Cornell University Library HD7123.M4 Report of the Special commission on soci ililllllillllillllliliillliilll 3 1924 002 705 162 ;n) Massachusetts, Special Commission on Social 7123 Insurance. MU Report of the Special 8oFnisslon on a, I Social Insurance. February, 1917' Mo 7/23 C.I Digitized by IVIicrosoft® THE LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY Digitized by Microsoft® This book was digitized by Microsoft Corporation in cooperation witli Cornell University Libraries, 2007. You may use and print this copy in limited quantity for your personal purposes, but may not distribute or provide access to it (or modified or partial versions of it) for revenue-generating or other commercial purposes. Digitized by Microsoft® Cornell University Library The original of tliis book is in tlie Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archivg,(^rg/^d^ai]|^u31 9240027051 62 HOUSE No. 1850 REPOKT OF THE Speoiai Commission on Social Insurance. Februaey, 1917. BOSTON: WRIGHT & POTTER PRINTING CO., STATE PRINTERS, 32 DERNE STREET. , /^ u Digitized by Microsoft® L. ^ ^bt Commontoeaitt) of $!ia00act)u$ett$. Boston, Mass., January, 1917. To the General Court of Massachusetts. The Special Recess Commission on Social Insurance, au- thorized by chapter 157 of the Resolves of the year 1916 to make certain investigations, has completed its work and begs * leave to present the following report, :i ■^ Respectfully submitted, ^ FRANK S. FARNSWORTH, J Chairman. -HJ) 5>. c Digitized by Microsoft® MEMBERS OF COMMISSION. Senator FRANK S. FARNSWORTH of Leominstee, Chairman. Senator WALTER E. McLANE op Fall Rivee. Representative ALLISON G. CATHERON of Beveelt. Repeesentative EDEN K. BOWSER op Wakefield. Representative HARRY C. WOODILL or Melrose. Representative EDWARD G. MORRIS op Boston. WENDELL P. THORE op Boston. JOHN P. MEADE or Brockton. EDNA LAWRENCE SPENCER op Cambridge. JOHN D. WRIGHT op Boston, Secretary. Digitized by Microsoft® Digitized by Microsoft® EEPOET OF THE SPECIAL OOMMISSIOI*^ OlS: SOCIAL IIsrSUEAIsrCE. Chapter 157, Resolves op 1916. Resolve providing foe the Appointment of a Special Recess Com- mission ON Social Insurance. Resolved, That a special commission, to be composed of two members of the Senate to be appointed by the president, four members of the house of representatives to be appointed by the speaker, and three other persons to be appointed by the governor, shall sit during the recess of the general court, and shall be known as the Commission on Social Insurance. It shall be the duty of the said, commission to study the effects of sickness, un- employment and old age in 'Massachusetts, to collect facts as to actual experience with the several forms of insur-ance therefor, and to recommend to the general court such legislation as it may deem practical and expedi- ent to protect the wage-earners of the commonwealth from the burdens of sickness, unemployment and old age, or any one or more of these. The state department of health find the bureau of statistics are authorized and directed to co-operate with the commission in every way feasible in carrying out the purpose of this resolve, and in case either or both of said departments shall undertake investigations deemed necessary by the commission, they shall be allowed for their necessary expenses, outside their regular appropriations, such sums as shall be approved by the governor and council. The commission shall report to the next general court with drafts of such laws as it may recommend, and it shall file its report with the clerk of the senate or with the clerk of the house not later than the first Wednes- day in January. The commission shall have a room in the state house assigned for its use, shall give such public hearings as it may deem necessary, may em- ploy such assistance, clerical or otherwise, as it may require, and shall receive such sums for clerical assistance, travel and other expenses, and for the compensation of its members as ^hall be allowed by the governor and council. [Approved June 1, 1916. Subsequently the duty of making a further special investi- gation was laid upon the Commission so created by chapter 164 of the Resolves approved June 2, 1916, which is as fol- lows : — Digitized by Microsoft® SOCIAL INSURANCE. [Feb. Chaptbb 164, Resolves op 1916. Resolve eequieing the Special Recess Commission on Social In- surance TO INCLUDE IN ITS INVESTIGATION AND RePOET THE Subject op the Houes or Laboe in Industeies opeeated con- TINUOUSLT FOE TWENTY-EOUE HoUES. Resolved, That the special recess commission on social insurance estab- lished by chapter one hundred and fifty-seven of the resolves -of the year nineteen hundred and sixteen, in addition to the matters already referred to said commission, shall study and investigate the subject of reasonable restrictions in the hours of labor in industries operated continuously for twenty-four hours, and shall include in its report to the next general court such recommendations, with drafts of proposed legislation, as it may deem practical and expedient. AU the provisions of said chapter shall, so far as pertinent, apply to the investigation herein authorized. [Approved June 2, 1916. INTRODUCTION. Pursuant to the earlier resolve, the following persons were appointed to serve as members of the Special Recess Commis- sion on Social Insurance by His Excellency Samuel W. McCall, Governor of the Commonwealth: — Wendell P. Thor^ of Boston. John P. Meade of Brockton. Edna Lawrence Spencer of Cambridge. By the Hon. Henry G. Wells, President of the Senate: — Senator Frank S. Farnsworth of Leominster. Senator Walter E. McLane of Fall River. By the Hon. Channing H. Cox, Speaker of the House of Representatives: — Representative AUison G. Catheron of Beverly. Representative Eden K. Bowser of Wakefield. Representative Harry C. WoodiU of Melrose. Representative Edward G. Morris of Boston. The Commission held its first meeting on July 12 1916 when it organized by electing the Hon. Frank S. Farnsworth as chairman, and John D. Wright as secretary. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 9 The Commission desires to record its appreciation of the valuable and devoted services of Mr. Wright as secretary of the Commission. Summary of Work of Commission. In the conduct of its work the Commission has carried on several special investigations more particularly described in the body of the report. It has held fourteen public hearings. Most of these were at the State House in Boston, but hearings were also conducted in Pittsfield, Holyoke, Fitchburg, Lowell, Worcester, Fall River and New Bedford. For the purpose of securing by direct observation knowledge of conditions in in- dustries operated continuously for twenty-four hours a day, the Commission visited both by day and night several paper mills engaged in the manufacture of different grades of paper. Upon the request of the Commission that it be authorized to attend the National Conference on Social Insurance at Washington on December 7, 8 and 9, the Council authorized and selected three members of the Commission to attend the conference on behalf of the Commission. The State Depart- ment of Health and the Bureau of Statistics have co-operated ^with this Commission as directed by the Resolve. The Com- mission takes this occasion to acknowledge the valuable aid given by each department as far as possible within its limited time, and the courtesy with which the services of these depart- ments have been placed at its disposal. The Commission has also held thirty-two executive sessions besides numerous conferences with individuals who had special knowledge of the subjects before it. There have been in addi- tion many meetings of subcommittees, which were appointed, as follows: — 'Old^Age Pensions — Mr. Thor^, Senator Farnsworth, Representative Woodill. Unemployment — Mr. Meade, Miss Spencer, Representative Morris. HealtK Insurance — Representative Catheron, Representative Bowser, Senator McLane. Among the more valuable services of the Bureau of Statistics was the preparation by Miss Moldenhauer, under the super- Digitized by Microsoft® 10 SOCIAL INSURANCE. [Feb. vision of the Bureau, of a summary of the legislation of the principal countries of the world which have provided systems of insurance for sickness, unemployment and old age. An examination has been made of the original sources in their original language, and the work has been brought as nearly up to the present moment as conditions permitted. This sum- mary is printed in the Appendix to the report. The State Department of Health in August assigned Dr. William W. Wolcott of that department to the special work of this Commission. Dr. Wolcott had preparation for work of this character, acquired both in private and in public service. He has kept in close touch with the Commission, attending its hearings and many of its executive sessions. By special au- thority of the Council he attended the Public Health Confer- ence at Cincinnati, where, the subject of health insurance was considered. While on this trip he investigated private mutual systems of insurance against sickness existing in some middle western States. Dr. Wolcott's report to this Commission of the conference at Cincinnati and of the special investigations conducted by him is printed in Appendix A (page 178). Recommendations. As a result of its investigations and considerations the Com- mission recommends the enactment of the following legislation, and submits bills therefor as directed: An Act to establish a State Board of Employment, printed in Appendix C (page 274). The Problem of Poverty. The duty laid upon this Commission of studying the effects of sickness, unemployment and old age in Massachusetts brought before it at once the general problem of poverty. Per- sons of large means are not concerned with unemployment as an economic problem, and while they may not altogether avoid sickness and old age, they have resources with which to meet at least their financial burdens. But to those who, from lack of thrift or lack of opportunity, have made no provision for Digitized by Microsoft® 1917.] HOUSE — No. 1850. 11 the time of special stress these three gaunt specters of human woe bring a train of misery and evil consequences not limited to the individual, but attacking the social structure of which he is a part. Any attempt at eradicating poverty or mitigating its evils involves a recognition of the fact that its causes and conse- quences are many. This Commission, therefore, cannot pro- ceed to a discussion of the phases of social insurance, to which it has been particularly required to direct its attention, with- out a preliminary review of what are in its opinion some of the more important causes of poverty. It has made no special study of these causes, and undertakes here to do nothing more than direct attention to some of them for the purpose of showing that no system of social insurance, as the term is gen- erally understood, even including insurance against sickness, unemployment and old age, can be altogether successful unless an adequate survey is made of fundamental causes of poverty and means of relief. In enumerating these causes and means of relief no attempt is made to be exhaustive or to assign the order of their importance. 1. Feeble-mindedness. — An examination of the social struc- ture of Massachusetts reveals at the bottom a class of indi- viduals too weak mentally to be self-supporting. They form, according to Dr. Fernald of the Concord Reformatory, some- thing like 15 per cent, of its population, and there is above this group ■ an additional 42 per cent, so far subnormal that their capacity for self-support is problematical. According to Dr. Elizabeth S. Sullivan of the Reformatory for Women the feeble-minded and subpormal form about 45 per cent, of its population. Special studies undertaken in the Boston Municipal Court, in the State Prison, and in several of our jails and houses of correction, show that the feeble-minded or mentally defective constitute a large element in our criminal population. The Commonwealth provides special institutions for this class, where they may lead, so far as they are capable, happy, pro- tected lives. These institutions house about 2,600. At large in the community there are variously estimated to be from 10,000 to 15,000 feeble-minded persons. The feeble- Digitized by Microsoft® 12 SOCIAL INSURANCE. [Feb., minded are seldom if ever permanently self-supporting. They fill our prisons, almshouses and other charitable institutions. They present insoluble problems to our courts. Their special significance in a study of poverty is that their feeble-minded- ness is incurable and very highly inheritable, and that they are very much more prolific than members of the community in general. In mingling with the general population they introduce a weakening strain which tends to lower greatly the capacity of that population for normal self-support. They are a problem clearly recognized by its students, who agree that the least that can be done is to segregate feeble-minded females of child-bearing age. 2. Insanity. — In the State hospitals for the insane, feeble- minded and epileptic this Commonwealth was in 1915 sup- porting 17,051 individuals at an expense of $4,031,352.68. Much insanity is preventable, some is incurable; some is caused by intemperance, some by sexual immorality. So far as it is preventable and curable, it presents one of the prob- lems of poverty to which the State should at least give the degree of attention which it has hitherto given the problem of relief. 3. Intemperance. — The total consumption of alcoholic bev- erages in the United States in 1915 was 2,015,595,291 gallons, or 19.80 gallons per capita. We do not have the figures for Massachusetts, but there is evidence that consumption is very great. Economically the money spent in the purchase of these liquors was waste which, even without the other social conse- quences entailed by the consumption of so much liquor, could hardly be disregarded in any study of poverty. According to the report of the Commission to investigate drunkenness there were for the year ending Sept. 30, 1913, 104,936 arrests for drunkenness in Massachusetts. The same Commission estimated that alcoholism caused at least one-third of all crimes other than drunkenness. We should also bear in mind that the arrested drunkards are only a fraction of all drunkards or of those whose earning powers are lessened by alcoholism. Any estimate of the earnings lost on account of alcoholism would be enormous. The alcoholic is seldom permanently self-supporting Digitized by Microsoft® °' i.yi.i.\ nuvbu. — iNo. i»50. 13 He readily falls into crime, and leads a disordered life, the general direction of which is toward poverty. The Commission to investigate the Increase of Criminals, Mental Defectives, Epileptics and Degenerates reported in 1911: — It is the belief of this Commission, based on long personal observation that the abuse of alcohol, directly and indirectly does more to fill our prisons, insane hospitals, institutions for the feeble-minded and alms- houses than all other causes combined. In our opinion the adoption of any means by which the consumption of alcoholic liquors in this Commonwealth can be greatly reduced will go far to prevent and relieve poverty. 4. Wages. — This Commission recognizes that it is normal and desirable that the individual should himself make adequate pro- vision for the hazards of life. To do this he must receive for his services a living wage, that is, a wage not only sufficient to support himself and his family in health, but to provide against sickness, unemployment and old age. Whatever stimulates or retards industry, or affects the supply of labor, has its effect upon wages. The Commission here simply desires to record its recognition that such economic problems as the tariff, immigration, taxation and the minimum wage cannot be di- vorced from a consideration of the subject specially assigned to it. 5. Vocational Training. — Whatever produces a more effi- cient worker increases the likelihood of his earning living wages and of making suitable provision for the hazards of life. A beginning has been made in this Commonwealth in special vocational and industrial training. Such training should be much more generally provided. 6. Thrift. — Evidence has been given before this Commis- sion of instances where individuals of even very low wage- earning capacity have accomplished remarkable results by the continuous practice of thrift. However appalling the situation of the lowest-paid wage earner appears in this Commonwealth, it is still possible for individuals and families to push from the lowest to the highest economic and social conditions by the exercise of intelligence, thrift, and, let it honestly be said. Digitized by Microsoft® 14 SOCIAL INSURANCE. [J^eo. good luck. Any social measure which tends to remove the stimulus to such endeavor is unwise. Any measure which fosters thrift should be encouraged. The savings systems of our schools should be more widely extended. The savings banks, co-operative banks, and the more recently introduced system of savings-bank life insurance, are examples of wisely directed effort under State encouragement. It would no doubt be possible to set forth many other causes of such poverty as exists in this Commonwealth and many other measures for its relief. The Commission would further record its recognition of the fact that not only do the fore- going causes produce poverty, but poverty in turn goes far towards creating the conditions which we have enumerated, and so the vicious circle is continued. The Commission believes it has stated enough to show an adequate recognition of the complexity of the problem presented. It desires at this point to direct the attention of the General Court to certain facts gathered by the Bureau of Statistics which indicate the economic condition of the wage-earning group in this Conimon- wealth, and which must be borne in mind, in considering the advisability of introducing any system of social insurance for wage earners. Economic Condition of Wage Earners in Massachusetts. According to figures computed for this Commission by the Bureau of Statistics the average wage of the laborer engaged in manufacturing industries in this Commonwealth in 1914 was $562.57. The Commission recognizes that in many families there is frequently more than one earner. It recognizes, also, that in the ordinary family the wages of the father should be adeq,uate for the support of the family. There appear to be no accurate statistics regarding the family incomes of wage earners. Statistical averages are, however, very deceptive unless we realize that the existence of many families with incomes greater than the average stated means that there are many other families whose incomes are lower than the average. Such incomes should be considered in relation to the amount necpssary for the support of a family. According to a study. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 15 made in Boston several years ago it was estimated that proper provision for a family of five required an income of $900 a year. But if we assume that this estimate is excessive, though it may be hard to show where the excess lies, and that only $700 is needed, we have an estimate which is very conservative, par- ticularly in view of the increased cost of living since the original estimates were made. With a majority of men earning $15 a week or less, it is abundantly clear that there are a great many individuals who can have no substantial savings to meet the special stress of sickness, unemployment or old age. Any provision for sickness, unemployment and old age by the members of such a class can come only by savings taken from means of subsistence already too low. Such saving re- quires a force of character and a degree of thrif tiness which can never be expected from the group as a whole. Nor is it suf- ficient to say that the individual has a chance to fit himself to earn better wages and by the exercise of thrift to provide for the future. While that statement is true, to a degree, of individuals better equipped in resolution, intelligence or physique than the average, it is not true, and it has never been true, of the mass of any large industrial population. All of us know cases of individuals of fair earning power and thrifty character who have come to want and^ suffering by reason of continued illness either of themselves or of their fam- ilies. Others have lost the savings of a lifetime, and have suf- fered a pinched old age because their natural business judgment or their training was not such as to enable them to safeguard their savings. The State which merely counsels thrift to such an individual but mocks him. It ought not to be too difficult a task of statesmanship to leave unimpaired sufficient incentives to thrift, and the development of that individual sturdiness which must be the very substance and strength of any Nation, while providing .that a man who makes a fair attempt to earn, support his family decently and save something shall not under any circumstances be allowed to become altogether destitute or required to accept pauper relief. The problem is to find some way of meeting ills of which the incidence on any individual is uncertain, but which will cer- tainly fall upon many individuals in the class. Though the Digitized by Microsoft® 16 SOCIAL INSUEANCE. [Feb. savings of any one may be insufficient for his burden, all together can bear the total burden if some way can be found to distribute its weight. The device of insurance exists for just such a situation. Nation after Nation has turned to it abroad, and in various schemes of social insurance has pro- vided for distributing the individual hazards of sickness, un- employment and old age. In the Appendices will be found a summary of such legislation. In this country we have individually adopted the principle of insurance on a vast scale. This Commonwealth has made it practically compulsory in its workmen's compensation act. It has recognized the value of the principle and assisted in establishing it as a voluntary plan in the system of savings bank life insurance. The existence of a multitude of fraternal insurance benefit societies, establishment funds, trade unions and private companies insuring against sickness, unemploy- ment or old age testify to popular support of the principle as a voluntary scheme. This Commission is unanimously of the opinion that the prin- ciple of insurance is a desirable one for application on a suf- ficiently wide scale to safeguard every wage earner in the Commonwealth from certain of the evils of sickness, unemploy- ment and old age. On the important and perhaps fundamental questions of whether the time is ripe for the adoption of any one of the plans submitted, whether participation in any plan should be compulsory for any large group of the population, whether the cost of any plan should be borne solely by the State, the em- ployer or the employee, or should be shared" by some two or all of them, — on these and certain other questions there is some divergence of opinion in the Commission, which will be indicated as each of the three subjects — sickness, unemploy- ment and old age — is separately treated. Sickness or Health Insurance. Prior to the appointment of this Commission little attention had been given in Massachusetts to the question of the advis- ability of adopting some general system of health insurance Digitized by Microsoft® 1917.] HOUSE — No. 1850. 17 for wage earners. . The jSrst health insurance bill was filed with the General Court of 1916. It did not attract much notice. Simultaneously with the consideration of the subject by this Commission, however, there has been a very general awakening of interest among employers, employees, medical men and the public. The subject has been considered by many groups and committees. Evidence given before this Commission at various hearings and conferences satisfies it that even among those who have given particular study to the subject opinion has not yet crystallized. Most groups appear to recognize the importance of the subject, and to desire further opportunity for study before undertaking legislation. In the opinion of this Commission, legislation on a subject of such magnitude and importance, and affecting so vitally such a large proportion of the inhabitants of the Common- wealth, should and probably must be adopted, if at all, only after thorough study andMiscussion, not only by such a com- mission as our own and by committees of the Legislature, but by the principal groups affected and by the public. The Commission is therefore unanimous in not recommending any health insurance legislation for immediate passage. Some of the Commission, while subscribing to the foregoing recom- mendation, are of the opinion that the Commonwealth, as soon as there has been adequate consideration of the details of leg- islation, should adopt a general system of health insurance for wage earners, supported by enforced contributions from em- ployers, employees and the State, and that such legislation is likely to prove of the greatest value in relieving distress and promoting the general welfare. Others of the Commission have filed dissenting statements which will be found on the pages following. Pkesent Health Insurance Agencies. Aiiy legislative consideration of the subject should be based upon a knowledge of conditions as they now exist". This Com- mission has therefore attempted to ascertain to what extent insurance against sickness now exists in this Commonwealth under voluntary plans. Its investigations have disclosed a great variety of or^fKteatFoiM'cMi^hing sickness insurance. 18 SOCIAL INSURANCE. [Feb. Among them are private insurance companies, establishment funds or benefit societies connected with particular industries, trade unions, fraternal organizations and small mutual groups with only the semblance of organization, where sometimes the only plan being to "pass the hat" in case of special distress of a member. A statement in detail of the Commission's findings as to present sickness insurance agencies will be found in Appendix A. To the Commission the most important conclusion reached from the examination of these plans is that there exists already in the Commonwealth a very general appreciation of the value of the insurance principle as a protection against the economic results of illness. There are numerous attempts among wage earners to apply the principle in various insurance plans. The results, however, fall very far short of the ideal. The Commis- sion was unable to find just how many wage earners were insured. Although insurance plans 'are numerous, it is sat- isfied that the number of wage earners insured against illness is far less than the total number. It is apparent, too, that the uninsured class includes the highest proportion of the thriftless and of those of very small means. An examination of the plans of insurance reveals, further, very few that make adequate provision for the economic stress occasioned by the combined effect of unemployment and the sickness which causes it. Amount of Sickness. As to the amount of sickness now existing among wage earners in Massachusetts the Commission has no definite statistics. The most important recent study of conditions in any part of Massachusetts is that made under the direction of L. K. Frankel and Louis I. Dublin for the Metropolitan Life Insur- ance Company. This was a survey of sickness in Boston during the two weeks beginning July 17 and July 24, 1916, and was a canvas of about 13 per cent, of the population of Greater Boston. The survey disclosed 19.6 persons sick in each 1,000 persons canvassed. This rate is distinctly lower than that disclosed by the surveys made by the same persons in other Digitized by Microsoft® 1917.] HOUSE — No. 1850. 1 cities outside of Massachusetts. Part of the favorable resu may be due to the season chosen for the survey. Yet, eve assuming that the average experience for the year is no wors than that indicated by the survey, it means that each individui suffered 7.15 days of illness during the year. This, of coursi is not the figure for employed persons. The report states tht sickness involving disability for work was 18.1 per 1,000 in th case of males, and that the same rate was observed for female It may be noted that this result is contrary to the usual e) perience, which shows a higher sickness rate among wome than among men. This would mean for each person in year 6.6 days involving disability for work. The rates fc sickness involving disability for work increased regularly wit age for both sexes. As to duration of illness up to date of the inquiry, the repoi states that 26.3 per cent, reported durations of illness les than one month, 39.11 per cent, were reported sick for les than three months and 48.4 per cent, showed a sickness perio of less than six months. For present purposes it is unnecessary to go further into tli details of this report. The report shows that even though tt condition of Boston may be somewhat better than that < certain other cities of the country, there still exists a lar^ amount of sickness involving financial loss and suffering, an this loss is very unevenly distributed, pressing especially har in many cases on account of the uncertainty of the incidenc and the duration of illness. A study made by the Instructive District Nursing Associj tion of Boston, the results of which were presented to th Commission, gave valuable evidence as to present medical cai among the very poor. All patients under care of the associi tion on Sept. 27, 1916, were studied. There were 1,038 case It appeared that 9| per cent, of the families had no medici care preceding the visit of the district nurse, although all wer^ in the opinion of the visiting nurse, in need of medical car The proportion not having had medical care increases as tl income decreases, being 7 per cent, for the highest and 13 pt cent, for the lowest income group. In the outlying district where hospitals and dispensaries are not so numerous or acce; Digitized by Microsoft® 20 SOCIAL INSURANCE. [Feb. sible as in the central part of the city, the proportion of fam- ilies without prior medical care was larger. In that part of Boston known as Forest Hills, of the families with incomes of less than $12 a week nearly 50 per cent, had had no prior , medical care, while in families of the same income in the North and West Ends, barely 1 per cent, had had no medical care. The conclusion drawn by the nursing association, which we adopt as sound, is that even in the city of Boston, in the out- lying sections, families do not receive the medical care which they 'need in many cases, chiefly for the reason that they do not feel they can afford it. Many who do receive medical care receive it later than they should. The association reports that in the central part of the city most of the families investi- gated were dependent upon medical charity for which the physicians treating them receive no compensation. These reports and other evidence given before ihe Com- mission confirm the prevailing impression of those acquainted with conditions that there exists a large amount of suffering from poverty and illness in this Commonwealth, and that even in a district as well supplied with medical and hospital facil- ities as Boston, competent medical service actually fails to reach a substantial portion of the very poor. These facts point to the need of a better organization of medical service, includ- ing an extension of the present system of hospitals and dis- pensaries. In the opinion of several of the Commission these facts also point to the need of a system of health insurance for the purpose of better meeting the financial burdens of sickness, a system which if adopted at all must be so related to our medical and hospital service as to improve rather than injure that service. For convenience in studying this problem there are presented in Appendix A, page 149, drafts of health insurance bills sub- mitted to this Commission. In Appendix A, page 174, the Commission also submits a statement relative to the cost of sickness among wage earners' in the Commonwealth. The total yearly cost of sickness to the employees in Massachusetts is estimated at $38,770,167, or an average of $25.70 per person each year. These estimates Digitized by Microsoft® 1917.] HOUSE — No. 1850. 21 are based on an investigation conducted by the Commission "among the labor unions in the State. From the answers received in connection with the investi- gation as to the amount of insurance carried by workers, an estimate of the cost of accidents to wage earners who were members of the unions investigated was also made. These may be found in Appendix A, page 177. For services in connection with both these investigations the Commission is indebted to Paul H. Means and A. E. O. Munsell, members of classes in econ,omics under R. F. Foerster, assistant professor of social ethics, Harvard University. FRANK S. FARNSWORTH. ALLISON G. CATHERON. EDEN K. BOWSER. HARRY C. WOODILL. EDWARD G. MORRIS. JOHN P. MEADE. EDNA LAWRENCE SPENCER. WENDELL P. THORE. Digitized by Microsoft® 22 SOCIAL INSURANCE. [Feb. REPORTS ON HEALTH INSURANCE. STATEMENT OF ALLISON G. CATHERON, EDEN K. BOWSER, FRANK S. FARNSWORTH AND HARRY C. WOODILL. The undersigned members of the Commission believe that as soon as there has been adequate consideration of the details of legislation the Commonwealth should adopt a general system of health insurance for wage earners supported by enforced contributions from employers, employees and the State, and that such legislation is likely to prove of the greatest value in relieving distress and promoting the general welfare. We therefore submit a statement for the purpose of indicat- ing briefly the need of health insurance, and some of the prin- ciples which in our opinion should be adopted in any health insurance plan. We are satisfied from evidence presented to the Commission, and from our own independent observation, that the suffering from sickness is particularly great among those of small means. With the wage earner ill there is the combined effect of loss of income and increased expense occasioned by the illness. Frequently, this combination makes it necessary for the family to appeal to charity. Various studies of families known to charitable organizations have shown, according to testimony given before our Commission, that in from one-third to three- quarters of all these cases illness of some one in the family contributed to the economic breakdown. The suffering from illness directly can be lessened by a higher development and better organization of medical and hospital care, and by the multiplication of hospitals and dis- pensaries. In our opinion, however, while poverty exists as it does among large numbers of our industrial population, and as it is likely to exist in at least the immediate future, no mere development of medical facilities and organization will go to Digitized by Microsoft® 1917.] HOUSE — No. 1850. 23 the heart of the problem. The only remedy which does so — short of abolishing poverty altogether, a problem discussed earlier in the report and not likely to find immediate solution — is one which distributes the burdens of illness so generally that they may be easily borne, taking into account that those responsible for illness or enjoying the benefit of its prevention should bear some share in its cost. No new device is needed for this purpose. The principle of insurance has been generally recognized as adapted for just such a situation, — a situation where loss is certain to fall on many members of a group, but where the incidence of that loss, and the extent to which it will fall on individual members, is uncertain. The existence of numerous voluntary plans of insurance shows a general belief in this principle. Even industrial insur- ance private corporations furnishing only a small death benefit, hardly more than enough for burial, and with the high premium rates required by the expenses of weekly collections has been deemed of such value by the wage earners of the Common- wealth that in the last insurance year they paid in premiums the sum of 112,251,000, though the losses paid were only $4,094,000.1 Voluntary Insurance ok Compulsory Insurance. Voluntary insurance has never reached all the pedple who need it. Those who fail to take it need it most. They are the thriftless and the persons of smallest means. The only way to secure anything like the universal application of the insurance principle needed for its greatest efficiency is by mak- ing the plan compulsory. Such has been the experience abroad. All of these countries which have adopted compulsory health insurance have had preceding it a high development of vol- untary sickness insurance, some of them to a much greater extent than exists in Massachusetts. It is natural to oppose any compulsory plan on the ground that it is an un-American infringement of the principle of personal liberty. We submit that it has never been found un-American to adopt compulsion for the performance of any 1 These figures g^i^jggi^g^ J[j7it^j^tj^igj-ano6 Commissioner. 