, under the 
 amendment of July 2.5, 1908, to one- 
 third (previously one-fourth) of the 
 annual expenditures for benefit, with 
 an assessment of two-thirds of this 
 subsidy paid by the community in 
 which the insured resides. 
 
 No dues are paid by employers, as they 
 are called upon to aid in the support 
 of accident and sickness insurance. 
 
 Members' dues, kroners 186,252 
 
 Subsidy from State and com- 
 
 Benefit varies according to the statutes 
 of the fund. However, it is legally 
 limited to Norwegian citizens and to 
 persons who have been resident in 
 Norway for 5 years (Cf. column 3). 
 
 Expenditures: 144,781 Idoners to un- 
 employed. 
 
 Appeal may bo 
 made, without 
 expen<?e, to; 
 
 (a) Executive 
 
 of fund; 
 and 
 
 (b) Ministry. 
 
 I 
 
 
 
 Totalincome, kroners... 222,561 
 Total capital, kroners 387, 545 
 
 
20(5 
 
 SOCIAL INSURANCH AND UNEMPJ.OYMRNT. 
 
 A. Unemployment Insuranok 
 
 I. COUNTRIES WITH 
 
 Nature. 
 
 Scope. 
 
 Form. 
 
 
 Voluntary insurance 
 
 Workmen's industrial 
 
 "Recognized unemployment funds" in connec- 
 
 
 (Law ol April 9, 1907, 
 
 societies the statutes 
 
 tion with public labor exchanges- (Law ol April 
 
 
 fTi forne TieiyiTiTiiTig Au- 
 
 o£ which call for un- 
 
 29,1913). .. ,. ■; 
 
 
 gust 1, 1907.) 
 
 employment benefit. 
 
 Requirements for State recognition: 
 
 1. Administration of fund independently of 
 
 industrial society. . i 
 
 2. Occupational or local limitation of fund. 
 
 3. At least 50 members; none below age 18 
 
 or above age 60. 
 
 4. Benefits must be regulated by statute so 
 
 that: 
 (a) No benefit is paid in case of unem- 
 ployment when there is informa- 
 
 
 
 
 
 
 
 tion of suitable work, or through ' 
 
 
 
 
 the fault of the insured (including 
 
 
 
 
 strikes and lockouts); no double . 
 
 
 
 
 insurance or insurance for the first 
 
 
 
 
 three days of unemployment is 
 permitted; ; 
 
 1 
 
 
 
 
 
 (b) Benefit is not paid until the insured ' 
 
 B 
 
 
 
 has been a contributing member 
 
 a 
 
 
 
 for one year, the maximum being 
 
 
 
 
 two-thirds of the normal daily 
 wage in the occupation or locality. 
 However, this must not be less 
 than i kroner or more than 2 
 kroners, and miist be paid for at 
 least 70 days in the year; and 
 (c) There must be ejctra dues in case of 
 insufflcimt funds. 
 
 
 Statistics (1912) 
 
 2,800,000 inhabitants; 
 
 63 funds, with 111,187 members (60% of those 
 
 
 
 600,000 wageworkers. 
 
 capable of being insured). 
 
 II. VOLUNTARY UNEMPLOYMENT INSURANCE BY WORKMEN'S 
 
 Scope. 
 
 Societies. 
 
 Membership. 
 
 Dues. 
 
 Benefits. 
 
 Persons 
 unem- 
 ployed. 
 
 E? 
 
 1 
 
 260,000 inhabitants: 55;000 
 workmen (1909). 
 
 8 
 
 800 
 
 2,400 fr. 
 
 1,800 fr. 
 
 
 
 
 40,000,000 inhabitants; 
 10,000,000 workmen, 
 (a) State (1912) 
 
 114 
 1141 
 
 49,696 
 r48 089 
 
 
 209, 564 fr. 
 (193, 578 fr.) 2 
 
 22^,169fr. 
 (206,747fr.)> 
 
 8,429 
 8,609 
 
 s 
 
 (b) State (1911) 
 
 
 t> 
 
 (c) 12 departments (1911) 
 
 (d) 61 cities 8 (1911) 
 
 
 
 209 
 
 
 ....... 
 
 
 
 
 
 
 
 Total, (b)-(d) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Tl* 
 
 5,900,000 inhabitants; 
 1,600,000 workmen (1912). 
 
 281 
 
 29 313 
 
 
 60,191 florins. 
 
 (92, 261 florins, 
 
 including sub- 
 
 sidyy 
 
 
 1 
 
 
 
 
 
 
 
 1 Not including cantonal legislation. 
 
 2 Beneflts toward which subsidy was paid. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 .Outside oj? Germany— Continued. 
 LEGAL REGULATION— Continued. 
 
 267 
 
 Bues. 
 
 Dues vary according to the statutes of 
 the fund. (In 1912 they varied be- 
 tween 4.80 and 26 crowns for the year, 
 the average being 12 crowns.) 
 
 State subsidy (compulsory): One-tliird 
 of dues. 
 
 Community subsidy (voluntary): Up 
 to a maximum of one-sixth of dues. 
 
 Dues, kroners 1, 300, 000 
 
 State subsidy, kroners 800, 000 
 
 Commimity subsidy, kroners 400,000 
 
 Total income, kroners- 2,500,000 
 Reserve fund, kroners 2, 400, 000 
 
 Total income, 1907-1912: 9,600,000 
 kroners(54% dues, 32% State subsidy, 
 and 14% commtmity subsidy) . 
 
 Benefits. 
 
 Benefits vary according to the statutes 
 of the fund. (Dailybeneflt of i);r.- 
 2 It. f;r 70-160 days, according to 
 duration of membership.) 
 
 Compensation: 1,700,000 kroners. 
 (Average unemployment, 26 davs, 
 for about half of which compensation 
 was paid.) 
 
 Total compensation, 6,500,000 kroners. 
 
 Appeal. 
 
 Appeal may be 
 made, without 
 expense, to; 
 
 (a) Executive 
 
 of fund; 
 
 (b) Commit- 
 
 tee; and 
 
 (c) Minister. 
 
 SOCIETIES WITH PUBLIC SUBSIDY, BUT WITHOUT LEGAL REGULATION.i 
 
 Subsidies. 
 
 Days of un- 
 employment 
 (with com- 
 pensation). 
 
 Expenses of 
 administra- 
 tion. 
 
 
 
 Community. 
 
 State. 
 
 
 Credit of 1,500 Ir. each. 
 
 
 
 The subsidies are apportioned according 
 to membership, dues, and benefits on the 
 basis of J of benefits paid. 
 
 
 
 
 
 47,542 fr. 
 50,726 fr. 
 18,550 fr. 
 
 102,795 
 116,373 
 
 
 Since the enactment of the finance law of 
 April 22, 1905, the State has granted an 
 annual credit of 100,000 fr. Maximum 
 State subsidy (for benefit up to 2fr. and 60 
 days) , 20 per cent of benefit for local funds 
 and 30 per cent for federation funds. 
 
 
 
 g 
 
 
 
 112,423 
 
 
 
 
 
 
 
 
 Total, 181,699. 
 
 
 42,070 fl. 
 
 See loo1> 
 note 4. 
 
 
 
 Subsidy of 50-60 cents toward benefit for 50 
 to 60 days. Also voluntary fund in 
 Dordrecht as yet without members, not 
 mentioned in Table III, below. 
 
 -d 
 
 « 
 
 
 
 8 Including 21 cities which have passed general legislation with regard to subsidies. 
 * Bill of August 9, 1907, providing for a State subsidy has not yet been enacted. 
 
SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 A. Unemployment Insueancb 
 
 II. VOLUNTARY UNEMPLOYMENT INSURANCE BY WORKMEN'S SOCIETIES 
 
 Sooiie. 
 
 Societies. 
 
 Membership. 
 
 Dues. 
 
 Benefits. 
 
 Persons 
 unem- 
 ployed. 
 
 7,40a,000 inhabitants; 
 2.100 000 woikmgn: 
 (1,000,000 industrial 
 workers (1912) 
 
 Societies supported by 
 
 
 
 
 
 
 
 
 
 (c) 61 communities 
 
 (d) 31 communities 
 
 (e) communities (9) 
 
 (I) communities 
 
 Total (a)-(f) 
 
 401 
 31 
 
 Seefootnote 2. 
 7 savings so- 
 cieties. 
 
 439 
 
 103,537 in 370 
 societies 
 rendering 
 report. 
 
 
 290,187 fr. 
 
 20,394 fr. 
 
 481 fr. 
 775 fr. 
 
 29,203 
 
 (27,081)1 
 
 1,569 
 
 ' (1,569)' 
 
 22. 
 
 40 
 
 
 
 
 
 
 
 
 
 
 
 
 3,800,000 inliabitants; 
 800,000 workmen: 
 Canton oi St. Gall (law 
 of Mav 19, 1894)— 
 (1913) 
 
 8 
 4 
 
 12 
 10 
 
 6 
 3 
 
 3 
 
 
 
 
 
 (1911) 
 
 
 
 
 
 Canton of Geneva (law 
 o£ Nov. a, 1909)— 
 (1911) 
 
 
 
 
 
 (1910) 
 
 
 
 
 
 Canton ot Basel City 
 
 (law or Deo. 16, 1909)— 
 
 (1912) 
 
 
 
 
 
 Canton of Appenzell 
 
 Canton of Appenzell 
 (1912). 
 
 
 
 
 
 
 
 
 
 
 
 
 
 34,700,000 inliabitants; 
 10,500,000 workmen: 
 (a) 2 cities 
 
 
 
 
 
 
 (b) 1 city (1910) 
 
 Savings fund. 
 
 795 savers. 
 
 About 12,000 
 lire. 
 
 
 542 
 
 
 
 III. PUBLIC VOLUNTARY 
 
 Scope. 
 
 Canton of Basel City (law 
 
 ot Dee. 16, 1909) (1912). 
 City ot Berne (1912) 
 
 Canton of Berne - 
 
 Societies. 
 
 Membersliip. 
 
 1,214 
 
 9,434 fr. 
 
 636 
 
 8,773 fr. 
 
 Unemploy- 
 ment fund. 
 Unemploy- 
 ment fund. 
 Unemployment fund for the watch and 
 clock industry ia Berne Jura (founda- 
 tion which has not yet begun activity). 
 
 Dues. 
 
 Benefits. 
 
 34,512 fr.3 
 19,130 fr. 
 
 No. of un- 
 employed. 
 
 605 
 (563) < 
 321 
 
 Number ot unemployed, and number of days ot unemployment, tor which communal subsidy was paid 
 Individual savers. 
 
SOCIAL INSTJKANCE AND UNEMPLOYMENT. 
 
 269 
 
 Outside of Gekmany — Continued. 
 
 WITH PUBLIC SUBSIDY, BUT WITHOUT LEGAL KBGULATION— 'Continued. 
 
 Subsidies. 
 
 Days of un- 
 employment 
 (with com- 
 pensation). 
 
 Expenses of 
 administra- 
 tion. 
 
 
 
 Community. 
 
 State. 
 
 
 
 24,911 fr. 
 49,830 fr. 
 
 
 
 State and Provinces subsidize some of the 
 communal unemployment funds. Be- 
 sides the five Provinces imder (b), an- 
 other Province voted a credit of 2,500 
 francs, but did not pay it. 
 
 Under (c) subsidies are paid to those re- 
 ceiving aid from industrial unions. 
 
 Under (d) subsidies are paid directly to 
 the industrial unions. 
 
 Headings (e) and (f) do not include com- 
 munities giving subsidies to individual 
 savers and savings organizatioiis, which 
 . come under (c) and (d). «K.t 
 
 These figures account for about 252,000 
 workmen organized in indiafitjaol unions . 
 
 
 
 
 
 
 134,1,57 fr. 
 
 12,546 tr. 
 
 289 fr. 
 .393 fr. 
 
 229,089 
 
 (208,890) I 
 
 11,797 
 
 (9,145) 1 
 
 481 
 
 522 
 
 
 
 
 
 1 
 
 . 
 
 19,448 fr. 
 
 "3 
 
 
 
 
 
 147,385 fr. 
 
 74,741 fr. 
 
 
 
 
 
 
 Total, 222,126 fr. 
 
 
 
 2,669 fr. 
 475 fr. 
 
 1,953 fr. 
 2,343 tr. 
 
 3,412 fr. 
 
 Credit: 2,000 
 
 fr. 
 
 1,601 fr. 
 
 
 
 Besides the cantons specified in the first 
 column, Zurich and Thurgau granted 
 smail subsidies to an industrial union 
 fund in 1911. 
 
 Subsidy of 50 per cent of benefit. 
 Subsidy of 00 per cent of benefit. 
 
 Bubsidy of 40 (o 50 per cent of benefit. 
 Subsidy of 50 per cent of benefit. 
 
 
 
 
 
 
 
 1 
 
 
 (For 2 684 
 days of un- 
 employ- 
 ment). 
 
 
 N 
 
 
 
 CO 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Subsidies are also paid under the Ghent 
 system by a private loimdation in Milan 
 (Societa Umanitaria). 
 
 
 Interest on 
 300,000 lire. 
 
 
 5,977 
 (1909) 
 
 
 ■3 
 
 
 
 s 
 
 UNEMPLOYMENT FUNDS. 
 
 Subsidies. 
 
 Days of un- 
 employment 
 (compen- 
 sated). 
 
 Expenses of 
 
 administra^ 
 
 tion. 
 
 
 
 ; ommunity. 
 
 State. 
 
 
 
 27,00(5 fr. 
 
 
 
 
 
 12,000 fr. 
 
 
 
 ■3 
 
 Lottery 
 granted; sub- 
 sidy of 5,000 
 fr. under con- 
 sideration. 
 
 
 
 1 
 
 
 
 
 1 
 
 3 Also sub^idie^ from a voluntary aid fund: 420 fr. 
 * Persons receiving per tliem benefits for 15,407.5 days. 
 
270 
 
 SOCIAL INSXTEANOE AND UNEMPLOYMENT. 
 
 13. Communal UNEMrLOYMEXT 
 I.'. SUBSIDIES TO 
 
 
 City and year of installar 
 tion of system. 
 
 t 
 
 Year of 
 report. 
 
 Requirements for payment- of 
 subsidy. 
 
 Amount and duration of 
 subsidy. 
 
 
 Classea.of 
 working- 
 men e^:- 
 cluded. 
 
 Period 
 of resi- 
 dence 
 
 re- 
 quired. 
 
 Waiting 
 period. 
 
 In propor- 
 tion to 
 .society 
 beneCt. 
 
 Maxi- 
 mum 
 per 
 day. 
 
 Maxi- 
 
 mum 
 
 duration 
 
 per year. 
 
 
 BerUn-Scheneberg, 1910.. 
 
 1912 
 
 
 1 year. 
 
 Maximum, 
 7 days. 
 
 50% 
 
 1 mark. 
 
 CO days. 
 
 1 
 
 
 
 Erlangen, 1909 
 
 1912 
 
 Unskilled. 
 
 3 years. 
 
 7 days. 
 
 50% 
 
 To be de- 
 termined 
 monthly. 
 
 0.60 m. 
 0.60 m. 
 
 weeks. 
 60 days. 
 
 .2 
 
 P 
 
 Kaiserslaiitem, 1913 
 
 
 
 
 
 
 
 Stuttgart, 1912 
 
 6 months, 
 
 Oct. 1, 
 
 1912, to 
 
 Mar. 31, 
 
 1913. 
 
 
 1 year. 
 
 1 year. 
 
 2 years. 
 
 lyear. 
 
 As in in- 
 dustrial 
 society. 
 
 As'in in- 
 dustrial 
 society. 
 
 60%; with 
 
 children, 
 
 5%-25% 
 
 more. 
 
 As in Stutt- 
 gart. 
 
 Unmarried: 
 0.40 m. 
 Married: 
 
 0.50-0.60 m. 
 
 Maximum 
 50% 
 
 50% 
 
 Im.; 
 with 
 chil- 
 dren, 
 1.50 m. 
 
 As in 
 Stutt- 
 gart. 
 
 As in in- 
 dustrial 
 society. 
 
 As in in- 
 dustrial 
 society. 
 
 6 weeks. 
 
 As in in- 
 dustrial 
 society.' 
 
 
 Feiierbach, 1913 
 
 
 1 
 
 Sohwabisch Gmiind, 1911 
 (entered into force Apr. 
 1, 1913). 
 
 Essllnfen, 1913 (entered 
 into force Oct. 15, 1913). 
 
 
 Occupa- 
 tionally 
 and physi- 
 cally suited 
 tor employ- 
 ment on 
 public 
 • work. 
 
 1 
 
 
 Asinin- 
 dustrial 
 society. 
 
 Im. 
 
 
 
 
 B 
 
 Freiburg i, B., 1910 
 
 Mannheim, 1913 (entered 
 into forcfrJuly 1, 1913). 
 
 1912 
 
 Occupa- 
 tionally 
 and physi- 
 cally suitec! 
 tor employ- 
 ment on 
 public 
 work. 
 
 1 year; 
 1 year. 
 
 5 days. 
 
 As in in- 
 dustrial 
 society. 
 
 50% 
 
 0.70 m.; for 
 
 each child, 
 
 0.10 m. 
 
 more. 
 
 Im. 
 
 Im. 
 
 40 days. 
 60 days. 
 
 
 
 
 
 Offenbach a. M., 1913. . 
 
 
 
 1 year. 
 
 5 days. 
 
 Unmarried: 
 0.50 m. 
 Married: 
 0.70 m. 
 For each 
 child, 0.15 
 m. more. 
 
 1.30 m. 
 
 78 days. 
 
 1 
 
 
 
 
SOCIAL INStTBANCE AND UNRMPI.OYMENT. 
 
 271 
 
 Insurance in the German Empire, 
 industrial societies. 
 
 Industrial societies 
 afleoted. 
 
 Benefits paid. 
 
 Community 
 
 subsidy, in 
 
 marks. 
 
 Remarks. 
 
 
 Number of 
 societies 
 (local ad- 
 ministra- 
 tions). 
 
 Member- 
 sMp. 
 
 Number 
 of unem- 
 ployed 
 receiving 
 benefit. 
 
 Number of 
 
 days for 
 whicn com- 
 pensation 
 was paid. 
 
 Amount of 
 
 benefit, in 
 
 m&Tks. 
 
 
 59 
 
 
 620 
 
 15,770 
 
 
 12,631 
 
 Subsidies are also paid to 
 , individual savers; cf. 
 V. Non - contributory 
 benefit to n^n-insured 
 imemployed in form of 
 meal tickets. 
 
 
 
 
 1 
 
 18 
 
 
 73 
 
 1,797 
 
 
 1,033 
 
 5,000 
 
 (also subsidy 
 
 for insurance 
 
 fund). 
 
 As regards Kaiserslau- 
 tem insurance fund, 
 cf. VI. 
 
 
 
 
 d 
 
 
 
 
 
 
 
 44 
 
 
 776 
 
 36,568 
 
 (incl. 
 
 savers). 
 
 66,022 
 (incl. with- 
 drawals by 
 savers). 
 
 Annual grant, 
 10,000; 9,746' 
 paid oilt 
 (incl. pay- 
 ments to 
 savers). 
 
 Annual grant, 
 1,000 (incl. 
 subsidy to 
 savers). 
 
 Annual grant, 
 •1,000 (incl. 
 insurance 
 fund). 
 
 Stuttgart and Feuerbach: 
 Mutual agreement. For 
 subsidies to saveis, cf. 
 V. 
 
 Schwabisch Gmilnd: As 
 regards Insurance fund, 
 cf. VI. 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 10 
 
 1,892' 
 (9 so- 
 cieties). 
 
 618 
 
 7,227 
 
 10,291 
 
 1,861 
 
 Freiburg: For subsidies 
 to savers, cf. V. 
 
 Marmheim: Non-contrib- 
 utory benefit to unem- 
 ployed not members of 
 societies. 
 
 1 
 
 « 
 
 
 
 
 
 
 
 
 
 
 
 
 
 For subsidies to savers, 
 cf. V. 
 
 
 
 
 
 
 r 
 
 
 1 
 
272 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 B. Communal Unemployment 
 
 IV. SUBSIDIES TO 
 
 
 City and year. o( Installa- 
 tion of system. 
 
 Year ot 
 report. 
 
 EequirementS'for payment of 
 subsidy. 
 
 Amount -and duration of 
 subsidy. 
 