24 SOCIAL INSURANCE. [Feb. obligation clearly and generally recognized. Free and com- pulsory education is a fair example. ' Every male citizen of Massachusetts between certain ages is by law a member of its militia and subject to military duty when required. Let it once be recognized clearly that every citizen has a duty to prepare himself to meet the hazards of life, such as sickness, unemployment and dependent old age, and . there will be no difficulty about the acceptance of the principle of compulsion to enforce any plan deemed effective, particularly when the State lends its assistance to the plan. We believe that such a duty of preparation rests upon every citizen. If he fails to make such provision the social structure suffers, and if his failure is complete the State suports him. In theory, then, all citizens should be compelled to make such provision. But it may be assumed that those of a sufficiently high income have an adequate surplus to meet these hazards, and compulsory insurance plans generally exempt such. It may be that such persons should be included ultimately, but it is more convenient to exempt them at the outset. As a practical matter, it has been found difficult to devise a system compulsory upon any but wage earners employed with some regularity. The reason for this limitation is that deduction from wages offers the most convenient means of collecting premiums. It may be that some practical compulsory plan of wider scope can be devised. None has been adopted in any foreign country, and none has been brought to the attention of this Commission. In our opinion the plan of widest application practicable at present is one which shall include all wage earners employed with some regularity and earning less than a given wage. We are satisfied that it is wise to include those who earn less than $100 a month. There should be opportunity for any one to enter the plan voluntarily. DiSTEIBTJTION OF CoST. On the important question of distributing the cost of insur- ance, we are impressed with the soundness of the arguments of those who urge that the cost should be shared by employer, employee and the State. Each is to a degree responsible for Digitized by Microsoft® 1917.] HOUSE — No. 1850. 25 sickness. This statement will be readily admitted as to the worker himself, who can exercise a great degree of control over Ws individual health. But he is unable to determine alto- gether the conditions of his housing, food, drink or labor. These are among the conditions under the control in some degree of the State. The State has recognized its responsibility for the public health by a great mass of legislation altogether .too large to make detailed reference to hefe. The employer's responsibility is not quite so clear, but we are satisfied that it exists. Some employers urge that their responsibility does not extend beyond occupational diseases, — a responsibility which is already recognized in the workmen's compensation law. It should be recognized, however, that there are many cases of disease which in the mass may be found to be due to occupa- tion, while in the particular case it may be impossible to trace the causation. Further, it is evident that the employer and not the employee determines the working conditions as to light, air, dust and other matters affecting health. If an employer has indeed conformed to the best present- day knowledge in establishing healthful conditions in his plant, it may be that he- should not in such a particular case be charged with further responsibility for disease. Such a case, however, at present is exceptional, and does not represent the general conditions which should determine the principles of a proposed law. It should also be realized that even in such an ideal case the employer will receive the benefit of the, improve- ment in conditions among his workers, which in our opinion will result from the adoption of a plan of health insurance. It is probably an impossible task to apportion the cost pre- cisely among employer, employee and State according to re- sponsibility. Other considerations will help our decision. The plan of insurance most likely in our opinion to prove successful is one in which the carriers are local mutual associations man- aged Iby employers and employees equally. If they are to have equal voice in the management of these associations they should make equal contributions to the cost of carrying the insurance. The proposal that the cost be distributed in the proportions of two-fifths for the employer, two-fifths for the employee and one-fifth for the Statco^^^g^^c^^y^^a^easonable one. 26 SOCIAL INSURANCE. [Feb. Carriers. We have already indicated that in our opinion the normal carrier of insurance under any health insurance plan should be a local mutual association of employers and employees. The reasons for this conclusion are that such a plan is more econom- ical in administration than where the membership is scattered; that it lends itself readily to the proper organization of medical treatment through contracts with local doctors or groups of doc- tors; that it focuses attention sharply on the sickness experi- ence of a particular locality; and that it unites the forces which may most readily improve the health conditions of that particular locality. Provision should be made for trade associations in larger cen- ters of population. It would seem wise, also, to include present establishment funds and fraternal and trade Unions which meet certain required standards of insurance, but such organizations do not possess the advantages of the local or trade associations, and their development as insurance carriers in our opinion should not be encouraged by the provision of the act. We think there are sufficient reasons for excluding private stock companies operating for profit from this field of insurance. The element of competition, entailing many agents, increases the cost substantially. It certainly does not seem just that the State should make any contribution to a system including this increased cost, nor should it require the employer to make such contribution. Benefits. The benefits which any health insurance plan should give are of two kinds, — financial and medical. The financial benefit should be large enough to meet much of the special economic stress caused by sickness and loss of wages, yet not large enough to encourage malingering. We believe that two-thirds the amount of wages as adopted in the bill printed in Appendix A is reasonable. The medical benefits should include medical and surgical care, nursing, medicines, appliances and hospital care if necessary. Medical benefits should extend to members of the worker's family. Any health insurance plan should in our opinion in- Digitized by Microsoft® ^ "^ 1917.] HOUSE — No. 1850. 27 elude a system of maternity insurance, with cash benefits pay- able to the wives of employed men as well as to insured em- ployed women. There should also be a small funeral benefit in case of death. Medical Administration. The most diflBcult questions which arise under the act are those concerning the relation of the medical profession to its administration. No entirely satisfactory solution of these prob- lems has been offered. It is important, in working out any plan affecting so vitally and so generally public health and the conditions of medical practice, to have the advice and co-operation of the medical profession. It is not likely that any plan which makes the con- ditions of medical practice less attractive will in the long run serve the public welfare; , yet the advantages^ to be gained from a system of health insurance seem to us so great that every attempt should be made to secure a proper adaptation of medi- cal practice to it, though the adaptation may be difficult to secure. The fear that the medical profession may be financially worse off by reason of a health insurance act seems to us unfounded. All medical practice under the act will then be paid for, whereas at present very much is never paid for. There is no doubt that the total amount of money available for medical treatment will be larger because of the fact that it is easier for a wage-earner to make many small payments than to pay a single large sum, and further, by reason of the fact that the State and the em- ployer, as well as the worker, make contr butions. In order that the best medical advice may be available for the solution of health and medical administration problems arising under the act, there should be provision for medical men upon the Commission as administrative supervisors of the act or as an advisory medical committee. We are not satisfied that we know just how this plan should be worked out, nor are we satisfied that the problem of the relation of the Department of Public Health to the administrative machinery has been solved. There are, however, a few principles which in our opinion should be observed in^^^^^i^^p^oyaedical administration. 28 SOCIAL INSURANCE. [Feb. First. — There should be on the part of the insured a reason- ably free choice of physicians, and if the insured desires to have no physician he should not be compelled to accept one under the act. In so far as he may thereby endanger the public health there is adequate law now to meet the situation. If the situation is one which does not endanger the public health, we do not believe there is warrant for infringing upon his right of personal liberty by compelling the insured to accept a physician to whom personally or to whose system of medicine he has great objection. The individual who refuses inedical treatment still receives financial benefits under the act greater than his own contributions would support, so that he has no excuse for demanding that he be exempt entirely from the system. Second. — All physicians of whatever school, licensed to prac- tice by law, should be allowed to elect to practice under the act. There should be some means of removing physicians from prac- tice under the act for sufficient cause. Third. — Physicians practicing under the act should be em- ployed by the carrier. We are not satisfied as to just which form of contract with physicians for payment is best, or whether any one form of contract is best in all situations. It therefore seems to us better not to prescribe the form of contract in the act, but to leave carriers to make such contracts subject to ap- proval of the commission administering the act. Fourth. — It is evident that we should not make the mistake of allowing the physician in attendance on the insured or his family to determine. when cash benefits shall begin and termi- nate. He would then be exposed to the temptation to benefit his practice at the expense of the fund. There must therefore be in addition to the attending physician, whose first duty is to his patient, a supervising physician employed by the carrier. The function of this supervising physician should be to see that proper treatment is given in all cases by the attending physi- cian, and that the fund does not suffer from malingering. In case of disagreement as to benefits or remuneration there must be some adequate plan for decision and review if necessary. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 29 Relation to Wobkmen's Compensation. It is essential to provide in any health insurance law in this Commonwealth that the present ^workmen's compensation act shall not be confused by the new system of health insurance. The worker who is incapacitated by reason of accident in indus- try should receive compensation, and if there be doubt as to whether his incapacity is due to industrial accident or disease, the right to apply for compensation should in no way be abro- gated by the health insurance law. If he were incapacitated by disease which was not purely the result of industrial accident he would receive medical care in any event upon the first day of illness. Whether he would receive benefits under compensation or under health insurance would depend on the termination and the character of the incapacity and its cause. The main point is that all the present rights of the employee to compensation should be preserved in full, and not diminished, by the health insurance system. The proposed law, printed in Appendix A, page 1 49, to ithis report, specifically so provides. Medical Examination of Workers. Health insurance does not require medical examination previ- ous to admission to insurance. This is one of the advantages of a compulsory system. Nor does the scheme require medical examination annually. In fact, it calls for no medical examina- tion except by the doctor who trpats the insured person when he is sick, and by the supervising physician, who certifies that he is entitled to sick benefit. The insured person and his family is guaranteed the right to choose his physician, under the proposed law, and cannot be required to accept a doctor whom he does not want. Certain persons have objected to the bill on the ground that it might result in a requirement by employers of a medical examination previous to employment, or at periodical intervals after entering employment. Employees have feared that men with defects would be excluded, without provisions being made for them, or that minor physical defects would be made an excuse for discharging a man who was objectionable for other reasons. Digitized by Microsofi® 30 SOCIAL INSURANCE. [Feb. Health insurance as proposed would not prevent an employer from doing what he can do to-day, but he could not enforce a physical examination of his employees under the health insur- ance system. He would have to do it, if at all, outside the sys- tem and pay for it extra. The proposed health insurance law leaves the rights and powers of employer and employee exactly where they are to-day. Labor would lose no legal safeguard. Furthermore, as the local and other insurance funds would be administered by boards on which employer and employee have equal representation, the practical effect of health insurance would be to bring about team-play rather than opposition in caring for the health of the workers in industry. Such has cer- tainly been the result in Germany, as the Comrnittee of the British Trade Union Congress testified before union labor in a report of 1911, after a careful study of the continental system. Cost. The cost of a system of compulsory health insurance depends on the number of persons affected, the nature and extent of the benefits offered, the scale of wages which the insured persons received, and the cost of the services and the materials to be provided in the benefit. Thus in a community where wages are low the benefit paid on the basis of a percentage of wages will cost less. Where medical services are provided, and the usual schedule of physician's fees are high, the cost will be higher than in a community with a lower average fee schedule. In Massachusetts the proposed health insurance bill would probably include about a million persons. An estimate has been prepared by the Bureau of Statistics of the Commonwealth showing that there are about 1,500,000 persons engaged in gain- ful occupations. In this estimate no deduction has been made for the classes of persons who would be exempt from insurance under the proposed law. These persons would number, accord- ing to an estimate made by the Bureau of Statistics, 468,262. Assuming the conditions laid down in the bill printed in Appendix A, there would be about 1,168,959 persons subject to the act. In computing cost it is necessary to estimate separately a Digitized by Microsoft® 1917.] HOUSE — No. 1850. 31 considerable number of items, not less than twelve, in order to ascertain the cost of the proposed bill. Among these items are the following: cash benefit to the insured person of two-thirds of the wage; hospital cash benefits of one-half the wage (paid to the family of the insured while he is in a hospital); medical care for the insured person; medical care for his dependents; maternity cash benefits; maternity medical care; hospital care of insured persons; hospital care for dependents; specialists' services; dental services; drugs and appliances; funeral bene- fits; and administration. Only a thorough study of the preva- lence' of sickness and the cost elements involved in each of these benefits would give a statistical basis or estimate of the cost of health insurance in Massachusetts. It may be pointed out here that it is usual to compute the cost of the system on the basis of a percentage of the wages of the insured persons. This is done for the reason that cash bene- fits are paid on the basis of a percentage of wages, and the con- tributions also are often calculated on a simi'ar basis. No other method of expressing the cost gives as clear an idea of its relative importance in comparison with the size of the problem. We have already a good deal of information bearing on the question of cost. The experience abroad (statistics are avail- able for a period of over, thirty years in Germany, and sliorter periods in nine other countries) shows that it can safely be said that the cost of a health insurance system along the same gen- eral lines now proposed in this Commonwealth would be be- tween 2j and 4i per cent, of the wage. These are the limits between which the cost has varied abroad. It must also be said that the upper limit is rarely reached, and only in a few of the local funds in Germany, where the funds have of their own voli- tion given higher benefits than those required by law. Ordi- narily the cost runs from about 3 to 3^ per cent, of the pay roll. There has just been concluded the first study of the cost of the health insurance system in the United States, made by the California Commission on Social Insurance, with Dr. I. M. Rubinow as its consulting actuary. As a result of a six months' study on the basis of benefits almost exactly the same as those Digitized by Microsoft® 32 SOCIAL INSURANCE. [Feb. proposed in the present bill, now before the Massachusetts Legislature, Dr. Rubinow reached the conclusion that the cost to California would be 3| per cent, of wages. It must be borne in mind that in California the average wage is $18, whereas in Massachusetts the average wage is about $12.50. The medical fee schedules in California are also about 50 per cent, higher on an average than those prevalent in Massachusetts. Most of these elements would tend to increase cost there. The fact that the California study was based on a statistical investigation, in no way affected, of course, by the experience abroad, yet with a result so closely in correspondence with the foreign ex- perience, lends much weight to the figure obtained. At a public address in Boston on January 9, when Dr. Rubi- now was questioned as to this problem of cost, and the value of making an investigation in Massachusetts similar to that made in California, he responded as follows: — Investigations that elicit facts are always desirable if properly made; but the value of an investigation of the cost of a health insurance sys- tem in Massachusetts would be to tell you whether your cost would be 3t% per cent, of wages, or Si'tr per cent, or 4t'6 per cent. You may be sure in advance that your cost will be between 3 and ij per cent., probably about 3 J per cent. With this percentage of wages and the figures as to persons covered by the proposed act quoted above from the Bureau of Statistics, as a basis, the cost of a system of health insurance in Massachusetts may be estimated at approximately $23,000,000. This cost does not mean the real or net cost, as to which something should be said. At the present time the community is already bearing the cost of caring for sickness and for the de- pendency resulting from sickness. It is also bearing the cost of a vast number of organizations supplying sickness insurance, many of them furnishing slight benefits. The bill now intro- duced provides that the distribution shall be 40 per cent, to the employer, 40 per cent, to the employee and 20 per cent, to the Commonwealth. The employee is now paying in one way and another at least as much as the proposed system would cost him. He is probably paying indirectly at least double what the the proposed system would cost him in contributions. A man Digitized by Microsoft® 1917.] HOUSE — No. 1850. 33 earning $18 a week would probably pay about 1| per cent, of his wages, 27 cents a week, as his contribution. It is known that the present contributions of wage earners for ndustrial in- surance (chiefly burial insurance) run usually as high, and very often much higher, than this, even among those of smallest means. A study made by Mrs. Elizabeth F. Moloney of the State Board of Charity, of 500 families aided under the act for the aid of mothers with dependent children, showed that the average amount of insurance premiums paid by each family was 54 cents per week. Some of these families were carrying both industrial and fraternal insurance. 'Of the $12,251,000 paid for industrial insurance in Massachu- setts in 1915 by wage earners, about $8,000,000 did not come back in benefits. While some of this burial insurance is for children, and might be continued under the proposed health in- sui'ance, a considerable part of this would be met by the funeral benefit under the proposed law. The wage earner is also meet- ing to-day the entire expense of his medical treatment, except so far as provided by charity, and he is struggling along as best he and his family can under the burden brought by sickness when his wages stop. From a financial standpoint the em- ployee will gain instead of lose, both directly and indirectly, by the proposed system. How about the employer? The employer will gain in two ways: first, he is at the present time meeting considerable ex- penses for various services to his employees when they are sick; paying the wages of a valued employee for a week while ill is common in the case of regular employees who have been in a business for a long time, and many establishments also have a form of sick benefit to which the employer, in some cases, con- tributes. A growing number of large establishments provide some form of medical supervision, examination, or, in some in- stances, medical care, and some establishments have elaborate hospital and dispensary plants with salaried physicians. The cost of all this would be deducted by such employers, as it would be borne by the health insurance system. The second way n which the employer is likely to gain is through the in- creased efficiency of his employees. A considerable portion of sick- ness, which now causes loss of time and requires the employer Digitized by Microsoft® 34 SOCIAL INSURANCE. [Feb. to substitute a new man and train him temporarily, would be diminished by better medical care and by the absence of worry, which is now one of the large contributing factors in diminishing the working eflSciency of men with families. Health insurance would contribute directly to diminishing broken time by dimin- ishing sickness. It would also contribute directly to efficiency by keeping the worker in better trim, and would lessen the shifting of workers. It has been estimated that it costs on the average $45 in manufacturing industries to get a new worker and train him to the job. Of the estimated cost of $23,000,000 the share of the Com- monwealth under the proposed plan wbuld be $4,600,000. But there are certain large items of expense which the Common- wealth and cities and towns are now bearing from which they would be relieved if a health insurance plan were in operation. The following estimate of such savings made after a confer- ence with Mr. Robert W. Kelso, secretary of the State Board of Charities, and bearing his approval as on the whole a reason- able estimate, is presented. The estimate is made by deducting from present public expenses on account of sickness the prob- able amount due to the care of persons who would be exempt under the bill, and the probable expense of chronic cases extending beyond the twenty-six weeks allowable under the bill. The items include certain reimbursements by the Com- monwealth to municipalities on account of the mother's aid act, in so far as that aid is due to sickness, reimbursement for the care of sick poor having a State settlement, reimburse- ment for local care of dangerous diseases, part of the expenses of the State Infirmary, part of the maintenance cost of tuber- culosis hospitals borne by the Commonwealth, and subsidies by the Commonwealth for the care of tuberculosis in municipal- ities. The estimate of saving which a health insurance bill would make to the Commonwealth on account of these items is $850,000. Certain savings by municipalities should also be considered. The statistics of 33 cities and 320 towns of the Common- wealth show, an expenditure of approximately $2,600,000 for the following items : — Digitized by Microsoft® 1917.] HOUSE — No. 1850. 35 Contagious-disease hospitals and quarantme, .... $293,000 Tuberculosis, 499,000 Municipal hospitals, 989,000 Subsidies to other hospitals, ' . 29,000 Health and sanitation in towns, 865,000 $2,675,000 We submit that it is a reasonable estimate that one-half of this total, or $1,300,000 now expended by cities and towns, would be met by insurance funds under the proposed act. While this is not a saving for the State, it is an important public saving. Finally, there is an annual expenditure of slightly more than $3,000,000 by the overseers of the poor in the Commonwealth as a whole for relief outside of institutions. A large proportion of this relief is on account of illness. Many studies of charitable work make the proportion more than 50 per cent. It does not therefore seem unreasonable to esti- mate that $1,000,000 now expended for relief by the overseers of the poor would be met by insurance funds under the pro- posed law. The reports of the State Board of Charities show that the incorporated charitable institutions of Massachusetts expend about $12,000,000 a year. About $4,800,000 come from annual contributions, dues or entertainments. Somewhat more than half of the $12,000,000 goes to hospitals, dispensaries and other institutions giving charitable medical care to the sick. Of the remaining proportion of the $12,000,000, a considerable part is for charitable relief of dependent persons who have been brought to require assistance because of the sickness of a wage earner. Altogether, it is certain that at least half of the total expenditure is for purposes of caring for sickness under conditions which would be met wholly, or in large part, by the proposed' health insurance. This by no means implies that the proposed law would obviate the necessity for such medical institutions. It would, however, render unnecessary part of the contributions to them, and would enable their resources to be used without, in many instances, requiring the acceptance of charity on the part of those benefiting by them; similarly with those contributions for relief in homes where relief has been caused by sicknesgvg/feec/ /jy M/crosoft® 36 SOCIAL INSURANCE. [Feb. A very large amount of money is annually given privately and without record by individuals to aid persons who are sick or whose families are dependent because of sickness. Almost all of the contributions of this kind, as well as the contribu- tions received by the incorporated charitable societies, come from the employing classes. It is not too much to say that several millions of dollars now annually given by these classes would not need to be given for the same purposes if the health insurance law were in force. This would mean in a measure that the employing classes, who wou'd have to contribute two-fifths of the expense of the proposed bill, would find relief to a not inconsiderable amount in another direction. We do not submit these figures for the purpose of making any close estimate of the net cost of a health insurance bill, but rather for the purpose of showing clearly that in consider- ing the gross estini^te, whether it be $23,000,000 or some other figure, we should have in mind the very substantial savings — many millions certainly — which would be made in expenses now being borne by employers, employees and the public. We are satisfied that adequate medical treatment during ill- ness, and reimbursement of a substantial portion of wages lost on account of, illness, is worth all it will cost. If the wage earners of the Commonwealth can pay over $12,000,000 a year, chiefly for the expensive funerals which the $4,000,000 returned to them by industrial insurance provides, even a much larger cost than $23,000,000 for the proposed plan of health insurance would appear to be justified if necessary. It is well, also, not to forget that a change in the distribu- tion of the cost between the employer, the employee and the Commonwealth might be made so that the contribution of the Commonwealth might be reduced, if it seemed better to throw a larger proportion upon the two industrial factors and not to increase so much the State tax. The benefits in the proposed health insurance law are liberal in comparison with those which are afforded abroad, although not more liberal than those which are afforded in some of the systems abroad. It is possible to reduce the cost substantially; by two methods. First, by limiting the number of persons included in the com]^ses}rbfiJ'Simim Thus, for instance, agri- 1917.] HOUSE — No. 1850. 37 cultural labor and domestic service might be excluded, and systems abroad have often begun with such exclusions. ' Again, the income limit to persons might be altered. There might be reductions made in the charge of the medical benefits pro- vided, etc. It would not be desirable to diminish the benefits to such a point that they would not yield •substantial returns. An experimental start should be such as will give a real result. There are a number of other questions which must be deter- mined before the adoption of any system of health insurance. Most of these questions relate to details of administration, some of them very important details. This commission in -the time at its disposal, for the consideration of a subject which is as yet very new to the citizens of this Commonwealth, has not been able to reach conclusions as to all matters of adminis- tration which it is satisfied will endure the test of experience. In general, the scheme of administration worked out in the bill printed in Appendix A, page 149, seems likely to be suc- cessful. Further study a;nd disciission will perhaps show the necessity of modifying the plan in some respects. We are satisfied, however, that some plan for health insurance should be adopted as an important early step in the interests of social welfare. FRANK S. FARNSWORTH. ALLISON G. CATHERQN. EDEN ,K. BOWSER. HARRY C. WOODILL. I find myself in accord with my associate members in their recommendations in the foregoing statement, with the single exception that I desire to note here that, inasmuch as the cost of the proposition of a compulsory system of health insurance for the Commonwealth has been variously estimated at from $4,000,000, to $27,000,000, I feel I cannot join with the other members in their recommendations as to the distribution of the cost of any such system until more accurate information is available based on Massachusetts statistics. HARRY C. WOODILL. Digitized by Microsoft® 38 SOCIAL INSURANCE. [Feb. STATEMENT OF JOHN P. MEADE AND EDWARD G. MORRIS, Universal health insurance aims to conserve the physical and economic welfare of the wage earner, the family and the State, The loss to the individual in wages and eiBciency, because of sickness and impaired health, is of an appalling character. The existence of poverty in the home and effect of ill-health upon the well-being of the working people of the Common- wealth are well known. Sickness among the working people of Massachusetts is the cause of more dependency than indus- trial injury arising out of and in the course of their employ- ment. The family dependent upon the income of the average laborer is heavily burdened when sickness enters the home. The economic loss resulting from interrupted wage-earning capacity is a menace to the proper development of family life. It is frequently manifest in the most acute poverty and lack of adequate nourishment and care. Wage earners with a small income are unable to meet the expense incidental to medical care during long periods of ill- ness. Investigations made in this Commonwealth have proven that this condition is true in the cage of thousands of working men who have been treated in hospitals and dispensaries. Because of the inability of large groups of wage earners to secure at the regular cost the medical attention needed, hos- pitals and dispensaries have become numerous in the large centers of industrial population throughout the country. It is said that the number of these institutions have increased seven- fold in the last fifteen years. Among the wage-earning section of the population an exces- sively high infant death rate exists. The investigation con- ducted by the Children's Bureau of the United States Depart- ment of Labor in Johnstown, Pa., during 1915, showed that the infant mortality rate among those who lived in the poorest paid part of the community was five times greater than that of the more favorable sections of the community. A similar investigation in Montclair, N. J., showed the same result, — an increased infant mortality rate with a decreased family income. These facts point strongly to the inability of the Digitized by Microsoft® 1917.1 HOUSE — No. 1850. 39 poorly paid wage earner adequately to bear the burden of sickness in the family. That the working -people of Massachusetts are keenly aware of the necessity of protecting themselves against conditions that undermine the stability of the home is evidenced by the fact that they paid over $12,000,000 in premiums for industrial insurance during the year 1915 in Massachusets. What is very significant in connection with this statement is the fact that they received but $4,000,000 in actual cash benefits in return. There is sufiicient knowledge available to justify the opinion that the attitude of the State toward the problem should be one of careful inquiry. The conservation of health is essential to its progress and development. European Nations have made this principle a leading governmental function. The investi- gations of our Commission on the question of health insurance have convinced us that it now constitutes one of the leading world problems. In our own country it occupies a prominent place in public discussion. During the past year the Commission on Social Insurance in California has conducted an investigation as to the need of health insurance in that State, and will report to the Legislature during 1917. The subject is practically a new one for the United States. The adaptation of a system of com- pulsory health insurance to the economic conditions in Mas- sacliusetts, whose industries are engaged in the keenest com- petition with other States of the Union, makes our problem entirely different from that of the European Nations. Compulsory systems of health insurance provide for contribu- tions by employers, employees and the State. Such a system enacted into Federal law would place all industries upon the same basis. The employers' contributions under such circum- stances could be made a uniform charge upon production, and their part in the plan of insurance made to spread over a na- tional area. With compulsory health insurance systems operat- ing in Massachusetts, and excluded from the other States of the Union, a condition would be created in our industrial life which would be distinctly harmful to some wage earners of the Com- monwealth. Employers would certainly add the cost of insur- Digitized by Microsoft® 40 SOCIAL INSURANCE. [Feb. ance contributions to the price of their product. The consumer would in the final analysis pay this portion of the expense. Can this cost be passed to the consumer without doing injury to the wages of our Massachusetts workmen, who are employed in the industries of this State which are a factor in Nation-wide competition? From the Bureau of Statistics we learn that 400,000 workers in the manufacturing industries of this Commonwealth receive an average annual income from their labor of $675 each or less. This amount is not sufficient to maintain a family in reason- able and frugal comfort. The corner stone in the economic structure of the home is a living wage. Conditions in industry that would impair this vital principle should be guarded against. Employers, who because of their inability to meet the compe- tition of other States could not put all the cost of health insur- ance on the price of their product, would be very likely to adopt a policy that would have a detrimental effect upon wages. Some of the leading employers of the Commonwealth declare this danger to be a real one. Under such conditions large corporations contributing vast amounts of money to the insurance fund would declare it diffi- cult to compete with the product of other States where no sys- tem of compulsory health insurance existed. The first to feel the effect of this change would be the wage earner. The legiti- mate fruit of his toil and industry would be jeopardized. Especially is this true in those industries where no organized effort can express the point of view of the worker. In Germany the General Commission of Trade Unions, in a report issued in April, 1916, dealing with this feature of compulsory health in- surance, makes this significant statement : — What is to prevent the employers from lowering wages by the amount of the insurance premiums they have to pay for their men? Only the trade unions can offer an effective resistance to this tendency; only the organization of the workers prevents the masters from casting the burden of their contributions on the shoulders of the workers themselves. It may be said that Massachusetts should be a pioneer in the work of health insurance, believing that, like the experience in workmen's compensation laws, legislation in this direction Digitized by Microsoft® 1917,] HOUSE — No. 1850. 41 would spread rapidly to other States, and the competitive difficulty would soon disappear. As regards workmen's com- pensation, it is known that employers everywhere-were insuring against the risks and hazards of industry prior to the adoption of this legislation, and the cost had become a fixed charge upon industry. The problem of transferring this cost to the consumer was not a new problem in the administration of the compensation laws. In many States the new legislation has made a reduction in the cost of accident insurance to the employer. New York, with its liberal act, is looked upon as a conspicuous example in this respect. It is true that some business concerns maintain certain features of health insurance in connection with the operation of their business in this Commonwealth. It cannot be said that they are in such proportion as to justify a comparison favorable to compulsory health insurance with conditions preceding the adoption of the workmen's compensation act. We hold the opinion that an effective system of sickness insurance can be successfully established only by Federal enactment or by an agreement between the States directly concerned with compet- itive industries. Unless such legislation was operative in other States, workmen leaving Massachusetts would be' compelled to lose their equity in the insurance fund which their earnings helped to maintain. Industries have their low and high periods of production at different times in the year. Fluctuation in employment is an ordinary condition in .manufacturing estab- lishments. The difference between the minimum and maximum working force employed throughout the State of Massachusetts in 1913 was over 185,000. These conditions cause a substantial number of workmen to accept employment and frequently es- tablish their residence in other States, as, for instance, in New Hampshire, where the shoe industry is a factor, and in Rhode Island, where the textile mills are numerous. Until the time arrives when we can safely consider an elaborate system of sickness insurance it would seem that the Commonwealth might consider to its advantage some extension. of our present system of medical administration. Sickness and poverty, to a very large degree, bear the relationship of cause and effect. In fami- lies where the wage of the provider is small sickness leads the Digitized by Microsoft® 42 SOCIAL INSURANCE. [Feb. way to misery and misfortune. Some practical manner of treat- ing with cases where this condition prevails would constitute work of the most constructive type. One of the most effective features of the sickness insurance program is the plan of pro- viding surgical and medical treatment to the dependents of in- sured workmen. To organize a system that would place medi- cal treatment within the reach of wage earners whose income is such that the cost of adequate service is prohibitive would seem to be productive of much good. The need for such service in maternity cases is strongly apparent in the homes of working people. The problems involved in the establishment of a State sys- tem of health insurance should be well thought out by employ- ers and workmen. There should be some basis of agreement reached by these important factors in the industrial life of the Commonwealth before legislation of this character is adopted. The medical fraternity has officially requested the Commission to refrain from proposing legislation until further study of the problem has been made by the profession. With the aim and purpose of health insurance to conserve the health of the wage earner and his family there can be no differ- ence of opinion. Until the means by which this end may be attained are thoroughly understood, and public opinion ig formed on the subject, no specific legislation should be recommended. JOHN P. MEADE. EDWARD G. MORRIS. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 43 STATEMENT OF WENDELL P. THORfi AND EDNA L. SPENCER. We do not advocate immediate legislation for health insur- ance because this Commission has not had sufficient time to study the subject thoroughly. The California commission has spent several years on the problem and is still at work upon it. The need of some kind of health insurance has been amply proved, but before a law is enacted for such insurance the pub- lic and the doctors should be given time to inform themselves as to the value of it, so that they may give it their approval and co-operation. We strongly recommend further study of this system of insurance at once, so that necessary details for the operation of such a law, and especially those relating to its administration, may be determined. There are two propositions for the methods of conducting the administration of such health insurance: should it be of the compulsory contributory character, or of the compulsory non- contributory type? In the compulsory contributory idea there is the un-American feature of compelling our people to enter into a scheme with which they may not be in sympathy. In the compulsory non-contributory feature, by which the wage earner shall not be compelled to contribute, there will probably be opposition from the remaining two parties who would be asked to contribute to it, namely, the State and the employer. Under the compulsory contributory scheme, by which the State, the employer and the employee must contribute, the masses of our people, the employees and wage earners, will find objection for the reason that by direct and indirect tax- ation they would pay it all. The contributory system would place all the burden upon the workers, and it is fallacious to say that there would be three distinct contributions from the government, the em- ployer and the employee. Let us analyze this claim and see who pays. If the government pays, the people pay; if the employer pays, he will charge it to the cost of his products, such as clothing, shoes and other things, and the people, who Digitized by Microsoft® 44 SOCIAL INSURANCE. [Feb. buy the -products, pay again. Now comes the employee, who must contribute his part according to this scheme, and for the third time he pays. If there is to be a system of health insurance established we recommend either of the following methods : — 1. The only contributors shall be the State and the employer. 2. A non-contributory system. We make these suggestions because we believe the employee should not be compelled to contribute to any such system of compulsory contributory health insurance directly from his overtaxed pay envelope. In the hearings held by the Commission, numbers of mem- bers of the medical profession, as well as labor organizations, opposed the enactment of any such proposed law at this time. Labor organizations are also strongly opposed to the compul- sory contributory feature. With any health insurance scheme there ought also to be a system of unemployment insurance to protect the insured during long periods of unemployment from lapses. Health insurance and unemployment insurance were jointly enacted in England in 1911. The medical profession should be given every opportunity to study carefully all existing legislation of this character which so vitally affects them. It is absolutely necessary that they be in complete harmony with any proposed health insurance legislation. As for the people, they should thoroughly under- stand the proposition, and no law which tends to limit medical freedom should be allowed to reach the statute books. We recommend, as a beginning along the lines of health insurance, that legislation be enacted from which maternity benefits may be had, so that any child born in Massachusetts and its mother may have the necessary protection and care needed at such vital times. Maternity benefits, we believt afford a positive and interesting opportunity for immeasurable good, and one that cannot fail to advance the well-being of our future citizens. We therefore recommend the following proposed maternity bill for enactment: — Digitized by Microsoft® 1917.] HOUSE — No. 1850. 45 An Act to protect Mothebs and Children during the Maternity Period in the Commonwealth by Right of Citizenship, through the Establishment of a Maternity Board. Be it enacted, etc., as follows: Section 1. From and after th^ second day of January, nineteen hundred and eighteen, there shall be established a board for the admin- istration of maternity benefits. Said board shall be appointed by the governor and shall consist of three members to serve without pay, all of whom shall be women, and one of whom shall be designated by the gov- ernor to serve as chairman. One member must be a representative of labor, one a physician experienced in obstetrical work, and preferably one who has practised among those who would' be eligible to receive maternity benefits under this act, and one a recognized student of economics. One member shall be appointed for three years, one for four years, and ona for five years. However, at the expiration of the time for which the first two members are appointed the governor shall appoint said members for the term of five years respectively. Section 2. Not later than one month previous to the date for all ap- pointments the governor shall hold a public hearing duly advertised, rela- tive to said appointments, at which he shall preside, and where discussion of names of those eligible for such appointments may be heard. The governor shall fill all expiring terms of office on said commission not later than one month after said term shall expire. Section 3. Said board shall have an office in the state house, and shall receive such money for general office expenses, clerical, travel and other- wise as shall be annually appropriated by the general court. Section 4. Any woman shall be deemed eligible under this act, who is about to become a mother or who has become a mother within two months, and whose income from whatever source is ten dollars a week or less, or whose husband is receiving ten dollars a week or less, or if the combined income of both husband and wife is ten dollars a week or less, and all other women whom it shall be determined, as hereinafter stated, are unable to provide the ordinary and proper care for themselves and infant during a period before and after childbirth. Any woman to be eligible under this act must have been a resident of the state for two consecutive years next previous to application for maternity benefits. Section 5. In case of wage workers, or the wives of wage workers, where satisfactory proof shall be offered that the wage of neither, nor the combined wage, or other income of both, is in excess of ten dollars a week, benefit shall be granted without further investigation. Section 6. An applicant for maternity benefits mUst apply, either through a clergyman or physician, to the mayor of the city or chairman of the board of selectmen of the town of which she is a resident. Such Digitized by Microsoft® 46 SOCIAL INSURANCE. [Feb. application shall be investigated and passed on by a city clerk or clerk of the board of selectmen. No employee or official of any private chari- table organization or poor relief department of a town or a city, or of the state board of charity, Shall be used as an investigator to secure informa- tion relative to requests for maternity benefits. All applications shall be forwarded with recommendations to the board of administration of mater- nity benefits, whose recommendatioiji shall be final, bjit any applicant who is denied maternity benefits shall be entitled to a hearing before the board, said hearing to be open if the applicant so desires. The financial necessity of the applicant shall be the only proposition upon which the board's decision shall be rendered. Section 7. It shall be unlawful to disclose the identity of a recipient of maternity benefits under this act, or to publish the proceed ngs ia any such case unless the consent of the recipient is obtained, or unless such recipient shall have caused public statements to be issued relative to same. Violation of any provision of this section shall be punished by a fine of not less than thirty nor more than fifty dollars for each offence. Section 8. Maternity benefits may continue for a period of six weeks, and as much longer as shall, in the judgment of the board, be deemed neces- sary. Women eligible to maternity benefits under this act shall receive either hospital care or home nursing, or both; medicine and medical care; and such other obstetrical care as may be necessary, and a sum of money not less than ten dollars a month nor more than fifty dollars. Section 9. Such cases shall not be given to a city physician, unless by request of the patient, who shall be allowed in all cases to choose her own physician. The attending physician shall be paid at a rate, in so far as is feasible, commensurate with his or her usual fee for such cases. Section 10. No charitable organization shall furnish nurses under this act. Section 11. No woman receiving maternity benefits under this act shall be deemed a pauper or recipient of charity. Section 12. The commonwealth shall appropriate the sum of twenty- five thousand dollars for all benefits provided for under this act, and the maternity board shall make such regulations and prescribe such oaths as it shall deem necessary to protect the commonwealth in the payment of such benefits. Section 13 . Upon the passage of this act permission shall be requested from the federal government to post copies of it ia every post office in the commpnwealth, and ia addition, an outliae of this act with a statement ol the requirements for eligibility shall be published once each month in the leading papers of the state. Section 14. This act shall be liberally construed to carry out its pur- pose, namely, as an exercise of the poUce power of the state to preserve the health of the citizens, and forever to prevent the placiag of the stigma of pauperism upon the holy state of motherhood. Digitized .by Microsoft® 1917.] HOUSE — No. 1850. 47 An extension of our present methods of dealing with sick- ness in all its details should, we believe, first be taken up and thoroughly dealt with before the enactment of any complicated general health insurance law. Many physicians in the hearings before the Commission expressed the belief that the present methods of prevention and help should be extended to the utmost before any health insurance system is inaugurated. Some felt that if necessary funds could be obtained to do this work properly health insurance would be found to be un- necessary. In European countries there is much discussion as to the value of health insurance. The results of its work in such places have not been entirely satisfactory, but this should not be construed to mean that some health insurance protection of the European type cannot be Americanized sufficiently to warrant its adoption here. We are heartily in favor of any equitable system that will minimize the costly hazards of sickness which destroy the happiness of our people, but we are not unmindful of the great expenses and the difficulties involved in the making and the working of such a protective law,, and therefore believe that this question should be given much more consideration before the final steps are taken than we have been able to give it during our limited time. A special commission should spend at least a year upon this problem. Unfortunately, the conditions in such countries as England and Germany do not allow a very close study of the workings of this insurance legislation under normal con-' ditions. We know, however, that the British Parliament has within the last year been considering changing the financial arrangements in relation to women insured under the act. If we could wait until the cessation of hostilities we would be able to get the benefit of the English experience with health insurance. The extension of the workmen's compensation act to cover the hazards of sickness and the prevention of it should be considered in connection with the further study of the health insurance problem, so as to ascertain if an extension of this Digitized by Microsoft® 48 SOCIAL INSURANCE. [Feb; system, properly changed and adapted, would not, to a large degree, take the place of health insurance. No problem that has ever been placed before the people of Massachusetts deals so intimately with the lives of such a large number of our people. The very complexity of it, as well as its tendency to alter the close relation between the medical profession and the people, demands that we deal with it with caution and care. WENDELL PHILLIPS THORE. EDNA LAWRENCE SPENCER. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 49 REPORTS ON OLD-AGE PENSIONS. INTRODUCTION. Old-age pensions have been the subject of investigation three times previous to the appointment of this Commission. The first investigation of which we have record was authorized by the Resolves of 1907 in accordance with which a commission of five persons to consider thje subject of " old age insurance, or old age pensions, or annuities," was appointed by the Governor and required to report in January, 1909. The time within which the commission was ordered to report was later extended by a resolve of 1909, and with a substantial added appropriation. The commission continued its investigation and reported to the General Court in 1910, its findings and conclusions being pub- lished as House Document No. 1400 of that year. 4' majority of the commission went on record as opposed to the establish- ment of any general non-contributory system of old-age pen- sions in Massachusetts. The second investigation of this subject authorized by the Commonwealth was made by a commission authorized by chap- ter 106 of the Resolves of 1913. The commission consisted of three persons who were appointed by the Governor, consisting of James E. McConnell, chairman, Magnus W. Alexander and Henry S. Dennison. Under the terms creating the commission it was required to make its report on or before Jan. 10, 1914. The commission found, however, that it would be impossible to report within the specified time limit, the Legislature subsequently extended the time until March 16 of that year, and the report was made as of that date. The findings and conclusions of the commission are to be found in House Document No. 2400 of 1914. This cqmpiippion alsq reported that from the evidence it had been able^ to gathe5,^^3rp^;)l^s^„n^9^roun^ upon which to 13038 50 SOCIAL INSUEANCE. [Feb. recommend definite legislation on the subject of old-age pen- sions. The commission recommended a more thorough and far- reaching investigation of old-age dependency, and the necessity for this sort of aid, and further recommended that the investiga- tion be undertaken in connection with the next regular decen- nial census of the Commonwealth. The commission suggested that legislation in the Commonwealth on the subject might be- come necessary at some future time, but did not feel itself justified in suggesting or submitting any definite legislation on the subject at that time. The third study and investigation of the subject of old-age pensions was made as a result of the suggestion of the 1913 commission, and was authorized by the General Court of 1914 by a resolve directing the Bureau of Statistics to conduct an inquiry in connection with the taking of the decennial census in order to determine the extent of age dependency in Massa- chusetts. Further reference is made to this report later on. In this con- nection it is interesting to note that the Commonwealth has ex- pended approximately $50,000 during the last nine years in studying and investigating the need and advisability of a sys- tem of pensions for its aged citizens. The commission of 1909 published in connection with its re- port a descriptive account of all the then existing systems of age pensions. These data have been further amplified and brought up to date by the Bureau of Statistics in connection with its study just completed, and, through the courtesy of the director of the Bureau, the Commission is printing in its Appendix a descriptive account of national old-age pensions. The Bureau of Statistics has been at considerable pains and expense in col- lecting the information contained in the Appendix above men- tioned, and the Commission regards it a most excellent and valuable summary of this class of insurance. In its investigation of the subject of age pensions the Com- mission found in the report which has just been published by the Bureau of Statistics, entitled "Report of a Special Inquiry relative to Aged and Dependent Persons in Massachusetts," practically all the information necessary for its use. This in- vestigation and report av^tszaaa^de/cfBiMfiaant of a resolve passed 1917.] HOUSE — No. 1850. 51 in 1914, directing the Bureau to conduct an investigation in the State in connection with the taking of the decennial census in the year 1915, to determine the number of persons over sixty- five years of age in the cities and towns of the Commonwealth, their length of residence in -the State, the number of dependent persons of all ages being supported in the various public and private institutions within the State, the number of persons receiving aid from any public or private source and the cost of such aid. Through the courtesy of the director of the Bureau of Sta- tistics such data as had already been gathered in connection with its investigation on the subject of aged indigency were at once made available to the Commission on its organization. While reference is made in various parts of the Commission's report to data contained in the report of the Bureau of Sta- tistics, the Commission at this time respectfully commends to the attention of the members of the General Court this docu- ment, which merits their careful study. It is doubtful if any State has ever conducted so thorough and far-reaching an investigation, or gathered and compiled such an amount of in- formation on the subject of age dependency as is contained in this excellent report. A majority of the Commission are in accord in recommending the principle of non-contributory age pensions. Tl^ose members of the Commission, constituting a majority, who recommend the principle of old-age pensions are also in partial agreement as to the taxation of intangible property in the Commonwealth as the best means of providing the necessary revenue for the payment of the pensions. Some of the majority, however, regard it as the part of wisdom to await the results of the new income tax recently enacted in the Commonwealth and de- signed to uncover much of the so-called "hidden wealth" in the State. In the event of this new form of taxation revealing any such appreciable amount of intangible property as has at different i times been estimated to exist, they believe it might then well be made to form the chief means of supporting a system of non-contributory age pensions. The other mem- bers of the majority recommend the passage of immediate legislation establishing a State system of old-age pensions, and Digitized by Microsoft® ' 52 SOCIAL INSURANCE. [Feb^ suggest that the income from the intangible wealth in the State should bear the burden of these pensions. Should the present income tax law prove inadequate in bringing to light enough property to yield a sufficient revenue for the payment of these pensions, these members, forming the major part of the major- ity members, suggest that it be left to the General Court to devise means of reaching this source of wealth, which in their opinion forms such a large part of the wealth of the State. Certain members of the Commission, as will be noted from one of the minority reports herewith, do not regard this as the proper time for putting into operation in the Common- wealth any State system of old-age pensions. While these members are of the opinion that as between the two systems the contributory has more merit than the non-contributory, they consider that the Commission's study shows neither the need nor the demand to warrant the establishment of any age pension system at the present time. The majority reports as well as the dissenting reports are herewith subjoined. Digitized by Microsoft® 1817.] HOUSE — No. 1850. 53 STATEMENT OF WENDELL P. THORE, EDNA L. SPENCER AND EDWARD G. MORRIS, RELATIVE TO NON-CON- TRIBUTORY OLD-AGE PENSIONS. We approach this subject of old-age pensions with solemn thought. We have felt the intense responsibility that must come to any one concerned in a report on a subject which touches so intimately the lives of such a vast number of our people and which means so much to their general welfare and happiness. We have been aware that the greater number of our citizens are in accord 'with our desire that a so-called non- contributory old-age pensions law be enacted to fill a very vital and necessary need — a humanitarian service. We realize, in advocating this measure, that the first test of a State's or Nation's greatness is in the care it takes of the people who inhabit it. After studying the problem of "protecting wage earners from the burdens of old age," we have concluded that it is a very different problem from other social welfare measures, in that there can be no recapitalization of energy and strength in the aged citizen. When old age comes to those without sufficient means, prospects of employment and health and other oppor- tunities are passed, or quickly passing, all lessening the pos- sibility of their providing for themselves, and we have them to treat humanely, with love and respect, or to throw deliberately on the scrap-heap, like human junk, to be neglected till death brings them peace. Therefore we are convinced that the Commonwealth should establish at once a system of non-contributory old-age pensions to protect our deserving aged citizens, both men and women, who are without sufficient means and unable properly to provide for themselves. We have reached this conclusion from the evidence given at our hearings and from the knowledge of the continuously increasing and intense demand for such pensions prolonged over a period of years in Massachusetts. We hold that the so-called non-contributory system of pen- sions is the most humane and equitable; that such protection is an inalienable right of good citizenship; and that a Christian State or Nation, dedi^^^^jt^ jt^oljj^are of its people, cannot 54 SOCIAL INSURANCE. [Feb. with honor continue to degrade its worthy aged people through pauperism after- they have given of their strength and vigor to create its wealth, its greatness and its glory. The result of our examination of the question of the causes of poverty in old age among our people does not agree with the opinions of those who maintain that we are an unthrifty people, and therefore fail to provide for ourselves through life. We find that greed in industry is the principal factor, — the greed which does not permit a living wage; that greed in industry penalizes the industrial army in all its ramifications, making a disastrous condition of need through the lives of the workers, thus keeping them in a condition of prolonged poverty. We are positive that greed in industry demands inhumanely, like Moloch, large profits for the few from the backs of the many; that greed in industry, which creates the und^erpaid toiler, is unholy, is the great industrial disturber, the funda- mental evil which brings the demoralizing hardships that sap the vitality and destroy the physical and moral well-being of the workers. Its baneful influences enter the homes, reduce industrial efficiency, and make the continuous and ultimate costs in the lives of the toilers such that it is impossible for them to save little, if anything, for times of need and for the later years of life. So long as this unfair, inimical and calamitous system of dividing the profits of labor continues slowly and painfully to drag the wage earner into and along the path of poverty to old age, just so long must there be a justifiable demand for non- contributory old-age pensions to be provided as a right of citizenship under the collective action of the Commonwealth to protect such victims. The justice of this demand no citizens can honorably deny. No better or more fitting reasons can be given for the! estab- lishment by this Commonwealth of so-called non-contributory old-age pensions than these, which were given by Lloyd George when Chancellor of the Exchequer in his advocacy of the measure in the British Commons in 1908: — The first general criticism is that this is a non-contributory scheme. ... I demur altogether to the division of the scheme iato contributory and non-contributory. So isffi^aa ^pwbassBft&xes imposed upon commod- 1917.] HOUSE — No. 1850. 55 ities which are consumed practically by every family in the countn/, there is no such thing as a non-contributory scheme. You tax tea and coffee, sugar, beer and tobacco, and you get a contribution from practically every family in the land one way or another. So, therefore, when a scheme is financed out of ptiblic funds, it is as much a contributory scheme as a scheme which is financed directly by means of contributions arranged on the German or any other basis. A workman who has contributed health and strength, vigor and sldll, to the creation of the wealth by which taxa^ tion is borne, has made his contribution already to the fund which is to give him a pension when he is no longer fit to create that wealth. There- fore I object altogether to the general division of these schemes into con- tributory and non-contributory schemes. There is, however, a class of scheme which is known as the contributory. There is the German scheme, ia which the workmen pay into a fund. It is rather a remarkable fact that most social reformers who have taken up this question have at first favored contributory schemes, but a closer examination has almost invariably led them to abandon them on the ground that they are unequal in the treatment of the working class, cumbersome and very expensive, and in a country like ours hopelessly impracticable. . . . Let me give you now two or three considerations why, in my judgment, a contributory scheme is impossible in this country. In the first place, it would practically exclude women from its benefits. . . . Another consideration is that the majority of the workingmen are •unable to deflect from their weekly earnings a sufficient sum of money to make adequate provisions for old age, in addition to that which they are now making, for sickness, infirmity and unemployment. We subscribe to these statements, for we believe that every statement made by Lloyd George herein is applicable to the conditions and touch the same principles as those with which we are concerned in relation to our own people. ' The term non-contributory is used in this report mainly as a contra-distinction between it and the term contributory. We all know that, directly and indirectly, not a single person escapes payment for any government expenses, and we are positive that the so-called non-contributory system is not a system that "robs from the rich to give to the poor." It is said that there is no difference between non-contributory old-age pensions and poor-telief. It is claimed by those who are willing to remake language to suit their own purpose that poor-relief called pensions does not alter the fact that it is poor-relief; but, if we accept the word pensions with its under- stood meaning, it as a periodic allowance to an individual in Digitized by Microsoft® 56 SOCIAL INSURANCE. [Feb. recognition of meritorious work or service. We claim that the industrial army and the mothers in the homes render such work and service to the State, and that such pensions are not de- grading and pauperizing, but come as rewards of merit. Poor- relief, in its understood meaning, is a particular kind of pauper- ization, a gratuity and a pauper's dole, given, not as a particular recognition of merit or of services rendered, but as charity. We maintain, as they did in Great Britain, that there is a complete distinction between non-contributory old-age pensions and poor-relief. It will be argued by some that because numbers of needy aged people did not appear before the Commission in support of pensions there is no real concerted demand from them for it. We disagree with this deduction, and hold that lack of means, inability to be present, no knowledge of the hearings, and just pride in refusing to disclose publicly their need until pensions are to be granted are some of the actual reasons why we did not hear from more of the needy aged. A similar seeming attitude on the part of the English people was also noticeable previous to the enactment of their old-age pension law. Common knowledge compells us to believe there are numbers of such people who would gladly welcome old-age pensions here in Massachusetts. Others hold that only those who will require pensions imme- diately are interested in the coming of such a law, but we know from experience that thousands of citizens below the pension- able age want pensions for those who need them now and as a safeguard for themselves in the coming years. Appealing for this protection because of the known impos- sibility of their people to provide for themselves in old age were members of labor unions representing thousands of workers who made vigorous appeal for the establishment of a system of non-contributory old-age pensions. To this appeal at ' our hearings was also added the favorable support of men and women in various walks of life, while the opposition to the non-contributory system was a negligible factor. Added to this demand for non-contributory old-age pensions was the overwhelming vote recorded at the last two State elections in favor of this measure through the medium of a referendum question ^^jipfee J%?'4?/§/%sfeiows : — 1917.] HOUSE — No. 1850. 57 Shall the representative from this district be instructed to vote for non- contributory old-age pensions, so as to have the Commonwealth pension its deserving needy aged citizens, women and men, over sixty-five years of age and residents of the Commonwealth for at least fifteen vears? In 1915 the vote upon this question in the cities and towns where it appeared upon the ballot was : ■ — Yes. No. Brockton, ... . . . . 7,215 1,341 Cambridge, . . . . . . 8,697 2,718 Lawrence, ... ... . . 5,082 1,303 Methuen, ... ... 1,035 308 Abington, . . ... 671 185 Whitman, . . .... 