 
 Classes of 
 working- 
 men ex- 
 cluded. 
 
 Period 
 of resi- 
 dence 
 
 re- 
 quired. 
 
 Waiting 
 period. 
 
 In propor- 
 tion to 
 society 
 benefit. 
 
 Maxi- 
 mum 
 
 &y. 
 
 Max' 
 
 mum 
 
 duration 
 
 per year. 
 
 
 
 1911-1912 
 1912 
 
 
 1 year. 
 
 As in in- 
 dustrial 
 society. 
 
 60% 
 
 im. 
 
 As in in- 
 dustrial 
 society. 
 
 
 Hlklrch - Grafenstad e n , 
 1910. 
 
 Schiltigheim 
 
 
 1 
 
 As in Strassburg. 
 
 
 
 9 
 
 MiilhansoTi^ IQfW 
 
 1911 
 
 a 
 
 
 1 year. 
 1 year. 
 
 As in in- 
 dustrial 
 society. 
 
 As in in- 
 dustrial 
 society. 
 
 families, 
 80%. 
 
 0.80 m.; 
 
 families, 
 
 im. 
 
 Im. 
 im. 
 
 As in in- 
 dustrial 
 society. 
 
 As in in- 
 dustrial 
 society. 
 
 Amendments, 1913 
 
 
 
 . 
 
 « 
 
 
 ■ Number of cases. The number of individuals receiving benefit was 288. 
 » Only days for which communal subsidy was paid. 
 
 V. SUBSIDIES TO SAVINGS 
 
 
 City and year of in- 
 stallation of system. 
 
 Year of re- 
 port. 
 
 Regturements for payment 
 of subsidy. 
 
 Amount and duration of sub- 
 sidy. 
 
 
 Classes of 
 working- 
 men ex- 
 eluded. 
 
 Period 
 of resi- 
 dence 
 
 re- 
 quired. 
 
 Waiting 
 period. 
 
 In propor- 
 tion to do- 
 posit with- 
 drawn. 
 
 Maxi- 
 mum per 
 day. 
 
 Maxi- 
 
 mum per 
 
 year. 
 
 a 
 
 Berlin-Sch6n c b e r g, 
 1910. 
 
 1912. 
 
 Females. 
 
 1 year. 
 
 Maxi- 
 mum, 1 
 week. 
 
 60% 
 
 1 m. 
 
 60 days. 
 
 1 
 
 Stuttgart, 1912 
 
 6 months, 
 
 Oct. 1, 1912, 
 
 to Mar. 31, 
 
 1913. 
 
 Irregular 
 workers 
 and mar- 
 ried female 
 workers. 
 
 1 year 
 
 6 days 
 
 50%; with 
 
 children, 
 
 5% to 25% 
 
 more. 
 
 lm.;with 
 children, 
 
 1.60 ; 
 
 marks. 
 
 50 days." 
 
 ^ 
 
 As in Stuttgart. • 
 
 
 
 
 i 
 
 Freiburg i. B., 1910... 
 
 1912. 
 
 
 
 
 60% 
 
 Im. 
 
 See foot, 
 note 2. 
 
 » 
 
 
 
 
 
 
 IM 
 
 axlmum dei 
 
 )0Sit 100 
 
 marks. 
 
 
 
 
SOCIAL IKSUEANCE AND UNEMPLOYMENT. 
 
 273 
 
 Insurance in the Gebman Empire — Continued. 
 INDUSTRIAL SOCIETIES-Contlnued. 
 
 Industrial societies 
 affected. 
 
 Benefits paid. 
 
 Community 
 
 subsidy, in 
 
 martts. 
 
 Remarks. 
 
 
 Number of 
 societies 
 (local ad- 
 ministra- 
 tions). 
 
 Member- 
 ship. 
 
 Number 
 of unem- 
 ployed 
 receivins: 
 benefit.- 
 
 Number of 
 days for 
 
 which com- 
 pensation 
 was paid. 
 
 Amount of 
 
 benefit, in 
 
 marks. 
 
 
 36 
 
 7,444 
 
 6271 
 1 
 
 7,499 ! 
 36 
 
 19,951 
 
 6,080 
 7..-.0 
 
 Mutual agreement be- 
 tween Strassburjr, 111- 
 Itirch - Grafenstaden, 
 Schiltigheim and IJisch- 
 heim. 
 
 
 
 
 
 
 
 
 
 
 
 
 3 
 
 20 
 
 
 194 » 
 
 2,480 < 
 
 
 2,316 
 
 < 
 
 
 
 
 
 
 
 
 
 
 ' 93 of this number received aid from the city. 
 
 * Only days for which communal benefit was paid. 
 
 SOCIETIES AND INDIVIDUALS. 
 
 Recipients of subsidy. 
 
 Deposits. 
 
 WithdrawaU. 
 
 Number 
 of days 
 
 for which 
 
 compen- 
 sation 
 
 was paid. 
 
 Com- 
 munity 
 subsidy 
 
 in 
 marks. 
 
 Remarks. 
 
 
 Indi- 
 vidual 
 
 savers. 
 
 Savings 
 societies. 
 
 Mem- 
 ber- 
 ship. 
 
 Number 
 of deposi- 
 tors. 
 
 Amount, 
 in marks. 
 
 Number 
 
 of 
 payees. 
 
 Amount, 
 in marks. 
 
 
 172 
 
 
 
 172 
 
 
 56 
 
 
 987 
 
 987 
 
 Cf.IV. 
 
 a 
 
 
 
 
 
 (^ 
 
 22 
 
 2 
 
 
 
 
 22 
 
 See Table IV. 
 
 Cf. IV. 
 
 
 
 
 
 s- 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 8 
 
 
 133 
 
 66.60 
 
 
 i 
 
 
 
 
 
 
 
 •a 
 
 : Maximum deposit 40 marks. 
 
 39501— IG- 
 
 -18 
 
274 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 B. Communal Unemployment 
 
 VI. PUBLIC VOLUNTARY 
 
 
 
 »- 
 
 
 
 
 Weekly dues, 
 
 in 
 
 
 
 
 Requirements for payment of subsidy. 
 
 Mem- 
 
 pfennings. 
 
 
 
 
 
 
 
 
 
 
 
 City and year 
 
 Year of 
 report. 
 
 
 
 
 Waiting 
 
 ber- 
 
 
 
 
 
 of installation 
 
 
 
 Waiting 
 
 period 
 
 ship 
 (risS) 
 classes. 
 
 
 
 
 
 o( system. 
 
 Classes of 
 working- 
 men ex- 
 cluded. 
 
 Period of 
 residence 
 required. 
 
 period 
 before 
 right to 
 obtain 
 
 after 
 begin- 
 ning of 
 unem- 
 
 Insured. 
 
 Rein- 
 sured. 
 
 
 
 
 
 
 benefit. 
 
 ploy- 
 
 
 
 
 
 
 
 
 
 
 
 ment. 
 
 
 
 - 
 
 
 
 Cologne, 1896, 
 
 July 1, 
 
 Workmen' 
 
 Insured, 
 
 52 
 
 6 days. 
 
 3 
 
 Schedule 
 
 
 entirely trans- 
 
 1912, to 
 
 with max- 
 
 13 weeks; 
 
 weekly 
 
 
 (I-III). 
 
 A B 
 
 
 
 
 formed in 1911. 
 
 June 
 
 imum 
 
 reinsured. 
 
 pay- 
 
 
 
 I 15 20 
 
 
 4 
 
 
 
 30, 1913. 
 
 average 
 
 daily wage 
 
 of 2.60 M.; 
 
 home 
 
 1 year. 
 
 ments. 
 
 
 
 II 20 30 
 
 III 45 00 
 
 Higher rates 
 
 for members 
 
 
 10 
 30 
 
 Ph 
 
 
 
 workers. 
 
 
 
 
 
 above age 60. 
 
 
 
 
 Kaiserslautem, 
 1912 (entered 
 
 
 Married 
 females. 
 
 
 52weeklv 
 pay- ■ 
 
 7 days. 
 
 (I-IV). 
 
 Un- Mar- 
 married, ried. 
 
 
 
 
 
 05 
 
 into force 
 
 
 
 
 ments. 
 
 
 
 I 20 30 
 
 
 
 'G 
 
 . April 1,1913). 
 
 
 
 
 
 
 
 II 32 48 
 
 
 
 ? 
 
 
 
 
 
 
 
 
 III 48 72 
 
 
 
 OS 
 
 
 
 
 
 
 
 
 IV 60 90 
 
 
 
 FQ 
 
 
 
 
 
 
 
 
 Initiation 
 fee, 50 pf. 
 
 
 
 
 Scliw a b i s h 
 
 
 Persons 
 
 1 year. 
 
 62 
 
 7 days. 
 
 2 
 
 Un- Mar- 
 
 
 
 
 Gmiind 1911 
 
 
 occupar 
 tionally 
 
 
 weekly 
 
 
 (I-II). 
 
 raarried. ried. 
 
 
 
 bh 
 
 (entered into 
 force April 1, 
 1912). 
 
 
 
 pay- 
 
 
 
 I 20 30 
 
 
 
 
 
 and phys- 
 ically 
 
 
 ments. 
 
 
 
 II 36 62 
 initiation 
 
 
 
 
 
 
 suited for 
 
 
 
 
 
 fee, 50 pf. 
 
 
 
 ■S 
 
 
 
 employ- 
 
 
 
 
 
 
 
 
 "S 
 
 
 
 ment on 
 
 
 
 
 
 
 
 
 1 
 
 
 
 public 
 
 
 
 
 
 
 
 
 
 
 works; 
 
 
 
 
 
 
 
 
 
 
 
 married 
 
 
 
 
 
 
 
 
 
 
 
 females. 
 
 
 
 
 
 
 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 275 
 
 Insurance in the German Empire — Continued. 
 
 UNEMPLOYMENT INSURANCE FUNDS. 
 
 Amount and ! 
 
 
 
 
 
 
 duration of sub- 
 sidy. 
 
 Number of insured. 
 
 Dues in marks. 
 
 Benefits in marks. 
 
 
 
 
 
 
 
 
 
 
 
 
 Com- 
 
 
 
 Amount 
 
 Maxi- 
 mum 
 
 Individ- 
 
 Rain- 
 
 Mem- 
 
 Indi- 
 
 
 Indi- 
 
 
 mun- 
 
 sub- 
 sidy. 
 
 
 
 per day 
 in marks. 
 
 dura- 
 tion per 
 
 ually 
 insured. 
 
 socie- 
 ties. 
 
 ber- 
 shin. 
 
 ally 
 in- 
 
 ties. 
 
 ally 
 in- 
 
 So"ie- 
 ties. 
 
 Remarks. 
 
 
 
 year, j 
 
 
 sured. 
 
 
 sured. 
 
 
 in 
 
 
 
 
 s 
 
 
 
 
 
 
 
 marks. 
 
 
 
 Insured: i Maxi- 
 First 1 Next 1 mum 
 
 25 
 
 H, 105 
 
 5, 124 
 
 19,170 
 
 6,002 
 
 23,798 
 
 60,377 
 
 Benefit 
 paid to 14 
 
 
 20days | 40 days 189; 38 
 
 
 
 
 
 
 
 
 
 A 1.50 0.75 , dropped 
 
 
 
 
 
 
 
 
 ally in- 
 sured, 2, 121 
 
 
 B 2. 001.00 1 because 
 
 
 
 
 
 
 
 
 
 Reinsured: 0.75 of non- 
 
 
 
 
 
 
 
 
 reinsured. 
 
 
 to 1.50, according pay- 
 
 
 
 
 
 
 
 
 Compensa- 
 
 
 to number of ] ment; 
 
 
 
 
 
 
 
 
 tion paid 
 
 1 
 
 weekly pay- remaiu- 
 ments made; der 151. 
 
 
 
 
 
 
 
 
 for 472 days 
 
 maximum, 60 
 
 
 
 
 
 
 
 
 ployment 
 to individ- 
 
 P-( 
 
 times these rates. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ually 
 
 
 
 
 
 
 
 
 
 
 insured; 
 
 
 
 
 
 
 
 
 
 
 for 31,731 
 
 
 
 
 
 
 
 
 
 
 days to re- 
 
 
 
 
 
 
 
 
 
 
 insured. 
 
 
 Unmar- 
 ried, 0.80; 
 
 60 days 
 
 
 
 
 
 
 
 
 See 
 Table 
 
 For subsi- 
 dies to in- 
 
 
 
 
 
 
 
 
 
 
 married. 
 
 
 
 
 
 
 
 
 IV. 
 
 
 03 
 
 1.20. 
 
 
 
 
 
 
 
 - 
 
 
 cieties, of. 
 
 C 
 
 
 
 
 
 
 
 
 
 
 
 IV. 
 
 oa 
 
 Unmar- 
 ried, 0.60; 
 
 6 
 weeks. 
 
 
 
 
 
 
 
 
 See 
 Table 
 
 For subsi- 
 dies to in- 
 
 
 
 
 
 
 
 
 
 
 married. 
 
 
 
 
 
 
 
 
 
 IV. 
 
 dustrial so- 
 
 
 0.75. 
 
 
 
 
 
 
 
 
 
 
 cieties, Cf. 
 IV. 
 
 1 
 
276 
 
 SOCIAL INSTJEAlSrCE AND UNEMPLOYMENT. 
 
 APPENDIX B. 
 
 Social Benefits Provided by Trade-Unions. 
 
 Owing to the limited time in which the following data were secured, they are repre- 
 sentative in character, and do not show all of the benefits provided by the umons 
 included in the list, nor the benefits of all unions which have established them. It 
 must be held in mind that many of the local unions, of national and international 
 organizations look after these matters, and the national or international officers have 
 no records of the work done by the local unions. 
 
 Bakery and Confectionery Workers International Union of America. — This organiza- 
 tion from October 1, 1895, to January 1, 1916, paid sick and death benefits to the 
 amount of 1274,593.89. Unemployed benefits are locally paid during the winter 
 period, averaging $75,000 annually. 
 
 Journeymen Barbers Internitional Union of America. — This organization has paid 
 sick and death benefits as follows: 
 
 October, 1901, to September, 1904 $100, 850. 92 
 
 November, 1904, to September, 1909 270, 716. 21 
 
 October, 1909, to September, 1914 360, 424. 45 
 
 September, 1914, to February, 1916 128,710.30 
 
 Total 860,701.88 
 
 International Boiler Makers and Iron Ship Builders and Helpers of America. — This 
 organization has paid death benefits to the amount of 115,600. 
 
 International Brotherhood of Bookbinders. — From April, 1914, to March, 1916, this 
 organization paid death benefits to the amount of $10,650. 
 
 Boot and Shoe Workers' Union. — From March 1, 1900, to June 1, 1915, this organiza- 
 tion paid sick, disability, and death benefits to the amount of $1,246,993.02. The 
 local unions paid approximately $200,000 for these benefits. 
 
 International Bnck, Tile, and Terra-Cotta Workers' Alliance. — This organization has 
 paid death benefits to the amount of $2,700. 
 
 United Brotherhood of Carpenters and Joiners of America. — -This organization had 
 paid sick benefits to the amount of $2,500,000; strike and lockout benefits to the 
 amount of $1,272,697.91, and disability and death benefits to the amount of 
 $3,697,650.61. 
 
 Benefits paid by the Cigarmakers' International Union of America in S6 years and i 
 
 months. 
 
 
 Loans to 
 traveling 
 members. 
 
 Strike benefit. 
 
 Siolc benefit. 
 
 Death and total 
 disability benefit. 
 
 Year. 
 
 Amount. 
 
 Cost 
 per 
 mem- 
 ber 
 per 
 year. 
 
 Amount. 
 
 Cost 
 
 per 
 
 memr 
 
 ber 
 per 
 year. 
 
 Amount. 
 
 Cost 
 per 
 
 mem- 
 ber 
 per 
 
 year. 
 
 1878 1 
 
 
 
 
 
 
 
 
 1879 
 
 
 $3,668.23 
 4,950.36 
 21,797.68 
 44,850.41 
 27,812.13 
 143,547.36 
 61,087.28 
 54,402.61 
 13,871.62 
 45,303.62 
 6,202.52 
 18,414.27 
 33,631.78 
 37,477.60 
 18,228.15 
 44,966.76 
 44,039.06 
 27,446.46 
 12,175.09 
 25, 118. 59 
 12,331.63 
 
 $1. 344 
 1.114 
 1.492 
 3.923 
 2.103 
 12.623 
 5.09 
 2.20 
 6.74 
 2.664 
 .296 
 .747 
 1.384 
 1.404 
 .68 
 1.616 
 1.586 
 1.004 
 .46 
 .942 
 .42 
 
 
 
 
 
 1880 
 
 $2,808.16 
 12,747.09 
 20,386.64 
 37,136.20 
 39,632.08 
 26,683.64 
 31,835.71 
 49,281.04 
 42,894.75 
 43,540.44 
 37,914.72 
 53,535.73 
 47,732.47 
 60,476.11 
 42,154.17 
 41,667.16 
 33,076.22 
 29,067.04 
 25,237.43 
 24,234.33 
 
 
 
 
 
 1881 » 
 
 $3,987.73 
 
 17,146.28- 
 
 22,250.66 
 
 31,561.50 
 
 29,397.89 
 
 42,225.59 
 
 63,900.88 
 
 58,824.19 
 
 69,519.94 
 
 64,660.47 
 
 87,472.97 
 
 89,906.30 
 
 104,391.83 
 
 106,758.37 
 
 112,667.06 
 
 109,208.62 
 
 112,774.63 
 
 111,283.60 
 
 107,785.07 
 
 $0,273 
 1.50 
 1.683 
 2.774 
 2.449 
 1.711 
 3.108 
 3.40 
 3.297 
 2.552 
 3.407 
 3.221 
 3.688 
 3.64 
 3.828 
 3.741 
 3.999 
 3.903 
 3.449 
 
 $75.00 
 
 1,674.25 
 
 2,690.00 
 
 3,920.00 
 
 4,214.00 
 
 4,820.00 
 
 8,850.00 
 
 21,319.75 
 
 19,175.60 
 
 26, 043. 00 
 
 38,068.35 
 
 44,701.97 
 
 49,458.33 
 
 62,158.77 
 
 66,725.98 
 
 78,768.09 
 
 69,186.67 
 
 94,939.83 
 
 98,993.83 
 
 $0. 005 
 
 1882' 
 
 .146 
 
 1883 
 
 .203 
 
 1884 
 
 .344 
 
 1885 
 
 .351 
 
 1886 
 
 .195 
 
 1887 
 
 .43 
 
 1888 
 
 1.232 
 
 1889 
 
 1.062 
 
 1890 « 
 
 1.027 
 
 1891 
 
 1.512 
 
 1892 
 
 1 601 
 
 1891 
 
 1.747 
 
 1894 
 
 
 1895 
 
 2 271 
 
 1895 
 
 2 698 
 
 18975 
 
 
 1898 , 
 
 3.306 
 3.134 
 
 1899 
 
 1 The weekly dues were 10 cents. 
 • The weeMy dues were 15 cents. 
 « The weeWy dues were 20 cents. 
 
 ' The weekly dues were 25 cents: 
 » The weeltly dues were 30 cents. 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT. 
 
 277 
 
 Benefits paid by the Cigarmakers' International Union of America in S6 years and 
 
 months — Continued . 
 
 
 ■ 
 
 ■ Strike benefit. 
 
 Sick benefit. 
 
 Death and total 
 disability benefit. 
 
 Year. 
 
 Loaus to 
 traveling 
 members. 
 
 Amount. 
 
 Cost 
 per 
 mem- 
 ber 
 per 
 year. 
 
 A-raount. 
 
 Cost 
 per 
 mem- 
 ber 
 per 
 year. 
 
 Amount. 
 
 Cost 
 per 
 mem- 
 ber 
 per 
 year. 
 