978 216 In 1916 the vote was: • Yes. No. Boston (Wards 9, 10 and 11), . . .... New Bedford (Eighth Bristol District), 6,147 3,561 1,076 1,140 We are aware of criticisms that will be made against such referenda, but this one was not vague and misleading, as many are; it was easily understood by the people. They knew from their experience the need of old-age pensions, and voted accord- ingly, regardless of the opposition, for they had seen relatives and friends suffering in their last years for the want of such pensions. At its convention in New Bedford in 1915 the Massachusetts State Branch of the American Federation of Labor, which represents approximately 200,000 people, adopted this resolution : — Because the conservation of our aged citizens, women and men, is better than hoards of wealth; because we beheve that Nations only reach great heights of prosperity and happiness as they protect and care for their people; because we know that happiness and prosperity can come on'y to the Nations which care f^}gi^$^d^%fMliW °^ ^°^' *^® children of men, be it 58 SOCIAL INSUEANCE. [Feb. Resolved, That the State Branch of the American Federation of Labor, in convention assembled, give its full support to the establishment by the Commonwealth of Massachusetts of a non-contributory old-age pension system, to keep our aged citizens, women and men, free from the fear of want, free from the barbaric stigma of pauperism when they are no longer able to toil. This resolution came after labor unionists for years had held that they did not want pensions of any kind, holding the hope that the time would come when they would be receiving a wage which would allow them to save for old age. But the time has not come, and they are now, as the resolution says, in favor of non-contributory old-age pensions, because they are unable to save for old age under the living conditions of the day. As a further demand, in 1915 every political party in Massa- chusetts had some reference, directly or indirectly, in its plat- form relative to old-age pensions, or to some means of protecting our people against the hazards of poverty in old age. Governor McCall, mindful of the people's desires, and faithful to his promises, said in his inaugural address in 1916, when asking for an investigation of this subject with a view to securing remedial legislation : — The members of the majority party also stand pledged to an investiga- tion for the purpose of devising a form of social insurance to protect the worker against the vicissitudes of sickness, unemployment and old age. I recommend that you inaugurate such an investigation with a view to the passage of suitable laws. I commend to your attention systems in force in Germany, Great Britain and in other countries in reference to these subjects. The German policy was established by Bismarck, under whose government it was declared in 1881, in a speech from the throne, that "those who are disabled from work by age or invalidity have a well- grounded claim to a greater care from the State than has hitherto been their share. To find the proper means for their care is a difficult, but also one of the highest, tasks of any conmnmity which rests upon the moral foundation of a common Christian life." Governor McCall's inaugural address in 1917 is further proof of the known desire to have such a pensions system as we recommend in the Commonwealth. Our Governor under- standing the need, specifically requests the Legislature to enact a system of old-age pensions without contributory provisions. This splendid appeal is epochal, for it not only tends to heln Digitized by Microsoft® " 1917.] HOUSE — No. 1850. 59 and to protect the aged people of Massachusetts, but also those of the Nation. It is, indeed, an emancipation proclamation that will eventually strike the shackles of old-age poverty from all Americans. The compelling force which we felt it our main duty to obey is in the knowledge of the humane justice and the bringing of happiness to thousands of our people by the enactment of such a pensions law. And we feel intensely that such a law will, as it did in England, finally win the favor of its most vigorous opponents because they will inevitably profit by its enactment, as have those who opposed its coming in the United Kingdom. The protection of old-age pensions by the non-contributory method is needed by all, and is such that those who are now well-to-do cannot afford to be against it. They might lose their wealth, as others have, and then these pensions would come as a godsend to them. The strangest thing of all is that the great masses of our people have been willing to enter old age and starve for years, when they had the power of the ballot with which to provide an old-age pensions law. The retrospect of thousands of good citizens who have suffered because of lack of means in old age is a sad one to contemplate; it is a stain upon the honor of the proudest State and of the proudest Nation of the world. We desire at this time to have the people of Massachusetts understand that in recommending a non-contributory old-age pensions system we are not advocating a scheme of pensions which has not already had a practical test. It has been in operation in New Zealand since 1898, in Australia since 1909 (the entire State), and in England since 1909. In all these countries the law has given entire satisfaction. We call to your attention the fact that within the State are systems of non-contributory old-age pensions costing several hundreds of thousands of dollars, which enormous amount is paid from the people's treasury to retired public servants who have always had better hours of labor, better pay, and, con- sequently, greater opportunity to provide for their old age by saving. Here the Commonwealth has established the precedent of non-contributory old-age pensions for well-paid government employees at the peop^f^^^j^f^^^j.^^^^ 60 SOCIAL INSURANCE. [Feb. In the city of Boston the amount of non-contributory old-age pensions reached the total this year of about $588,000, paid by all its citizens to a comparatively few former government employees now retired under various pensions laws. Other cities, likewise, have civil pensions lists on the non-contributory basis. In 1915 four retired judges of our Supreme Court each received a retirement pension of about $625 a month. In 1906 Justice Charles Allen of the Supreme Court retired under the act which allows judges to receive a special pension. His pension was $5,200 a year, and he continued to draw this' pension for about seven years, until his death in 1913. When his will was probated it was found that, he left an estate in- ventoried at $776,970.52. Why is it that no questions about "thrift" are brought for- ward in these cases of civil pensions for judges and others? Why is it that there is no fear of lessening the "moral fiber," or of the "loss of manhood" if these judges and other such pensioners do not contribute to the general fund? Why is it that no questions as to the need of the recipients are asked? When these pensions were established the majority of our people had little or no knowledge of them or of their significance. They have little or no knowledge of them to-day; and yet everywhere there has been shown dissatisfaction with a system of government that protects a privileged and exclusive few in their old age with non-contributory pensions at the expense of those who are excluded from such pensions. This is one of the causes of the constant and irresistible demand for such pensions for all our people who are worthy and need them. Every citizen of Massachusetts has contributed his propor- tionate share toward these pensions; and yet in their old age many of these contributors are obliged to face their closing years without the protection of pensions, and if they are with- out means they must accept help from the degrading hand of charity. We ask. Is such a system of pensions just or equi- table? It will be held that some face greater dangers in public service than do others in industrial activity. But with this opinion we cannot agree. We find in the great industrial Digitized by Microsoft® 1917.] HOUSE — No. 1850. 61 establishments high-speed machinery with ever-present danger to the workers; we find such dangers in railroading, in the building trades and in other occupations. In comparison with the public service rendered the Commonwealth, upon which arguments are based favoring civil pensions for judges and other government employees, we place the good mother in the home and the toiler in indvtstry, and hold that they, whose employment is neither as remunerative nor as steady, and whose opportunity to save is not as great, render as good service to the State as do government employees. The opinion has been advanced that the system of pensions which we advocate will place an intolerable burden upon the State, but we do not believe it will be as costly as our present burdensome and highly unsatisfactory methods of creating pauperism from cold and ignominious charity. Recent statistics (1915) show that we are at present paying enormous sums for known public and private poor-relief amount- ing to $3,233,948 for approximately 36,496 people sixty-five years old or over. This great amount does not include the money spent by children who support their parents or by those who aid needy relatives and friends, — people in most cases who cannot afford to do so. This amount of money not ascertain- able would probably run into the millions. If this unknown amount could be added to the cost of public and private charity the total would undoubtedly exceed $9,000,000 a year. Increasing the approximate number of people who accept known public and private poor-relief from 36,496 to 50,000 — people sixty-five years old and over, with a maximum pension of $2.50 for each person a week, and adding administration expenses — the cost would aggregate $6,500,000. We believe this amount would not overreach the total now expended by relatives and friends, joined with that for the maintenance of degrading almshouses throughout the State and for the support of the shameful public and private poor-relief now given per- sons within our Commonwealth. We believe an approximate cost of a system of non-contrib- utory old-age pensions may be ascertained by coriiparing the expense of such systems in proportion to the population of such countries where similar systems are in operation. Digitized by Microsoft® 62 SOCIAL INSURANCE. [Feb. In March, 1914, the total amount paid in old-age pensions in the United Kingdom was £12,370,299. The administrative expenses were "practically inconsiderable," notwithstandmg that there were 984,131 pensioners, of whom 931,344 were in receipt of the full five shillings pension. The remainder received less, down to one shilling, under the schedule of the English a;ct which gives, accordi*ig to income and property, from five shillings to one shilling pensions. The English act covers a total of about 46,000,000 people in the United Kingdom. In Australia, in 1915, the total number of old-age pensioners was 90,892. The amount paid in pensions was £2,691,317, and the amount paid to benevolent asylums for the maintenance of pensioners was £27,630. The cost of administration in propor- tion to every £100 of pensions and asylum payments for the year 1915 was £1 15s. (4 per cent.). The total number of pensioners to every 10,000 of the population was 184. The estimated population of the Commonwealth of Australia was 4,958,000 in 1915. In New Zealand on March 31, 1915, there were in force 19,352 pensions. Payments made at the end of the financial year were £460,814. The estimated population of this country was 1,095,994 in 1914. We are aware that it is impossible to state at this time just how many applications would be forthcoming for pensions here in Massachusetts, because we know that many of our people are practically suffering slow starvation rather than appeal for poor-relief, charity or enter an almshouse. It should be understood by all that a non-contributory system of pensions like that which we recommend is a partial and not a universal system. It is partial in that it excludes the rich and those well-to-do, who could not comply with the requirements as to qualifications because they have more property or income than one would be allowed to possess if granted a pension. This would of course greatly reduce the prospective number of applicants under any age group, whether or no the pensionable age were placed at sixty-five or seventy years. Allowing that there are about 189,000 men and women over sixty-five years old in Massachusetts, the process of elimination under the qualifying clauses of a pensions act, as shown in the proposed Digitized by Microsoft® ■1917.] HOUSE — No. 1850. 63 law appended hereto, would very greatly reduce the number of those who would be eligible under this age limit," and the fabulous figures that have been quoted from time to time as to the cost of a pensions system for people over sixty-five years old would be shown to be out of all proportion to fact. The non-contributory system is not new under our form of government. Schools, roads, parks and all other public im- provements are, in general, paid for on the non-contributory basis involving direct and indirect taxation. No one specifically contributes to them. They are, for the most part, provided from general taxation. In conjunction with other schemes we have considered the feasibility of a compulsory contributory scheme of old-age pensions similar to the German system, maintained from funds contributed by the State, the employer and the employee, but we find ourselves unable to recommend such a system of pen- sions. We hold that such a system as this, .to which the worker must contribute, would be an unjust immediate taking from him of that money he cannot afford to pay. The cost of maintaining a compulsory contributory old-age pensions system with its complicated system of bookkeeping, and other details in relation to those employed and those temporarily out of employment, would be a tremendous and needlessly expensive burden extending over forty years for thousands of our citizens in the checking of contributions and other matters. Without a State system of unemployment protection (insurance), to care for the worker and furnish some funds for him during periods of unemployment, there might occur lapses, making endless diffi- culties which do not burden the non-contributory system. There is, moreover, the proper American repugnance to being compelled by law to contribute specifically to any purely governmental function of this character. The majority of our people will demand that such protection as this should come to them without any such requirements. Let us set these difficulties aside- for a moment, and analyze the compulsory contributory system and see who pays the cost which, superficially, is said to be borne by three distinct con- tributors, — the State, the employer and the employee. 1. We find that when the State contributes it is the people's Digitized by Microsoft® 64 SOCIAL INSURANCE. [Feb. contribution; and as the workers constitute the greater number, in this first instance they pay the bill. 2. When the employer contributes, he being a manufacturer of the necessaries of life, such as shoes, clothing, etc., he will charge this contribution expense to the cost of the products which he sells to the workers. And again the workers pay the bill. 3. Now comes the employee's contribution. Again he pays. Consequently the workers pay the entire bill or contribution. It is no mystic problem, this contributory system, but simply a contributory hand entering the pockets of the workers three times and compelling them to pay it all. Is such a system a fiair one which puts on the backs of the major part of our people, the workers, the entire cost? What is to be done with those who are past fifty years old, whose earnings are very limited and who could not under any possible circumstance contribute? If the contributory has been, or can be proven to be of greater value than the non-contributory system, why is it that the countries which have such a system have not changed to the contributory plan? It is extremely difficult to determine just what amount should be granted as a full old-age pension, but the following figures given by the State Board of Charity as to the present cost of caring for the aged are interesting and may suggest the likely amount: - — From all this office knows of local expenditure for indoor poor-relief, $3.50 per week would represent a fair average per capita cost for the sup- port of each person over sixty-five years of age in almshouses. This would represent an average yearly cost for each person of $182. In answer to the question. Confining the question to citizens of the Commonwealth, what was the largest and what was the smallest amount supplied any needy person over sixty-five years of age in 1916, they reply that the figures are unknown. Answering the question. What is the most costly institution of poor or almshouses, they say : — Taking the question to mean the costliest institution on a per capita basis for the year just closing, the most costly institution is probably that of Milton, where the expenses are in the neighborhood of $10 a week for Digitized by Microsoft® 1917.] HOUSE — No. 1850. 65 all inmates. In. addition the ipstitution provides very good care for its patients. The institution which costs the largest gross amount is that of Boston, because of its numbers. We quote these figures from the State Board of Charity as a particular indication of what the Commonwealth spends at times for indoor poor-relief. What good citizen who refuses to accept pauperism is not entitled to the same expenditure for his comfort in old age? We wish to call your attention to the fact that we are now compelled to care lor any needy people of advanced years should such need come to the attention of the authorities. Consequently, the expense of old-age pensions could not be considered an entirely new burden upon the State in the form of taxation, as many people receiving such poor-relief would become old-age pensioners. As a further suggestion of proof that the funds now used for outdoor and indoor paupers, public and private poor-relief, would in a large measure be transferred to a pensions fund without the necessity of asking for new appropriations for such people, we quote the following from the sixty-second statistical abstract of 1915 of the United Kingdom : — A number of paupers, especially outdoor paupers, ceased to be de- pendent on poor-relief in 1911 in consequence of the partial removal of the pauper disqualification for old-age pensioners. . . . The total number of in door paupers over seventy years of age (pensionable age) decreased from 57,000 at Jan. 1, 1910, to 47,197 at Jan. 1, 1915. Correspondingly, the number of outdoor paupers decreased from 138,223 at Jan. 1, 1910, to 8,456 at Jan. 1, 1915. These figures relate only to England and Wales, and do not include Scotland and Ireland or other parts of the United Kingdom. It will be found by these figures that numbers of outdoor paupers change to pensioners without added expense to the government. It is conclusive evidence that the people prefer to be pensioners rather than paupers. The State Board of Charity's report for the year 1915 gives, as a total valuation of almshouses in Massachusetts, $4,732,- 129.53. The cost of repairs for the year amounts to $305,901.18 of which $169,075.54 was spent on new construction at Long Digitizeaby Microsoft® 66 SOCIAL INSURANCE. [?eb. Island, Boston. These figures are based on returns made by the overseers of the poor for the cities and towns. The total amount of salaries for wardens and matrons is, $108,287. In 167 almshouses the management is in the hands of wardens and matrons, and in 5 by a matron only, which makes the State's total of 172 almshouses. The combined salaries for these oflScials average about 11,200 a year for the cities and about $500 for the towns, in addition to their board and lodgings. About three-fourths of the cities and towns employ a total of 519 assistants who are generally paid by the city or town, except in a few instances by the wardens. We find that the town of Acton has an almshouse property valua- tion of $5,000 and a total annual cost of $2,070.86, with a net cost of $649.39. There were but two inmates, one between sixty and seventy, and the other between seventy and eighty. The average cost per person outside of the property investment was $324.69. The town of Adams' almshouse valuation is $20,262. Its total annual cost is $6,903.30, with a net cost of $4,874.09. There were 25 inmates at an average cost of maintenance per person of $194.96. The town of Bellingham's almshouse valuation was $9,957.32. Its total annual cost was $3,381.10, with a net cost of $1,229.77. The three inmates averaged a per capita cost of $409.59. The town of Easton's almshouse valuation was $6,335. Total annual cost was $4,324.91. Net cost, $2,434.78. The average cost for the six inmates was $405.76 each. The almshouse valuation for the city of New Bedford was $186,650. Total annual cost was $38,845.98, with a net cost of $35,658.13. At the time of visitation there were 198 inmates, and the average cost of maintenance of each was $180.09. The almshouse valuation in the town of North Andover was $14,000. Total annual cost was $4,247.48, and the net cost $3,661.02. Six inmates averaged an expense per person of $610.17. In North Reading the town's almshouse has a valuation of $9,000. Total annual cost was $4,245.93. Net cost, $141.95, This institution had but 1 inmate. Reading's almshouse ^^j^i^j^.^^J^^O. Total annual cost, 1917.] HOUSE — No. 1850. 67 $2,625.24. Net cost, $2,035.75. Number of inmates, 6, at an average cost per person of $339.29. . We call your attention to the immense total amount now being expended in the Commonwealth for degrading almshouses, and the staggering total invested in these various properties amounting to nearly $5,000,000 to provide for a total of only 5,007 persons. The foregoing list, selected at random from the Board's report, shows significant figures in the general cost per person, the lowest in the list being $141.95, at Reading,- and the highest being $610, at North Andover. These figures prove conclusively to us that a great number of the almshouses in the Commonwealth should be abolished, and that a large county pension home should be established for purpose of economy in each of the several counties, using the best alms- house, where possible, to house those unable to care for them- selves and who are without friends or relatives and need such institutional care. The total number of inmates in the almshouses throughout the Commonwealth in 1915 (the latest available statistics) was 5,007 persons. Combining the cost of repairs that year with improvements and the assessed valuation, together with the salaries and expenses of wardens and matrons, the grand total expense is $5,146,317.71. The investment for these 5,007 in- mates averages $1,027.82 per person. It is our belief that a large part of this cost for institutional care would be unneces- sary if the greater majority of these people were old-age pen- sioners and could live in private families or in the homes of relatives. In fact, several towns have already come to this conclusion and are supporting such dependents in private families. Included in such towns are Marshfield, Huntington and Chester. In considering how to obtain the necessary funds to support such a system of non-contributory old-age pensions without new or extra taxation, we include for your careful study a declara- tion made by the Tax Commissioner of the Commonwealth in his report. House, No. 2290 of 1913, relative to the enormous amount of intangible personalty (stocks, bonds, etc.) which has escaped taxation for years, though legally taxable. Tax Commissioner Yi^kmi^MiRoSS^T^ said in this report: — 68 SOCIAL INSURANCE. [Feb- That . . . $4,646,264,910 is intangible personalty subject to taxation, but which is not taxed because the Legislature of the Commonwealth has never been willing to enact laws to compel its disclosure. These considera- tions point to an amoimt and value of intangible personalty in this Com- monwealth which escapes taxation which is astounding. This statement shows that while the little householder and the loaf-of-bread buyer have been continually taxed directly and indirectly to bear the burdens which this great wealth should have equally borne, the owners of these billions of dollars' worth of intangible personality legally taxable have evaded their just responsibilities because Legislatures have been indifferent. The income from taxation due the State from this property was estimated nearly four years ago to be over $50,000,000, of which the larger part was never paid. If this property had been compelled to yield the taxes due from it there would have been enough to provide old-age pensions and other social welfare measures without any thought of added taxation. A new income tax law has recently been enacted, and it is expected that it will obviate the difficulties of which the Tax Commissioner complains. While we do not believe it will get more in taxes from the intangible personalty than could have been secured under the old method, if a proper and drastic disclosure law had been enacted, it may, nevertheless, give the Commonwealth an opportunity to know who are the owners of this property and where to tax it. Here is the nest-egg that should bear the burden of old-age pensions. We recommend that an extra 2-mill tax per thousand be placed on such holdings which come under the new income tax law where the value of such property held by an individual, directly or indirectly, is more than $2,000. We believe that this 2-mill tax, if applied, would bring at least $10,000,000 of new money, of just taxes, into the State treasury, and would not place a new direct burden upon real estate, but would be a just contribution from that wealth which has for years evaded taxation while the masses of our people have been compelled to pay. If this contemplated amount, or a good part of it, were added to the amount Wsgitixmfb^piraAs(tm>degra.de our aged people 1917.] HOUSE — No. 1850. 69 with poor-relief in its various forms, we would have more than enough with which to establish and maintain a non-contribu- tory old-age pensions system. As another method by which to obtain funds for such a pen- sions system, we recommend that the Commonwealth open an old-age fund, to be open forever to receive bequests, contribu- tions, escheats, unclaimed savings, unredeemed railroad pas- senger rebates and other moneys. Our reason for this recom- mendation is based on the fact that there have been millions of dollars left by people in the State to benefit old people's homes and private charitable organizations, and we believe that if it were known that the Commonwealth had opened such a fund to help protect its worthy aged citizens it would, if properly advertised, receive a large amount of money. But, withal, if it should be necessary to include any of the cost in the general tax levy, we are agreed that it should be done, for we feel that the general welfare will be so much benefited that all can afford and will be willing to bear a proportionate cost. The principle of old-age pensions being sound, surely we are able to get the money necessary to maintain such a system. With the same problem in view we call to your attention the fact that there are at present savings banks assets within the Commonwealth of $1,078,282,174 and deposits amounting to $997,000,000, represented by 2,457,264 accounts, an average of $406.02 for each account. The question in our minds in relation to this vast amount of savings is whether, by the in- corporation of a State savings bank, this money could not be handled under the direction of the Commonwealth with a greater degree of safety than is now given it, and, at the same time, be made to pay larger dividends by loaning such money directly to the highest bidder, and sharing such earnings, after the expenses of administration have been deducted, with those who have struggled to acquire these savings. Instead of per- mitting this money to pay only 3 or 4 per cent, to the depos- itors through the indirect methods now employed of permitting certain propositions to be called -'savings bank investments," and allowing the use of this money to help those who control such propositions to make large fortunes from such savings while the depositors themselves receive comparatively small Digitized by Microsoft® 70 SOCIAL INSURANCE. [Feb. and insignificant returns, the State should enter the savings bank business, if possible, to benefit not only depositors, but also the public treasury and old-age pensions. We would have gone more extensively into a discussion of the various systems of old-age pensions, insurance and annuities, but they have been treated in House, No. 1400 of the year 1910, while civil pensions have been considered in House, No. 2400 of the year 1914. We desire to say, however, that we do not agree with their conclusion that no general system of old- age pensions is needed within the Commonwealth. We recommend that a study be made of the old-age pensions laws now in use in the United Kingdom, Australia and New Zealand, for each of these countries has had the non-contrib- utory plan in operation for many years. We call special at- tention to the invalidity part of the Australian act, and to that part of the New Zealand act which in general allows: — Any person otherwise qualified to receive a pension who owns property on which he resides, and which does not permit of the granting of a full pension, may qualify for the full pension by transferring the said property ' to a public trustee. The pensioner is permitted to reside on the said prop- erty, rent free, during his lifetime, but he must pay all rates and charges thereon. If a husband and wife, both being pensioners, are Uving together and one dies the survivor is permitted to continue to reside on the prop- erty. On the death of both pensioner and siuTdvor, or where the pensioner is no longer entitled to a pension, the public trustee shall sell the property, and, after deducting from the proceeds of the sale the amount of pension paid as a consequence of the transfer of the property, together •with his commission and interest at the rate of foin" per cent., shaU pay the balance to the person or persons entitled thereto. Provision is made for a pensioner or survivor, or next of kia, paying such amounts as aforesaid at any time with a view to obtaining a retransfer of the property and obviating a sale. This appears to us to be an excellent provision, as the whole accumulation after years of toil of some of our people is rep- resented in a little home or farm. When the powers to earn have lessened, and there is not even a small income to provide the necessary wants, it often becomes imperative for the owners of such property to mortgage or sell their little homes. This provision in many cases would obviate such possibilities and allow those who so desire to remain during life in the home which represents all they possess after their years of struggle. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 71 It is sometimes argued by those who do not beUeve they will ever have need of an old-age pension that they should not be compelled to contribute directly or indirectly, through taxation, to the support of those who will become pensioners. If these dissenters were the 'only ones in the State who contributed taxes for things not specifically used by them, or for their protection, the workers would have a weaker foundation upon which to base their arguments for a non-contributory old-age pensions law. But the workers know they do contribute the greater amount in the building and upkeep of State roads over which the well-to-do automobilists travel, and over which the workers themselves seldom if ever go. Workers without children con- tribute through their direct and indirect taxes to the support of our public schools in which the children of all are, or can be, educated. They support our public parks and other civic improvements which enhance the value of adjoining properties, — the real estate of others, — parks to which the masses of the workers never can go. This is but proof of the contention that every one in society is bearing the burdens of others. It is, in fact, the fundamental basis upon which society is organi23ed in the form of a Common- wealth for mutual protection. " It is a social compact by which the whole people covenent with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good" (Preamble Massachusetts Consti- tution). If small householders object to helping others to an old-age pension, citizens who do not own houses, but who pay for fire and police protection and other civic betterments which enhance the value of the objecting householders' property, could just as well complain that they are providing something for others .through direct and indirect taxation out of which they receive little or no direct benefits. Some think that the small house owner and the real estate owner are the only ones who will be obliged to pay, through taxation, for the costs of non-contrib- utory old-age pensions. This opinion is an error, for such taxes are paid in the majority of cases by the rent-payers. In such a dty as Boston there are thouBiands of people living in apartments who are continually paying taxes through their Digitized by Microsoft® 72 SOCIAL INSURANCE.- [Feb.. rents; they do not own real estate, but they are, logically, the real taxpayers. Surely it is this great army of rent-payers who have the right to complain, — these rent-payers who bear the unfair burden and who can easily prove at all times that they are paying for everything they get. There has been much moralizing as to what should consti- tute deserving citizenship under a pensions law. This argu- ment and that argument have been used against granting of pensions because of some inconsequential condition in which the applicant might have found himself during life. It is impos- sible for a Commonwealth to legislate upon such superficial details. We know that some people are mentally unequal to enter the battle of money-making against those of greater mentality; we know that many people would refuse to make money in a manner that others would not hesitate to employ; hence, moral honesty may be a prime factor of their inability to amass funds for their old age. Shall we condemn this honesty and penalize those who practice it by the poorhouse and pauperism? Shall we say to the man who has no wealthy relatives who could, by bequest, protect his old age, "You are condemned to the horrors of want when age has made it impossible for you to toil and protect yourself"? The Commonwealth cannoit legislate morals into its people, nor can it equalize the ability and the earning power of its citizenry. Likewise, it cannot legislate thrift, nor can it legis- late against the laws of probability, nor can it enact laws that will make possible the coming of good fortune, so that all our people will be enabled to protect themselves through life. There can be no question but that all our people desire to be self-supporting through life; but circumstances over which they have no control bring them to an inevitable want in old age. The struggle to hold a position after one has reached the age of fifty, not to speak of sixty-five, is becoming more and more difficult, and the demand for younger workers to fill the places of the older employees continually increases. What are we to do with such workers? We are in duty bound to protect them; it is a real and just duty of the State. Yet our people toil on, hope on, with the thought that perhaps the good fortune will be theirs which will always make them self-providing. Shall Digitized by Microsoft® 1917.] HOUSE — No. 1850. 