 1900 
 
 $33,238.13 
 44,652.73 
 45,314.05 
 62,621.41 
 58,728.71 
 65,293.93 
 50,650.21 
 50,063.86 
 46,613.44 
 41,589.34 
 39,828.77 
 38,543.47 
 33, 113. 10 
 45,264.82 
 51,077.15 
 42,266.70 
 
 1137,823.23 
 105,215.71 
 85,274.14 
 20,868.15 
 32,888.88 
 
 9,820.83 
 44,735.43 
 22, 644. 68 
 32,423.39 
 19,999.58 
 221,044.70 
 47,671.20 
 12,646.87 
 
 8, 877. 02 
 60,898.60 
 
 9,947.56 
 
 53.982 
 
 3.02 
 
 2.236 
 
 .513 
 
 .766 
 
 .237 
 
 1.102 
 
 .523 
 
 .779 
 
 .438 
 
 4.902 
 
 1.10 
 
 .304 
 
 .214 
 
 1.236 
 
 .253 
 
 fll7,455.84 
 134,614.11 
 137,403.45 
 147,064.56 
 163,226.18 
 165,917.80 
 162,906.82 
 173,505.67 
 184, 755. 69 
 186,983.28 
 189,438.59 
 201,296.03 
 204, 776. 61 
 196,853.58 
 207,679.62 
 210,427.87 
 
 S3. 214 
 3.664 
 3.474 
 3.427 
 3.592 
 3.7»9 
 3.696 
 3.728 
 4.026 
 3.716 
 3.777 
 4.132 
 4.336 
 4.157 
 4.384 
 4.60 
 
 198,291.00 
 138,466.38 
 128,447.63 
 138,975.91 
 151,752.93 
 162,818.82 
 186,514.17 
 207,558.87 
 220,979.71 
 238,284.47 
 226,717.63 
 251,677.41 
 261,910.21 
 280,655.62 
 279,746.15 
 278,609.64 
 
 $2. 642 
 
 1901 
 
 3.672 
 
 1902 
 
 3.115 
 
 1903 
 
 3.14 
 
 1904 
 
 3.241 
 
 1905 
 
 3 664 
 
 1906 
 
 4.084 
 
 1907 
 
 4 328 
 
 1908 
 
 4 689 
 
 1909 
 
 4.628 
 
 1910 
 
 
 1911 
 
 6 036 
 
 1912 
 
 5.405 
 
 1913 
 
 
 1914 
 
 5 762 
 
 1915 
 
 6.94 
 
 
 
 Total 
 
 1,430,788.84 
 
 1,562,993.08 
 
 
 4,119,806.18 
 
 
 3,945,979.77 
 
 
 
 ' 
 
 
 
 Out of work benefit. 
 
 Total 
 cost per 
 member 
 per year 
 
 tor all 
 benefits. 
 
 30-cent 
 contriD- 
 
 uting 
 members. 
 
 20-cent 
 benefi- 
 ciary 
 retired 
 members. 
 
 10 and 15 
 
 cents 
 
 dues 
 
 paying 
 
 members. 
 
 Balance at 
 
 close of 
 
 fiscal 
 
 year. 
 
 Year. 
 
 Amount. 
 
 Cost per 
 member 
 per year. 
 
 
 
 
 
 
 
 
 $124 55 
 
 1879 
 
 
 
 $1,344 
 
 1.114 
 
 1.77 
 
 5.569 
 
 ■3.99 
 
 16.741 
 
 7.889 
 
 4.106 
 
 4.212 
 
 7.296 
 
 4.655 
 
 5.25 
 
 7.179 
 
 6.88 
 
 9.452 
 
 13.646 
 
 13.678 
 
 13.877 
 
 11.361 
 
 10. 804 
 
 8.315 
 
 10.541 
 
 11.143 
 
 9.394 
 
 7.475 
 
 8.318 
 
 8.417 
 
 9.491 
 
 9.05 
 
 12.008 
 
 -10.494 
 
 13.996 
 
 11.146 
 
 11.107 
 
 10.934 
 
 13.085 
 
 14.024 
 
 2,729 
 4,440 
 14,604 
 11,430 
 13,214 
 11,371 
 12,000 
 24,672 
 20,660 
 17,133 
 17,555 
 24,624 
 24,221 
 26,678 
 26,788 
 27,828 
 27,760 
 27,318 
 26,347 
 26,460 
 28,994 
 33,965 
 33,974 
 37,023 
 39,301 
 41,536 
 40,075 
 39, 250 
 41,337 
 40,354 
 44,414 
 43,837 
 42,107 
 40,373 
 40,180 
 40,001 
 38,044 
 
 
 
 5,066.22 
 11,155.62 
 37 740 79 
 
 
 
 
 
 
 1881 2 
 
 
 
 
 
 
 
 
 
 
 77,506.29 
 126,783.30 
 70,078.73 
 86,511.46 
 172,-813.25 
 227,228.24 
 239,190.53 
 285,136.54 
 383,072.87 
 
 
 
 
 
 
 
 
 
 
 
 1885 
 
 
 
 
 
 
 
 
 
 
 Ig87 
 
 
 
 
 
 
 
 
 168 
 496 
 713 
 957 
 1,229 
 1,518 
 1,497 
 1,644 
 1,873 
 1,859 
 2,049 
 2,252 
 2,584 
 2,863 
 3,105 
 3,605 
 3,904 
 4,297 
 4,828 
 5,266 
 5,535 
 5,908 
 6,314 
 6,608 
 6,846 
 7,167 
 7,344 
 7,692 
 
 
 1889 
 
 
 
 
 
 $22,760.50 
 
 21,223.50 
 
 17,460.75 
 
 89,402.75 
 
 174,517.25 
 
 166,377.25 
 
 175,767.25 
 
 117,471.40 
 
 70,197.70 
 
 38,037.00 
 
 23,897.00 
 
 27,083.76 
 
 21,071.00 
 
 15,558.00 
 
 29,872.50 
 
 35,168.50 
 
 23,911.00 
 
 19,497.50 
 
 101,483.50 
 
 76,107.25 
 
 39,917.00 
 
 36,942.50 
 
 42,911.05 
 
 31,898.71 
 
 68,198.00 
 
 122,954.00 
 
 80.924 
 
 .876 
 
 .664 
 
 3.337 
 
 6.271 
 
 5.993 
 
 6.434 
 
 4.46 
 
 2.653 
 
 1.312 
 
 .703 
 
 .797 
 
 .669 
 
 .395 
 
 .719 
 
 .877 
 
 .609 
 
 .471 
 
 2.514 
 
 1.713 
 
 .91 
 
 .877 
 
 1.062 
 
 .793 
 
 1.704 
 
 3.231 
 
 •• - - 
 
 
 421,950.06 
 503,829.20 
 456,732.13 
 340, 788. 66 
 236,213.05 
 177,033.12 
 194,240.30 
 227,597.01 
 
 
 
 1893 
 
 
 
 
 1895 
 
 
 
 
 1897 & 
 
 ""■ 118 
 
 203 
 
 341 
 
 662 
 
 860 
 
 1,103 
 
 1,343 
 
 1,380 
 
 1,312 
 
 1,340 
 
 1,360 
 
 1,231 
 
 1,155 
 
 1,291 
 
 1,257 
 
 1,238 
 
 1,273 
 
 1,205 
 
 1,150 
 
 
 1899 
 
 292,407.95 
 
 
 31il, 806. 24 
 
 1901 
 
 321, 124. 33 
 
 
 361, 811. 29 
 
 
 495, 117. 91 
 
 1904 
 
 589,234.20 
 
 1905 
 
 688,679.13 
 
 1906 
 
 714, 506. 14 
 
 1907 
 
 775,305.85 
 
 1908 
 
 705,960.75 
 
 1909 
 
 672, 184. 39 
 
 1910 
 
 489,426.98 
 
 1911 
 
 443,384.62 
 
 1912 
 
 399, 474. 62 
 
 1913 
 
 414,037.45 
 
 1914 
 
 319,804.75 
 
 191,5 
 
 240, 791. 97 
 
 
 
 
 1,609,686.62 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 The weekly dues ■were 10 cents. 
 
 2 The weekly dues were 15 cents. 
 1 The weekly dues were 20 cents. 
 
 < The weekly dues were 25 cents. 
 '' The weekly dues were 30 cents. 
 
 Total benefits paid during 1915, excluding loans, $621,839.07. Total benefits paid hi 36 yearaand 2 months 
 inoludtag loans, |12,669,254.49. 
 
278 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 The foregoing table is one of the most complete Hatorical r&um^s of the financial 
 transactions of the International Union ever issued. It presents a bird's-eye view of 
 the benefits paid, the cost per member per year, and the cost per member for the given 
 number of years, and the balance on hand at the end of each fiscal year. For instance, 
 in the payment of out-of-work benefit the amounts fluctuate according to the state of 
 trade. The highest cost per member per year for out-of-work benefit was $6,434 in 
 1896, and the lowest cost per member per year was 39i cents in 1903. 
 
 The out-of-work benefit has been paid for a period of 26 years, commencing January 
 1, 1890, and the average cost per member per year for the first 10 years was $3,291. 
 This is instructive information, as the 10 years in queston were about equally divided 
 between periods of normal trade condition and industrial stagnation. The average 
 cost per member per year for the 26 years in which the benefit has been in operation 
 was $1,955. 
 
 The 15-cent-dues-paying members receive strike and not more than $50 death 
 benefit. The 20-cent beneficiary retired members receive sick and death benefits, 
 hence both are included when figuring the cost per member per year in the payment 
 of benefits in which they participate, although m the tables they are given separate 
 columns of membership and afiiliation. 
 
 Note. — The following explains the different kinds, periods, and amount of benefits 
 paid; 
 
 Loans: One-year members are entitled to a loan for transportation to the nearest 
 union in whatever direction he or she desires to travel; but m nowise shall the loan 
 exceed in the aggregate $20. 
 
 Strike benefit: For the first 16 weeks $5 per week is paid and $3 per week until the 
 strike or lockout shall have terminated. 
 
 Sick benefit is $5 per week, provided such sickness or inability shall have been for 
 at least one week or seven days, but no member shall be entitled to any sick benefit 
 for a longer period than 13 weeks in any one year. 
 
 Death and disability benefits: These benefits are graduated and are as follows: A 
 member who shall have been such for two years, the sum of $50 is paid toward defraying 
 funeral expenses. Including the said $50 funeral expenses, the International Union 
 pays upon the death of a member the following sums : (1) If the member has been such 
 for at least five consecutive years, a sum of $200. (2) If the member shall have been 
 such for at least 10 years, $350. (3) If the member has been such for at least 15 con- 
 secutive years, $550. The total disability benefit was adopted in 1902. This benefit 
 is paid direct to the applicant or guardian, and is the same amount as in the case of 
 death, less $50, which is retained and paid toward defraying funeral expenses at time 
 of death. A benefit of $40 is paid in the event of the death of a wife or widowed 
 mother of a member. 
 
 Out-of-work benefit: Any member having paid weekly dues for a period of two years 
 is entitled to an out-of-work benefit of $3 per week, and 50 cents for each additional 
 day. No benefit is paid for the first one week after a member was discharged from 
 employment or laid off. Any member receiving benefit for six weeks is not entitled 
 to any benefit for seven weeks thereafter, and no member shall receive more than $54 
 during the period of one year. 
 
 No physical examination of applicants for membership is required 
 
 Coopers International Union. — From 1890 to August, 1915, this organization paid 
 sick benefits to the amount of $12,400. From 1909 to August, 1915, it paid death 
 benefits to the amount of $20,000. 
 
 International Union of Cutting Die and Cutter Makers. — This organization has paid 
 during the past 7 years $3,800 in death benefits. 
 
 _ International Photo-Engravers' Union of North America.. — This association only pays 
 sick benefits to members afilicted with tuberculosis. From January 1, 1909, to April 
 1, 1916, they paid $51,429.65 for these benefits. The locals of this union since Novem- 
 ber, 1914, have paid approximately $100,000 for unemployment benefits. From 
 January 1, 1903, to April 1-, 1916, this international union has paid $24,460 for death 
 benefits; the locals since 1906 have paid $5,000 in death benefits. 
 
 International Brotherhood of Foundry Employees. — Fi'om April, 1905, to January, 
 1916, this organization and its local unions paid sick benefits to the amount of $21,86o! 
 From April, 1905, to January, 1916, $7,750 in death benefits were paid by the organiza- 
 tion and its local unions. 
 
 Glass Bottle Blowers Association.— 'iYxe locals of this association pay $8 per week as 
 sick benefits. The unemployment benefits paid by this association in 1908 were 
 $325,000; in 1914, they were $70,000. The death benefits from September 1891 to 
 April, 1, 1916, were $902,000. 
 
 The Granite Cutters International Association of America. — This association paid 
 death benefits from March, 1877, to April 1, 1916, amounting to $431,931.04. 
 
SOCIAL INStTBANCE AND UNEMPLOYMENT. 279 
 
 United Cloth Hat and Cap Makers of North America. — This organization has paid sick 
 benefits from May, 1912, to May, 1915, to the amount of $9,661. During the winter of 
 1913 and 1914 some of the local unions paid unemployment benefits amounting to 
 $6,964. 
 
 International Hod Carriers Building and Common Laborers Union of America. — This 
 organization has paid from January 7, 1907, up to April 15, 1916, death benefits to the 
 amount of $45,775. During the year 1915 they paid $9,900. 
 
 Hotel and Restaurant Employees' International Alliance and Bartenders' International 
 League of America. — ^The following figures cover the periods indicated: 
 
 Piiid out in sick benefits: 
 
 May, 1900, to Apr. 30, 1901 (21 out of 182 locals) $3, 209. 00 
 
 May, 1901, to Apr. 30, 1902 (33 out of 309 locals) 4, 786. 50 
 
 May, 1902, to Apr. 30, 1903 (56 out of 518 locals) 9, 592. 51 
 
 May, 1903, to Apr. 30, 1904 (102 out of 659 locals) 21, 561. 95 
 
 May, 1904, to Apr. 30, 1905 (84 out of 567 locals) 17, 438. 20 
 
 May, 1905, to Apr. 30, 1907, two years (130 out of 554 locals) 48, 426. 97 
 
 May, 1907, to Dec. 31, 1908 (225 out of 499 locals) 68, 738. 83 
 
 Jan., 1909, to Dec. 31, 1910 (205 out of 481 locals) 68, 691. 50 
 
 Jan., 1911, to Dec. 31, 1912 (309 out of 541 locals) 109, 116. 97 
 
 Jan., 1913, to Dec. 31, 1913, one year (285 out of 592 locals) 74, 423. 32 
 
 Jan., 1914, to Dec. 31, 1914, one year (336 out of 596 locals) 96, 421. 55 
 
 Making a total for the period of $522,407.30 which was paid from the sick benefit 
 funds of local unions. The international law does not provide for an international sick 
 benefit; it does provide for death benefit, and has paid out from February 1, 1903, to 
 February 29, 1916, the sum of $344,100, which means that 6,882 death benefit claims 
 have been allowed and paid. Six months' continuous good standing and current 
 month due stamp at time of demise is the requirement. No health examination 
 required to become a member. 
 
 Local unions paid additional benefits as follows: . 
 
 May, 1900, to Apr. 30, 1901 (24 out of 182 locals) $2, 416. 00 
 
 May, 1901, to Apr. 30, 1902 (33 out of 309 locals) 7,178.00 
 
 May, 1902, to Apr. 30, 1903 (27 out of 518 loclas) 5, 234. 25 
 
 May, 1903, to Apr. 30, 1904 (63 out of 659 locals) 10, 505. 00 
 
 May, 1904, to Apr. 30; 1905 (49 out of 567 locals) 7, 248. 80 
 
 May, 1905, to Apr., 1907 (97 out of 554 locals) 21, 574. 07 
 
 May, 1907, to Dec. 31, 1908 (164 out of 499 locals) 32, 294. 72 
 
 Jan., 1909, to Dec. 31, 1910 (154 out of 481 locals) 28, 131. 55 
 
 Jan., -1911, to Dec. 31, 1912 (202 out of 541 locals) 36, 808. 12 
 
 Jan., 1913, to Dec. 31, 1913 (165 out of 592 locals) 29, 005. 40 
 
 Jan., 1914 to Dec. 31, 1914 (202 out of 596 locals) 29,295.97 
 
 Dedth benefit payments by local unions 209, 691. 88 
 
 Death benefits by international union 344, 100. 00 
 
 553, 791. 88 
 
 . No unemployed benefits either in the international or affiliated locals. Locals pay 
 no benefit on account of wives or dependents. Paid out of the defense fund from 
 August 1, 1904, to February 29, 1916, the sum of $180,409. 98. 
 
 Amalgamated Association of Iron, Steel, and Tin Workers of North America. — ^Thia 
 organization has paid the following benefits from April 1, 1915, to and including 
 March 31, 1916: Sick benefits, $17,285; death benefits, $7,250, death benefits of 
 members' wives, $1,200. 
 
 Amalgamated Lace Operatives of America. — From June, 1914, to December, 1915, 
 this organization paid $3,500 for unemployed benefits. From January 1, 1914, to 
 January 1, 1916, it paid $6,075 in death benefits, and for the same period paid death 
 benefits for members' wives and other dependents to the sum of $675. 
 
 Wood, Wire, and Metal Lathers International Union. — ^This organization has paid 
 death benefits to the amoimt of $68,754.41. 
 
 Laundry, Workers International Union. — ^During the year 1915 paid unemplojrment 
 benefits to the amount of $280. Th6 local unions of this international paid during the 
 year 1915 death benefits to the amount of $1,250. 
 
 United Brotherhood of Leather Workers on Horse Goods. — From January 1, 1904, to 
 July 1, 1915, this organization paid sick benefits to the amount of $84,548; and death 
 benefits to the amount of $25,257. 
 
280 SOCIAL INSTJEANCE AND UNEMPLOYMENT. 
 
 Amalgamated Lithographers of America. — ^This association pays death benefits from 
 the national treasury and these benefits vary from $50 to J500, according to the length 
 of the membership of a deceased brother. They have paid upon claims against the 
 mortuary fund of this association in the past three years and three monthE the sum 
 of $28,620, on approximately 66 death claims. The payments by the locals of this 
 association to members who are sick and members who are unemployed have been 
 very largely in excess of the above sum. 
 
 International Brotherhood of Maintenance of Way Employees. — ^This organization 
 from November 1, 1892, to September 1, 1913, paid $218,267.96 in death benefits. 
 
 Amalgamated Meat Cutters and Butcher Workmen oj North America. — ^This organisa- 
 tion paid unemployed benefits from January,. 1910, to April 1, 1916, $14,633.49. In 
 1905 they inaugurated a death benefit and from January of that year to April 1, 1916, 
 they paid $23,850 for these benefits. Nearly all of the local unions have sick benefits 
 ranging from $3 to $8 per week. 
 
 United Mine Workers of America. — ^This organization during the past year spent 
 $1,259,515.75 in strike benefits. Many of the districts affiliated with their international 
 union pay benefits to their members in case of sickness and to the dependents of the 
 deceased employees. 
 
 International Molders' Union of North America. — ^This organization, since its incep- 
 tion up to December 31, 1915, has paid the following benefits: Strike benefits, 
 $4,766,224; death benefits, $1,003,687; disability benefits, $115,300; sick benefits, 
 $2,661,192.45; out-of-work benefits, $348,198.25. 
 
 Pattern Makers' League of North America. — ^This organization paid unemployed bene- 
 fits from 1909 to 1915 to the amount of $48,683. From 1898 to 1915 they paid in sick 
 and death benefits $117,315.07. 
 
 International Paving Cutters' Union of the United States of America and Canada. — 
 From January 1, 1903, to March 31, 1916, this organization paid unemployment benefits 
 to the amount of $45,986 and death benefits to the amount of $20,250. 
 
 Operative Plasterers' and Cement Finishers' International Association. — This organiza- 
 tion paid death benefits from November 1, 1896, to October, 1915, to the amount of 
 $209,397.50. From September, 1914, to October 1, 1915, they paid $36,500 in death 
 benefits. 
 
 Metal Polishers, Buffers, Platers, Brass and Silver Workers Union of North America. — 
 This organization pays death benefits on a graduated membership. For the first year 
 they pay $50, second year $100, third year $125, fourth year $150, fifth year $175, 
 sixth year $200. 
 
 National Brotherhood of Operative Potters. — This organization has paid death benefits 
 from August 17, 1910, to March 31, 1916, to the amount of $40,725. 
 
 National Print Cutters' Association of America. — This association paid $7, 650 in.death 
 benefits from September 1, 1906, to April 1, 1916, for 43 members who died. 
 
 National Association of Machine Printers and Color Mixers of the United States. — Dur- 
 ing the year 1912 this organization paid strike benefits amounting to $5,000. From 
 April 12, 1912, to August, 1915, they paid $5,400 in death benefits; $200 for each death 
 benefit. 
 