73 we penalize them for their honest toil when they fail? Shall we consign them to the degradation of pauperism because they have hoped, because they have aspired, because they have failed righteously? For years many different bogeys have been used to prevent the coming of non-contributory old-age pensions. It has been said that it will destroy gome mystic "independence" of our people; that it will lessen the wonderful buncombe "thrift," or fail to keep the "moral fiber" of our people stimulated; that it will lessen "filial obligation," or, perhaps, some "indolent citizen" would receive a pension. We are unwilling to let such implications go unchallenged, because we know that our citi- zens deserve better treatment. If it is true that a system of non-contributory old-age pen- sions to protect our people, which does not require any specific contributions, will break down our manhood ideals, why is it that our school system, our police and fire systems, our public parks systems, and other governmental businesses which are on similar non-.contributory bases, without specific contributions, do not act as a deterrent to high standards of citizenship? To be logically consistent, then, why not make specific contribu- tions to all these governmental departments which, like non- coptributory old-age pensions, insure protection? Among the many fallacious claims made is that some of our people will become indolent if a non-contributory system of old- age pensions is enacted; it is claimed they will suffer the hard- ships of a long period of forty years or more because of their indolence, so that at last they may receive a small pension. We cannot believe that any great number of our people would forego the opportunity of active participation in profitable work which would insure much more ample comfort than would be theirs from a small pensions allowance in old age. As a proof that such fears are not based on facts, indolence is a dis- qualification under pensions laws. As an instance we quote from the English old-age pensions act: — A person shp,ll be disqualified . . . if, before lie becomes entitled to a pension, he has habitually failed to work according to his ability, oppor- ' tunity and need for the maintenance or benefit of himself and those legally dependent upon him. Digitized by Microsoft® 74 SOCIAL INSURANCE. [Feb, This is but one of such regulations in the English pensions law that immediately destroys the fantasy of those who believe that a pension would come to the indolent and slothful/ We advance the thought that it would, indeed, be better to treat even the so-called unworthy aged with the same kindness and forbearance we give the unfortunate criminal, ^o one would wish to permit great numbers of our people to suffer the brutality of poverty in old age because they fear that some so- called unworthy person might receive a pension. Shall we con- demn to the scrap-heap, like so much wasted material, thou- sands of good citizens because we are inane fault finders and finicky dissectors of the moral worth in, and the causes of in- digence among, our people? Even if they have shortcomings as to morality and worth, as citizens in our Commonwealth these people are of us, children of some parents; they are a part of the organic whole, and sTiould be treated as a Christian State must treat its people. Any effort to determine the blameable and unblameable in human affairs must be done by those with superhiunan pre- rogatives. We do not claim to be able to judge mankind, and divisions as to worthiness, if they are to be finally drawn, must be made by otheijs. However, in dealing with everybody we believe that a npn-contributory old-age pensions system will have an edifying effect, — will be an incentive to good citizen- ship as a necessary requirement for qualification. There is a belief that the recent law passed in Massachusetts compelling children to support their destitute parents will, in large measure, reduce the need of old-age pensions. We do not agree mth this idea, for we know that very few parents would desire to bring their children into court, knowing well that it would result in unpleasant relations with them. There are those who are unmarried, or who have no children, or whose children are not residents of the State, and, therefore, beyond the jurisdiction of our courts. The most unfair aspect of this law is that the children of our pensioners are not subject to its unpleasant provisions because of this class legislation, while the remainder of our citizens whose parents do not 'receive such pensions, but who provide the money which supplies tbese special-privilege pensions, are amenable to the penalties of this law. If this is not unfafepf'etctSs' i©gid«fl^n, what is it? 1917.] HOUSE — No. 1850. 75 We dislike the condemning suggestion contained in this law that our people must be forced to do that which they would willingly do if they at all times had the means. We cannot consider the assumption that such a law will ever have the decent purpose that permits it to take the place of old-age pensions; and we further claim that every worthy man and woman, citizens of the Commonwealth, are entitled to the in- dependent protection of a pension, so that they shall not be under obligations or become burdens to relatives and friends. Whatever are the merits of such a law we are unwilling to allow our people to be stigmatized by it as lacking love and respect for their parepts. We entirely disapprove the assimiption that the enactment of a' non-contributory old-age pensions law will lessen filial obligations, will lessen love for and protection of parents by their children. For we know that a pensions income for the aged, however small, would make both parents and children happier and keep them together. The saddest happening in the lives of sons and daughters is when they find themselves unable to protect their fathers and mothers because of the expense of their own immediate families, — the expenses of unemployment, sickness, and other exigencies which continually press upon them. It has been proved in countries where non-contributory old-age pensions, are granted the aged parents that it has not lessened filial obligations, — respect for parents, — but, on the contrary, has made family ties stronger and happier. To show further that old-age pensions of the non-contributory plan in a gr^at measure creates conditions which promote re- gard for parents instead of lessening it, we quote from the New Zealand Pensions Commissioner's report for 1905: — One phase of the old-age pensions scheme to which I desire to direct attention is that which has resulted in the improved relations between the younger generation and their, aged parents. Prior to the introduction of the act it was with extreme difficulty that numbers of sons and daughters throughout the colony were able to make proper provision for the welfare of fathers and mothers who had reached the age when work was out of the question, and when in many instances the state of health demanded the utmost care and attention. This, though often ungrudgingly given, neces- sitated a great amount of self-denial and an added expenditure that could be ill afforded. Now, with the beneficent old-age pensions act on the statute book, the old ordgs^^gtejl^f&to "hanged in many directions; 76 SOCIAL INSURANCE. L^eb, and with the change that has been brought to the home of many of our young colonists that measure of assistance which has been sufficient to lift them from drudgery, and, in some instances, want, to the realm of com- parative comfort. For, by means of the aid now given them by their aged parents in the shape of the pension, they have been freed from the evil which is perhaps the surest destroyer of their domestic happiness, namely, the anxiety created by the difficulty in providing the necessaries of life; and aged people now receive at the hands of their children an amount of consideration which it was practically mipossible for the latter to previously bestow. . . In many instances the freedom which has come to the younger generation has resulted in their sphere of influence in the world being enlarged, in that they now find themselves in position to marry, and , are thus able to add to the wealth of the State be the bringing up of families. Thousands of our citizens know full well the truth contained in this statement from New Zealand. Every condition spoken of in it has come home to everybody, and has been a cause of unhappiness and bitterness in many families, which non-con- tributory pensions would correct. It is impossible for us to see how the majority of the workers, try as they will and do, can save anything from their weekly wage after meeting the living expenses of the week, with the at- tendant incidentals due to sickness, unemployment and other causes. The average yearly wage in Massachusetts in 1913 in manufacturing industries gives approximately $10.95 a week. Let us increase this average weekly to $15 or $20, and then let us ask the workers, especially those with children, how they would find it possible to save after the costs of ordinary neces- saries of living have been met. We know it is impossible to save much, if anything, from such wages. To flaunt in the faces of those who have reached old age without means, after having struggled manfully and well through long years of painful self-denial in which they have been unable to save, the reproval, "You should have been thrifty," is inhuman mockery. Many of such opponents say the people should not spend so much on clothes, shoes, amusements, cigars, et cetera. Let us analyze this and see what would happen to the industry and the business of the community if such money of the masses were withdrawn from circulation and saved. First, we would Digitized by Microsoft® 1917.J HOUSE — No. 1850. 77 meet the inevitable proof that general business would suffer, and the unemployment of the people who now depend upon employment in this general business would consequently result. This condition of affairs would ultimately reach the pockets of the very men who now advocate this false economy called thrift. Second, if this kind of thrift were practiced we would not be living according to American standards, for no real American standard could request, little less demand, that a supposedly free people live so penuriously as to deny them- ' selves the necessary pleasures and comforts that make life worth living in order to save a few pennies for old age. After considering the opposition of the objectors who dis- parage the non-contributory plan of pensions because they believe it will discourage thrift, we are convinced that such objections are not founded upon fact; and we are unwilling, therefore, to accept any stigmatic suggestion that our people, as a whole, are unthrifty. We know they often practice fru- gality to a painful degree, and we will not advocate that par- simony, which is unreasonable and excessive saving for the sake of saving at the expense of decent living conditions, be their practice. Nor do we believe it is the duty of the citizen to practice that miserliness which denies one's self and others the ordinary comforts, and even the necessaries, of life for the mere sake of hoarding money for old age. We know that thousands of our people must of necessity, and do, practice prudence and providence beyond reason and justice to themselves. It is, in fact, an ever-present wisdom obtained from the sad experience in the homes of the masses. The advocates of pseudo-thrift who advise people to be thrifty on small wages should change their term, for they misunderstand the real definition and sig- nificance of the word, which means the earning and saving with a view to wholesome and profitable expenditure at a proper time. This proper time is incessantly faced by the toiler whose weekly wage must often be expended upon those dependent upon him long before it is due, leaving him nothing to save for old age. Yet every dollar thus expended promotes the industry and the business of the Commonwealth. In this way is paid 90 per cent, if not all of the taxes, directly and indirectly, which go into the tre^^u^^^^^f, fe S||,te. 78 SOCIAL INSURANCE. [Feb. Will any one believe that he who saves selfishly and miserly for his own protection is of as much 's^alue to the commimity as he who, spending as he goes, even extravagantly, buys of the products of industry, thus contributing to the prosperity of all? It will readily be seen that while reckless extravagance is not praiseworthy it is of greater value to any community than the practice of the sordid greed of niggardliness. To show that thrift has not decreased in the United Kingdom during the period in which non-contributory pensions have been in operation, we quote the following figures from the sixty- second statistical abstract of the United Kingdom, which con- tains tables showing that thrift on the part of the working classes has not diminished since pensions became efiFective in 1909. It is shown in this report that during the period of six years preceding Dec. 31, 1908, the number of depositors' ac- counts for the United Kingdom increased to 1,885,090, and the amount due depositors to £16,043,126, while during the six years following 1908 (year of pensions law enactment) the number of depositors' accounts increased to 2,496,563, and the amount due to depositors to £29,884,994, notwithstanding that the figures for the year ending Dec. 31, 1914, were affected by the war. Here is a very notable argument to repudiate the statement that old-age pensions discourage thrift. A claim is also made that "the people want something for nothing." If the people ever have, they have never received it, especially in the caring for those who need assistance in old-age. If it were not for the sadness of it, it would be hu- morous for us to continue working along the lines that will insure longevity, and then refuse to protect old people with pensions so that they may enjoy life to the end with some measure of comfort. Much fear has been expressed that if Massachusetts were to enact a pensions law residents of other States would come here and take up residence in order to receive its immediate benefits.- This would be impossible, because any proposed pensions law should stipulate that an applicant must have been a resident of the Commonwealth for a term of years. A phase of industri^gl^ed^^lMelto^teuld not be forgotten in 1917.] HOUSE — No. 1850. 79 relation to the need of pensions is that the larger number of the working class in industry to-day is facing an efficiency test which was unknown a short while ago. High speed and intri- cate machinery demand from these workers a health-racking exactness that slowly destroys their physical stamina and well- being. It is a battle between the endurance powers of the human and the high speed and tremendous strength of mar- velous contrivances of steel. In this vitality-using contest the worker loses and becomes prematurely old, — unfitted to per- form his usual tasks at a much earlier period of life than formerly. The worker must alone and unfairly bear the loss of his strength, of his failing eyesight, of his physical breakdown from his overtaxed and meager earnings; At this time of life the earning power of thousands of workers becomes lessened. They are no longer wanted in industry. They have honestly been unable to save for old age, and in middle life the great ma- jority of them feel the coming of the baneful prospects of degrading poverty. This is also true of thousands of workers in offices and in other businesses. Consequently, it has come to us, in the course of our investigation to protect the wage earner, that there should be something done to hold such people in industry who are passing middle life and are no longer able to meet the exacting requirements of their particular trade or work. We recommend that employers, labor unions and others study this question carefully, and devise some scheme whereby such workers may be employed in other departments of industry or civil business. To put upon the worker the whole, or even a partial, burden of the cost due to his physical incapacity under these circumstances is inhuman. This burden should be borne directly by the profits of industry that were made from this human wreckage, and the worker should be protected by some form of invalidity and age pensions without specific con- tributions by him. To test these observations let us con: fidentially approach, if you will, this type of citizen fifty years old, gray, not as active as before, but, withal, a good citizen who has lived with his family according to American standards, but who has not been^a .^,|g|gd^/^ift.^ Ask him if he has been 80 SOCIAL INSURANCE. [Feb. able to save an;^thing, and invariably his answer will be no, for family expenses, happenings in life over which he had no con- trol, have taken it all. Then there is his good wife; she too has been unable to save. If this husband break down or lose his position, both are but a few weeks from need, from charity, or perhaps the poorhouse, unless they have children or other relations and friends who can help them. This fear, this worry which comes to thousands of our people is more destructive of humanity than many of the conditions and diseases for which we annually spend thousands of dollars to prevent. A few years ago the Commonwealth enacted a law "to provide for suitably aiding mothers with dependent children," known as the widows' pension law. This act, like all other legislation of this character, is of the non-contributory type. When it was proposed, it was called paternalistic and socialistic, and was considered a mad attempt to make citizens provide for the support of widows and children not related to them. The cost of maintaining this act has increased enormously over the original estimate, yet every one is satisfied that it is a good law and serves a great purpose. Many of those who opposed it in the first instance are now agreed that it has proved its value. It has been suggested that the old-age pension is a Federal and not a State duty. This brings back the time-worn argument of State rights. We respect its moss-grown antiquity, but we refuse to be misled by such subterfugean Rip Van Winkleism. We feel it would be much more economical for Massachusetts to expend her own money within the Commonwealth than it would for her to pay the costs under a Federal law in which she would be obliged to bear in part a heavy burden of other States which have not an equal industrial wealth. It could be argued with equal justification that workmen's compensation and so-called widows' pensions, child labor and the restriction of hours of labor, are purely national and not State propositions, yet the Commonwealth has enacted such laws. . There is already a system of contributory pensions in opera- tion for State employees, to which these employees and the Commonwealth contribute. Even here the masses of the people are paying out of the State's treasury towards the civil pensions of government employees,, and vet they themselves are un- . , , . . , , Digitized by Microsofmi "^ provided tor m old ag° 1917.] HOUSE — No. 1850. 81 Another reason for our advocacy of the so-called non-con- tributory old-age pensions system for our people is that we believe it will be found to be constitutional. This Commonwealth has already expended over $35,000 in investigating the subject of old-age pensions covered in the reports made in 1910 and 1914, and to this is to be added the expense of this Commission's work relating to the subject. For the Commonwealth to spend another dollar for investigations of any kind whatsoever without taking definite action in establishing an old-age pensions system would be little less than criminal expenditure of the people's money. It is now time for positive action in behalf of' this great problem, and the people should not permit theinselves to be humbugged by any claim that it is necessary to waste more time or more money in investigating this subject which has already been sufficiently investigated. Against the critics of the non-contributory old-age pensions system we place the following letters and statements from emi- nent statesmen who know how the non-contributory old-age pensions system has worked, in their respective countries: — Prime Minister Asquith, Commons, 1911, said: — I think we were perfectly right not to adopt the principle of contribution in regard to old-age pensions, because I am satisfied — as I was then — that a system of old-age pensions based upon contribution would have been futile and a failure. Lloyd George, in 1912, when Chancellor of the Exchequer said: — After the first year, however, the popularity and success of that measure (non-contributory old-age pensions) was so firmly assured that at the last general election the worst accusation that any one could bring against a candidate was that he was ia favor of tampering with that first great article in the Magna Charta of the poor. A. Bonar Law, now Chancellor of the Exchequer of England, says : — The old-age pensions scheme has, in my opinion, been very successful and beneficial. I am sure it would not be abandoned here, and I per- sonally strongly approvtf>ffiffttsc/ by Microsoft® 82 SOCIAL INSURANCE. [Feb. Arthur Henderson, formerly chairman of the Board of Edu- cation of London, and now a member of the British Cabinet, sends the following: — In my opinion the introduction of old-age pensions (non-contributory) has been of the greatest benefit to the working people of this country. By relieving large numbers from the fear of destitution in their old age it has increased the happiness of the people at large. For this reason alone, apart from the subsidiary advantages, such as the strengthening of family ties and the removal of the much-dreaded stigma of pauperism, in my opinion it has been thoroughly worth the trial. I see no reason to suppose that it has discouraged thrift, and I am quite sure that of the various social reforms which have been introduced in the last ten years this is one of the last which our people would allow to be repealed. Phillip Snowden, M.P., had this to say in 1916: — No legislative act ever passed in this country has been so popular as the old-age pensions act. One never hears a word of criticism of it, and those who opposed its enactment never hint at opposition to it. The act could not be repealed. No such suggestion has been made from any quarter. No parliamentary candidate would ever dream of suggesting its repeal. Mr. Lloyd George has never repudiated the act. It has been the greatest boon ever conferred on the old folks in this coimtry. It has made con- siderable economies in the cost of the poor-law system, as old people can now live with relatives and friends who formerly had to go inside the poorhouse. From John Redmond, M.P., comes this letter:—^ Old-age pensions have made the people happier; they have not become thriftless because of it; and it has been a great boon, not only to old people of seventy years of age and over, but also to their families and to the community in general. From F. Herbert Stead, M.A., of London, we receive the following: — As you know, the position I have occupied and occupy has enabled me to come into touch with the old people most recently in our agitation for national old-age homes in different parts of the country. Everywhere there seems to be no consciousness or even a hint of pauper taint attaching to the old-age pensions. People look forward with hope and joy to the time when they shall receive their pension. They used to look forward with horror and desnair Digitized by Microsoft® ^^a^a^ 1917.] HOUSE — No. 1850. 83 to the time when they would have to receive poor-law relief. The attempts of a very small minority, who were "in principle opposed to old-age pensions," to "crab" and disparage pensions and regard them as merely another form of poor-law rehef only throw into stronger relief the national unanunity of satisfaction with the moral as well as the social relief of old-age pensions. Sydney Webb, widely known authority and writer on eco- nomic subjects and member of the Fabian Society of England, says: — The old-age pensions act has by universal testimony been an unqualified success, a pure gain with almost no drawbacks. Fraud has been very small (and then only venial). . . . The experience of New Zealand and Aus-. traUa has been the same, and the number of paupers over seventy years has been enormously reduced; there are now hardly any outdoor paupers over seventy, whilst of the indoor paupers there remain only the chron- ically sick or feeble-minded or incapable, to whom the workhouse is a home of rest. No political party would dare to suggest repealing the act; in fact, no one has ever done so. Arthur M. Myers, Minister of Pensions for New Zealand, wrote on July 24, 1916: — I think there is little doubt but that the great bulk of the community is satisfied that the provision made by Legislature is one that is of very great benefit to that section of the people, who, through force of circum- stances, in their old age are dependent upon others for their support. As to the sentiment of the people, for or against the law, and the possi- bility of its being repealed, I think I am safe in saying that there are no set of circumstances that I can conceive wh6re a demand would be made for denying the old people the pension, which has now been payable since the year 1898. F. W. Ross, Assistant Commissioner of Pensions for the Com- monwealth of Australia, adds his approval thusly: — The relief extended by the pensions act is widely appreciated, atid the operation of the act has given general satisfaction. To these opinions could be added numbers of others, but space does not permit, and our citizens should go very carefully before decrying the efficiency of the non-contributory old-age pensions system. They should at all times, when they desire Digitized by Microsoft® 84 SOCIAL INSURANCE. [Feb. such laws, instruct their representatives and senators and other officers of government to carry out their expressed wishes. When Lloyd George and former Premier Herbert H. Asquith and other able men of the United Kingdom were advocating the humanitarianism of old-age pensions every conceivable state- ment was made against its value and necessity, — statements similar to those we are now hearing here, and among them is the erroneous claim that it will ruin our prosperity, a claim that was used by those who opposed the measure in England. But practical experience in Great Britain has not justified the claim, but has shown distinctly that the assumption is not in accord- ance with fact. Lloyd George, in his second budget speech in 1910, testified to the fallacy of such argument in these words: — It looks as though this rich and powerful Nation, after the exceptional provisions it has been making for the needy and unfortunate, has been blessed with greater prosperity than it has ever attained in the whole history of its commercial greatness. This expression is significant. It tells us tersely that Nations prosper as they guard and care for the children of God, the children of men; so shall we prosper as we care for and protect our people in their old age. In arriving at these conclusions we have given thought to all the trivial objections against non-contributory old-age pensions that tended to belittle the wage earners — the great industrial army — and the mothers in the homes, and we cast them aside as erroneous and inane as compared with the nobler justice and higher humanitarian aims which are centered in the pen- sions system that will protect our people from the want, the degradation and the shame of pauperism in old age. We ask, what imagination can conjure a fitting emblem for these heroes of toil who have been touched by the Master-hand, which has placed upon their brows the wreath of courage and valor, — a courage that would take the test with any hero of any battle line; a valor born in these God-fearing toilers, who love their families and heroically sacrifice all for them in the battle of life? Can a mere protection of a non-contributory old-age pensions system by the State — by the people as a Digitized by Microsoft® 1917.] HOUSE — No. 1850. 85 tvhole — ever be a compensating reward for this heroism, this valor, this courage; for these difficult, and at times heart- rending, struggles against great odds which the masses of the people have silently and uncomplainingly borne in their years of great contributions to the development and prosperity of this Commonwealth? We submit for your consideration a compiled old-age and invialidity pensions act, as follows: — An Act to protect Citizens of the Commonwealth fkom Want in Old Age, Invalidity or Disability, by Right of Citizenship; AND TO CONSERVE AND PROMOTE THEIR HeALTH, HaPPINESS AND Prosperity. Part I. ■ — Old-age Pensions. Statutory Conditions. Section 1. (1) Every person (woman or man) in whose case the conditions laid down by this act for the receipt of an old-age pension (in this act referred to as statutory conditions) are fulfilled, shall be entitled to receive such a pension under this act so long as those con- ditions continue to be fulfilled, and so long as she or he is not disqualified under this act for the receipt of the pension. (2) An old-age pension under this act shall be at the rate set forth in bhe schedule to this act, section thirteen. (3) The sums required for the purposes of this act or its administration shall be paid out of moneys provided as required by the general court from taxes from intangible personalty (certain stocks, bonds, etc., further described in the tax commissioner's report,^ or from any other taxable property. (4)|The receipt of an old-age pension under this act shaU not deprive the pensioner of any franchise, right, or privilege, or subject her or him to any disability. Section 2. The statutory conditions for the receipt of an old-age pension are — (1) The person, if a woman, must have attained the age of sixty; if a man, must have attained the age of sixty-five. (2) A person shall be deemed to have attained the age of sixty or sixty- five on the commencement of the day previous to the sixtieth or sixty- fifth anniversary, as the ease may be, of the day of her or his birth. (3) The person must satisfy the pension authorities that for at least twenty years up to the date of the receipt of any sum on account of a pension she or he has been a citizen of the commonwealth, and that for at least fifteen years in the aggregate up to the date of the receipt of 86 SOCIAL INSURANCE. [Feb. any sum on account of a pension She or he has had her or' his residence in the commonwealth: provided, that for the purpose of computing the fifteen years' residence in the commonwealth under this provision — (a) Any period spend abroad in any service of the United States, the remuneration for which is paid out of moneys provided by the national government, or as the wife or servant of a person in any such service so remunerated; and (h) Any periods spent abroad by any person during which that person has maintained or assisted in maintaining any dependent in the com- monwealth; and (3) If it appears that any person has directly or indirectly deprived herself or himself of any income or property in order to qualify herself or himself for the receipt of a pension, or for the receipt of an old-age pension at a higher rate than that to which she or he would otherwise be entitled under this act, that income or the yearly value of that property shall, for the purposes of this section, be taken to be part of the means of that person. Time of Payment. Section 5. (1) An old-age pension under this act, subject to any directions of the commissioner and of the treasurer of the commonwealth in special cases, shall be paid weekly in advance in such manner and subject to such conditions, as to identification or otherwise, as the treas- urer and the commissionej)/gjr^/,y Microsoft® 1917.] HOUSE — No. 1850. 89 (2) A pension shall commence to accrue on the first Friday after the claim for a pension has been allowed, or, in the case of a claim provision- ally allowed, on the first Friday after the day on which ^he claimant becomes entitled to receive the pension. (3) After the first day of March, nineteen hundred and eighteen, the central pension authority shall, if the facts warrant, date a pension back to, but not beyond, the date of claim, application or question of a person. (4) A sum shall not be paid on account of an old-age pension — (a) To any person while absent from the commonwealth; or (6) If payment of the sum is not obtained within three months after date of which it has become payable. Norir-assignment . Section 6. Every assignment of or charge on, and every agreement to assign or charge, an old-age pension under this act shall be void, and, on the bankruptcy of a person entitled to an old-age pension, the pension shall not pass to any trustee or other person acting on behalf of the creditors. Claims for Pensions. Section 7. (1) All claims for old-age pensions under this act, and all questions whether the statutory conditions are fulfilled in the case of any person claiming such a pension, or whether those conditions con- tiaue to be fulfilled in the case of a person in receipt of such a pension, or whether a person is disquahfied for receiving or continuing to receive a pension, shall be considered and determined as follows : — (a) Any such claim shall stand referred to the local pension com- mittee, and the committee shall (except in the case of a question which has been originated by the pension officer, and on which the committee had already his report), before considering the claim or question, refer it for report and inquiry to the pension officer. (6) The pension officer shall inquire into and report upon any question or claim so referred to him, and the local pension committee shall, on the receipt of the report of pension officer, and after obtaining from tiim or from any other source if necessary any further information as to claim or question, consider the case and give their decision upon the claim or question. (c) The pension officer or any person aggrieved may appeal to the central pension authority against the decision of the local pension com- mittee allowing or refusing a claim for pension or determining any question referred to them within the time and in the manner prescribed by regula- tions under this act, and any claim or question in respect of which an appeal is so brought shall stand referred to the central pension authority, and shall be considered and determined by such authority. (d) If any person is aggrieved by the refusal or neglect of a local pension conunittee to consider a cl^^/|gj ^5i^^^j^r to determine any question 90 SOCIAL INSURANCE. [Feb. referred to them, that person may apply in the prescribed manner to the central pension authority, and that authority may, if it considers that the local pension committee have refused or neglected to consider and determine the claim or question within a reasonable time, consider and determine the claim or question in the same manner as on an appeal from the decision from the local pension committee. (2) The decision of the local pension committee on any claim or ques- tion which is not referred to the central pension authority, and the de- cision of the central pension authority on any claim or question which is so referred to them, shall be final and conclusive. Pension Authorities. Section 8. (1) The local pension committee shall be a committee appointed for every county from the citizens of such cqunty. (2) A local pension committee may appoint such and so many sub- committees, consisting either wholly or partly of the members of the committee, as the committee think fit, and a local pension committee may delegate, either absolutely or under such conditions as they see fit, to any such subcommittee any powers and duties of the local pension committee under this act. (3) The central pension authority shall be the insurance commissioner of the commonwealth, and the commissioner may act through any such committee, persons, or person appointed by him, with the consent of the governor and council, as he thinks fit. (4) Any reference in this act to pension authorities shall be construed as a reference to the pension officer, the local pension committee, and the central pension authority, or to any one of them, as the case requires. False Representation. Secxion 9. (1) If, for the purpose of obtaining or continuing an old- age pension under this act, either for herself or himself or for any other person, or for the purpose of obtaining or continuing an old-age pension under this act for herself or himself or for any other person at a higher rate than that appropriate to the case, any person knowingly makes a false statement or false representation, she or he shall be liable on con- viction to imprisonment for a term not exceeding six months. (a) Any court shall, however, have the power, in the case of a person convicted of an offence under subsection (1) of this section, to impose a fine not exceeding one hundred dollars instead of imprisonment, if it thinks that the justice of the case would be better met by a fine than by imprisonment. (2) If it is found at any time that a person has been in receipt of an old-age pension under this act while the statutory conditions were not fulfilled in her or his case, or while she or he was disqualified for receiving 1 Digitized by Microsoft® 1917.] HOUSE — No. 1850. 