 International Printing Pressmen and Assistants' Union of North America. — This 
 organization paid death benefits from June 1, 1914, to June ] , 1915, to the amount of 
 $16,203.49. 
 
 Amalgamated Association of Street and Electric Railway Emploi/ees of America. — ThiB 
 association paid death and disability benefits during' the year 1915 of $210,988.88. 
 The local unions paid sick benefits during the year 1915 to the amount of $88,303.97; 
 death and disability benefits to the amount of $79,356.03. 
 
 International Slate and Tile Roofers' Union of America. — This international has paid 
 death benefits during the past four years to the amount of $4,400. 
 
 Spinners' International Union. — The local unions of this organization has paid 
 during the last five years for out-of-work benefits $100,000. 
 
 International Stereotypers and Electrotypers' Union. — This organization pays death 
 benefits of $100 for each member. At the end of the fiscal year. May, 31, 1915, they 
 had paid $5,700 on 57 members. 
 
 Journeymen Stonecutters' Association of North America. — The locals of this asso- 
 ciation paid during the past 10 years $50,000 in sick benefits. The international 
 association paid during the past 20 years $224,400 in death benefits, 
 
 Stove Mounters' International Union. — This organization paid death benefits from 
 January 1, 1903, to April 1, 1916, to the amount of $18,500. 
 
 Switchmen's Union of North America. — This organization has paid benefits as fol- 
 lows: Sick benefits, $76,066.85; unemployed benefits, $40,941.54; death benefits 
 $1,641,506.35. ' 
 
SOCIAL INSUEANCB AND UNEMPLOYMENT. 
 
 281 
 
 Journeymen Tailors' fJniono/America.— This organization has paid from July, 1914, 
 to July, 1915, sick benefits to the amount of $21,180.90; unemployed benefits to the 
 amount of $6,400; death benefits to the amount of $12,848.70. 
 
 The Order of Railroad Telegraphers. — This organization has paid death benefits to 
 the amount of $1,164,631.47. 
 
 United Textile Workers of America. — During the last six years this organization has 
 paid $18,000 in death benefits. 
 
 Tobacco Workers' International Union. — This international has paid up to the end 
 of the year 1915 $122,875 in sick benefits. For death benefits for the same period of 
 time it has paid $23,000. 
 
 International Steel Plate Transferrers' Association' of America. — Durin" the year 
 1915-16 this organization paid unemployment benefits to the amount of $200. 
 
 Travelers' Goods and Leather Novelty Workers' International Union. — This organization 
 has paid death benefits to the amount of $4,000. The local unions have paid $2,750 
 in death benefits. 
 
 International Typographical Union. — From August 1, 1908, to May 31, 1915, this 
 organization paid old-a^e pensions to the amount of $974,094; from October 1, 1892, 
 to May 31, 1915, it paid $1,175,585.75 in death benefits. Erection and maintenance 
 Union Printers' Home for Aged, Infirm, and Sick Members, $1,333,564.02. 
 
 International Shingle Weavers' Union of America. — This organization pays strike 
 and lockout benefits $3 a week for single men and $5 a week for married men. 
 
 Woodcarvers' International Association of North America. — From 1890 to January 1, 
 1916, this organization has paid death benefits to the amount of $70,550. The local 
 unions of this organization froih 1911 to January 1, 1916, paid $4,070.74 for sick and 
 death benefits. 
 
 Order of Railway Conductors. — The Order of Railway Conductors maintains an 
 insurance department. Insurance is compulsory, the members having the option 
 to select the class of insurance which they will carry. 
 
 Certificates are issued as follows: Series A, $1,000, assessment $2 per month; Series 
 AA_, $1,500, assessment $3 per month; Series 15, $2,000, assessment $4 per month; 
 Series C, $3,000, assessment $6 per month. Formerly certificates for $4,000 and $5,000 
 were also issued. 
 
 The insurance is paid for death from any cause and the following disabilities: 
 Loss of one or both hands, one or both feet, total loss of sight, total loss of hearing. 
 
 Since the formation of the order, in 1868, to April 1, 1916, there was paid on account 
 of disability and death, $18,838,067, During the year 1915 claims paid by series 
 was as follows: 
 
 Series A, S1,000 each... 
 Series AA, Sl,500 each. 
 Series B, 12,000 each... 
 Series C, 13,000 each... 
 Series D, $4,000 each. . 
 
 Total 
 
 Amount. 
 
 $197,000 
 
 3,000 
 
 510,000 
 
 438,000 
 
 32,000 
 
 1,180,000 
 
 Certificates in force December 31, 1915, were as follows; 
 
 Amount. 
 
 Series A, S1,000 each... 
 Series AA, $1,500 each. 
 Series B, $2,000 each... 
 Series C, $3,000 each. . . 
 Series D, $4,000 each. . 
 Series E, $5,000 each... 
 
 Total 
 
 84,934,500 
 
 The order maintains, in addition to the insurance, a relief fund for the needful assist- 
 ance of aged and disabled members, A yearly assessment of $3 is made against each 
 member of the order for this fund. Payments are made, after examination of the 
 applicant by an officer of the order, and approval of the recommendation by the board, 
 to any member who has betiome incapable of performing his duties. The maximum 
 
282 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 that may be paid is |50 per month, the policy being to allow the beneficiary a suffi- 
 cient aniount to bring his income from the fund and other sources to |50 per month. 
 
 There are 538 members of the order now receiving monthly assistance from the relief 
 fund. During the month of April, 1916, $14,515.83 was paid to members from this 
 fund. Since the adoption of the law maidng it possible to care for those who are 
 eligible to receive this assistance, in 1901, there has been paid $1,170,109.42 from this 
 fund. 
 
 The order also takes care of the wives of insane members, and from July 1, 1903, to 
 Marckl, 1916, $16,519 was paid on this account. This money is taken from the general 
 fund, which accrues from annual dues of $2 per year paid by each member of the 
 order. 
 
 Brotherhood of Locomotive Engineers. — The Brotherhood of Locomotive Engineers 
 maintains as a distinct department of the organization a life and accident insurance 
 association. The Brotherhood has also established a pension association, and also pays 
 indigent benefits and contributes to the maintenance of the Home for Old and Dis- 
 abled Railroad Employees at Highland Park, 111. 
 
 There is attached copy of the Report and Financial Statement of the Locomotive 
 Engineers' Mutual Life & Accident Insurance Association and Accident & Indemnity 
 Insurance, December 31, 1915; copy of a statement concerning the protection offered 
 by the pension association, and copies of the April 1, 1916, statements of the insurance, 
 indemnity insurance and relief fund. ' 
 
 For the 10-year period, January 1, 1905, to December 31, 1914, the brotherhood paid 
 out for claims incurred bjr accidental deaths as a result of injuries while in service as 
 engineer, $4,860,000. This was in addition to payments on account of natural death. 
 For bhndness, incident to service, there was paid $845,250; for amputation of one or 
 both legs from accident while on duty, $604,500; for amputation of one or both arms 
 from accidental injury while on duty, $264,750. The total for accidents alone, during 
 the 10-year period, was $6,574,500. 
 
 The total amount of insurance in force is nearly $145,000,000, and over $33,000,000 
 has been paid to the beneficiaries of deceased and disabled members. 
 
 From the time a member enters the insurance until his insurance is paid, the aver- 
 age term of insured Ufe is 11 years and 7 days. 
 
 Report and financial statement Locomotive Engineers' Mutual Life & Accident Insurance 
 
 Association and Accident & Indemnity Insurance, Cleveland, Ohio, July 1, WIS, to 
 
 December SI, 1915. 
 
 Cleveland, Ohio, January 17, 1916. 
 To the Board of Trustees, Locomotive Engineers' Mutual Life & Accident Insurance Asso- 
 ciation, Cleveland, Ohio. 
 
 Gentlemen: In accordance with your instructions transmitted to me under date 
 of July 29, 1915, by your president, Mr. W. E. Futch, I have made a thorough examina- 
 tion of the books and accounts of the Locomotive Engineers' Mutual Life & Accident 
 Insurance Association, and also of the indemnity department for six-months period 
 ending December 31, 1915. 
 
 I investigated and verified each report of each insurance secretary and found every 
 item of income accounted for on the books of the association. 
 
 The disbursements for general expenses and salaries were compared with the actual 
 receipted invoices and vouchers on file, and T found same to be correct. 
 
 I also verified and audited all death, disability, and weekly indemnity claims paid, 
 and the individual receipts from the beneficiaries, which had been obtained and 
 placed on file as evidence of the association's discharge of their obligations, all of 
 which I found correct. 
 
 I investigated all bank balances and found them to correspond with the books of 
 the association. 
 
 As provided in the by-laws of the association, I find that the president and general 
 secretary-treasurer have each given bond in the sum of $50,000 in the Fidelity & 
 Deposit Co., of Maryland, and also find that the insurance secretaries are properly 
 bonded as the law provides. 
 
 At the last board of trustees' meeting held at Cleveland, Ohio, on July 28j 1915, the 
 president and general secretary-treasurer were instructed to deposit with Southern 
 Bank & Trust Co., of Valdosta, Ga., an amount not to exceed $500,000 at 5 per cent 
 interest per annum and they furnish satisfactory bond. 
 
 I find that the Southern Bank & Trust Co. have furnished a bond for $400,000 in the 
 United States Fidelity & Guaranty Co. I also find that the Southern Bank & Trust 
 Co. have not furnished additional bond for amount over $400,000, and all further 
 accumulation of 10 per cent are being deposited in the Guardian Savings & Trust Co., 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 283 
 
 of Cleveland, Ohio, as per resolution passed by Board of trustees under date of July 
 28, 1915. 
 
 The Guardian Savings & Trust Co. are being bonded by the Fidelity & Trust Co., 
 of Maryland, in, the sum of $350,000 at December 31, 1915, under three bonds, addi- 
 tional bonds being issued as the amounts of balance on deposit increase. 
 
 I attach hereto, and make a part of this report, a detailed statement of the receipts 
 and disbursements for the period beginning July 1, 1915, and ending December 31, 
 1915, and other exhibits, which show a very satisfactory condition of the affairs of 
 the association, and efficient, conservative management on the part of your officials. 
 
 Respectfully submitted. 
 
 Chaeles F. Rahn, 
 Public Accountant and Auditor. 
 
 Financial Statement, Locomotive Engineers' Mutual Life & Accident Insur- 
 ance Association, Dec. 31, 1915. 
 
 Mortuary fund. 
 
 RECEIVED. 
 
 Montli. 
 
 Net assess- 
 ments. 
 
 From 
 
 claims of 
 
 carried 
 
 members. 
 
 Refunds. 
 
 Total. 
 
 Claim No. 
 
 Amomit. 
 
 July 
 
 $159,114.01 
 
 196,775.18 
 160,702.26 
 159,821.06 
 158,293.57 
 158,564.48 
 
 " $2,401.45 
 
 1,680.86 
 1,452.36 
 3,772.55 
 939.86 
 3,232.96 
 
 f 79 M 
 \ 352 N 
 
 $1,500.00 
 1,498.00 
 
 1 $164,513.46 
 198,456.03 
 
 
 September . . . 
 
 
 
 162, 154. 60 
 
 
 
 
 163,593.61 
 
 
 
 
 169,233.42 
 
 
 723 N 
 
 2,860.00 
 
 164,647.43 
 
 
 183,798.41 
 
 
 
 
 
 
 
 Total 
 
 993,270.55 
 
 13,480.00 
 
 
 6,848.00 
 
 1,196,396.96 
 
 Interest from Julv 1 1915 to Dec 31 1915 
 
 
 5,675.49 
 
 
 
 
 
 
 
 Total 
 
 1,202,072.45 
 
 
 
 
 
 
 
 
 DISBURSE 
 
 MENTS. 
 
 
 Montli, 
 
 Death 
 . olairris. 
 
 Disability 
 claims. 
 
 Total. 
 
 July 
 
 $116,666.44 
 124,692.72 
 172, 345. 01 
 151,600.00 
 117,603.86 
 197,836.86. 
 
 $18,760.00 
 7,500.00 
 1,500.00 
 12,000.00 
 16,000.00 
 4,600.00 
 
 $135,416.44 
 
 
 132, 192. 72 
 
 
 173,845.01 
 
 
 163,600.00 
 
 
 132,603.86 
 
 
 202,336.86 
 
 
 
 
 
 Total 
 
 880,644.89 
 
 69,260.00 
 
 939,894.89 
 
 
 262,177.56 
 
 
 
 
 
 
 Total 
 
 1,202,072.45 
 
 
 
 
 
284 
 
 SOCIAL ISrSUEANCE AND UNEMPLOYMENT. 
 
 Mortuary fund — Continued. 
 MOHTUAEY FUND CLAIMS PAID. 
 
 Date. 
 
 No. 
 
 Death. 
 
 DisaWlity, 
 
 Total. 
 
 July 6.., 
 
 Do.. 
 
 Do.. 
 
 July, 8... 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 July 13.. 
 
 Do.. 
 
 July 17.. 
 
 July 22.. 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 July 26.. 
 
 Do.. 
 
 Do.. 
 
 Aug. 4.. 
 
 Do.. 
 
 Do-. 
 
 Do.. 
 
 Do.. 
 
 Do.. 
 
 Aug. 6. . 
 
 Aug. 11. 
 
 Do-. 
 
 Do- 
 
 Aug. 13. 
 
 Do.. 
 
 Do.. 
 
 Aug. 21. 
 
 Do.. 
 
 Do.. 
 
 Do- 
 
 Do- 
 
 Do- 
 
 Do-. 
 
 Aug. 28. 
 
 Do.. 
 
 Do.. 
 
 Do., 
 
 Sept. 1.. 
 
 Do-- 
 
 Sept. 8.. 
 
 Sept. 10. 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do-.. 
 
 Do... 
 
 Sept. 18.. 
 
 Do-.. 
 
 Do... 
 
 Sept. 23-. 
 
 Do... 
 
 Do... 
 
 Sept. 29.. 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Oct. 5.-.. 
 
 Do... 
 
 Oct. 8...- 
 
 Do-- 
 
 Do.-- 
 
 Oct. 14... 
 
 Do... 
 
 Oct. 20... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Do... 
 
 Oct. 23... 
 
 Do... 
 
 Oct. 27... 
 
 Do... 
 
 Do... 
 
 362 N 
 373 N 
 
 394-401 N 
 271 N 
 357 N 
 369 N 
 
 402-409 N 
 375 N 
 
 410^14 N 
 
 415^27 N 
 267 N 
 428 N 
 
 430 N 
 436 N 
 
 438-442 N 
 
 445 N 
 447 N 
 372 N 
 
 432-J33 N 
 448-456 N 
 
 431 N 
 435 N 
 
 443 N 
 
 444 N 
 456-462 N 
 
 464 N 
 465-471 N 
 
 162 N 
 
 366 N 
 472-478 N 
 
 434 N 
 
 446 N 
 479-487 N 
 
 271 N 
 365 N 
 
 494 N 
 497-499 N 
 501-503 N 
 505-511 N 
 613-514 N 
 490-491 N 
 
 495 N 
 512 N 
 
 515-519 N 
 520-531 N 
 
 496 N 
 542 N 
 271 N 
 490 N 
 
 , 504 N 
 
 532-541 N 
 
 543-552 N 
 
 553 N 
 
 554-555 N 
 
 437 N 
 
 493 N 
 
 556-569 N 
 
 492 N 
 
 557 N 
 
 579-584 N 
 
 429 N 
 
 500 N 
 
 553 N 
 
 572 N 
 
 575 N 
 
 585-593 N 
 
 676 N 
 
 594-605 N 
 
 488 N 
 
 578 N 
 
 606-618 N 
 
 670-671 N 
 
 619-626 N 
 
 674 N 
 
 632-634 N 
 
 637 N 
 
 639 N 
 
 640 N 
 642-643 N 
 629-631 N 
 644-654 N 
 
 636 N 
 
 638 N 
 655-659 N 
 
 $3,000.00 
 1,500.00 
 9,000.00 
 166. 44 
 1,000.00 
 1, 500. 00 
 
 11,250.00 
 1, 500. 00 
 9, 750. 00 
 
 31, 500. 00 
 1,500.00 
 1, 500. 00 
 1,600.00 
 4,500.00 
 9,000.00 
 3,000.00 
 
 1,600.00 
 4,500.00 
 19,600.00 
 1,600.00 
 3,000.00 
 1,500.00 
 3,000.00 
 10,500.00 
 1,500.00 
 15,000.00 
 2,640.00 
 1, 500. 00 
 16,000.00 
 4,453.70 
 1,500.00 
 13,500.00 
 ■ 170:44 
 1,500.00 
 1,600.00 
 7, 500. 00 
 6,000.00 
 13,500.00 
 3,000.00 
 3,428.68 
 1,500.00 
 1,500.00 
 10,500.00 
 23,260.00 
 1,600.00 
 3,000.00 
 166. 46 
 1,928.66 
 3,000.00 
 21,000.00 
 28,250.00 
 1,613.00 
 4.600.00 
 3,000.00 
 1,500.00 
 31,600.00 
 1, 500. 00 
 3,000.00 
 12,000.00 
 1, 500. 00 
 750.00 
 2,987.00 
 1,600.00 
 3,000.00 
 24,000.00 
 3,000.00 
 19,600.00 
 1,600.00 
 3,000.00 
 31,500.00 
 6,000.00 
 16,000.00 
 1,600.00 
 7,500.00 
 3,000.00 
 3,000.00 
 3,000.00 
 4, 500. 00 
 9,000.00 
 22,600.00 
 1, 600. 00 
 1,500.00 
 15,000.00 
 
 $7,500.00 
 
 760. 00 
 
 4,600.00 
 3,000.00 
 
 $135, 416. 44 
 
 1,500.00 
 
 1,600.00 
 
 4,500.00 
 
 3,000.00 
 
 1,500.00 
 
 6,000.00 
 
 3,000.00 
 
 3,000.00 
 
 132, 192. 72 
 
 173,845,01 
 
 163,500.00 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 285 
 
 Mortuary /Mnd— Continued. 
 
 MORTUARY FUND CLAIMS PAID— Continued. 
 
 Date. 
 
 No. 
 
 Death. 
 
 Disability. 
 
 Total. 
 
 Nov. 1 
 
 660-662 N 
 
 255 N 
 
 627 N 
 
 C63-669 N 
 
 490 N 
 
 670-677 N 
 
 678-679 N 
 
 680-687 N 
 
 688-693 N 
 
 706-707 N 
 
 641 N 
 
 708-714 N 
 
 6K 
 
 698 N 
 
 715 N 
 717-723 N 
 
 299 M 
 
 700 N 
 
 704 N 
 
 724-730 N 
 
 731-736 N 
 
 702 N 
 737-739 N 
 
 696 N 
 740-747 N 
 
 703 N 
 748-763 N 
 
 489 N 
 694 N 
 
 699 N 
 764-772 N 
 777-778 N 
 
 696 N 
 723 N 
 776 N 
 
 780-783 N 
 
 785-786 N 
 
 489 N 
 
 697 N 
 
 716 N 
 779 N 
 
 787-805 N 
 
 $7,500.00 
 
 2,600.76 
 
 750. CO 
 
 18,000.00 
 
 642.86 
 
 15,000.00 
 
 4,500.00 
 
 21,000.00 
 
 6, 000. 00 
 
 7, .500. 00 
 
 3,000.00 
 
 15,750.00 
 
 460. 25 
 
 1,500.00 
 
 
 
 Nov. 6 
 
 
 
 Do 
 
 
 Do 
 
 
 
 Nov. 9 
 
 
 
 Do 
 
 $3, 000. 00 
 
 
 Nov. 11 
 
 
 Nov. 16 
 
 
 
 Nov. 19 
 
 7, .500. 00 
 
 
 Do 
 
 
 Nov. 23 . . 
 