91 the pension, she or he, or, in the case of her or his death, her or his personal representative (if such personal representative becomes entitled to any sum or sums as a personal representative), shall be liable to repay to the treasurer of the commonwealth any sums paid to her or him in respect of the pension whUe the statutory conditions were not fulfilled, or while she or he was disqualified for receiving the pension, and the amount of those sums may be recovered as a debt due the commonwealth. This section shall also apply, with" necessary modifications, to cases where an old-age pension is received at a higher rate than that appropriate to the case, as it applies to cases where a person has been in receipt of an old- age pension while the statutory conditions were not fulfilled. (a) Any decision of the local pension committee under section seven on any question which is not referred to the central pension authority, and the decision of the central pension authority on any question which is referred to them under that section, shall be conclusive proof of any matters decided by the committee or the authority. (6) A copy of a decision of the local pension committee or central pension authority, if authenticated in manner provided by regulations to be made for the purpose under section eleven, shall be received in evidence. (3) Where ^ny person who is in receipt of an old-age pension is liable to repay to the treasurer of the commonwealth any sums under this section in consequence of the finding of a local pension committee, or of the central pension authority in the case of a question referred to them, the treasurer shall be entitled, without prejudice to his powers under sub- section (2) of this section, to direct the deduction of those sums from any sums to which that person becomes entitled on account of an old- age pension, in manner to be provided by regulations to be made for the purpose under section eleven of this act. Questions as to Pension Rate. Section 10. (1) It is hereby declared that a question may be raised at any time as to ■ — (a) Whether at any time or during any period a person has been in receipt of an old-age pension when the statutory conditions were not fulfilled, or when he was disquahfied for receiving the pension; and • (6) Whether a person has been at any time or during any period in receipt of a pension at a certain rate when his means exceeded the amount which justified the payment of a pension at that rate, and, if so, at what rate the pension, if any, should have been paid; and (c) Whether a person who is in receipt of a pension at a certain rate is, having regard to his means, entitled to a pension at a higher or a lower rate, and, if so, at what rate the pension, if any, should be paid; and that an application may be made at any time to alter or revoke a provisional allowance of a claim for a pension. Digitized by Microsoft® 92 SOCIAL INSURANCE. [Feb. (2) Section seven of this act shall apply to any such question or appli- cation as it applies to the questions mentioned in that section. (3) Any such question may be raised notwithstanding that the de- cision of the question involves a decision of the local pension committee or central pension authority, as the case may be; but where by a later decision a former decision is reversed, a person who has received any sums on account of an old-age pension in accordance with the former decision shall, notwithstanding anything in subsection (2) of section nine, in the absence of any fraud on his part, be entitled to retain any sum so received up to the date of the later decision which he would have been entitled to retain but for the reversal of the former decision. (4) Where a question is raised as to the disqualifications of a person to receive an old-age pension, and it is alleged that the disqualification has arisen since the person has been in receipt of the pension, and that the disqualification is continuing at the time the question is raised, or, if it has ceased, has ceased less than three weeks before that time, the payment of the pension shall be discontinued, and no sum shall be paid to the pensioner on account of the pension after the date on which the question is raised: provided, that if the question is decided in favor of the pensioner she or he shall be entitled to receive all sums which would have been payable to her or him if the question had not been raised. (5) If the decision on any question involves the discontinuance of an old-age pension, or the reduction of the rate at which the pension is paid, or if, in a case where the pajrment of the pension has been dis- continued on the raising of the question, the question is not decided in favor of the pensioner, the person in respect of whose pension the decision is given shall not be entitled to receive a pension or to receive a pension at a rate higher than that determined by the committee or authority, as the case may be, notwithstanding any change of circumstances, unless she or he makes a fresh claim for the purpose and the claim is allowed, or, in a case where she or he alleges that she or he is entitled to receive a pension at a higher rate, raises a question for the pi^pose and the pen- sion is allowed at a higher rate. Administration, Rules and Regulations. Section 11. (1) The governor and council, in conjunction with the insurance commissioner (central pension authority), may make regula- tions as needed for carrying this act into effect, and in particular — (o) For prescribing the evidence to be required as to the fulfillment of statutory conditions; and (6) For prescribing the manner in which claims to pensions may be made and where paid, and the procedure to be followed on the con- sideration and determination of claims and questions to be considered and determined by pension officers and local pension committees, or by the central pension authority, and the mode in which any pension may Digitized by Microsoft® 1917. HOUSE — No. 1850. 93 be raised as to continuance, in the case of a pensioner, of the fulfillment of the statutory conditions, and as to the disqualifications of a pensioner- and ' (c) As to the appointment of, number, quorum, term of ofiice, and proceedings generally of the local pension committee, and the appoint- ment of pension officers, and the use by the committee, with or without payment, of any offices, and the provision to be made for the immediate payment of any expenses of the committee, pension officers, or other details necessary to carry out the provisions of this act, and which are ultimately to be paid by the commonwealth. (2) The regulations shall provide for enabling claimants to obtain in- formation as respects old-age pensions under this act through city or town clerks; and for provisionally allowing claims to pensions before the date on which the claimant will become actually entitled to a pension; and for notice being given by registrars of births and deaths to the pen- sion officers or local pension committees of every death of a woman over sixty and of a man over sixty-five registered by them, in such manner and subject to such conditions as may be laid down by the regulations; and for making the procedure for considering and determining on any claim for a pension or question with respect to an old-age pension under this act as simple as possible. (3) Any expenses incurred by the insurance commissioner or in carry- ing this act into effect shall be defrayed out of the moneys provided by the general court. When entitled to Pension. Fection 12. (1) A person shall not be entitled to the receipt of a pension under this act until the first day of January, nineteen hundred and eighteen, and no such pension shall begin to accrue until that day. (2) This act may be cited as the Old-age and Invalidity Pension Act of 1917. Pension Rate. Section 13. Schedule:- Means of Pensioner. Rate of Pension per Week. Where the yearly means of the pensioner as calculated under this act — , Do not exceed $212, .... $2 50 Exceed 1212, but do not exceed $238, ... . . 2 00 Exceed 1238, but do not exceed $264, . . 1 50 Exceed $264, but do not exceed $290, . . 1 00 Exceed $290, but do not exceed $316 . . 50 Exceed $316 . .... No pension. I Digitized by Microsoft® 94 SOCIAL INSURANCE. [Feb. Pabt II. — Invalid Pensions. Condition. Section 14. (1) Subject to this act, every person above the age of twenty years, who is permanently incapacitated for work by reason of an accident or by reason of his being an invalid, and who is not receiv- ing an old-age pension, shall, while in this commonwealth, be qualified to receive an invalid pension. (2) Subject to this act, every permanently blind person above the age of twenty years who is not qualified under subsection (2) of this section to receive an invalid pension, and who is not receiving an old^ age pension, shall, while in this commonwealth, be qualified to. receive an invalid pension. (3) Aliens shall not be qualified to receive an invalid pension. (4) No person shall receive an invalid pension unless — (a) She or he is residing in the commonwealth on the date when she or he makes her or his claim to the pension. (b) She or he has on that date resided in the commonwealth con- tinuously for at least twenty years. (c) She or he has, while in this commonwealth, become permanently incapacitated or blind. (d) The accident or invalid state of health was not self-induced, nor in any way brought about with a view to obtaining a pension. (e) She or he has no claim against any employer, company, corporation, or other person, or body, compellable under private contract or law to adequately maintain or compensate him on account of accident or in- valid state of health. (/) Her or his relatives, namely, father, mother, husband, wife, or children do not, individually or collectively, adequately maintain her or him. (5) For the purpose of an invalid pension, a person who is afflicted with a congenital defed;, and who is rendered permanently incapacitated or blind thereby, shall be regarded as having become permanently in- capacitated or blind while in the commonwealth if she or he was brought into the commonwealth before attaining the age of three years. Amount of Pension. Section 15. (1) The amount of an invalid pension shall in every case be determined by the schedule of means and pension amount allowed thereunder in section thirteen of this act, but the pension authorities shall determine each amount of pension, having regard to any contribu- tion made to her or his maintenance, and having regard to her or his having received compensation from any source in respect of any injury. (2) The pension authorities shall in the case of invalidity, and also in the case of accident vfT^Sni^^PMiemM' incapacity for work is not 1917.] HOUSE — No. 1850. 95 manifest, direct an examination of the claimant to be made by a duly qualified medical practitioner, who shall certify whethpr in his opinion the claimant is permanently incapacitated for work, and shall state the grounds upon which his opinion is founded: provided, that the examina- tion may be dispensed with if the claimant resides in a place remote from any duly qualified medical practitioner, or, where medical testi- mony conflicts, the pension authorities shall have the power to decide the application. Pabt III. — Public Trustee. Section 16. (1) Where any person who otherwise would be entitled to a pension under this act is the owner of the property on which she or he resides, she or he may convey or transfer the same to the central pension authority, who shall hold the same as a public trustee, and who shall deal with such property as directed by the rules and regulations to be made for such purposes under section eleven of this act, and all pro- visions of this act, where applicable, shall apply to this section and such property or pension as shall come under this section. (2) The property so conveyed or transferred shall not be deemed to form part of the accumulated property of the pensioner for the purposes of this act. (3) The pension authorities shall permit the pensioner or pensioners to reside on the property rent free during life, and if the pensioner dies leaving a wife or husband who is also entitled to a pension, the survivor shall be entitled so to reside on the said property for life. (4) While the pensioner or survivor aforesaid so resides she or he shall maintain the premises in good and substantial repair, and shall pay all taxes and other rates payable thereon. (5) On the death of the pensioner or of the survivor aforesaid, or where from any cause the pensioner is no longer entitled to a pension, the central pension authority shall sell the property, and out of the proceeds thereof shall (after deducting the commission payable, to be defined under section eleven of this act) refund to the treasurer of the commonwealth so much of the pension paid to such pensioner or pensioners since the date of the conveyance or transfer as but for the operation of this section would not have been payable, together with interest thereon at the rate of four per centum per annum, and shall, pay the balance, if any, to the person or persons entitled thereto: provided, that if at any time the pensioner or survivor aforesaid so desires, the central pension authority shall, on the payment of so much of the pension so paid as aforesaid, reconvey or transfer the property to the applicant or said survivor, as the case may be, and thereafter the value of the property shall not be deducted from the capital value of the accumulated property of the pensioner as aforesaid, and her or his pension shaU be adjusted accord- ingly. (6) Notwithstanding anything in the last preceding subsection, on the Digitized by Microsoft® 96 SOCIAL INSURANCE. [Feb. death of the pensioner or of the survivor as aforesaid, the central pension authority shall, on the application of the person or persons who would have been entitled to said property if it had not been so conveyed or transferred as aforesaid, and on payment by the applicant to the central pension authority of the amount of pension so paid in excess of the amount which would have been payable had no such conveyance or transfer been made, and also on payment of the amount of interest and com- mission as aforesaid, convey or transfer the property to said applicant. (7) Upon the receipt of any moneys under the preceding subsections of this section the central pension authority shall forthwith pay the same to the treasurer of the commonwealth. Part IV. ■ — Old-age Pension Fund. Section 17. (1) The commonwealth shall establish an old-age pension fund to be open forever, to receive contributions, gifts, escheats, unclaimed savings, bequests and any other form of property or money to be used for the purposes of this act. (2) The treasurer of the commonwealth shall be the custodian of any property or moneys received under this act, subject to the direction of the central pension authority as directed by the rules and regulations to be made for such purposes under section eleven of this act. (3) In order to have it known that this fund has been established, the central pension authority shall, from time to time, each year, advertips it in a fitting manner in some of the various newspapers in the common- wealth. WENDELL P. THORE. EDNA LAWRENCE SPENCER. EDWARD G. MORRIS. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 97 STATEMENT OF ALLISON G. CATHERON, FRANK S. FARNS- WORTH AND HARRY C. WOODILL. The undersigned members of the Commission are satisfied that the time is not ripe for the adoption of any system of old- age pensions in Massachusetts. In this conclusion we agree with the majority of two previous commissions which have studied the subject on behalf of this Commonwealth. While there is evidence of widespread desire for a system of non- contributory old-age pensions among those who would at once or soon become the beneficiaries of such a system, a,nd while this desire is not altogether confined to such prospective bene- ficiaries, there does not appear to us to exist any such wide- spread need. Little evidence was presented to the Commission of actual suffering on account of poverty in old age, though we are ready, of course, to admit that some such suffering exists. The present system of institutional care or outdoor relief is admittedly, adequate to meet this suffering, so far as it is a mere physical problem, but the argument is made that the citizen in old age should not be the subject of pauper relief. There is a natural sympathy with this point of view which we ourselves feel, yet to grant relief in the form of a pension to all aged poor is but to change the name, perhaps the extent, of relief, but not its real character. It would be much simpler to provide merely that aged persons receiving outdoor relief should not bie deemed paupers, and to make existing relief more nearly ade- quate in individual cases. Nearly all proposers of non-contribu- tory old-age pensions systems recognize that in order to dif- ferentiate them from mere outdoor relief plans some elements of merit or service must be recognized in granting the pension. The distinctions made are usually of the slightest character. We are not ready to admit that merely to have arrived at a , needy old age without having spent a portion of one's life in the prison or almshouse demonstrates such merit as to entitle one to public support, through a pension. Nor do ^ve believe it possible to attach to any general non-contributory old-age pension system such standards as to secure in actual enforce-, ment a recoffnition of real service to the State. The politi- ° Digitized by Microsoft® 98 SOCIAL INSURANCE. [Feb. cal temptation to remove embarrassing conditions is very- great, and the task of drawing into practice distmctions as to merit is equally difficult. We are told by the proponents of such legislation that pensions are to be granted only to the deserving poor. If we are inclined to adopt such a system, it is worth while remembering the remark of a certain State senator to members of this Commission: "I should like to see the man with courage enough to tell any of my constituents that they are not deserving." ^ If we are to have non-contributory old-age pensions, let us recognize frankly that we are adopting a general and expensive system of public relief for the aged poor. Such a system will be in small degree a substitute for existing institutional care. Such care is seldom given except where custody is needed on account of mental, moral or physical infirmities. Of the 189,000 persons over sixty-five years of age in Massa- chusetts it is impossible to tell how many will qualify under any pension law. They will not be those in our institutions, but will include those now receiving outdoor relief, and many of those now supported in whole or in part by relatives or by their own exertions. Assumptions are of little value except to enable us to realize some of the possible costs of the system. If one-half of the individuals over sixty-five come under the law, and each of these 94,500 persons receives a pension of $150, not an extravagant assumption, the yearly cost will be $14,175,000. This amount would add greatly to the comfort and sense of security of many inhabitants of the Common- wealth, but such a result, however sufficient as an incentive to individual benevolence, is not in our opinion a sufficient reason for the appropriation of public funds. It is merely to adopt Robin Hood's method of robbing the rich to give to the poor, or, more precisely, robbing by taxation the industrious and thrifty, whether poor or rich, and giving to those who have need. It may be that at some time conditions will exist which will require such a general system of public relief, even at the risk of handicapping the industries of the flommonwealth with a great burden of taxation. To us it seems wiser at present to devote public efforts tc^i^eS>E^M(^ii^^oi the conditions which 1917.] HOUSE — No. 1850, 99 ckll for such relief. Means of lessening unemployment, of im- proving the public health, of relieving citizens from the economic burdens of sickness, of securing proper vocational education, of encouraging thrift, and like measures which will enable the industrious worker in much greater degree to provide for his own old age, are to our mind of more immediate importance. When a pension system is to be adopted it seems to us wiser that a contributory system be chosen. Such a plan may be regarded as an assisted system of savings. Those who advocate non-contributory old-age pensions can hardly object to the State's contribution to a contributory pension system. Others will find ground for supporting the State's share as a means of encouraging thrift and assisting industrious effort, for one of the greatest advantages of the contributory system is that it makes a sure distinction between the worker and the shirker. Modern industrial conditions have their part in aging the worker before his time. The employer finds it to his advantage not to retain the aged in industry. Both this responsibility and this advantage are recognized in assessing the employer for a share in the support of a contributory system. It is recognized that those who are now old or near the pen- sionable age cannot be supported on any contributory pension plan. It would be necessary tb give such persons credit for contributions in proportion to their age. Such a concession to the non-contributory principle might be justified merely as a means of introducing the contributory plan. It should, however, be recognized that a man's normal wage should be sufiBcient to provide not only for the support of- the man and his family during his earning period, but for the sup- port of his wife as well as himself when he is, on account of old age, no longer capable of earning. As a State-aided, contrib- utory pension plan is the easiest way under which a worker can make proper provision for old age, it ought to be possible for him under such a system to make provision for his wife as well. To say that his wages are insufficient to make such con- tributions is to confess that he does not receive a true living wage. ■ The same principle really applies in the case of women who arejiot wives of wage earners, nor wage earners themselves. Some one is paying for their support, and it should be recog- Digitized by Microsoft® 100 SOCIAL INSUKANCE. [Feb. nized that adequate support includes proper support for old age. We recognize that there is not at present any general demand for a contributory system of old-age pensions; we submit, however, that in principle and in probable efficiency in opera- tion it has much more to commend it than the non-contributory plan. ALLISON G. CATHERON. FRANK S. FARNSWORTH. HARRY C. WOODILL. Digitized by Microsoft® 1917.] , HOUSE — No. 1850. 101 STATEMENT OF EDEN K. BOWSER. There has not been in Massachusetts, or in any high-wage country, a sufficient experience on which to found any final judgment concerning old-age pensions. There is, however, enough experience to warrant an opinion that an old-age pension of the non-contributory type is adapted to and is a proper part of our governmental function, when proper means are found to meet the expense. Those deserving men and women who, through misfortune or in- ability to save, are not able to provide for their old age, should be cared for, and it is certainly a function of a well-governed State to see to it that its citizens enjoy the fullest measure of happiness and self-respect. Old-age pensions are a means to that end. Old-age pensions, however, mean a great increase in State expense, perhaps doubling or trebling our State tax. We can- not at present say that the State is prepared to meet that new expense. An increase in State tax means an increase in city and town tax, which taxes are for the most part borne by real estate and the contributions of those small real estate holders who have fought the same battles and suffered the same vicissitudes of fortune, sickness, unemployment and losses as those whom they are to support by old-age pension. The direct taxes coming to the State through taxation of intangibles and incomes are not now certain in amount, and I there is little value in speculation as to probable increases or decreases, or as to whether or not there are new sources open to taxation sufficient to take care of old-age pensions. Within a year or two we shall have an exact demonstration as to how large our new State revenues are, and until that time it is not good judgment to greatly alter or amend our taxation laws. If it shall be found that there is an increase in State income adequate for such a purpose, definite legislation might then be considered. And if it shall be found that taxation of intangibles will not yield an adequate revenue for the cost of old-age pensions, then our citizens should be squarely informed of that fact, so that they may not be misled into voting for legislation, however de- sirable it may appear to be, on the mistaken assumption that some one else is going to pay the bills. Digitized by Microsoft<^j^^^ K. BOWSER. 102 SOCIAL INSURANCE. [Feb. STATEMENT OF JOHN P. MEADE. Changed conditions of civilization have presented the problem of old age in a new form. The transition from an agricultural State to a Commonwealth where manufacturing industries predominate has resulted in a great and growing multitude of wage workers dependent upon their daily wage for sustenance and support. The pace at which intricate machinery compels the worker to respond with physical activity is such that the effective workmg life of the industrial population is shortened. It is a matter of common knowledge that, in the power-driven industries of the Commonwealth, workmen above sixty years of age are not generally employed. The demand for speed eliminates them where they are unable to maintain the pace. The merchant or business man approaching this age can slacken his activity and thus prolong his productive years. But when the physical power of the wage earner begins to fail it is very diflBcult for him to keep his employment. There are no reliable statistics to indicate the number of aged persons employed in the manu- fa,cturing industries of Massachusetts. We do know, however, that of all persons injured in the course of their employment in this Commonwealth less than 3 per cent, are sixty years of age and over. These figures from the Massachusetts Industrial Accident Board can only mean that a comparatively small number of the older people are employed in industry. Yet medical progress and improved sanitary conditions within recent years have undoubtedly prolonged the length of human life. In 1880, for example, but 3.5 per cent, of the population of the United States were sixty-five years of age and upward; in 1910 the percentage was 4.3 per cent., and this during a period which was characterized by an extraordinary immigra- tion of young persons. While greater longevity is most desir- able it seems to have the effect of intensifying the problem of old-age dependency. Because of these facts there is now a well- established public opinion that the almshouse is not a fitting reward after a life of honorable conduct and toil. These changed conditions have induced many countries out- side of the United States to relieve old-age dependency. Nations less powerf ulo/i^ffiJd ©qsaeesiBf less wealth than the 1917.] HOUSE — No. 1850. 103 United States have apparently solved the question of old-age relief. Great Britain, Denmark and the British colonies in Australia and New Zealand pension the needy, deserving and aged poor. Belgium, France, Germany, Italy, Spain and Sweden provide old-age insurance under State management. In our own country Alaska recently adopted a plan of pro- viding for the aged and indigent pioneers of its gold fields. The old-age pension law adopted in Arizona in 1915 was, how- ever, pronounced unconstitutional by its Supreme Court. The support of the very aged poor in this Commonwealth at the present time is derived from many sources, — from their individual savings, private insurance, contributions of children and other relatives, employers' retirement pensions, municipal pensions. United States military pensions, public poor relief and private charities. With the annual income of the average wage earner in Massa- chusetts estimated at about $564, it is evident that the margin for possible saving on such an income is exceedingly small for a large portion of the working population. If saving in this respect is affected at all, it is likely to be at the expense of child labor, home work, overcrowding in the tenements, or other conditions not conducing to the public welfare. Whatever the causes and conditions of this problem, it is in- disputable that a portion of the population reaches old age without means of support. Old age is the last emergency of life, for which provision is neglected for every other exigency. It is not correct to assume that all such persons have not been industrious and thrifty during their lives. The savings of many are often swept away by bad investment. Many business failures, too, occur, especially among small-sized concerns, and the number of persons impoverished through fraud or mis- fortune in middle life is very great. In the report of the Massachusetts Commission on Old Age Pensions, Annuities and Insurance of 1910 there will be found the significant statement that out of 14,988 destitute old people interviewed by the Massachusetts Old Age Commission, 4,677 had had some prop- erty at one time or another. It has been said that the possibility of a pension awaiting some portions of the population in their declining yea!rs would Digitized by Microsoft® 104 SOCIAL INSURANCE. [Feb. be sure to weaken their character and habits of thrift. Twenty; years of old-age pensions in Denmark have not visibly weakened the thrifty habits of these people. Indeed, the number who apply for poor relief between the ages of fifty-five and sixty (when eligibility to a pension begins) has markedly declined within that period. On the other hand, the absence of any such system in this Commonwealth has not resulted in making thrift a distinctively Massachusetts trait. That Massachusetts will sooner or later be forced to face the question of old-age relief can scarcely be doubted by any one who is familiar with the condition of affairs in modern industrial communities. The general reasons for some method of relieving old-age dependency are admitted to be sound. Very few are they who do not acknowledge the desirability of old-age pensions. Voters are quite willing, as recent events have demonstrated, to sign petitions instructing their representatives to support bills in the Legislature, with this purpose in view. Many large employers of labor in this Commonwealth still retain on the pay rolls of their business some of their superannuated workmen who have grown old in the service. The principle meets with almost universal approval. The pensioning of the aged and deserving persons of the Commonwealth who have contributed by their talent and labor to its development is a problem that has engaged the attention of the General Court for many years. Groups of citizens in different parts of the State petition the Legislature each year to enact legislation designed to reduce old-age pauperism'. The establishment of an old-age pension system in Massachu- setts can only be accomplished by wise and constructive effort. Pensions for the aged persons of the Commonwealth should not be granted indiscriminately. Only those of good moral char- acter, who through a lifetime of patient industry and toil have contributed to the moral, social and industrial development of Massachusetts, can be said to have a legitimate claim in this respect. Pensions ,are justifiable only on the ground of service rendered to the Commonwealth. When the attempt is made to secure an income sufiicient to provide pensions for the deserv- ing and aged persons, without means of support, the vital diflBculty is reached. The annual amount required would be in Digitized by Microsoft® 1917.] • HOUSE — No. 1850. 105 proportion to the conditions of eligibility. Estimates based on certain bills presented to the Legislature in recent years vary from $5,000,000 to $18,000,000. To add either of these amounts to our present State tax would be simply creating a new burden while attempting to escape an old one, for in addition to the amount now being paid by the State to the recipients of public relief, which investigation of the Bureau of Statistics places at over $2,250,000, there would then remain the task of raising through the State tax the income necessary to maintain the pension fund. The small property owner and the wage earner paying rent would bear this burden chiefly. The Industrial Commission of Wisconsin in its "Report on Old Age Relief," issued in March, 1915, expressed the opinion that a fund should be raised by the State and county, each contributing one-half of the amount necessary for the purpose of providing pensions for aged persons of its Commonwealth. As a means of securing funds by the State for this purpose it was suggested to levy a special poll tax of $1.50 per annum upon all citizens between the ages of twenty to sixty years. This suggestion has at least the merit of candor. It recognizes the fact that when pensions are paid out of general taxation they cannot be said to be entirely non-contributory. The term "non-contributory," in its rela- tion to old-age pensions, can only be properly used to designate that system which does not employ personal contributions for the specific purpose of providing the payments. In the final analysis the citizens of the Commonwealth must be called upon to pay the bills. . I favor a system of pensions for the aged, needy and deserv- ing persons of Massachusetts who are without income or means. I hold it. to be the duty of the Commonwealth to maintain in reasonable comfort those persons who come within this classi- fication, and who by years of service have contributed to its moral, social and industrial progress. Pensions for such persons would simply mean an appreciation of those qualities that make for a prosperous Comnaonwealth. They would be as honorable as that of the soldier, who ofiFers his life for the preservation of the State. Taxation is the only effective means by which to meet the expenses incidental to an old-age pension system. To share the Digitized by Microsoft® 106 SOCIAL INSURANCE. ' [Feb. cost of maintaining the expenses of government, according to the ability of each to pay, is the most practical and just prin- ciple. The Tax Commissioner of Massachusetts, in House Document No. 2290 of 1913, expresses the opinion that in- tangible property to the value of $4,500,000,000 is escaping taxation. A reasonable assessment on this property would yield a sum sufficient to maintain a pension system for the aged and needy. Legislation was enacted by the General Court of 1916 with a view to increasing the revenues of the State by the taxation of intangibles and incomes. It has been said that "within a year or two we shall have an exact demonstration as to how large our new State revenues are, and until that time it is not good judgment to greatly alter or amend our taxation laws." While many will doubtless agree with this view, it is sound to insist that the Legislature should evolve some laws that would insure its rightful revenue from the taxation of intangible personalty. As a means of meeting one of its highest duties, namely, providing for those aged persons without means whose lives have been spent in its service, the Commonwealth should establish an old-age pension system and secure from the taxation of intangibles the means to support it. JOHN P. MEADE. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 107 REPORT ON UNEMPLOYMENT. The problem of unemployment has attracted the attention of the best minds in the Commonwealth for many years. The effect of involuntary idleness upon the general well-being of the individual and its depressing influence in the home constitutes a problem closely associated with the progress of the Common- wealth. Governor McCall, in his inaugural address to the Legislature of 1916, took occasion to present this matter, urging attention to its serious import to the State, and asking that a constructive plan be devised to diminish unemployment and the evils arising therefrom. In forcible language he described the acute con- ditions prevailing in the latter part of the year 1914 and early in the year of 1915, and said: — The unemployraent crisis of the past year revealed our unpreparedness in methods of dealing with this grave problem methodically and effectively. We already have the beginnings of a system of State employment offices, and it seems clear that the State has a constructive opportunity in this direction of which immediate advantage should be taken. Two recent special commissions have recommended legislation along these lines as being both expedient and necessary. One of the most deplorable problems in our civilization is the suffering of the industrious citizen because of lack of employ- ment. When the income of the wage earner is interrupted the welfare of the home is affected. Especially is this true when the family is large and the duty of securing the necessities of life for a number of small children is imperative. A serious prob- lem in a community is the presence of groups of families whose provider is unable to obtain the means of support because of inability to secure work. The effects of unemployment are not restricted, however, to the anxiety and hardships of those out of employment. They Digitized by Microsoft® 108 SOCIAL INSURANCE. [Feb. constitute a serious injury to the entire community, which be- comes manifest in the consequences of acute poverty. The need for some practical means of diminishing unemployment in Massachusetts is apparent at once when it is realized that three- fifths of the wage earners of Massachusetts earn an annual average wage of less than $575 a year ^ and we are told that out of 700,000 workers in the industrial establishments in this State over 400,000 receive less than $675 a year.^ Abnormal conditions in the industrial world have brought about increased wages in some portions of the Commonwealth since these figures were compiled. This does not mean lightening the burden of the wage earner to an appreciable extent, because of the extra- ordinary increase in the. cost of commodities. Regular employment is essential to the conservation of health and the development of character. It is indispensable to the well-being of the home. "Reasonable security of employment of the bread earner," said W. K. Beveridge, "is the basis of all private duties and all sound action." On account of inability to get work, wage earners lose five days for every two lost through sickness.^ From the standpoint of economic loss to the worker, unemployment should be considered before acci- dents and sickness. More effective machinery is needed to bring the man and the job together. The marketing of materials has become most efficiently organized, but very few adequate means exist to bring the buyer and seller of labor together. The fluctuations in the numbers employed in the industrial establishments of the Commonwealth indicate the extent to which employees are taken on and discharged in the course of a year. For example, during 1914 there were employed, during the month of March, 633,583 wage earners in the industries of Massachusetts, while in December of the same year the number dropped to 580,489. ^ Thus we observe that at least 54,000 wage earners in the manufacturing industries of the State were thrown out of employment because of a falling off in production during a period of only nine months. The terrible loss to the community caused by casual labor 1 Bureau of Statistics. ' Maseaoliusetts CommiBsion on Unemployment, 1915. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 109 is appalling, the cost not only in dollars and cents, because of the poverty arising therefrom, but the cost in the health and the lives of these workers. It is in their families that the children either die in the first few months of life or grow to a warped and stunted maturity, to produce in turn another generation of inferior men and women. As proof of the e£fect of casual labor on the health and prosperity of a community, it has been stated that four-fifths of the problems of the med- ical oflSicer of health arise where, the casual labor class con- stitutes possibly one-tenth of the population, and that it is this same class which constitutes two-thirds of all our pauperism other than that of old age, sickness, widowhood and orphanage. We therefore advocate the regularization of industry by Federal and State control, to the end that the total national demand each year may be equalized. The help of private industries is imperative to this end, in avoiding seasonal and other fluctuations. TheSe results can be brought about in private industries — 1. By the reduction of the turnover of labor, under an em- ployment manager (the turnover of labor is at present so great that often to keep up a force of 300 men, 1,000 are engaged and discharged). 2. By a scientific transfer of workers between departments. 3. By planning production, whenever possible, six months in advance. 4. By building up slack season trade. 5. By going after steady rather than sporadic or speculative business. 6. By careful study of market conditions, and adjustment of the business to take advantage of them. 7. By the establishment, when possible, of foreign trade to supplement domestic trade, since a diversity of customers tends to regularize the demand. Employers should co-operate with each other, and with all others making legitimate efforts, toward the lessening of unemployment; they are, indeed, already begin- ning to do so. The above suggestibns are in general accord with the ideas of Mr. John B. Andrews, Secretary of the American Asso- ciation for Labor Legislation, as set forth in Appendix C of Digitized by Microsoft® no SOCIAL INSURANCE. [Feb. the report of the Ontario Commission on Unemployment, 1916. Steady jobs that afford a competent living to citizens are of vital importance to the Commonwealth. Dr. Royal Meeker, United States Commissioner of Labor Statistics, lays bare the common attitude toward unemployment, and defines its true significance in the following statement : — Unemployment is the greatest evU of our competitive industrial system. We have been exceedingly slow tO admit the actuality of involuntary un- employment. Even yet we more than half believe that he who seeks may find work at all times, and that unemployment is due to the refusal of workers to work. Only in periods of industrial crisis and depression do we awaken to some faint realization of the fact of unemployment and the tre- mendous money losses and the irreparable injuries to the character of workless workers resulting therefrom. With enormous toil and turmoil and clatter of preparation we organize soup houses, bread lines and phil- anthropic "industries," which produce for the most part pifHing Wares of little or no utility at substandard wages. With the onset of good times we drop our fevered activities in formulating complete programs to take care of unemployment, relapse into our normal state of profound indifference, and speedily forget the unemployed and their unemployment. We have never as yet acknowledged or realized that the unemployed (another name for the poor) we have always with us. In the best of times there js in the United States an appalling amount of unemployraent even in our most stable industries. The exceedingly fragmentary statistics at our command indicate that the losses due to unemployment are immensely greater, both in money and in morals, than the losses due to industrial accidents or in- dustrial iUness. All these industrial hazards must be frankly recognized and frankly faced. The ostrich, we are told, thinks to efface his enemies from the landscape by burying his head in the sand. He is a firm believer in the blissfulnesB of ignorance and the folly of wisdom. We have much in common with the ostrich. We hold tenaciously to the philosophy that social, economic and political evils exist only when we open our eyes to them; that industrial accidents, illness and unemployment are not burdens until we provide some sane method of carrying or eliminating them. Until very recently our favorite method of dealing with industrial hazards, including involuntary unemployment, was to close our eyes tightly and bury our communal head in the sand. Expert opinion in this Commonwealth is in accord with the foregoing statement. The necegsity for permanent interest in the matter of unemployment is forcibly set forth in the report of the Massachusetts go^m^|t^.Jo^^romote work during the 1917.] HOUSE — No. 1850. Ill year 1915. This group of able citizens reached the opinion that^ The permanent and fundamental aspects of the problems of unemploy- ment should, however, be kept before the pubhc mmd persistently, until some practical propositions for the betterment of this great evil are brought forward. It is to be hope^ many committees, both voluntary and official, will be formed to think out this complex problem, and that the interest in it will not be allowed to flag when the immediate need has passed. What- ever the proper ^preventive measures may be, it is certain that they must be provided for during good times. After the bitter experiences of the past winter, our State will have much to blame itself for if the next depression finds us equally ill-prepared to meet it. Other Massachusetts commissions have devoted much time to the consideration of this problem. The Commission on Immigration of 1914, in considering the relation of immigra- tion to unemployment, gave expression to the following view: —: The first step toward the reduction of the evils of the present system of distribution is a State employment agency, which shall make a compre- hensive study of the labor market, shall give special attention to casual labor problems, shall do the practical work of placing the individual man in each indi\'idual job, and shall develop a foUow-up systera so that sub- sequent work shall be increasingly efficient. An extension of our existing public employment offices to other parts of the Commonwealth, and the adoption of a plan to secure the support and co-operation of workmen and em- ployers, would be the most practical means with which to approach the problem of unemployment. It would be the first step in organizing the labor market on a scientific basis. Just as the produce exchange brings about co-operation between those who buy and those who sell, so should the public employ- ment office be a means of placing the unemployed worker in touch with occupational activity. It would seem to be the most practical means at hand for this purpose. As a barometer of industrial conditions in the Commonwealth it would be of great value, and it would also be of benefit as a practical insti- tution for the accumulation of important statistical data. One of the most striking facts of modern industrial life is the enormous waste of time and money by working people in search of employment. A man seeking work to-day must try many , Digitized by Microsoft® 112 SOCIAL INSURANCE. [Feb. methods. The most common is to apply at the actual place where labor may be found. He may tramp or ride to different parts of the city, or he may even answer advertisements in the daily newspapers, and in following them up may find himself in line at the entrance of some of our industrial establishments in company with a large group of applicants for the same job. If he has some money at his disposal he may try a private employ- ment agency, where he will find established the custom of paying from 5 to 20 per cent, of his first month's earnings for the job. The cost to the employers of this Commonwealth in main- taining employment departments in connection with their busi- ness, and in advertising in the newspapers in Massachusetts for workmen, is an expensive item, and one which must in the final analysis be made a charge upon the industry. It is no exaggeration to say that the aggregate cost of this feature of the industrial life of the State represents millions of dollars. Such conditions are unscientific, uneconomic and constitute a burden to the employer, the workmen and the consuming public. There is no reliable data at hand to prove what it costs the wage earners of this Commonwealth to secure employment' through private employment agencies. We have learned, how- ever, from investigation that in the State of California it is known that more than $400,000 was paid by the working people to private employment agencies in a single year.^ These facts^ warrant us in stating that the system of placing workers through the private employment offices in the industrial estab^ ments of Massachusetts is costly to the people of our Common- wealth. Much of our unemployment can be eliminated by a modern organization of the labor market. The loss of time between jobs for workers represents millions of dollars in the aggregate,, and this waste a unified system of State employment offices could reduce to a very low minimum by connecting work and the worker with .the least possible delay. The use of the labor exchange in the industrial Nations of Europe has passed the experimental stage. It is now looked upon as an integral part of every system of social insurance. 1 California Commi^^^^jgj^g^jg^gijy^ Housing Conditions. 1917.] HOUSE — No. 1850. 113 It occupies a prominent place in the industrial system of Ger- many. In England no worker is more than 5 miles away from a labor exchange, and in the countries of northern Europe labor exchanges are now looked upon as essential factors of industrial development. It is plain that the cost of relieving unemployment is not a net expense. We are especially impressed with that part of the report of the Ontario Commission on Unemployment which reads as follows : — Special stress is laid on the prevention of disease. So, too, the preven- tion of unemployment, when feasible, is far better than the best provision of relief. In any country society is faced by the alternative of leaving those in distress to shift for themselves as best they may, or of relieving them on some considered plan. The cost of inaction must be balanced agaiast the cost of adequate relief. Inaction involves the physical and often the moral deterioration of many workers. It encourages iadiscrimi- nate begging, and is responsible for the growth of a parasitic class. It compels mothers with young children to neglect their" domestic duties in, order to secure a livelihood. It may compel large numbers of young chil- dren to go to work at an age when, for their own sake and for the general good, they should remain in school. It is difficult to believe that any form of organized relief, which does not directly pauperize, can be more costly to society than the refusal to take action. Payment for such refusal is always exacted in the form of increased provision for the sub-normal and for criminals, and constitutes a very heavy burden. As an instrument to relieve much of the unemployment in this county the public employment office has demonstrated its value. An investigation conducted by this Commission of its operation in the United States has convinced us of its efficiency and adequacy in diminishing unemployment. Reports from the chief industrial States in the country indi- cate an awakened interest in this matter and in a more efficient and intelligent use of the public employment office as a factor in treating with unemployment. The Commissioner of Labor of Missouri, in replying to the questions addressed to him by the Commission relative to the question of unemployment, said: — There is no doubt in my mind but that employment bureaus are needed in the chief industrial ce]^p^J^^ij\j^yJ^e country. In fact, all the 114 SOCIAL INSURANCE. [Feb. large cities should have a labor exchange, which should be a part of a gen- eral system wherein the employer and employee could meet and be referred to each other as they may desire or as conditions may require. These offices are really just beginning to be substantially established. It is a great work to be done. The evils of unemployment can at least be minimized; certainly the causes and conditions of unemployment can be truthfully ascertained, and the offices would at least be able to suggest a remedy for overcoming the handicaps, trials and troubles incident to sea- sonal occupations or employment. A general record system, providing full, complete information as to conditions of industrial employment, em- ployers and employees, and as to each industrial center where the offices are located, to be used in a systematic way by some means of communica- tion from one center to the other throughout the country, would be the most valuable asset to an industry that could be provided, because then you would be able to work out all plans to provide remedies for social and economic iUs. Another large industrial State — the State of New York — established under its new industrial commission a bureau of employment, with a director who is charged with the duty of supervising State employment offices. The first office was es- tablished in Brooklyn early in 1915. Shortly afterwards offices were established in Buffalo, Rochester, Syracuse and Albany. The administrative office is located in New York City, and the branch offices throughout the State send in daily reports of their work to the main office. Through this method all the offices are kept in constant touch with one another, and all the employees are under civil service. In New York the law calls for separate departments for men and women and a separate department for juveniles. Each office has an advisory committee composed of an equal number of representatives of organized labor and representatives of em- ployers' associations, with a provision for equality of voting power. The State director, in describing the functions exercised by the New York Public Employment Bureau, informs the Com- mission as follows : — It is a settled question that it is the duty of the State to give the child an academic education, and we are already reaching out toward the phase of giving him an industrial education. It is surely just as much the duty of the State, after giving %^if}^^p1^^§^}^ion it does, to further direct 1917.] HOUSE — No. 1850. ^115 hjm in the choosing of his life work. This can only be done practically and effectively through a wide system of public employment offices. Every day that a workman loses, through the lack of knowledge as to a proper opening for his services, is a loss to himself and society. AU com- munities should have a central bureau of information where the worker can learn what kind of openings there are m that community for him, and where the employer may turn for an opportunity to make a broad selection of the kind of workers necessary for his particular work. Through the placing of adult workers ia positions for which they are fitted the public employment offices become acquainted with industry and its demands and opportunities. This information can be used by public employment offices in covering the first phase of their work mentioned above, namely, that of practical and proper juvenile direction and placement. The establishing of our public school system has practically eliminated the private school, except in special lines. Private employment bureaus (which charge a fee) may probably be necessary for many years, but for all general lines of work, from the highest to the lowest, it is the duty of the State to furnish workers with information regarding industries and opportunities, and incidentally to save a large class of workers from the vicious exploitation carried on by some private employment agencies. And further, in regard to public employment bureaus, he said : — These offices are handling all sorts of workers, from the professional man to the man who uses a pick and shovel. Some of the offices have estab- lished separate departments for the disposal of teachers and farm hands. In the women's department domestics naturally have led in number. Excluding the domestics from the calculation, more than 60 per cent, of the places filled in all the offices up to this time belong in the class known as skilled or professional. Public employment offices have been too gen- erally regarded as places fitted only to handle common labor or the near- xmemployable. The policy in this State for these offices is not to attempt to handle people who have to be "reclauned." That work for the present has to be left to charitable organizations. The attempt is being made to make ^he offices bureaus of information for the capable workers on the one hand, and the employers on the other. Endeavor is being made to eliminate, the use of the word "free" in connection with these offices. It is true their services are free, and so also are the services of the pubUc school. We have, however, long smce outgrown the use of the term "free " in connection with public schools. We should not retain it in referring to the public employment offices, giving them the tamt of charity, and thus driving away capable workers who resent the implication of being patron- ized. No parent, however well-to-do, thinks of charity when he sends his child to the pubUc school. Too often he will not patronize a "free" public emolovment bureau, except as a last resort. One of the greatest benefits ^ •' Digitized by Microsoft® 116 SOCIAL INSURANCE. [Feb. of these new offices is that they are traiping a set of men and women who eventually will be capable of dealing adequately with the question of properly fitting workers into industry. The employees of these offices are now coming in contact with the needs of industry on the one hand, and the needs of applicants for work on the other. It is not every man, even though he may be well trained in other lines, who can understand the needs of the employer for the different kinds of workers, or who can take an order for help in hand and select from the individuals in front gf him, or from his registration lists, one who is best fitted to fill all the demands of the position offered. The haphazard method of hiring men, which so often obtains, has been the means of creating many unemployables. Men under the stress of an immediate need, either of themselves or the employer, have been placed in positions for which they were so poorly fitted that the work was not only disagreeable to them, but they could not adequately meet the demands of the position. The consequences of this were discon- tent on the part of the worker and resentment on the part of the employer. This same man adequately fitted to a position might not only have been happy in his work, but far more productive, meaning higher wages on the one hand, and on the other, greater output, with less expenditure of strength. When the general public, and especially employers, become better ac- quainted with the true function of public emplojrment offices, when they give them their confidence and patronage, it is to be expected that the offices will become what they should be, actual bureaus of industrial in- formation. In States where seasonal occupations predominate the bene- fits of the public employment office to employer and workman alike are acknowledged. In the State of South Dakota public employment offices managed under the Department of Immi- gration are said to be doing excellent work in this respect. Ex- plaining its work in a letter to our Commission, the commis- sioner says : — The public employment office managed by this department gets the man for the employer when he is needed, and, to a less extent, we find work for the unemployed. Our work comes largely in providing harvest labor for the grain farmer, as we need about 8,000 to 10,000 transient laborers in a good grain year. It is conducted especially to meet the need of this sea- sonal labor. I do think that a system of labor exchanges can prove mu- tually helpful, each supplementing the other. Our labor matters are pretty well adjusted, and not difficult in any season except for the harvest. We have united in what is known as the National Farm Labor Exchange covering all the grain-growing territory of the mid-western States from Texas to North Dakota, and think that we see some desirable results, from this. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 117 The Department of Labor of the State of Michigan sends to the Commission the following in reply to questions seeking in- formation with, regard to the utiHty of the pubHc employment office in that State : — In places where there are no employment offices at the present time the man looking for a position is compelled to tramp from one concern to another and wait for several hours in line to see the superintendent, and then perhaps is told that they are not in need of help, and must then con- tinue his journey until he has made all the factories. In the cities where we have public employment offices the employers of labor telephone in their wants, the persons looking for work apply at the employment office, and are advised whether or not there is any demand for help in their line, and if so, where such demand is. Their ticket from the employment office insures them an audience with the employer at once. It is simply a more convenient and modern method than the old style. In Michigan we have ten employment offices operated by the State, five having been opened during the past year. It is my intention to ask the Legislature for an appropriation in order to open several more offices next year. In 1915 there were 54,000 persons sent from our five employment offices in operation at that time, and another office opened at Flint in June, 1915, making six in all. The managers of the several bureaus in Michigan report to each other every day concerning the number of people sent out and the number of people requested by employers, together with other information they may have. In some cities we may have an oversupply of labor and in others a shortage, and in that way we are able to inform the employers where there is an over-supply of labor, and upon receipt of an order from a distant town or city men are sent from the nearest point. I do not claim that in case of a calamity, or a universal shutdown of plants throughout the State, an employment office could be of any material assistance in localities where there would be "nothing doing," except that they might be used as bureaus of information by people seeking employ- ment, by keeping in touch with other parts of the country where there might be a demand for help. It is interesting to note that the State of Illinois has a general advisory board; in connection with its various free employment offices, which is concerned with all problems connected with unemployment, as well as a local advisory board for each, of its free employment offices located at its various industrial centers. The following is an excerpt from a letter to the Commission by the general superintendent of the Illinois Free Employment Office : — Digitized by Microsoft® 118 SOCIAL INSURANCE. [Feb. In regard to the advantages to the employer and the workman of the public emplojTnent offices in this State we beg to advise that, in times of labor scarcity such as we are now experiencing, the advantages to the em- ployer are only too manifest. For instance, we receive calls from employers daily for assistance in finding for them help to fiU their requirements which they have been unable to fill from any other source. This is probably due, to the excellent pubhcity secured and reputation enjoyed by this office. We have demonstrated to their satisfaction the fact that an efficient free labor exchange receives the patronage of all classes seeking employ- ment, and consequently is the source to which all employers appeal in experiencing difficulty in securing the help which they need. In a like manner confidence is installed in the workman who finds hims elf out of a position, and where a reputable free pubhc emplojrment office exists he soon learns that every available opportunity is generally listed with such an office. Consequently, the advantages of an office of this kind are so apparent that we know of no argument which could be used to advocate its abolishment, and are thoroughly satisfied that an efficient system of free labor exchanges established throughout the chief industrial centers of this State has proven a very effective method of alleviating the suffering of the unemployed. For instance, in the Chicago offices alone we are now filling at the rate of about 8,000 positions monthly. Even should they all prove but temporary, the vast effect upon the public cannot be too greatly appreciated. The Commission of Labor of the State of Kansas sends to the Commission the following in reply to questions seeking in- formation with regard to the utility of the public employment office in that State : — The advantage to the employer and employee wiU be untold when a system of interchange between States operating public employment offices is maintained, preferably through the Federal government. Oiu- State employment office saves both the employer and employee thousands of dollars in getting the two in touch with each other. The establishing of public employment offices throughout the State is the only method of relieving the evils consequent to unemployment. The foregoing statements are typical of reports received from many other States of the Union. They indicate a growing in- terest in the work of diminishing unemployment. The general attitude toward the problem is now one of active concern. To connect the industrious citizen who is out of work with em- ployment is held to be of advantage to the individual, the >ome and the commui^l^^^^Jo^arry^n this work is now con- « « sidered by the great manufacturing States of this country as a legitimate function of governmental activity. The study and investigation of the subject of unemployment in this country has made clear to our Commission the need of more constructive methods of dealing with this problem in Massachusetts. The statement to this Commission of Charles F. Gettemy, Director of the Bureau of Statistics, is published on page 295 of Appendix C; also a very interesting analysis of un- employment in the organized industries of Massachusetts from 1908 to 1916 from the same source (Appendix C, page 277). We believe the time has come when something must be done to increase the efficiency and opportunities for usefulness of the State employment offices to the public. If the management of these offices is to be under the administration of the director of the Bureau of Statistics, he should not be hampered in his choice of important employees in said offices by selection through civil service, if by so doing he should find it difficult to secure those who, by temperament and personality, are especially qualified to deal with persons seeking employment. The Commission realizes that tactful guidance in the placing of these people often spells the difference between success or failure in their lives. We believe that the statutes should provide for an advisory council in each city where a State employment office is estab- lished, with equal representation by employers and employees. The functions of this advisory council should include all matters of local administration that would tend to make the State office efficient in administering to the technical needs of employers and workmen in given industries. We concur in the recommen- dation that the State employment offices be gradually increased to a number sufficient to include all the important industrial centers of the Commonwealth. We believe that their efficiency can be improved so that their capacity for usefulness both to capital and labor may be made productive of great value to the Commonwealth. The utmost publicity should characterize their administration. In instances of labor difficulties it would be but just, and in accordance with the spirit of Massachusetts laws, to have published statements relating to the controversy placed at the disposal of applicants for employment. Public Digitized by Microsoft® ,120 SOCIAL IJNaUKAJNCE. li'eb. service corporations which derive their franchises from the people, such as telephone or railroad corporations, should be considered in the integral thought of the prevention of unem- ployment, and made to give of their services at reduced cost in an effort toward bringing the person out of employment into speedy and inexpensive communication with those in need of labor. On page 299 of the Appendix, the Commission reprints an abstract from the remarks and recommendations made to the Commission by H. J. Skeffington, United States Commissioner of Immigration. The statement and suggestions contained therein, relative to new fields of activity by the government in this direction, are worthy of careful consideration in connection with our report, and it would seem that the State could, per- haps, co-operate with the national government in this work to the good advantage of both. While the • Commission is convinced of the practical and immediate necessity for the establishment of State employment oflBces in accordance with the general methods here outlined, it is also of the belief that the State should direct its efforts further along the lines of a general constructive policy with regard to this fundamental problem. According to the assump- tion of the leading authorities on the subject, the more serious periods of business depression come, roughly speaking, at inter- vals of ten years. We believe that it is possible so to plan industrial and governmental expenditures as to compensate for decreased private employment dm-ing such periods by the scientific creation of an unemployment reserve fund. For the purpose of creating such a reserve fund for the pay- ment of wages during periods of business depression, it would be entirely practicable to delay one-tenth of the permanent gov- ernmental improvement expenditures. This need not entail a uniform delay in all such expenditures, but would include all of some, none of others, and a varying percentage of the rest. The same plan is equally applicable to railroads and other great corporations, and should include the purchase of equip- ment. One of the great contributing factors to the violent fluctua- tions in employment is the habit of following the trend of the Digitized by Microsoft® lyiv.J HOUSE — No. 1850. 121 general market, which makes more pronounced both periods of depression and prosperity. Proper regularization would not only tend to lessen the violence of the fluctuations in employ- ment, but would tend also toward the elimination of the periods of great industrial depressions. It would mean forestalling by scientific methods those conditions of unemployment which at present force the honest and deserving worker to become the recipient of charity. According to Mr. John R. Shillady, secretary of the mayor's committee on unemployment of New York, the total amount of public expenditures on improvements. Federal, State, county and municipal, — apart from current administrative and oper- ating expenses in 1913, amounted to about $586,500,000. (Department of Commerce, Bureau of Census, Report on Wealth, Debt and Taxation, 1913.) While this sum represents expenditures for an enormous variety of undertakings, it represents but 10.6 per cent, of the total cost payments made by public authorities during that year, which amount totaled $5,527,C|00,000. It is true that this reserve fund would reach directly only certain industrial groups, but since it would go far toward preventing a general business depression resulting in unemployment, it would indirectly benefit all workers. This is closely analogous to the plan now in operation whereby the Federal reserve banks release, during periods of financial de- pression, portions of reserve funds in their custody, making investment capital available at a time when, because of lack of confidence on the part of the investing public, there is a restriction of circulation. Mr. and Mrs. Sydney Webb, writing on the prevention of destitution, say, "The very depression itself creates in every direction more depression. Prevent it in one industry and you, to a corresponding extent, prevent it in others. Regularization of the aggregate would tend greatly to regularization of every part of the aggregate." They further suggest the printing of the reports of the British Historical Manuscripts Commission and the official history of the South African War as instances of public work which might be reserved for years of trade depression. Mr. Shillady, whose estimates on unemployment have already Digitized by Microsoft® 122 SOCIAL INSURANCE. [Feb. been quoted, in a comprehensive paper on this question, read before a Conference of Charities and Correction at Indianapolis in 1916, cites the possibilities of the working of the plan by our government in the reclamation service, public buildings, rivers and harbors, and good roads developments, and further suggests that the expenditures for "repairs and up-keep" might well be subject to regularization. Mr. Frank M. WUliams, State engineer and surveyor of New York, stated it to be his opinion, relative to regularization of expenditures for the construction of the Erie Canal in that State, thart — If yearly appropriations were made for the construction of the Erie Canal, which would be similar to the manner in which the (national) gov- ernment carries on certain construction work, it might be feasible to vary the amount appropriated each year in acordance with the condition of the labor market; that is, when labor is plentiful, a larger appropriation would be made than in the years when labor is scarce. This quotation is as cited in Mr. Shillady's paper., Mr. Roswell F. Phelps, who for twelve years has- been con- nected with the Massachusetts Bureau of Statistics, — a branch of the work of which Bureau has been the collection and pub- lication of statistics of unemployment, — believes that the plan of accumulating a reserve fund during years of prosperity, to be used during periods of depression in making permanent improvements, would undoubtedly prove an efficient and scientific method of providing employment in times of special distress. A statement by Mr. Phelps touching upon this subject is published in Appendix C to this report, page 297. Public construction here in Massachusetts might well come under some such form of regularization, which, combined with the co-operation of large industries, would go far towards pre- venting a repetition of the deplorable conditions of the winter of 1914-15 in this Commonwealth. The dilatory habit of waiting for a condition, and then, in the midst of the resultant distress, trying hastily and usually ineffectively to remedy it, is to be condemned as unscientific and wastefully extravagant. There is no similarity between a program of scientific regu- larization of industry and the often somewhat hysterical, though well-intentioned, emplo^ijjg^g^ tjj^^ un^ployed on public works. 