 
 
 Do 
 
 1,500.00 
 
 
 Nov. 26 
 
 
 Do 
 
 
 
 Do 
 
 3, 000. 00 
 
 
 
 13,600.00 
 
 750.00 
 
 1, .500. 00 
 
 1,500.00 
 
 m, 600. 00 
 
 13, .^.00. 00 
 1,500.00 
 6,000.00 
 1, 600. 00 
 
 13, .500. 00 
 3,000.00 
 
 33,000.00 
 
 151. f.2 
 
 3,000.00 
 
 3. 000. 00 
 
 22, .600. 00 
 3,000.00 
 1, 600. 00 
 1,673.98 
 3,000.00 
 9,000.00 
 2,250.00 
 1,011.36 
 1,500.00 
 1,500.00 
 1,600.00 
 
 48,000.00 
 
 
 Dee. 2 
 
 
 
 
 
 
 Do 
 
 
 
 Do 
 
 
 
 Dec. 3 
 
 
 
 
 
 
 Do 
 
 
 
 
 
 
 Do 
 
 1,.500.0D 
 
 
 
 
 Do 
 
 1,600.00 
 
 
 
 
 Dec. 20 
 
 
 
 Do 
 
 
 202, 336. 86 
 
 Do 
 
 
 
 Do 
 
 
 
 Doe. 21 
 
 
 
 
 
 
 Do 
 
 
 
 
 
 Dec. 23 
 
 
 
 
 
 
 Do 
 
 
 
 Do 
 
 
 
 Do 
 
 
 
 
 1,500.00 
 
 
 
 
 
 
 880,644.89 
 
 69,550.00 
 
 939 894.89 
 
 
 
 
 Relief fund. 
 
 RECEIPTS. 
 
 Month. 
 
 From 
 claims of 
 deceased 
 members. 
 
 Refund or 
 claims 
 vrith- 
 drawn. 
 
 Total. 
 
 Jnly , 
 
 $6,100.00 
 
 $23.00 
 23.00 
 60.00 
 25.00 
 
 211.50 
 
 $6,125.00 
 25.00 
 
 August 
 
 October 
 
 3,965.00 
 1,500.00 
 8,115.00 
 
 4,015.00 
 
 1,525.00 
 
 8,326.60 
 
 39,898.58 
 
 
 December 
 
 
 
 
 
 Total 
 
 19,680.00 
 
 336.50 
 
 59,915.08 
 680.83 
 
 Interest {rom July!, 1915, to Dec. 31, 1915 
 
 
 
 
 
 Total 
 
 
 
 60,595.91 
 
 
 
 
 CLAIMS PAID. 
 
 July 1, 201 claims . 
 July 1, 2 claims... 
 July 21, 1 claim... 
 July 26, 1 claim... 
 
 Aug. 2, 203 claims. 
 Aug. 4, 1 claim 
 
 $4,357.50 
 
 60.00 
 
 25. 00 
 
 800. 00 
 
 . 4,402.50 
 25.00 
 
 $5,232.50 
 
 4,427.50 
 
286 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Sept. 1, 210 claims 84,677.50 
 
 Sept. 1, 2 claims 115.00 
 
 Sept. 3, 1 claim 25.00 
 
 Sept. 4, 1 claim 25.00 
 
 Oct. 1,212 claims.. 4,672.60 
 
 Oct. 4, 1 claim 25.00 
 
 Not. 1, 210 claims .' . 
 
 Deo. 1,208 claims 4,574.00 
 
 Dei. 15, 197 claims 4,299.00 
 
 Dec. 20, 1 claim... 25.00 
 
 Doc. 22, 3 claims 75.00 
 
 14,742.50 
 
 4, 697. 50 
 4,624.00 
 
 8,973.00 
 Total 32,697.00 
 
 EXPENSE DISBURSEMENTS. 
 
 Depository bond $194. 44 
 
 Postage, postals, and stamped envelopes 1 42. 72 
 
 Printing 41.50 
 
 Office supplies 4. 60 
 
 Total 
 
 Balance on hand Dec. 31, 1915. 
 
 S283.16 
 
 32,980.16 
 27,615.75 
 
 Total 60,595.91 
 
 On deposit in bank Dec. 31, 1915 27,664.16 
 
 Cash on hand 51. 59 
 
 Total. 
 
 Amount advanced to 201 members on the relief fimd to Dec. 31, 1915. 
 
 Surplus mortuary fund. 
 
 RECEIPTS. 
 
 . 27,616.76 
 . 282,182.00 
 
 Month. 
 
 10 per 
 cent of net 
 mortuary 
 received. 
 
 Refund. 
 
 Total. 
 
 My 
 
 August 
 
 September 
 
 October 
 
 November 
 
 December 
 
 Balance on hand July 1, 1915 
 
 Total 
 
 Interest from July 1, 1915, to December 31, 1915. 
 
 Total. 
 
 $18,354.03 
 22, 651. 82 
 18, 426. 65 
 18, 690. 19 
 18,094.72 
 18,386.06 
 
 114, 403. 47 
 
 $38.35 
 
 38.36 
 
 118,354.03 
 22,561.82 
 18,465.00 
 18,690.19 
 18,094.72 
 18,386.06 
 
 335, 138. 28 
 
 449, 580. 10 
 1, 803. 61 
 
 451,383.71 
 
 DISBURSEMENTS. 
 
 Depository bond $132.84 
 
 Balance on hand Dec. 31, 1915 451, 250. 87 
 
 Total 461,383.71 
 
 On deposit at — 
 
 The Guardian Savings & Trust Co., Cleveland, Ohio 40,617.10 
 
 Southern Bank & Trust Co., Valdosta, Ga 410, 633. 77 
 
 Total 451,260.87 
 
 Annuity mortuary fund. 
 
 RECEIPTS. 
 From beneficiary: 
 
 August..... , $50.00 
 
 September 45. 00 
 
 October. ISO. 83 
 
 N ovember 144. 64 
 
 December ■. 620. 00 
 
 Total 910.37 
 
 Balance on hand July 1, 1916 6, 467. 72 
 
 6,398.09 
 Interest from July 1, 1915, to Deo. 31, 1916 109.04 
 
 Total 6,607.13 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 287 
 
 Annuity mortgage fund — Continued. 
 
 DISBURSEMENTS. 
 
 Date. 
 
 Claim No. 
 
 Name. 
 
 Claim. 
 
 Interest 
 
 Total. 
 
 Aug. 4 
 
 129M 
 660M 
 416M 
 129M 
 670L 
 129 M 
 129M 
 
 Catherine Cain 
 
 
 S13. 62 
 
 S13. 62 
 
 Sept. 22 
 
 
 $690.00 
 
 690. 00 
 
 Oct. 7 
 
 Lora Rowley 
 
 20.00 
 
 20.00 
 
 Nov. 1 
 
 Catherine Cain 
 
 500. 00 
 
 
 Nov. 23 
 
 Thelma J. Calder •. 
 
 119. 79 
 
 619. 79 
 
 Dec. 9 
 
 Catherine Cain 
 
 20.00 
 20. 00 
 
 
 Dec. 15 
 
 .....do 
 
 
 40.00 
 
 
 Total 
 
 
 
 
 1,230.00 
 
 153. 41 
 
 1, 383. 41 
 
 
 Balance on hand Deo. 31, 1915 
 
 6, 123. 72 
 
 
 Total 
 
 
 
 
 
 6, 507. L3 
 
 
 
 
 
 
 Claim. 
 
 Division. 
 
 Claimant. 
 
 Beneficiary. 
 
 Amount. 
 
 129M 
 
 son 
 
 578 
 47 
 31 
 3 
 
 M.E.Cain 
 
 Catherine Cain . 
 Thelma J. Calde 
 
 
 
 $1 488 21 
 
 6701. 
 
 George Calder 
 
 
 
 1,' 233. 87 
 
 222M 
 
 C. A. HoIme.s 
 
 
 
 
 660M. 
 
 Wm. H. Lowrey 
 
 Alice J. Lowrey 
 LoraE. Rowley 
 
 
 
 515 12 
 
 4J6M 
 
 C. P. Howley 
 
 
 
 1 022 24 
 
 
 Total 
 
 
 
 
 
 
 
 
 
 
 
 Interest at the rate of 4t per cent being allowed on daily balances. 
 
 Mortuary expense fund. 
 
 RECEIPTS. 
 
 Month. 
 
 Admission 
 fees, etc. 
 
 2 per cent 
 
 of net 
 mortuary 
 received. 
 
 Total. 
 
 July 
 
 August 
 
 September 
 
 October 
 
 November 
 
 December 
 
 Balance onliand July 1, 1915 
 
 Total 
 
 Received interest from July 1, 1915, to Dec. 31, 1915 . 
 
 S157.96 
 161. 83 
 154. 92 
 188. 46 
 209.61 
 192. 92 
 
 ?3, 670. 80 
 4,510.37 
 3,685.32 
 3, 718. 03 
 3,618.94 
 3,677.22 
 
 1,065.59 
 
 22,880.68 
 
 Total. 
 
 $3, 828. 75 
 4,672.20 
 3,840.24 
 3,906.49 
 3,828.45 
 3, 870. 14 
 
 63, 768. 86 
 
 87, 715. 13 
 1,370.22 
 
 89,085.35 
 
 DISBURSEMENTS. 
 
 Salaries $9, 355. 45 
 
 Attorneys' fees and legal expenses 2, 059. 03 
 
 Rent 1,662.20 
 
 Depository bonds 1, 166. 67 
 
 Prmtlng 865.30 
 
 Postage, postals, and stamped envelopes 843. 13 
 
 Trustees board meeting 683. 61 
 
 Office supplies and expenses 600. 62 
 
 Auditing 250. 00 
 
 Traveling expenses of president 184. 76 
 
 Telegraph and telephone 146. 63 
 
 National Fraternal Congress of America 119. 00 
 
 Office furniture 76. 50 
 
 Bonds for insurance secretaries .15 
 
 Total 18,012.95 
 
 Balance on hand Dec. 31, 1915 71.072.40 
 
 Total 89,085.35 
 
 On deposit in bank Dec. 31, 1915 69, 539. 62 
 
 Cash on band 1,532.78 
 
 Total 71,072.40 
 
288 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Mortuary eajpense/wnd— Continued. 
 
 DETAIL OF CASH BALANCE. 
 
 Mortuary lund $262,177.56 
 
 Mortuary expense lund (In bank) J69, 639. 62 
 
 Cashonliand 1,532.78 
 
 71,072.40 
 
 Eellel fund (in bank) 27,564.16 
 
 Cash on hand 51. 59 
 
 27,615.75 
 
 Annuity fund 5,123.72 
 
 Surplus mortuary fund '. 451, 250. 87 
 
 Total 817,240.30 
 
 On deposit at: 
 
 The Guardian Savings & Trust Co., Cleveland, Ohio 405, 022. 16 
 
 Southern Bank & Trust Co., Valdosta, Ga 410,633.77 
 
 Total 815,656.93 
 
 Home' office (cash drawer) 1, 584. 37 
 
 Total 817,240.30 
 
 UNPAID PUBLISHED CLAIMS. 
 
 [These were held up, owing to litigation or failure of beneficiary to qualify, but payment of all these has 
 been provided for to Dec. 31. 1915.] 
 
 Claim. 
 
 Division. 
 
 Name. 
 
 Amount. 
 
 286 E 
 
 224 
 
 85 
 286 
 637 
 758 
 570 
 730 
 
 12 
 161 
 448 
 839 
 
 55 
 158 
 676 
 244 
 355 
 
 59 
 186 
 230 
 
 W.E.Hayes 
 
 $732.00 
 
 965 E 
 
 T. W. Harrison 
 
 376.70 
 
 7421 
 
 
 136.37 
 
 999 J 
 
 F.B.Reynolds 
 
 1,500.00 
 
 3 K 
 
 
 1,037.39 
 1,554.45 
 
 154 K 
 
 
 360 K 
 
 
 464.04 
 
 647 K 
 
 John H. Steele . . . 
 
 300.00 
 
 840 L 
 
 
 1,500.00 
 
 79 M 
 
 
 1,500.00 
 
 1014 M 
 
 Charles York . . 
 
 125.00 
 
 96 N 
 
 
 . 599. 20 
 
 271 N 
 
 
 166. 44 
 
 640 M 
 
 Angus C. Low.. 
 
 72.50 
 
 352 N 
 
 Arthur W. Simmons . . . ... 
 
 1,498.00 
 500.00 
 
 357 N 
 
 Alexander Matheson 
 
 434 N 
 
 N. M. Burch 
 
 46.30 
 
 489 N 
 
 C W. Smith 
 
 337. 12 
 
 723 N 
 
 
 1,326.02 
 
 
 Total . 
 
 
 13,771.53 
 
 
 
 Indemnity claim fund. 
 
 RECEIPTS. 
 
 Month. 
 
 Net pre- 
 miums. 
 
 Refund. 
 
 Total. 
 
 July 
 
 August , 
 
 September , 
 
 October ■ , 
 
 November 
 
 December 
 
 Balance on hand July 1, 1915. 
 
 $34,368.08 
 
 814. 52 
 
 12, 044. 12 
 
 39,650.54 
 
 1, 116. 54 
 
 337. 65 
 
 Total 
 
 Interest from July 1, 1915, to Dec. 31, 1915.. 
 
 88,33L43 
 
 Total. 
 
 $250. 00 
 
 20.00 
 
 270.00 
 
 $34,368.06 
 
 1,064.52 
 
 12,044.12 
 
 39,650.54 
 
 1,136.54 
 
 337.65 
 
 55, 113. 85 
 
 143; 715. 28 
 1,625.35 
 
 145,340.63 
 
SOCIAL INSUKANCE AND UNEMPLOYMENT. 
 
 2&9 
 
 Indemnity claim fund — Continued. 
 
 DISBURSEMENTS. 
 
 Month. 
 
 Death 
 claims. 
 
 WeeWy 
 claims. 
 
 Total. 
 
 July 
 
 
 19,473.21 
 
 9. 066. 42 
 11,650.76 
 
 8,285.72 
 7, 254. 02 
 
 9. 827. 43 
 
 59,473.21 
 
 Au^st ... 
 
 83,000.00 
 2,000.00 
 2,960.00 
 6, COO. 00 
 4,000.00 
 
 12, 066. 42 
 
 September 
 
 13,550.76 
 
 October 
 
 11,245.72 
 
 November 
 
 12, 254. 02 
 
 December 
 
 13, 827. 43 
 
 
 
 Total 
 
 16,960.00 
 
 65,457.66 
 
 72,417.56 
 
 
 72,923.07 
 
 
 
 
 
 Total. 
 
 
 
 145.340.63 
 
 
 
 
 
 INDEMNITY CLAIMS PAID. 
 
 No. 
 
 Weekly. 
 
 133-1791 
 
 434 H, advanced . 
 992 G, balance... 
 580 H, balance... 
 909 H, balance... 
 498 H, advanced . 
 39 I, advanced... 
 401, advanced... 
 
 180-2271 
 
 330 E, balance... 
 809 H, balance... 
 857 H, balance... 
 894 G, balance... 
 119 H, advanced . 
 856 H, advanced . 
 
 228-2811 
 
 107 1, advanced . . 
 807 H, advanced. 
 
 943 H, advanced . 
 
 944 H, advanced. 
 282 1, advanced . . 
 
 156A 
 
 903 H, advanced. 
 
 241 1, balance 
 
 107 I, advanced . . 
 
 157 A 
 
 283-3281 
 
 361 H, balance... 
 3291, advanced.. 
 3301, advanced.. 
 
 158 A 
 
 331 1, advanced - . 
 
 ,332-3811 
 
 382 1, advanced . . 
 
 383-3881 
 
 389 1, advanced.. 
 
 390-1001 
 
 39 I, balance 
 
 282 I, balance 
 
 78 H, balance 
 
 434 H, advanced . . 
 401 1, advanced . . . 
 
 4021 
 
 498 H, advanced . . 
 
 403-4041 
 
 8.56 H, advanced.. 
 
 4051 
 
 40 1, advanced 
 
 406-416 1 
 
 417 I, advanced... 
 
 418-4501, 
 
 430 H, balance 
 
 944 H, advanced . . 
 
 451-4621 
 
 463 I, advanced . . . 
 454 1, ad vinced . . . 
 4.1)5 I, advanced... 
 456 1, advanced . . . 
 457 I, advanced... 
 
 $2,000.00 
 
 1,000.00 
 
 84,284.30 
 95.00 
 210. 00 
 230. 00 
 146. 00 
 100. 00 
 
 ' 95. 00 
 125. 00 
 
 3,075.34 
 100. 71 
 310.00 
 35.00 
 150. 00 
 397.86 
 120.00 
 
 2, 810. 72 
 250.00 
 400.00 
 225.00 
 75.00 
 100.00 
 
 600. 00 
 
 20.00 
 
 250. 00 
 
 3,435.70 
 200.00 
 500. 00 
 100.00 
 
 100. 00 
 4,348.,iiS 
 
 130. 00 
 267. 86 
 22.';. 00 
 
 785. 01 
 80.00 
 26. 71 
 
 140. 00 
 
 90.00 
 
 125. 00 
 
 10.71 
 
 175. 00 
 
 231.43 
 
 140. 00 
 
 40. 00 
 
 200. 00 
 
 443. 58 
 
 200. 00 
 
 1,868.60 
 
 130. 00 
 
 56. 00 
 
 904.29 
 
 25.00 
 
 50. 00 
 
 300. 00 
 
 250. 00 
 
 220. 00 
 
 39501—16 19 
 
290 
 
 SOCIAL INSUKANCE AND X7NEMPL0YMBNT. 
 
 'Indemnity claim fund — Continued. , 
 
 INDEMNITY CLAIMS PAID— Continued. 
 
 Date. 
 
 No. 
 
 Death. 
 
 Weekly. 
 
 Total. 
 
 Oct. 1 
 
 458-520 T 
 
 
 $3,959.99 
 
 80.00 
 
 46.71 
 
 350.00 
 
 3,107.16 
 
 300.00 
 
 130. 00 
 
 115.00 
 
 m. 43 
 
 8.57 
 
 
 1 
 
 521 1, advanced . . 
 
 
 
 1 
 
 3'Jl I, halanoe 
 
 
 
 8 
 
 522 I, advanced 
 
 
 
 15 
 
 523-578 1, advanced * . 
 
 
 
 15 
 
 
 
 
 15 
 
 498 H, advanced 
 
 
 $11,245.72 
 
 15 
 
 389 I, balance 
 
 
 
 15 
 
 
 
 
 19 
 
 6791. 
 
 
 
 20 
 
 159 /V . ... . 
 
 $2,000.00 
 
 
 21 
 
 8r 6 H, advanced - ■. . . - 
 
 100.00 
 
 
 23 
 
 160 A. 
 
 960.00 
 
 
 27 
 
 
 22.86 
 40.00 
 220.00 
 2,979.69 
 202.86 
 500.00 
 38.67 
 70.00 
 
 
 Nov. 1 
 
 
 
 
 1 
 
 581 1, advanced 
 
 
 
 1 
 
 582-6281 
 
 
 
 1 
 
 919 G, balance. , 
 
 
 
 1 
 
 417 1, advanced 
 
 
 
 1 
 
 456 T, balance. '-. . 
 
 
 
 1 
 
 
 
 
 6 
 
 161 A 
 
 2,000.00 
 
 
 5 
 
 943 H, advanced 
 
 200.00 
 
 2,102.13 
 
 204.29 
 
 
 16 
 
 629-6721 
 
 
 12,254.02 
 
 16 
 
 
 
 16 
 
 162 A 
 
 1,000.00 
 
 
 18 
 
 
 71.43 
 
 
 19 
 
 163 A 
 
 2,000.00 
 
 
 20 
 
 
 60.00 
 
 100.00 
 
 200. 00 
 
 115.00 
 
 150.00 
 
 3,781.44 
 
 75.00 
 
 119.29 
 
 102.86 
 
 -60.00 
 
 318.45 
 
 60.00 
 
 260.00 
 
 38.57 
 
 14.29 
 
 34.29 
 
 140.00 
 
 200.00 
 
 1,510.71 
 
 340.00 
 
 490.00 
 
 522. 15 
 
 
 23 
 
 856 H, advanced 
 
 
 
 23 
 
 40 1, advanced 
 
 
 
 27 
 
 
 
 
 27 
 
 
 
 
 Deo. 1 
 
 674-729 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 498H, balance 
 
 
 
 
 903 H, balance 
 
 
 
 2 
 
 944 H, advanced 
 
 
 
 2 
 
 
 
 
 2 
 
 731 1 
 
 
 
 6 
 
 
 
 
 6 
 
 7321 
 
 
 
 8 
 
 
 
 
 g 
 
 734 1, advanced. .... 
 
 
 
 16 
 
 
 
 
 15 
 
 807 H, advanced 
 
 
 
 15 
 
 
 
 
 20 
 
 762-776 I 
 
 
 
 20 
 
 
 2,000.00 
 2,000.00 
 
 
 22 
 
 165 A 
 
 
 
 22 
 
 
 400.00 
 75.00 
 
 210.00 
 65.00 
 
 891.09 
 29.29 
 
 100.00 
 
 
 22 
 
 
 
 
 22 
 
 
 
 
 22 
 
 
 
 
 23 
 
 
 
 
 23 
 
 730 1, balance 
 
 
 
 24 
 
 
 
 
 
 
 
 
 
 16,960.00 
 
 55,457.66 
 
 72,417.58 
 
 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 291 
 
 Indemnity claim, fund — Continued. 
 
 INDEMNITY EXPENSE FUND. 
 
 Admission 
 fees, etc. 
 
 5 per cent. 
 
 Total. 
 
 hoe on hand July 1, 1915. 
 
 Received, July 
 
 Received, August 
 
 Received, September 
 
 Received, October 
 
 Received, November 
 
 Received, December 
 
 34.75 
 
 .74 
 
 3.25 
 
 13.70 
 5.00 
 2.47 
 
 $1, 808. 86 
 
 42.87 
 
 633.90 
 
 2,139.50 
 
 58.76 
 
 17.77 
 
 {3,859.31 
 
 1,813.81 
 
 43.61 
 
 637.15 
 
 2, 1.53. 20 
 
 63.76 
 
 20.24 
 
 Total 
 
 Received interest from July 1, 1915, to Deo. 31, 1915. 
 
 29.91 
 
 4,701.66 
 
 8,590.88 
 123.98 
 
 Total. 
 
 8,714.86 
 
 DISBURSEMENTS. 
 
 Salaries $1,756.99 
 
 Depository bond 388. 89 
 
 Rent 332.44 
 
 Printing 210.67 
 
 Auditing 200.00 
 
 , Postage, postals, and .stamped envelopes 145. 98 
 
 OfBce supplies and expenses 41. 50 
 
 Total 3,079.47 
 
 Balance on hand Deo. 31, 1915 5, 636. 39 
 
 Total 8,714.86 
 
 On deposit in bank Dec. 31, 1915 5, 287. 13 
 
 Cash on hand 348.26 
 
 Total.. 
 
 5,635.39 
 
 Detail of cash balance, indemnity insurance, Locomotive Engineers' Mutual Life and 
 Accident Insurance Association, Dec. SI, 1915. 
 
 Indemnity claim fund $72, 923. 07 
 
 Indemnity expense fund (in bank) $5, 287. 13 
 
 Cash on hand 348. 26 
 
 5, 635. 39 
 
 Total 78, 558. 46 
 
 On de_posit at — 
 
 The Guardian Savings & Trust Co., Cleveland, Ohio 78, 210. 20 
 
 Home office (cash drawer) 348. 26 
 
 Total 78, 558. 46 
 
 The State op Ohio, Cuyahoga County, ss: 
 
 I, the above named Charles F. Rahn, being first duly sworn on my oath, say that 
 the foregoing is a full, true, and accurate account and statement of the financial con- 
 dition of the Locomotive Engineers' Mutual Life and Accident Insurance Association, 
 and indemnity department for and during the period beginning July 1, 1915, and end- 
 ing December 31, 1915. 
 
 Charles P. Rahn. 
 
 Sworn to before me by the said Charles F. Rahn, and by him subscribed in my 
 presence, at Cleveland, Ohio, this 17th day of January, A. D., 1916. 
 [seal.] Oscar J. Horn, Notary Public. 
 
292 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Protection Offered by the Pension Association of the Brotherhood of 
 
 Locomotive Engineers. 
 
 facts worth knowing. 
 
 The attention of all members of the B. of L. E. eligible to membership in the pension 
 association is called to this particular feature of the organization. 
 
 Aim and object. — The pension association provides a monthly income for you ^Aen 
 thepay car ceases to come or when you are thrown on the "scrap pile." 
 
 When paid. — If you were in active service at the time you joined the association, 
 when you are permanently disqualified on account of either mental or physical dis- 
 ability, or, having reached the age of 65 years, you voluntarily retire, or are retired 
 by the railroad employing you, you will receive your pension. 
 
 If you were engaged in an occupation other than that of engineer at the time you 
 joined the association, when from mental, physical, or other causes you are unable to 
 perform any kind of remunerative work, or have reached the age of 70 years, you will 
 receive your pension. 
 
 Qualification for membership. — Membership in this association shall be confined 
 exclusively to members of the B. of L. E. who are in good standing at the time of 
 making application and at the time of enrollment as members. Age of applicant to 
 be taken from the B. of L. E. records, and all applications for membership must be 
 accompanied by one month's dues: Provided, however, That after the passage of this 
 law no application will be received for membership in this association &om any 
 applicant who shall have reached the age of 60 years: And be it further provided, , 
 That on and after June 30, 1916, no application will be received for membership in 
 this association from applicants who have reached the age of 50 years. 
 
 Only members of the B. of L. E. who are in active service as defined by the statutes 
 of the B. of L. E. or firemen or hostlers who are members of the B. of L. E., who are 
 in active service as firemen or hostlers, or other members of the B. of L.*E. who are 
 engaged in other remunerative occupations and are earning at least $60 per month, 
 are eligible to membership in this association. Firemen and hostlers who are eligible 
 to membership in this association and elect to become members shall be considered 
 as being in active service as herein defined. 
 
 Coat of membership. — ^AU active members of the association under the age of 30 
 years shall pay 50 cents per month. 
 
 All active members from the age of 30 to 35 years shall pay $1 per month. 
 
 All active members from the age of 35 to 40 years shall pay $1.50 per month. 
 
 All active members from the age of 40 to 45 years shall pay 12 per month. 
 
 All active members from the age of 45 to 50 years shall pay $2.50 per month. 
 
 All active members from the age of 50 to 55 years shall pay $3 per month. 
 
 All active members from the age of 55 to 60 years shall pay $3.50 per month. 
 
 All active members from the age of 60 to 65 years shall pay $4 per month. 
 
 All active members over the age of 65 years shall pay $4.50 per month. 
 
 Any member of this association who has been declared a pensioner by the board of 
 governors, who shall have paid dues for 60 months or less, shall receive a pension from 
 this association for the remainder of his Hfe of $25 per month. 
 
 Those paying dues for 61 months to 120 months, $30 per month. 
 
 Those paying dues for 121 months to 180 months, $35 per month. 
 
 Those paying dues for 181 months to 240 months, $40 per months. 
 
 Those paying dues for 241 months to 300 months, $45 per month. 
 
 Those paying dues for 301 months to 360 months, $50 per month. 
 
 Those paying dues for 361 months to 420 months, $55 per month. 
 
 Thos paying du.es for 421 months to 480 months, $60 per month. 
 
 Those paying dues for over 480 months, $65 per month. 
 
 Why you should join. — Did you ever stop to think that all you have to sell is your 
 labor, and when the time comes when you have no more labor to sell the railroad 
 company will not want you? Do you realize that when that day arrives the pay car 
 will cease to bring you your monthly check that you have been receiving all these 
 years? Rent and living expenses go on the same as before. How will you meet 
 them? Have you saved enough money to care for you in your old age? If not, don't 
 you think it would be a mighty good investment to join the pension association now 
 and provide for yourself and those dependent on you, instead of waiting until it is 
 too late and then trying to Uve on the cold charity of the world? Think it over. 
 
 Why the B. of L. E. pension is best. — ^You get exactly what you pay for and are not 
 depending on the good will of some official to say whether or not you get it and what 
 the amount shall be; neither are you in danger of having it cut oft at any time when 
 
SOCIAL INSUEANOE AND UNEMPLOYMENT. 293 
 
 you may not be willing to do something the company wants you to do. For example: 
 One railroad had a strike of conductors and trainmen. Under penalty of losing their 
 pensions, old, white-haired members of the B. of L. E. were forced to act as strike- 
 breakers. When the B. of L. E. had the concerted wage movement in 1912 and affairs 
 had almost reached a crisis, retired members of the B. of L. E. were sent for and- 
 notified to hold themselves in readiness to act as strikebreakers "under penalty of 
 haying their pensions cut off." What will become of your railroad pension if you 
 make a mistake and get discharged, and are beyond the age limit? Why, you lose it.. 
 Not so with the B. of L. E. pension; it is sure. 
 
 A young man's pension. — Many members are of the opinion that the pension 
 is for old men. Nothing is further from the true facts. Take the case of a young 
 engineer under 30 years of age. By an investment of 50 cents per month, should 
 anything happen to him so he is disquaUfied from earning a living at his chosen pro- 
 fession (locomotive engineer), there may be 30 or 40 dreary years ahead of him to 
 Uve, but he is guaranteed a pension for life — certainly a good investment. 
 
 Age limit. — ^Already by action of the association no member of the B. of L. E. be- 
 yond the age of 60 years can become a member of the pension association. After 
 June 30, 1916, no application will be received from applicants over 50 years of age. 
 Better get into clear. Don't be found asleep at the switch and let the pension get 
 by you. You will be sorry only once, and mat will be always. There is only one 
 time to do anything, and that is now. 
 Yours, fraternally, 
 
 , W. S. Stone, President. 
 
 W. E. FuTCH, Vice President. 
 
 Wm. B. Pebnteh, Secretary-Treasurer 
 
 Locomotive Engineers, 
 Mutual Life and Accident Insurance Association, 
 
 Cleveland, Ohio, April 1, 1916. 
 
 Monthly statement. 
 
 Total number of claims levied Apr. 1, 1916 98 
 
 Official numbers, 1068, 1069, 1070, 1071, 1072, levied Apr. 1, 1916. 
 
 Total amotmt of assessments levied Apr. 1, 1916 $213, 000 
 
 Deaths, 77 $163, 500 
 
 Killed, 16 36, 000 
 
 BUnd, 1 1, 500 
 
 Disability, 1 3, 000 
 
 Drowned, 2 6, 000 
 
 Suicide, 1 3, 000 
 
 Total (98) 213, 000 
 
 Amount paid in claims from 1868 to Apr. 1, 1916 $33, 348, 267. 44 
 
 Total amount of Insurance in force Apr. 1, 1916 $144, 828, 750 
 
 Total membership Feb. 29, 1916 68, 399 
 
 Increase for March, 1916 123- 
 
 Total membership Mar. 31, 1916 68,522 
 
 W. E. Putch, 
 
 President. 
 0. E. Richards, 
 General Secretary- Treasurer. 
 
294 
 
 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Locomotive Engineers Mutual Life and Accident Insurance Association. Monthly 
 report of indemnity insurance. 
 
 [Cleveland, OUo, Apr. 1, 1916.] 
 
 Member- 
 ship. 
 
 Principal sum. 
 
 Weekly in- 
 demmty. 
 
 Total members Feb. 29, 1916.. 
 
 INCKEASE FOB MARCH. 
 
 Amount of insurance: ~ Carried. 
 
 tl,000 J5.00 
 
 1,000 7.50 
 
 1,000 10.00 
 
 1,000 12.50 
 
 1,000 15.00 
 
 1,000 20.00 
 
 1,000 30.00 
 
 1,500 7.50 
 
 1,600 10.00 
 
 1,500 12.60 
 
 1,500 15.00 
 
 1,600 20.00 
 
 1,500 30.00 
 
 2,000 10.00 
 
 2,000 12.50 
 
 2,000 16.00 
 
 2,000 20.00 
 
 2,000 30.00 
 
 5.00 
 7.50 
 10.00 
 12.50 
 15.00 
 20.00 
 30.00 
 
 Lapses and deaths. 
 Net increase.. 
 
 Total membership Feb. 29, 1916.. 
 Increase for March 
 
 Total membership Mar. 31, 1916 
 
 Total amount of insurance in force Mar. 31, 1916. . 
 
 Death claims paid to Feb. 29, 1916 
 
 Death claims paid in March 
 
 Total amount of death claims paid.. 
 
 Weekly indemnity claims paid to Feb. 29, 1916. 
 Weekly indemnity claims paid in March 
 
 Total amount of weekly indemnity claims paid 
 
 Total amount of death and weekly indemnity claims 
 paid 
 
 7,555 
 
 172 
 51 
 
 7,655 
 121 
 
 7,676 
 
 88,876,000.00 
 
 167 
 
 170 
 
 8,954 
 127 
 
 9,081 
 
 5,000.00 
 
 21,000.00 
 6,000.00 
 2,000.00 
 
 1,600.00 
 1,500.00 
 1,500.00 
 6,000.00 
 
 26,000.00 
 2,000.00 
 20,000.00 
 112,000.00 
 60,000.00 
 
 9,130,500.00 
 42,500.00 
 
 ■ 9,088,000.00 
 
 1135,542.50 
 
 50.00 
 
 316.00 
 120.00 
 60.00 
 
 10.00 
 12.50 
 16.00 
 80.00 
 
 130.00 
 12.50 
 160.00 
 1, 120. 00 
 750.00 
 
 30.00 
 12.60 
 60.00 
 260.00 
 160.00 
 
 138,880.00 
 885.00 
 
 137,995.00 
 
 9,225,995.00 
 
 1290,732.14 
 5,000.00 
 
 296,732.14 
 
 295,732.14 
 
 756,747.35. 
 12,466.82 
 
 769,214.17 
 
 769,214.17 
 
 1,064,946.31 
 
 W. E. FuTOH, President. 
 
 C. E. BiCHABDS, General Secretary Treasurer. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 295 
 
 Members placed on B. of L. E. Insurance Association Relief Fund during March. 
 
 Name. 
 
 Claim 
 number. 
 
 Division 
 number. 
 
 W.L.Mark 
 
 676 
 677 
 678 
 679 
 680 
 
 172 
 
 E.W. Church.... 
 
 398 
 
 J. C. Barnes 
 
 47 
 
 John Hunt 
 
 30 
 
 John M. Blaney . 
 
 72 
 
 
 
 Total number o£ men placed on relief fund to Mar. 1, 1916 675 
 
 Claims previously discontinued: 
 
 Because of death 222 
 
 Because of blindness 7 
 
 Because expired 155 
 
 Because withdrawn 16 
 
 Because of benefits discontinued 90 
 
 During March: 
 
 Because expired 4 . 
 
 Because benefits discontinued 2. 
 
 490 
 
 6 496 
 
 Number of members placed on Apr. 1,1916. 
 
 179 
 5 
 
 Total number of members on relief fund Apr. 1, 1916 184 
 
 W. E. FUTCH, President. 
 
 C. E. KiCHARDS, General Secretary TreoffU/rer, 
 
 BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENQINEMBN. 
 
 The Brotherhood of Locomotive Firemen and Enginemen maintains its own insur- 
 ance department. Each member carries insurance, varying from |500 to $4,500, the 
 premium for insurance being 55 cents per month for each |500. The insurance is 
 paid to members of the family of the insured in case of death, and to the member in 
 case of disability, such as for the loss of one hand or both hands, one eye or both eyes, 
 Bright's disease, permanent paralysis of either extremity, locomotor ataxia, valvular 
 disease of the heart, and consumption of the lungs in its last stages. If the examining 
 physician finds that a change of climate vrould be beneficial to a member afflicted with 
 consumption, the member is paid $50 per month until recovery or death. 
 
 There was paid out during the month of December for death and disability claims 
 $91,528.50. There is paid to the Home for Aged and Disabled Railroad Employees, at 
 Highland Park, 111., the sum of $100,000 per year. 
 
 The organization also maintains a funeral-expense fund to pay the burial and funeral 
 expenses of beneficiary members. The sum paid out under this fund amounted to 
 $2,914.31 in the month of December, 1915. 
 
 No agents are paid to collect insurance premiums, the members taking care of the 
 funds the same as in all other branches of the brotherhood. 
 
 The following shows the amounts paid on account of death and disability (exclusive 
 of consumption allowances), and the amount received from members whose claims 
 have been paid, for the past three years: 
 
 Death. 
 
 DisabiUty. 
 
 Total. 
 
 1913. 
 
 Paid in claims 
 
 Amounts received 
 
 1914. 
 
 Paid in claims 
 
 Amounts received 
 
 1915. 
 
 Paid in claims 
 
 Amounts received 
 
 TOTAL FOR THREE TEAKS. 
 
 Paid in claims. 
 
 Amounts received 
 
 $802,862.25 
 80,740. 60 
 
 743,300.75 
 81, 730. 05 
 
 667,249.55 
 85,548.50 
 
 2,213,412.55 
 248,019.15 
 
 $217,750.00 
 22,806.80 
 
 219,500.00 
 26,862.60 
 
 216,725.00 
 25,006.60 
 
 663,975.00 
 74,676.00 
 
 $1,020,612.25 
 103,647.40 
 
 962,800.75 
 108,592.65 
 
 883,974.55 
 110, 556. 10 
 
 2,867,387.65 
 322,696.15 
 
296 SOCIAL INSXJEANCE AND UNEMPLOYMENT. 
 
 BROTHERHOOD Ol? RAILROAD TRAINMEN. 
 
 Within a few months after the organization of the Brotherhood of Baihoad Trainmen, 
 September 23, 1883, a mutual optional fraternal plan of insurance was adopted. Since 
 that time, and in the light of experience gained in the workings of various changes 
 which have been adopted, the plan has been developed to make it liberal and to give 
 the maximum return to the members commensurate to the amounts paid in. For the 
 past 20 years, it has been compulsory, and any person joining the brotherhood must 
 elect wMch class of insurance he will carry. 
 
 The classes of insurance are: A, $550; B, $1,100; 0, $1,500; D, $2,000. 
 
 The assessments per member, payable monthly, for the respective classes are: A, 75 
 cents; B, $1.50; 0, $2; and D, $3. The law permits the levying of additional assess- 
 ments when the receipts from members in any class are inadequate to meet the lia- 
 bilities on account of members in that class. It has been necessary to apply this pro- 
 vision of the law but twice. 
 
 In addition to the foregoing, a certificate for class A, $550, is issued to members who 
 aie ineligible to carry death and disability benefits. This applies where a member 
 has received the benefits of the insurance and is paid for disability or death. 
 
 Insurance to the amount fixed in the respective class is paid for any of the following 
 causes: Death from any cause, loss of a Hmb, consumption, paralysis, loss of speech, 
 loss of eyesight, the partial loss of a limb, ankylosis of a Umb, and in fact any disease 
 or disability permanent in character and which, incapacitates the member from per- 
 forming the duties of a railroad trainman, and also upon reaching the age of 70 years. 
 
 The liabilities on account of benefit certificates is $185,000,000. The assets on 
 March 31, 1916, were $2,167,466. The organization has paid from the beneficiary 
 fund to March 31, 1916, $28,833,132. 
 
 About 47 per cent of the amount paid was on account of casualties on the railroads, 
 resulting in death or permanent total disability. About 43 per cent was paid on ac- 
 count of death, disabilities, and old age. 
 
 During the past three years there has been in operation a funeral benefit fund in 
 which all members who have received their benefit claims must participate. The 
 certificate is payable at death and amounts to $150, the cost per member being 25 cents 
 per month. There Jias been disbursed from this fund $51,919. 
 
 Each subordinate lodge has its own local arrangement for the payment of sick and 
 accident benefits, the amounts paid ranging from $3 to $7 a week. While there is not 
 in force an out-of-work benefit, yet the local lodges do a great deal in the way of taking 
 care of the unemployed, by helping members along who are seeking work, frequently 
 paying house rent, furnishing food and clothing, and caring for the families of men 
 out of employment. It is estimated that as much as $35,000,000 has been paid by th'e 
 members in this way. 
 
 HOME FOR AGED AND DISABLED RAILROAD EMPLOYEES. 
 
 The Brotherhood of Locomotive Engineers, Brotherhood of Locomotive Firemen 
 and Enginemen, Order of Railway Conductors, Brotherhood of Railroad Trainmen, 
 and the ladies' auxiliary organizations of the brotherhoods maintain at Highland 
 Park, 111., a Home for Aged and Disabled Railroad Employees. There is attached 
 a copy of the by-laws, rules and regulations of this society. 
 
 As shown thereby, this institution was organized May 28, 1890, and its object is 
 to provide a home for worthy, aged and disabled, helpless and destitute railroad men 
 who are no longer able to provide for themselves; and to aid such who by accident 
 or from other causes are permanently incapacitated for railroad work. 
 
 The society owns its own buildings and is very well situated in the suburbs of 
 Chicago. The Brotherhood of Locomotive Engineers, the Brotherhood of Railroad 
 Trainmen, and the Brotherhood of Locomotive Firemen and Enginemen have approved 
 the plan by which the brotherhoods are to take over the home and assume all of the 
 obligations. These organizations each donated outright $15,000 as a building fund, 
 with the understanding that after the overhead charges were met the cost per capita 
 would be met by the brotherhoods in proportion to the number of members cared for 
 in the home. The Order of Railway Conductors has not adopted this plan, but con- 
 tributes to the maintenance of the home. 
 
SOCIAL INSUEANCE AND UNEMPLOYMEKT. 297 
 
 The report of the board o£ truBtees of the home tor the year ended December 31, 
 1915, shows the following: 
 
 Balance on hand Jan. 1, 1915 117, 979. 79 
 
 Receipts 37,809.90 
 
 Interest 549. 38 
 
 Total income and balance 56, 339. 02 
 
 Expenditures 35, 858. 95 
 
 Balance on hand Jan. 1, 1916 20, 480. 07 
 
 The income, other than interest, was from the following sources: 
 
 Brotherhood of Locomotive Engineers Ill, 312. 69 
 
 Order of Railway Conductors 3, 341. 82 
 
 Brotherhood of Railroad Trainmen 12, 801. 71 
 
 Brotherhood of Locomotive F. and E 7, 283. 45 
 
 G. I. A. andB. of L. E. 1,194.65 
 
 B. L. E., local divisions 12. 00 
 
 O. p.. C, local divisions 78. 00 
 
 B. R. T., local lodges 489. 65 
 
 Ladies' society lodges: 
 
 B. of L. E 33.50 
 
 B. of L. F. and E 17. 80 
 
 O. R. 61. 90 
 
 B. of R. T 25. 00 
 
 Miscellaneous 717. 98 
 
 Return funeral expenses paid 439. 75 
 
 Total 37, 809. 90 
 
 There is also attached a tabulated statement of the receipts and disbursements 
 by the home during its existsnce. 
 
 Also a record of inmates in the home from date of its organization, according to the 
 organization of which they were members. 
 
 By-Laws, Rules, and Regulations of the Home for Aged and Disabled Rail- 
 road Employees of America of Highland Park, III. 
 
 [Organized May 28, 1890. Incorporated Aug. 19, 1904.] 
 
 By-Laws. 
 
 Article I. — Name. 
 
 Section 1. The name by which this society shall be known in law is "The Home 
 for Aged and Disabled Railroad Employees of America." 
 
 Article II. — Object. 
 
 Section 1. The object of this society is to provide a home for worthy aged and 
 disabled, helpless and destitute railroad men who are no longer able to provide for 
 themselves, and to aid such who, by accident or from other causes, are permanently 
 incapacitated for railroad work, and in this practical way exemplifying true brotherly 
 principles; and to acquire and hold real and personal property for the use and benefit 
 of this society. 
 
 Article III. — Seal. 
 
 Section 1. The society shall have an official seal, bearing the name of this society, 
 which shall be affixed to all official documents issued by and under the authority of 
 this society. 
 
 Article IV. — MembersMp. 
 
 Section 1. This society shall consist of three classes of members, viz, honorary 
 members, associate members, and active members, provided that honorary and 
 associate members shall have no vote at the meetings of the society. 
 
298 SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 Sec. 2. Any person may become an honorary member who shall contribute the 
 sum of 1100 to the society, and he shall not be liable for further dues or assessments. 
 
 Sec. 3. Any person may become an associate member who shall pay an admission 
 fee of $1 and annual dues of $1 after the first year of membership. 
 
 Sec. 4. The active members of this society shall consist of three members from 
 each of the following railroad organizations described in these by-laws as brother- 
 hoods, and the ladies' auxiliaries of said brotherhoods, described in these by-laws as 
 auxiliaries, one of which members shall be the chief executive officer of each of said 
 railroad organizations and auxiliaries, and the other two members shall be selected 
 from the members of each of said railroad organizations and auxiliaries by said chief 
 executive officer, said railroad organizations and ladies' auxiliaries being as follows: 
 
 The Order of Railway Conductors. 
 
 The Brotherhood of Locomotive. Engineers. 
 
 The Brotherhood of Locomotive Firemen and Enginemen. 
 
 The Brotherhood of Railroad Trainmen. 
 
 The Ladies' Auxiliary to the Brotherhood of Railroad Trainmen. 
 
 The Ladies' Society of the Brotherhood of Locomotive Firemen and Enginemen. 
 
 The Grand International Auxiliary to the Brotherhood of Locomotive Engineers. 
 
 The Ladies' Auxiliary to the Order of Railway Conductors. 
 
 Provided the number of brotherhoods and auxiUaries entitled to participate in 'the 
 active membership of this society, as above set forth, may be increased or diminished 
 at any annual meeting of this society. 
 
 Sec 5. In case the chief executive officer of any of said brotherhoods or auxiliaries 
 refuses to become an active member of this society, or refuses or neglects to appoint 
 ' members of said brotherhoods and auxiliaries to act as members of this society, the 
 active members of this society shall fill such vacancy at its annual meeting, or any 
 adjourned meeting thereof, by selecting active members from said brotherhoods or 
 auxiliaries as the case may be. 
 
 Sec 6. The active members of this society shall be the only members of the society 
 entitled to vote at the meetings of the society. They can take part and vote in person 
 or by persons designated by the chief executive officers of their organizations to rep- 
 resent them at the meetings of the society. 
 
 Sec. 7. The active members of this society shall be fully authorized to execute all 
 powers of this society over all its estate and property, shall have charge of the funds 
 of this society, eliect all officers of the society and members of the board of trustees, 
 and determine the compensation to be paid them, and transact the entire business of 
 the society. The active members of this society shall not be liable to pay any dues 
 or assessments and may be reimbursed for their necessary travehng expenses if such 
 is not otherwise provided by their organizations. 
 
 Article V. — Annual and special meetings. 
 
 Section 1. The annual meeting of this society shall be held on the second Tuesday 
 of April in each year at the home of the society in Highland Park, Lake County, 111. 
 
 Sec 2. In case of failure to hold the annual meeting on the date specified, a special 
 meeting shall be called for that purpose, and all officers and trustees whose term of 
 service may have expired because of such failure shall retain their offices until their 
 successors are elected. 
 
 Sec. 3. Special meetings of the society may be called by the president, or in case 
 of his absence or inability to act, by the vice president or second vice president, or 
 on request of five members of the society, or by the board of trustees; but when spe- 
 cial meetings are called, five days' notice of the time and place of the meeting and 
 the subject proposed to be considered shall be given to the active members, and no 
 no other subject shall be acted upon at such meeting unless there be at least six mem- 
 bers present, and then only by unanimoU8_ consent. 
 
 Sec. 4. At any annual or special meeting of this society no less than six active 
 members shall constitute a quorum. 
 
 Article VI. — Officers. 
 
 Section 1. The officers of this society shall consist of a president, vice president, 
 second vice president, secretary and treasurer, and a board of trustees of four mem- 
 bers, who shall be elected annually by the society from its members. 
 
 Sec 2. None but an active member of this society shall be eligible to election as 
 an officer hereof, except by unanimous consent of the meeting at which the election 
 is held. 
 
SOCIAL INSTJEANCE AND UNEMPLOYMENT. 299 
 
 Sec. 3. Such persons as may give valuable assistance or render signal service to 
 the home may be elected honorary trustees on the board of trustees. Honorary trus- 
 tees may attend meetings of the board of trustees and meetings .of the society in an 
 honorary and advisory capacity. 
 
 Sbc. 4. If any officer of this society shall become inattentive to his duties or other- 
 wise fail to properly serve as such, he may be notified to show cause why his office 
 should not be declared vacant. Such notification shall lie with not less than six 
 members of the society, who shall file specific charges against the accused with the 
 secretary and treasurer or the board of trustees. Either or both shall, within 10 days, 
 transmit the charges to the accused, and he shall be heard and judged by a regular 
 meeting of the society or a special meeting thereof called for the purpose. In the 
 event of failure to show good and sufficient cause, the office shall be declared vacant, 
 and an election had at once to fill the vacancy thus created. A majority vote of the 
 members present shall decide whether excuses offered are sufficient to excuse the 
 officer for the neglect charged. 
 
 Article VII. — Duties of president and vice president. 
 
 Section 1. It shall be the duty of the president to devote as much of his time to 
 the interest of the society as possible; he shall preside at the sessions of the society 
 and perform such other duties as. usually fall to the office of president. 
 
 Sec. 2. It shall be the duty of the vice president to assist the president in the dis- 
 charge of his duties as presiding officer at meetings of the society, and during the 
 absence of the president he shall be the presiding officer, and in case of death, resig- 
 nation, or removal of the president he shall discharge the duties and assume the 
 responsibilities of the office of president. 
 
 Sec. 3. The second vice president shall, in the absence or inability to act of the 
 president and vice president, assume the duties and prerogatives of the president. 
 
 Article VIII. — Duties of secretary and treasurer. 
 
 Section 1. It shall be the duty of the secretary and treasurer to act as manager of 
 the home, to keep a true and correct record of all the proceedings of the society; to 
 prepare, sapi, and seal all certificates of membership and important documents issued 
 by the society, to receive all revenues and make all disbursements in connection with 
 the home as provided by these by-laws, to keep a correct account of all moneys received 
 and disbursed by him and make a monthly report through the columns of the several 
 magazines or journals published by the railroad brotherhoods, of all moneys received 
 from the several sources and for what purpose; also the financial standing of the 
 society at the end of each quarter; he snail make all arrangements for the meetings 
 of the society and the board of trustees and attend the same with all necessary books 
 and papers; he shall, before assuming his duties as secretary and treasurer, execute 
 a bond each year to the amount determined by the board of trustees for the faithful 
 performance of his duties. 
 
 Sec. 2. At each annual meeting of the society he shall submit a complete report of 
 the receipts and expenditures during the previous year classified in such manner as 
 the board of trustees may direct; the state of various funds of the society; the number 
 of inmates in the home; the number of deaths, and those then being cared for, together 
 with applications on file, expulsions and cause thereof, and give information of any 
 nature relating to the objects of the society which may be of interest and importance. 
 When a death or expulsion occurs he must immediately notify the division or lodge 
 to which the inmate belonged. 
 
 Sec. 3. He shall superintend and manage the home and pay all bills which shall be 
 presented and audited by the trustees in conformity with these by-laws; he shall 
 receive applications subject to the by-laws and rules of the society and home. 
 
 SbC. 4. The secretary and treasurer shall employ such help as necessary to properly 
 care for the home subject to the approval of the board of trustees. He shall receive 
 such compensation for his services as the board of trustees may determine. 
 
 Sec 5. The secretary and treasurer shall send to all active members a report of all 
 business transacted at each annual meeting, in circular form. 
 
 Article IX. — Duties of board of trustees. 
 
 Section 1. The board of trustees shall have the control and management of the 
 affairs and funds of the society. No expenditures for permanent improvements shall 
 be made without their authority, and no one shall be admitted to the home without 
 their approval. 
 
300 SOCIAL INSUBANCE AND UNEMPLOYMENT. 
 
 Sec. 2. It shall be the duty of the board of trustees to audit the books and accounts 
 of the society and of the secretary and treasurer at least once in three months, and 
 they may employ an expert accountant if they deem if necessary, and to fix the 
 amount of, and have the custody of the bond of the secretary and treasurer, and if 
 approved each trustee shall indorse the same with his signature before it is accepted 
 and placed on file. 
 
 Sec. 3. It shall be the duty of the board of trustees to transmit a full report of the 
 condition of the books of the officers to the active members of the society previous to 
 the annual meeting. 
 
 Sec. 4. The board of trustees shall have the power when authorized by the society 
 to acquire and dispose of real and personal property of the home, but no authority 
 granted under this section will empower the board of trustees to dispose of any such 
 property in any way as to limit the operation or interfere with the welfare of the 
 home. When authorized by this society the board of trustees shall have the power to 
 borrow money for the purpose of carrying out the aims and objects of the society and 
 to pledge the real and personal property of the society as security for the payment 
 of the money so borrowed; and said board shall have the authority to sign the name of 
 this society to any evidence of indebtedness or of security when the same has been 
 authorized by this society. 
 
 Sec. 5. The board of trustees shall constitute a board of visitors and one of their 
 number shall personally visit the home as often as once a month. 
 
 Sec. 6. The first regular meeting of the board of trustees shall be held immediately 
 after the adjournment of each regular annual meeting of the society. They shall 
 organize by electing a chairman and secretary who shall serve for the ensuing year. 
 The board shall meet quarterly to transact such business as may be necessary. The 
 date of each quarterly meeting shall be fixed by the chairman and notice of such 
 shall be sent to each member of the board within a reasonable time, to insure attend- 
 ance. 
 
 Special meetings may be called at any time by the chairman of the board president, 
 of the society, or any two members of the board by giving five days' notice. Two 
 members shall constitute a quorum. 
 
 Sec. 7. The board of trustees shall have the power to fill any vacancy in the board 
 until the next annual or special meeting of the society. 
 
 Sec. 8. The board of trustees shall have control of the home and its inmates and 
 make all rules and regulations in regard to the management of the home and its in- 
 mates, and shall hear and determine all charges made against any member for violation 
 of the rules and other misconduct and prescribe penalties therefor. 
 
 Article X. — Fiscal year. 
 
 Section 1. The fiscal year of this society shall begin on the 1st day of January and 
 terminate on the 31st day of December. 
 
 Article XI. — Funds. 
 
 Section 1. The secretary and treasurer shall place all funds of the society in the 
 depository or depositories selected by the board of trustees and himself to the credit 
 of the Home for Aged and Disabled Railroad Employees of America, and shall keep 
 a correct record of the receipts and disbursements of each fund. The board of trustees 
 and the secretary and treasurer may invest or deposit the funds in excess of current 
 expenses to the best advantage and to the credit of the home. The secretary and treas- 
 urer shall be the custodian of the certificates or other evidence of deposit or invest- 
 ment. Extension and depreciation reserve funds so deposited or invested shall not 
 be withdrawn except by approval of the board of trustees and the secretary and 
 treasurer. 
 
 Sec 2. The board of trustees shall appoint one of their number whose duty it shall 
 be to countersign all checks for disbursements approved by him subject to the audit 
 of the board in session, and all checks, etc., shall be signed by both said trustee and 
 the secretary and treasurer;- otherwise they shall be invahd. The secretary and 
 treasurer shall be held responsible for all disbursements. 
 
 Sec 3. The society shall establish and maintain the following-named funds, which 
 shall be used exclusively for the purpose for which they have been created : General 
 maintenance fund; extension fund; depreciation reserve funds; and special bequest 
 funds. 
 
 Sec 4. The general maintenance fund shall be established in adequate sum safely 
 to provide for meeting the expense of maintaining the home for three months or other 
 period that may be decided upon by the board of trustees to conform to the periods 
 of reimbursement by the supporting organizations. 
 
SOCIAL INSITKAlSrCE AND UNEMPLOYMENT. 301 
 
 Sec. 5. Receipts from all sources other than those named in section 4 of this article 
 shall become part of the extension fund (except the furniture depreciation reserve 
 fund referred to in sec. 6), which shall be established to provide for permanent im- 
 provements, additions, and extensions of the facilities of the home as its needs may 
 grow. All appropriations from this fund shall be subject to the approval of the home 
 society. 
 
 _ Sec. 6. The secretary and treasurer, with the consent of the supporting organiza- 
 tions, shall charge to them as a part of the regular maintenance of the home on an agreed 
 proportionate basis, quarterly or otherwise as bills may be rendered for such mainte- 
 nance expenses, an amount for depreciation of the buildings and furnishings of the 
 home, which for the book value of the buildings shall equal one-quarter of 2 per cent 
 quarterly and for the book value of the furnisliings oiie-quarter of 10 per cent quar- 
 terly, and shall credit said amounts, the first to building depreciation reserve fund 
 and the second to furniture depreciation reserve fimd, respectively. Appropria- 
 tions shall be made from the building depreciation reserve by the home society to be 
 used solely to provide permanent improvements, additions, and extensions of the home 
 as its needs may grow. 
 
 Sec. 7. The home society shall be empowered to receive bequests, foundations, and 
 endowments, provided the specified purposes of the donor thereof shall be wirhin 
 the purpose and limitations of the home, and there shall be carried on the books of 
 the home such fund accounts as may be necessary to secure that the income from all 
 bequests, foundations, and endowments is applied for the purposes for which donated, 
 and subject to the approval of the home society, or otherwise except only with the con- 
 sent of the heirs, executors, administrators, assigns, or other legal representatives of 
 the donors. 
 
 Article XII. — Admission of inmates. 
 
 Section 1. Any person desiring admittance to the Home for Aged and Disabled 
 Railroad Employees of America must make application to the proper officer of his 
 lodge or division, who will apply to the secretary of this society for an application 
 blank. Applicant's declaration shall be made and signed by the applicant in the 
 spaces provided therefor and sworn to before a notary public or qualified judicial 
 ofiicer. A certificate of examining physician as to applicant's physical and mental 
 condition shall be appended in form and detail satisfactory to the management of 
 the home, together wtih a certificate under seal by the subordinate lodge or division 
 of which the applicant is a member as to his standing and other requirements of these 
 by-laws. The application shall then be forwarded by the lodge or division to the chief 
 executive officer of the organization, who shall certify as to the standing in that organ- 
 ization and eligibility for admission of the applicant. The application shall then be 
 forwarded to the manager of the home and by him forwarded to the board of trustees 
 for approval or disapproval. If approved, notice will be returned to the lodge or divi- 
 sion and then the applicant will be admitted, but the society reserves the right of 
 rejecting or expelling any inmate at any time for cause. All applications for admis- 
 sion, together with all the papers relating thereto, must have the approval of the 
 board of trustees before applicant is admitted. 
 
 Sec. 2. No insane or dangerous person, or persons afflicted with any contagious or 
 infectious disease or addicted to the use of liquor will be admitted to the home. 
 
 Sec. 3. No person not eligible to the insurance department of any of the brother- 
 hoods will be accepted as an inmate of the home unless it is shown by the records of 
 his grand lodge or division that he has been a continuous member of the brotherhood 
 from the date of his disability to the date of his application to the home. 
 
 Sec 4. No person otherwise eligible will be admitted to the home if suffering from 
 a disabling incurable affliction or a progressive disease which is liable to result in death 
 within a reasonably short time after admission to the home, or which requires at time 
 ofadmission or is liable to require shortly thereafter continuous hospital treatment or 
 other constant medical attention. 
 
 Sec. 5. Any appeal from a decision of the board denying admission under this 
 article shall be made to the society at its next meeting, notice of such appeal to be 
 giyen to the secretary and treasurer within 30 days after date of decision of the board. 
 
 Article XIII. 
 
 Section 1. The lodge or division sending an inmate to the home must keep him 
 in good standing with his grand and local lodge or division, and in case of his death 
 while in the home, see that the home is relieved of all burial expenses. 
 
302 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Aeticle XIV. 
 
 Section 1. It shall be unlawful for the home society to indorse any article of 
 merchandise. 
 
 Article "XY.— Dissolution. 
 
 Section!. No distribution of the property of this society shall be made until all 
 debts are fully paid and then only upon its final dissolution and surrender of its 
 organization and name; nor shall any distribution be made except by a vote of a 
 majority of the active members. In such case all the property of this society remain- 
 ing after the payment of its debts, shall be divided among the several brotherhoods 
 and auxiliaries set forth in section 4 of Article IV of these by-laws in proportion as 
 the several organizations have contributed to this society and are entitled to mem- 
 bership. 
 
 Article XVI. — Rules of order. 
 
 The rules of order for the government of the deliberations of this society shall be as 
 laid down in Roberts's Rules of Order. 
 
 Article XVII. — Order of business. 
 
 The order of business at meetings of this society shall be: Roll call of officers and 
 members; reading of minutes of previous meeting; appointment of committees; 
 reports of officers; reports of committees; unfinished business; communications; 
 resolutions and motions; new business; nomination and election of officers; general 
 debate; closing. 
 
 Article XVIII. — Amendments. 
 
 These by-laws may be modified, altered, or amended at any annual meeting of the 
 society or at an adjourned meeting thereof. 
 
 Rules. 
 
 No. 1. Persons admitted into this home will be fed with plain but wholesome 
 food; clothed with plain but decent apparel; and lodged in a plain but safe manner. 
 Due regard shall be paid to their health, comfort, and happiness, and to this end 
 their persons, clothing, and apartments shall be kept clean. 
 
 No. 2. Every inmate of this institution shall make himself useful in every way 
 consistent with his physical condition and cheerfully cooperate with the management 
 in the performance of such duties as may be assigned to him. The manager to be the 
 judge of the physical condition of the inmate. 
 
 No. 3. Every inmate is required to keep his bed and room neat and tidy when his 
 physical condition will permit, attending to it the first thing in the morning after a 
 thorough airing. 
 
 No. 4. The manager shall have authority to regulate the internal affairs of the home, 
 and if a resident proves obnoxious and persists in his conduct, he shall be dismissed. 
 
 No. 5. Complaints of any nature whatsoever must be made direct to the manager. 
 Inmates disregarding the legal method of securing redress or disseminating, exag- 
 gerated or untruthful reports, calculated to bring the home or its management into 
 disrepute, if found guilty, shall be expelled. 
 
 No. 6. Any inmate feeling dissatisfied or aggrieved on account of treatment accorded 
 him shall make his complaint in writing to the manager, duly specifying the same, 
 and in event his complaint is not satisfactorily adjusted, shall have the right of an 
 appeal to the board of trustees. Said appeal must be in writing addressed to the 
 secretary of the board. The trustees wQl promptly investigate all such complaints 
 when properly submitted and their decision shall be final, subject only to appeal to 
 the society. 
 
 No. 7. Accusation or charges against the manager, or other persons in charge of 
 the home, must be of a specific nature and made in writing addressed to the secretary 
 of the board of trustees. A copy of these charges shall be forwarded by the secretary 
 to the other members of the board. If a majority of the board believe an investiga- 
 tion necessary, the chairman shall call a meeting of the board within 30 .days. 
 
 No. 8. Inmates will not be permitted to spend their time in idle gossip about stores 
 and saloons. Any inmate coming into the home in an intoxicated condition, bring 
 into the home or their room, or having in their possession about the home, any intox- 
 icating liquors or beer, shall be immediately expelled by the manager. 
 
SOCIAL INSURANCE AND UNEMPLOYMENT. 
 
 303 
 
 No. 9. Spitting on the floor, or in or about the halls, throwing anything out of the 
 windows for the first offense will be just cause for discipline by the manager, and for 
 the second offense will be cause for action by the board of trustees. 
 
 No. 10. Profane language or boisterous talking, at any time, will not be tolerated 
 in or about the home, and all employees are required to be kind and polite to all 
 inmates. 
 
 No. 11. Inmates desiring to visit any point outside the vicinity of the home must 
 make application to the manager, whose consent shall be obtained before leaving. 
 
 No, 12. Inmates remaining away from the home for a period of 48 hours, or more, 
 witho^ permission from the manager shall be evidence that the inmate has volun- 
 tarily left the home and he can not return unless by consent by the board of trustees. 
 Should an inmate return after absenting himself without permission, he will be fed 
 and sheltered for a period not to exceed 24 hours. 
 
 No. 13. Inmates expelled for violation of the rules who decline to exercise the right 
 of appeal granted by the rules, or who exhaust their right of appeal, shall under no 
 circumstances be eligible to readmission except by unanimous vote of the board of 
 trustees. 
 
 No. 14. The manager will establish hours for the serving of meals, and when sum- 
 moned, every inmate will respond promptly unless prevented by sickness or excused 
 by the manager. Inmates must not be out later than 9.30 p. m., a.nd must not use 
 the electric lights after 9.30 p. m., except in unavoidable cases. Inmates will not be 
 
 Eermitted in the kitchen or to interfere with the employees except when on special 
 usiness in the discharge of the duties assigned them by the manager. 
 No. 15. Any resident of the home dismissed for violation of the rules of the institu- 
 tion desiring to appeal from the decision of the manager must immediately give notice 
 of appeal to that official and the secretary of the board of trustees. He must make a 
 statement in writing setting forth the grounds for appeal and must furnish the manager 
 with a copy of such statement. 
 
 Receipts and disbursements of the Home for Aged and Disabled Railroad Employees of 
 Americafrom 1890 to 1915, inclusive. 
 
 
 Receipts. 
 
 . Disburse- 
 ments. 
 
 
 Receipts. 
 
 Disburse- 
 ments. 
 
 1890 
 
 $276.09 
 4,304.03 
 5,247.46 
 6,396.61 
 5,074.43 
 6, 866. 67 
 7,654.97 
 7, 530. 36 
 6, 667. 56 
 7,844.80 
 11,863.71 
 8,005.58 
 6,947.16 
 9, 102. 35 
 19,761.61 
 11,230.90 
 
 $184. 70 
 4, 667. 79 
 4,836.11 
 6,112.22 
 5, 292. 27 
 6,527.37 
 7,208.89 
 8, 275. 70 
 6,299.48 
 6,376.26 
 8,424.79 
 6,553.54 
 7,381.09 
 7,854.86 
 13,233.87 
 11,238.78 
 
 1906 
 
 $14,949.47 
 19,697.31 
 15,901.97 
 11,877.03 
 31,405.61 
 22,726.07 
 30,060.36 
 32,352.99 
 33,776.84 
 38,369.23 
 
 $11,481.62 
 12,058.83 
 14,593.40 
 36, 963. 49 
 
 1891 
 
 1907 
 
 1892 
 
 1908. 
 
 1893 
 
 1909 
 
 1894 
 
 1910 
 
 29, 898. 43 
 
 1895 
 
 1911 
 
 26,506.60 
 32, 203. 36 
 
 1896 
 
 1912 
 
 1897 
 
 1913 
 
 30,451.12 
 27 902. 64 
 
 1898 . ... 
 
 1914 
 
 1899 
 
 1915 
 
 35, 868. 95 
 
 1900 
 
 Building fund, 1909 
 and 1910 
 
 
 1901 . 
 
 373,870.05 
 133, 604. 82 
 
 365 375.96 
 
 1902 
 
 
 1903 
 
 127,928.68 
 
 1904 
 
 Total 
 
 1905 
 
 507,474.87 
 
 493, 304. 64 
 
 
 
 
 APPENDIX F. 
 
 Speech op Hon. Meyer London, op New York, in the House op Representa- 
 tives, March 24, 1916. 
 
 immigration. 
 
 The House in Committee of the Whole House on the state of the Union had under consideration the bill 
 (H. R. 10384) to regulate the immigration of aliens to and the residence of aliens in the. United States. 
 
 Mr. London. Now, Mr.. Chairman and gentlemen, I am not going to recite any 
 poem^ nor will I talk aboutmy love for the flag. No man who really loves or respects 
 his wife hires a brass band to advertise it. 
 
 I do not see why men permit themselves to be constantly proclaiming to the world 
 how deeply they love the flag of the Republic. Let us come to the point. 
 
 The opposition to immigration is traceable to three principal sources. First, there 
 is the chauvinist element, which fears contamination from foreign stock. They are 
 the successors of the Anti-AUen movement, of the Know-Nothing movement, of the 
 A. P. A. movement. This element is to be found in every country of the world. It is 
 the man who is so proud of himself because of his birth in a particular land, and 
 
304 SOCIAL INSUEANCE AKD UNEMPLOYMENT. 
 
 because of his ancestry, that he considers it superfluous that he amount to sometlung 
 himself. To the chauvinist Chinaman, Ms country is the Celestial Empire; to the 
 Japanese, the land of the Rising Sun; the Germanhas, of course, the greatest culture; 
 the Frenchman the noblest civilization; the Englishman rules the world; the 
 Americans are, of course, the free and the brave. 
 
 _ While this sort of national frailty is excusable in old nations, Asiatic or European, 
 It is utterly incomprehensible -when found among the American people, full of the 
 vigor of youth and absorbing unto itself all that is' strong and virile in the human 
 stock. This sort of man can not be reasoned with. 
 
 We come to the second element. We find year after year and Congress after Congress 
 a solid vote for the restriction of imnligration from the representatives of those States 
 where children are exploited, where industry is undeveloped, where agriculture is 
 in a primitive state, and where there is a particularly submissive class of labor. 
 
 These States suffer because of lack of immigration. Not only have .they not de- 
 veloped their natural resources, but they have been suffering periodically from floods 
 and inundations which they seem to be utterly incapable of coping with. The white 
 immigrant, bringing with him the germs of discontent, coming here in quest of better 
 opportunities, a rebel seeking a larger freedom, is feared by these elements. And the 
 strange thing about it is that it is these very States that have an illiteracy of dis- 
 tressing proportions among the native white population. 
 
 Thus, Alabama, from which comes the distinguished author of this bill, has 1.5.7 
 per cent native white illiterates. North Carolina has 16 per cent;' South Carolina, 
 15 per cent; Tennessee, 11 per cent; Louisiana, 17 per cent. One is tempted to ask 
 the question why these gentlemen who are so opposed to illiteracy do not get busy in 
 their own States. 
 
 Some of these States have an area larger than some of the Empires of Europe. 
 
 Alabama, with 52,000 square miles area, has a population of 2,270,000. Germany, 
 with just four times the area of Alabama, or 208,000 square miles, has 67,000,000 
 people, or more than thirty times as many inhabitants as has this State. 
 
 Mississippi, with only 1,902,000 inhabitants, is larger than the combined area of 
 Switzerland, Denmark, and Holland, though these three European countries support 
 a total of 13,000,000 people in comparative comfort. 
 
 Texas, with a population of 4,250,000, is larger than France, Holland, Denmark, 
 and Switzerland combined, with their 53,000,000 inhabitants. 
 
 Oregon, which is 10 per cent larger than England, Wales, and Scotland, has less 
 than 1,000,000 people, as compared with the 42,000,000 in this British Isle. 
 
 Europe, almost identical in total area with the United States, supports a population 
 of 450,000,000 souls. 
 
 There is something wrong with American statesmanship if America can not com- 
 fortably take care of 100,000,000 souls while Europe supports 450,000,000. 
 
 The third element is organized labor. We have organized labor invoked in sup- 
 port of this bill by elements which have consistently and persistently, in season and 
 out of season, thwarted every effort and defeated every aspiration of the working 
 people. It is true that a large number of the official representatives of the trades- 
 unions ask for this bill. The working people, surrounded by enemies, engaged in a 
 life and death struggle with, the superior forces of capitalism, in sheer desperation seek 
 to limit the supply of labor. 
 
 The trades-unions fear not only the competition of numbers, but the rivalry of large 
 masses of foreign workers not familiar with the language and easily exploitable. 
 
 But that is where organized labor is on the wrong track. Organized labor, with its 
 magnificent record of accomplishment, permits itself to play into the hands of the 
 unreasoning chauvinist and of the most reactionary labor-hating element, in the vain 
 hope that labor will improve its condition by limiting the working population of the 
 United States through restrictive immigration. There would be just as much logic 
 in limiting population by prohibiting childbirth. Every child added to the poor 
 man's family is a burden which weakens the power of resistance of the worker to 
 oppression. 
 
 I know that the trusts and the corporations have their own designs in seeking free 
 and unrestricted immigration. I know that steamship companies have by alluring 
 advertisements been stimulating immigration into certain industrial sections of the 
 country, although the extent of the practice is exaggerated. But this is not the kind 
 of immigration lihat I am fighting for. I am opposed to immigration artificially 
 stimulated in the interests of capital. I will join you in adopting the most rigorous 
 rules to prevent greedy capital from taking advantage of helpless immigrants. I 'will 
 certainly go the fimit in prohibiting the importation of workers which has for its object 
 the breaking of strikes or the crushing or organized labor. No; I will go a step further, 
 and I will demand that the power of the Congress of the United States be invoked 
 to prohibit the transportation of strike breakers, whether native or foreign, from one 
 portion of the United States into another. 
 
SOCIAL INSUEANCE AND UNEMPLOYMENT. 305 
 
 The truth is that normal immigration automatically regulates itself. If times are 
 good, relatives from abroad are induced to come to America. If times are ba3, relatives 
 are warned to stay away. Thus the beginning of every panic is followed by an in- 
 creased emigration from the United States, and there is no surer sign of returning 
 prosperity than an increasing tide of immigration. A study of membership of labor 
 unions and of strikes teaches the same lesson. Improving times are accompanied 
 by larger union membership and by a growing number of strikes. 
 
 I speak for the immigrant who, being a victim of religious, economic, or political 
 oppression, seeks access to the United States to improve his condition. If he is illit- 
 erate, it is so much more reason why an opportunity should be given to him to give 
 to his child the light which was denied to the parent. See with what avidity the 
 children of the immigraiit rush to your schools. As long as the schoolhouse exists 
 there need be no fear of the illiterate. 
 
 Come to the city of New York, witii its schools and colleges and universities, with 
 its evening extension courses, with the best free-lecture system in the world, and 
 you will realize what the American school is doing for the immigrant. 
 I put my faith in the American school. 
 
 The trouble with the average representative of organized labor is that he is incapable 
 of that broader vision which sees above and beyond the narrow needs of the moment. 
 That is the misfortune of the trade-union movement. What lack of intelligence 
 The politician is afraid to tell them that they are stupid. The average member of 
 Bricklayers' Union 6879 does not give a rap what happens to the rest of the world 
 so long as Bricklayers' Union 6879 is taken care of. 
 
 We find in Ward's "The Ancient Lowly " a refeirence to a remarkable historical inci- 
 dent which is typical of the narrowness of craft statesmanship. Ward teUs us that the 
 early Christians obeyed literally the injunction of the Bible against the making of 
 images. There was an orgajiization in ancient Rome engaged in the carving of images — 
 a sort of a union. This image carvers' union refused to see the spiritual significance 
 of the new faith, the beauty of the conception of one God, the higher ethical code, 
 and it stoutly opposed the spread of Christianity to the last, for no reason other than 
 that it threatened the image-carving business. And that is how the bricklayer, with 
 the bricklayer's mind, has always judged big things. He has one remedy — to reduce 
 the number of bricklayers. 
 
 And it is the same unthinking and unreasoning method that has checked the progress 
 of the whole labor movement. The bricklayer does not give a snap for the carpenta-j 
 the carpenter does not give a care for the metal worker; none of them for the railroad 
 worker or the telegrapher or the printer. That is how it came that etereotypers 
 recently lost a bitterly contested strike against newspaper owners — because the type- 
 setters kept on working while the stereotypers were on strike. 
 
 The railroad workers could have crowned many an effort of other unions with imme- 
 diate success by refusing to haul the products of any industry in which a strike was 
 pending. But that requires a broad vision, it requires a higher intelligence, a deeper 
 grasp of things. It is so much easier to look out for oneself. 
 Mr. QuiN. I would like to ask the gentleman a question. 
 
 Mr. London. No; I can not yield. I do not want to be interrupted. I am approach- 
 ing the subject from an entirely different angle, and I should be not disturbed. 
 Mr. Chairman, how much time have I used? 
 The Chairman. The gentleman has used nine minutes. 
 
 Mr. London. The question was asked here, "What do you think of those 400,000 
 meil who went to Europe after the declaration of liie present war to join the colors?" 
 I want to say something about those 400,000 men. I say that the man who enjoyiBg, 
 safety in the United States, went abroad to fight belongs to ihe noblest and best stock 
 that the United States could ever hope to get. Why do you not look at the thing 
 from this standpoint? 
 Mr. Kahn. They could all read and write, too, could they not? 
 Mr. London. Oh, yes; undoubtedly. 
 
 The gentleman from Alabama [Mr. Burnett], in the few remarks that he made here 
 during the discussion of the rule this morning, said that he did not like to see a repeti- 
 tion, of what happened at Youngstown, at Lawrence, and down at Columbus, N. Max. 
 That gives away his case. Some people do not want any white labor, because white 
 labor organizes into unions and fights. They want child labor; they want the sub- 
 servient, docile .labor of an oppressed and submerged race. 
 Mr. Cooper of Ohio. Mr. Chairman, will the gentleman yield for a question? 
 The Chairman. Does the gentleman from New York yield to the gentleman from 
 Ohio? 
 Mr. London. Yes. 
 
 3950y-16 ^20 
 
306 SOCIAL INSUEANCE AND UNEMPLOYMENT. 
 
 Mr. Cooper of Ohio. Were the men who were in the labor trouble at Youngstown 
 members "of organized labor? 
 
 Mr. I-ONDON. I assume that they were not; but if they were not organized it was 
 the fault of the narrowness of the labor movement that does not know how to reach 
 the masses. The union should greet the immigrant as a brother. The union man 
 should teach him unionism. Instead of that, the labor leader looks upon every im- 
 migrant as an enemy. If you are going^to keep down the supply of labor by keeping 
 out immigration, why not limit childbirth? That would be a way of keeping down 
 the population. In 1798 a Presbyterian minister by the name of Malthus suggested 
 that^and now and then the theory crops up — that the population is too large. 
 
 I. have no faith in the friend of labor who encourages every st\ipid demand of the 
 worker, checking at the same time every real aspiration of the working class for a 
 greater share in life's joys. 
 
 I find it hard to reconcile a vote for restriction of immigration in the name of labor 
 with a vote against child-labor legislation. We have had that exhibition here. The 
 Representatives of many a State voted solidly for restriction of immigration and 
 against child labor legislation. 
 
 Nor have I had much respect for the labor leader who permits himself to be a tail 
 to the kite of the politician. The union card should not be used for political trade. 
 Had there been genuine friendship for labor there would be an irresistible demand that 
 the 2,000,000 cluldren be taken out of the factories and quarries and mines by legisla- 
 tion which would completely elirrdnate child labor instead of the present meanii^less 
 makeshifts of child-labor legislation, which by regulating child labor retain it; that 
 the 4,000,000 women slaving their lives away in factories should be returned to the 
 homes where they belong, so that wife and child should not compete with husband 
 and father. Had there been a real interest in labor's cause this Congress would get 
 busy to provide unemployment insurance, health insurance, and old-age pensions. 
 Natural resources of vast extent still unexploited and held by the Nation would, 
 under the guidance of the Nation, have been found to offer remunerative employ- 
 ment to tens of millions of men. 
 
 A national network of unemployment exchanges would have been spread all over 
 the country to aid the jobless in reaching the job. Facilities would have been offered 
 for the free transportation of workers during the movements of labor incident to the 
 gathering of harvests. Vocational education would have been promoted. The 
 rising cost of living would then engross our attention. The concentration and increase 
 of the total wealth of the Nation, accompanied by an increased poverty of the many, 
 the social problem in all its ramifications and in all its depth would then become 
 the object of our studies. 
 
 The true friend of labor would seek to qualify the workers to take a larger and larger 
 share in the administration of the Government and in the running of industries, thus 
 paving the way for industrial democracy. 
 
 But we hear none of these things. 
 
 What has become of our reforestation projects? Have all our arid lands been 
 irrigated? What measures have been taken to prevent disastrous floods that have been 
 devastating tens of thousands of square miles of fertile land? Have our physical 
 resources been exhausted? Have our mental resources been exhausted? What 
 about the development of the natural resources about which the platforms of all 
 political parties speak so eloquently? 
 
 I protest most solemnly against that narrowness of mind, against that lack of vision, 
 against Hiat absence of sympathy for our fellow men which refuses to a fellow human 
 being a refuge and a resting place. 
 
 The captain of a ship who would refuse to take on board a drowning person would 
 be shunned as inhuman unless he could plead in justification that the addition of a 
 passenger would result in the sinking of .the ship with all on board: Not unless all 
 opportunities are exhausted, not unless there is no room left to shelter one more, will 
 the American people be justified before their own conscience and before history in 
 adopting the philosophy of Cain, "Am I my brother's keeper?" 
 
 Adopt the literacy test, refuse admission to the man without a knowledge of the 
 alphabet, but with hands willing to work and with a soul free from the contamination 
 of commercialism. Paralyze industry, check progress, reverse the policy which has 
 given to America life and sustenance, surround the country with a Chinese wall of 
 exclusion, smother all humane instincts, punish the unfortunate man for being illiterate 
 by depriving him of an oj)portunity to earn his bread. But remember that no free 
 people can long remain unjust. The day of retaliation will come. The narrower the 
 policy you pursue the quicker will you be overthrown. . The American people will 
 again be as just as they are free. [Applause.] 
 
 The Chairman. The time of the gentleman from New York has expired 
 
Cornell University Library 
 HD7123.A5 1916b 
 
 Commission to study social insurance and 
 
 3 1924 002 434 961