1917.] HOUSE — No. 1850. 123 The only change in the present procedure would be the plan- ning ahead for a period of ten years for industrial and govern- mental works, which would produce a steadying effect on gen- eral employment by carrying on improvement plans in such years as the labor market shows a slackening tendency through a falling off in private industry. This program aims to prevent unemployment, not to relieve it, and has no relation whatsoever to public charity. This is the time, when unemployment is at a minimum be- cause of abnormally favorable industrial conditions, that we should deal with the great problem of unemployment by the inauguration of an unemployment reserve fund. That some such plan may be carried out in Massachusetts in conjunction with our present employment bureaus and our industries, and with the co-operation of the Federal govern- ment, we recommend that the Governor be requested to ap- point as soon as practicable a committee, consisting of the heads of appropriate departments of the State government, to consider the most feasible method by which such regularization may be effected, to the end that State expenditures, upon more or less permanent improvements and purchases of supplies, may be so regulated as to provide a maximum of employment in years of great business depression. We recommend that the Governor appoint an advisory committee of twelve, properly representative of the industrial and other interests concerned, to consult with the committee. We recommend that said com- mittee report to the Governor upon this subject six months from the date of appointment, and that such report be made public. It is clear to the Commission that at the root of the unem- ployment problem lies the curse of poverty. It is clear, also, that not only does unemployment create poverty but poverty in turn creates unemployment. Poverty restricts the purchas- ing power of the worker, which reduces the demand for labor and increases the number of the unemployed. It is necessary, in order best to meet conditions of unemploy- ment so as to secure greater harmony between employer and employee, to insure freedom of the worker through a political and industrial democracy. The wage earner is entitled to a living wage and a faitf'/8baa*/5je>Mbeo;|aofits made from his toil. 124 SOCIAL INSURANCE. [Feb. The very vital problem of dealing with the physically handi- capped should not be ignored. They should receive hospital or corrective treatment, which in the majority of cases would result in making efficient workers of these people, thereby changing a State liability to a State asset. Whatever may be done, however, for the physically handicapped and for prevent- ing unemployment, there will never come a time when all un- employment will cease to exist. Every year industries fail and thrust thousands into temporary idleness; improved machinery displaces many more; and, even in the best of times, weather conditions, together with many other unavoidable causes, swell the number to considerable proportions. It will be observed in our report on unemployment that there are many perplexing problems which would seem to require permanent supervision and attention. Constructive work in the solving of these problems can only be accomplished from small beginnings and the experience derived from continuous contact with them. The matter of regularizing industry, providing for temporary relief during periods of depression, reducing the loss of time by the worker engaged in casual labor, and the need of governmental supervision and regulation of the State and pri- vate employment agencies, makes necessary in our opinion the establishment of a State board of employment. This board should serve without pay and should consist of two employers of labor, two representatives of employees, and a woman known to be interested in economic and industrial matters. It should have a paid secretary, and should be provided with such sums for expenses as the Legislature may deem proper for the keeping of office records and the compiling of information necessary to its development. A bill incorporating such recommendations as the Cominisr sion makes in the foregoing paragraphs will be found in Ap- pendix C, page 274. In closing we quote from Carlyle, the great Scotch historian, who, in a few eloquent sentences, touches the very heart of the subject: — With the working people, again it is not so well. Unlucky! For there are from twenty to twenty-five millions of them. Whom, however, we . . as "the masses consist of 1917.] HOUSE — No. 1850. 125 units, . . every unit of whom has his own heart and sorrows; stands covered there with his own skin, and if you prick him he will bleed. Every unit of these masses is a miraculous man, even as thou thyself art; strug- gling with vision or with blindness for his infinite kingdom (this life which he has got once only in the middle of eternities) ; with a spark of the di- vinity, what thou callest an immortal soul, in him. Clearly a difficult point for government, that of deaUng with these masses; if indeed it be not rather the sole point and problem of government, and all other points mere accidental crochets, superficiaUties and beatings of the wind. For let charter chests, use and wont, law common and special, say what they will, the masses count to so many millions of units made to all appearance, by the Creator, whose earth this is declared to be. FRANK S. FARNSWORTH. ALLISON G. CATHERON. EDEN K. BOWSER. HARRY C. WOODILL. EDWARD G. MORRIS. WENDELL P. THORE. JOHN P. MEADE. EDNA LAWRENCE SPENCER. While we concur with the foregoing report that the first step in solving the problem of unemployment should be the creation of a network of State employment bureaus, we go further and advocate that this should be followed by some system of un- employment insurance when sufficient data and statistics are available, through our labor bureaus, to make such a law prop- erly efficient in solving the problem of caring for the honest worker during periods of unemployment without his recourse to ciiarity. Government statistics published of the working of the unem- ployment insurance act of England show that during the pros- perous years since the enactment of the law this insurance has in its fund a surplus of over $5,000,000 which can be used as never before in a crisis of unemployment. EDNA LAWRENCE SPENCER. WENDELL PHILLIPS THORE. Digitized by Microsoft® 126 SOCIAL INSURANCE. [Feb. REPORT RELATIVE TO THE HOURS OF LABQR IN CONTINUOUS INDUSTRIES. Chapter 164 of the Special Acts and Resolves of the year 1916 directed the Commission, in addition to considering the subjects of sickness, old age and unemployment in the Com- monwealth, to investigate the subject of reasonable restrictions in the hours of labor in industries operated continuously twenty-four hours. Pursuant to the directions contained in this resolve, the Commission has given, in Boston, Pittsfield, Holyoke and Fitchburg, public hearings, which were confined exclusively to the consideration of this subject. In addition, the subject has come in for consideration and discussion at other hearings, especially at those held in Lowell, Worcester and Fall River. A majority of the members of the Commission are unani- mous in their recommendations for legislation limiting the hours of labor of tour-workers in paper mills. Some of the members of the Commission go further, however, and recom- mend an act extending the three-tour eight-hour provision to all so-called "continuous industries" in the Commonwealth. These members believe it would be discriminating unfairly for the Commission to select the paper industry alone as the ob- ject of special legislation, without at the same time making provision for any other industry where similar conditions might exist. Other members recommend a bill which applies only to the tour-workers in paper mills, and its provisions are very similar to bills of this character filed in recent years with the Legis- lature by the State Branch' of the American Federation of Labor and the Progressive party. The bill in substance provides that no person employed as a tour-worker in any paper mill which is in continuous operation day and night shall be required,' Digitized by Microsoft® 1917.] HOUSE — No. 1850. 127 except in cases of emergency, to work more than eight hours in any one day. A substantial fine is provided in case of failure to comply with the provisions of the act, and the duty of enforc- ing the act is left to the State Board of Labor and Industries. Other members, comprising a minority of the Commission, recommend legislation limiting the hours of men employed in industries running night and day to eleven. Those members who submit the eleven-hour bill believe for all practical purposes it will accomplish the desired end and at the same time, without going to what they consider the extreme point, of specifically recommending the establishment of the eight-hour three-shift system in continuous industries not already working under that plan. Certain others, also constituting a minority of the Commis- sion, maintain that the investigation of the Commission has shown no such appeal or need as to warrant at this time legis- lative interference in the case of any continuous industry. These members deem it the part of wisdom to leave the settle- ment of the hours of labor in the industries to the employers and men themselves. It is their belief that the three-tour eight-hour plan is being adopted by the manufacturers as rapidly as industrial and labor conditions will permit. The several reports follow. Digitized by Microsoft® 128 SOCIAL INSURANCE. [Feb. STATEMENT OF EDWARD G. MORRIS, WENDELL P. THORfi AND EDNA L. SPENCER. While we absolutely agree with the principle set forth for the protection of workers in the regulating of the hours of labor in certain industries in House Bill No. 429 and House Bill No. 932, which were before the Legislatures of 1915 and 1916, respectively, each dealing with tour-workers in paper mills, we believe the intent of that part of the resolve which created this Commission, and which deals with "the restrictions of the hours of labor in industries operated continuously for twenty- four hours," compels us to consider not only the hours of labor in the paper mill industry, but also every other industry where the hours are equally as long and equally as oppressive. This part of the resolve reads : — Resolved, That the special recess commission on social insurance estab- lished by chapter one hundred and fifty-seven of the resolves of the year nineteen hundred and sixteen, in addition to the matters already referred to said commission, shall study and investigate the subject of reasonable restrictions in the hours of labor in industries operated continuously for twenty-four hours, and shall include in its report to the next general court such recommendations with drafts of proposed legislation, as it may deem practical and expedient. AU the provisions of said chapter shall, so far as pertinent, apply to the investigation herein authorized. With the context of this resolve in view, and having in mind the justice which the problem demands in dealing fairly with all workers who are, or may be, compelled to come within such unhealthful and demoralizingly long hours of labor, we are con- strained, in order to be consistent, to advocate the enactment of a law which will create an eiglit-hour day in all industries operating day and night, continuously or intermittently, within the Commonwealth, except in case^ of emergency, as described in section 2 of the act which we propose and which is appended hereto. The continued agitation to protect the workers in the paper industries from the extremely long and unreasonable hours of the two-tour shifts, which constitute practically a twelve-hour day and S6venty-two-^o.^^r^-^o|jk^^w^, where such mills are 1917.] HOUSE — No. 1850. 129 operated continuously for twenty-four hours, was caused by the absolute inhumanity, and the danger to the health and the well-being of the workers. Such working hours are intolerable, — nothing less than industrial slavery; a condition, which, if permitted to continue, would be a stain on the name of Massa- chusetts, whose record has been, and should continue to be, that of a leader in the world's industrial and humanitarian progress. Another reason that compels us to include other than the paper industry in the proposed law attached hereto is that we believe that if there are any other industries which are subject- ing any of their employees to the same long, u'hreasonable and devitalizing hours of toil, as has been evidenced in the two- tour shifts so bitterly complained of in the paper industry, we must in all fairness also include such industries within the scope of this proposed law. If we restrict a law to the paper industry only, we could easily be accused of unfairly selecting one industry for attack. This is not our purpose, and thus it is obvious that justice demands that we treat all industries alike in a desire to protect all the workers within the Commonwealth who are now being, or who might be, compelled to labor, to the detriment of their health and happiness, more than eight hours. Will any citizen in Massachusetts say that a twelve-hour work day and a seventy-two-hour work week should not be prohibited by law, when such long hours are not only destruc- tive of the physical, moral and social well-being of the workers, and afford no opportunity for recreation, but also become a menace to the family life, allowing the father little or no time to enjoy his wife and children? Tour-workers testified before this Commission to the evils of such conditions of labor, and the manufacturers themselves were not in opposition to this testimony. Organized labor tour- .workers emphatically stated that they would never return to the two-tour system, which meant that any attempt on the part of the manufacturers at any time to place the hours on the old basis would be resisted. Where the Commission found paper- mill workers under the two-tour shifts at work, it was informed that it is utterly impossible for the workers to continue under Digitized by Microsoft® 130 SOCIAL INSURANCE. [Feb. such long and oppressive hours of labor. It was further told that they were organizing to demand a change to the three- tour shifts, — the eight-hour day. While the Commission did not have the opportunity to visit other industries than the paper industry where similarly long hours were said to exist, the common knowledge gathered from the evidence given at the several hearings was such as to compel us to ask that an eight-hour day law include all industries within its provisions. To the credit of more than 90 per cent, of the paper manu- facturers of Massachusetts it must be said that they have placed their miHs upon the three-tour basis, making what is to all purposes an eight-hour day for each tour-worker. Many of these manufacturers are agreed that greater efficiency is obtained on the eight-hour basis — the three-tour shifts — than under the twelve-hour day of the tWo-tour shifts> and that the three-tour shifts, with this increased efficiency, have been suf- ficiently productive to offset the cost of the shorter hours — the eight-hour day — given their tour-workers. Many of them admitted that the two-tour shift is dangerous to the health and well-being of the workers, but they opposed the enactment of such an eight-hour day law principally for two reasons, — first, they held that, if competitive conditions arose outside of Massa- chusetts, and the paper manufacturers of other States should return to the two-shift basis, they desired to be able to do like- wise without the interference of law; second, they were positive in their opposition to the establishment of a legal eight-hour day in Massachusetts. Both of these contentions appeared to us to be based upon no just or solid foundation. The objection to the establish- ment of an eight-hour day is not viewed by us as a dangerous innovation and inimical to the interests of the industries of the State, and we submit candidly for consideration, as upholding our point of view, the labor legislation of recent years in^this. Commonwealth lessening the hours of labor for women and minors in industries. These laws were passed on broad human- itarian grounds, and have been a positive betterment for all concerned. We know from past experience that, when Massa- chusetts enacted laws of this character, other States were Digitized by Microsoft® 1917.] HOUSE — No. 1850. 131 compelled by public opinion to enact, or voluntarily proceeded to enact, similar legislation, thus reducing the so-called danger- ous competition due to different hours of labor to an inconse- quential minimum. We further hold that, where the health and happiness of the workers are concerned, industry must shape its course accord- ingly, because industry in itself is not the first consideration bf the State, and must be considered second to the welfare of the workers. While the coming of the positive eight-hour day may be temporarily delayed, its merits are such that they will create a momentous demand for it and its embodiment finally in our fundamental law. If a time should come, however, when economic and industrial conditions would seem to make neces- sary a return to the two-tour shift, — the twelve-hour work day, — there would undoubtedly be an opportunity to have any law which interfered with necessary needs modified or repealed. At this point it is interesting to note what Mr. Charles Sumner Bird, himself a paper manufacturer of years' experience, of the firm of Bird & Son, of Walpole, Mass., has to say in a letter to this Commission concerning the problem and the imperative need and justice of such legislation. Mr. Bird said: — In paper miHH which run twenty-four hours continuously, I think that the two-tour system, twelve-hour day, seventy-two hour week is intolerable and should be stopped by the State. It is a menace to the workers' health, in that thirteen hours at night and eleven hours during the day are op- pressive, especially in those mills operating under hot and moist condi- tions; it is a menace to the welfare of the family life, in that it allows the father Uttle or no time to see and enjoy his wife and little children. No man who has worked in a paper m U seventy-two hours a week for any considerable length of time doubts that a two-tour twelve-hour per day system is deleterious to health and to decent Uving conditions. The argument that the eight-hour or three-tour system will drive paper mills out of Massachusetts falls to the ground in face of the fact that many paper mills in Massachusetts, and in the country, are now on the three- tour system. Fifteen years ago I put my paper mills on the eight-hour system, and my business is as competitive as any I know of. I doubt whether the three-tour system adds much to the cost of paper, but whether it does or not is of no consequence compared to the importance of con- servmg the physical well-bemg of the workers now engaged m the excessive hours prevaUing m the ^^Bi^^J^^^osoft® 132 SOCIAL INSURANCE. [Feb. Mr. Bird has stated to a member of this Commission, more- over, that he emphatically favors the extension of the eight- hour shift to all industries operated continuously for twenty- four hours. From statements made to this Commission by the tour- workers now working under the eight-hour system it is evident that they are unwilling to trust the keeping of their present eight-hour day to the decision of their employers alone. They had struggled, they said, to secure such conditions which they are now enjoying, and they want the limitation of their hours of labor protected by law. This appears to us to be a reason- able demand, and legislation, accordingly, should be enacted. Moreover, their side of the case contained the positive demand from them that the State protect their health and well-being. There are those who maintain that the passage of such a law would have a disconcerting effect upon industry. With this we do not agree, for we are just as sure that whatever protects and advances the social welfare of the workers must equally advance the prosperity of any industry. In some of the hearings held by the Commission in the sev- eral cities there was an absence of workers, which might seem to indicate that the workers are not interested in having shorter hours, although they are working long hours on the two-tour basis, — twelve-hour day. But it is commonly known that workers, and especially the unorganized, have some fear about appearing at hearings in opposition to their em- ployers, when their appearance before a commission on such a proposition might result in the loss of the family's bread and butter. This absence, therefore, should not be construed to emphasize any lack of interest on their part in the lessening of their hours of labor. Then again we know that few work- ingmen can be as well represented as their more powerful em- ployers. Many of them lack the aggressive confidence displayed by the manufacturers at such hearings, and it is not to be expected that they can as readily or as easily present their cases. When the fire prevention and health laws for industrial plants were first advocated they were opposed with the same argu- ments which are now being used against the reduction of hours of labor herein mentioned. Manufacturers maintained it was Digitized by Microsoft® 1917.] HOUSE — No. 1850. 133 unnecessary to have such laws, for many of them had put into practice all that these proposed laws required. Yet we believe these laws of great value in preventing a return to dangerous conditions. Having in mind this preventive principle, we further urge the enactment of our proposed law. As always, when humanitarian legislation of this character is proposed, with its prime purpose to conserve the health and happiness of our people, — of any part of the industrial army, — the haze of unconstitutionality is put forth to befog the issue, to blind the vision and to destroy the vital purpose and the honest effort in behalf of such just measures. The unconstitu- tionality of any interference with the contractual relations between employee and employer is discussed and debated to no fruitful end, for after all we are not the judges of constitutional rights and cannot well believe that such opinions are of value from the judicial standpoint. We know, however, that it is our duty, if the evidence warrants, — and it has warranted it, — to protect the workers so that no employer will be able from any motive to destroy the health and happiness of a single toiler in industry in Massachusetts. Therefor, we recommend legislation, as hereinbefore outlined, for this purpose; and we have faith that our courts, if called upon to deliberate upon the constitutionality of the vital pur- pose of such a law as we propose for the general welfare, will deal with it with the modern understanding and ability which such a great problem requires. The act which the undersigned submit follows. EDWARD G. MORRIS. WENDELL P. THORE. EDNA LAWRENCE SPENCER. An Act to regulate the Hours or Labor of Certain Employees in Industries operating Day and Night. Be it enacted, etc., as follows: Section 1. No person who is employed as a worker in any industry which is in operation both day and night, either continuously or intermit- tently, shall, except in case of emergency, be required, requested or per- mitted to work more than forty-eight hours in any one week or more than eight hours in any one calendar day. Digitized by Microsoft® 134 SOCIAL INSURANCE. [Feb. Section 2. Only a case of danger to property, to life, to public safety or to public health shall be considered a case of emergency within the mean- ing of this act, except in case of employment for the repair, renewal, ad- justment or care of machinery or appliances in order to maintain the same in continuous operation, and except in case of employment of a worker in substitution for and in the temporary absence of another. Section 3. For the purpose of this act the expression "worker" shall mean any employee who tends, or is employed for the purpose of tending, machinery or appliances of any description which are operated both day and night, either continuously or intermittently, and shall be deemed to in- clude machine' tenders and their helpers, cutter tenders and all other persons whose attendance is required in consequence of the continuity of operation of such machinery or appliances. Section 4. Any owner, superintendent or other agent in any such industry who requires, requests or permits any person therein employed as a worker to work more hours than herein specified during any one cal- endar day or during any one week, except in case of emergency as herein defined, shall be punished by a fine of not less than fifty dollars nor more than one hundred dollars for each offense. Section 5. It shall be the duty of the state board of labor and industries to receive complaints concerning alleged violations of this act, and to make or direct thereupon all'needful and proper investigations and prosecutions. Section 6. This act shall take effect upon the first day of September in the year nineteen hundred and seventeen. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 135 STATEMENT OF SENATOR FARNSWORTH AND REPRESENT- ATIVE WOODILL. The undersigned, a minority of the Commission, find them- selves unable to join with a majority of the Commission in recommending legislation limiting the hours of labor of em- ployees in the so-called "continuous industries." They regret that they are unable to subscribe to the views of the other members with reference to this part of the Commission's report. They are, however, in accord with their associate members of the Commission who maintain that the hours of tour-workers in the two-shift paper-making industries are too long. They heartily endorse this principle without any reservations, but are decidedly opposed to the idea of recommending legislation at this point, when practically all this class of industries in Massachusetts have already voluntarily adopted the shorter hour plan, and in view of the fact that there is every indication that the other manufacturers are contemplating such a course. At this point, with reference to the recommendations of three members of the Commission as to a law fixing the number of hours of labor of employees in every continuous industry in the Commonwealth, the undersigned do not regard legislation of so broad a character necessary. They are of the opinion that it is premature, to say the least, to recommend a law so far-reaching in its scope. Outside the paper-making industry no evidence has been presented to the Commission which would indicate either the existence of a demand or justifiable necessity therefor. Furthermore, in view of the fact that the evidence presented to the Commission during its study of the hours of labor in continuous industries deals wholly with the paper mills, they will in their statement confine themselves to a discussion of that evidence. It developed at the hearings held by the Commission in the principal paper-making cities in the State that 90 per cent, of the paper manufacturers in Massachusetts are now operating their mills on the three-tour eight-hour basis, and that in the city of Holyoke and in other parts of the State a great number of these mills had adopted the shorter hour system since 1912. Digitized by Microsoft® 136 SOCIAL INSURANCE. [Feb. The undersigned believe, after mature reflection and after giving due consideration to all statements made by those who appeared before the Commission, that most of the manu- facturers fully recognize the fact that the shorter shift is the better policy. The evidence submitted would further indicate that they are rapidly putting their mills on this working basis,, and it would appear that it is only a question of time when all the paper mills in the Commonwealth will have put this scheme into operation. In their opinion, to pass a law at this juncture in the State of Massachusetts, arbitrarily fixing the number of hours which a man should work, would be establishing a bad precedent, and would be inexpedient for the reason that it would be the first legislation put on the statute books regulating the hours of labor of men in private industry in Massachusetts. As already stated, the manufacturers are adopting the three-shift system gradually, and, it appears, as rapidly as industrial labor conditions will permit. It seems therefore, to be by far the better policy to leave the adjustment of this matter to the employers and employees. The effect of enacting such laws, as a majority of the Commission recommend, at this time would have a disturbing and disconcerting effect upon industry. It would, in the opinion of the undersigned, be an unwise inter- ference with the rights of the employers and employees mutually to agree on better working hours. They believe also that it would be depriving the manufacturers and employees of their constitutional rights. As stated in another part of the report, the Commission has given more hearings on the subject of restricting the hours in continuous industries than on any other one subject it has had to study. In addition to seven hearings, which were announced and fully advertised to deal exclusively with this subject, the topic has come in for discussion and consideration at several other hearings. The public hearings given in Pittsfield, Hol- yoke and Fitchburg dealt entirely with the hours of employees in continuous industries. These hearings were especially well advertised in all the local newspapers, and by promiscuous posted announcements. Notwithstanding this fact, however, and that the Commission had arranged special evening hearings Digitized by Microsoft® 1917.] HOUSE — No. 1850. 137 for the convenience of the tour-workers, as well, as in the day- time, -at two of the public evening hearings — in Pittsfield and Fitchburg — no one appeared to endorse the so-called tour- workers' bill, nor to protest against bad working conditions in the mills. In the vicinity of Pittsfield there are mills operating on the longer hour two-shift system, and it appeared from testimony given at the Fitchburg hearing that there are mills in the vicinity of Fitchburg also operating on two shifts. The minority regards it as rather significant that the greatest demand for this proposed legislation should have come from the tour-workers in the city of Holyoke, where every mill is at the present time working on the three-shift plan. Since all the men, practically, who appeared at the evening hearing of the Commission in the city of Holyoke, to endorse and recommend legislation establishing the three-tour system throughout the Commonwealth, were union members, their appearance and interest for this particular legislation would appear to have been on the general principles for which the labor unions stand. At a subsequent hearing held in Boston, at the request of a large number of manufacturers, for the purpose of giving the opposi- tion a chance to be heard further, some of the same members of the Holyoke Union were present, and again appealed to the Commission to recommend restrictive legislation. The minority of the Commission have gathered the impres- sion from much of the testimony given at the hearings on this subject that in most of the paper mills the very best of feeling exists at the present time between the manufacturers and workmen. It seems to these members that the manufacturers have the interest of their employtees at heart and are doing all in their power to improve the working conditions and to make the mills attractive to them. They were particularly impressed by the statements made by certain of the older mill owners as to the length of time that many of their employees had been with them. They believe this would not be the case if the working conditions had been as unsatisfactory as some would have us believe. There were certain manufacturers who testi- fied that the passage of a law requiring them at once to change over their system of working hours could only result dis- astrously. These men operate small mills and do not employ Digitized by Microsoft® 138 SOCIAL INSURANCE. [Feb. a great number of men. Most of their tour-workers are men who have been' with them several years and are skilled in their particular line, and to obtain sufficient additional help and train them in the work would appear to be rather difficult, in addi- tion to substantially increasing the operating expense. The undersigned are further of the opinion that if any legis- lation is required regulating the hours of men in this class of industry it should be national rather than State legislation. A great many of the manufacturers were questioned with regard to this point, and frankly expressed themselves as not being opposed to Federal legislation on this matter. Therefore, for the reasons above stated, the undersigned refrain from reporting any legislation at this time, and beg respectfully to dissent from the accompanying reports. FRANK S. FARNSWORTH. HARRY C. WOODILL. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 139 STATEMENT OF JOHN P. MEADE AND EDWARD G. MORRIS. We endorse the so-called three-shift eight-hour system in all industries operating continuously, and report a bill (Appendix D, page 305) extending the three-tour system to all paper-making industries operating continuously twenty-four hours a day in the State. A greater number of hearings have been given on this subject than on any one of the others which the Commission had to study. The fact that so large a number of employers in the paper industry have already voluntarily adopted the three- shift eight-hour system, and have found it a practical method of business, has commended itself to us as one of the principal reasons for supporting such legislation. Legislation of this character has been opposed by the manufacturers because, — First, it would cripple their ability to compete with outrof- State manufacturers operating on the two-shift system, and for that reason they do not approve of any proposed law which will prevent Massachusetts manufacturers from returning to the two-shift working basis. Second, it would increase the cost of production, and the ad- ditional labor required would be diflBcult to find at the present time. Third, such a bill would be unconstitutional and would take away the freedom of contract. Fourth, legislation of this nature should emanate from na- tional rather than State authority. With regard to the first objection, the Commission has in- formati&n from authoritative sources to support the contention that no substantial operating loss has resulted in paper mills where the change from the two-tour to the three-tour system has been effected. On the other hand, it was brought out at some of the hearings of the Commission that efficiency had been promoted, and that the immediate increased wage cost had been almost if not quite offset, .in cases where industries had changed to the new shorter basis. At this point it is significant to observe that there has been no disposition on the part of the employers in any case to return to the old two-shift twelve hour a day system. Digitized by Microsoft® 140 SOCIAL INSURANCE. [Feb. The second objection has been answered in part by the above paragraph. With regard, moreover, to the problem of provid- ing extra labor in mills changing over to the three-shift eight- hour plan, there has been no substantial difficulty in securing the additional help necessary to establish the change. As to the constitutionality of such legislation and its interference with the freedom of contract between employer and employee, — the ground upon which the third objection of the opposition is made, — we are of the opinion that this question should be left to the decision of the Legislature and the courts. We would, however, respectfully call the attention of the General Court to labor legislation adopted in recent years affecting the hours of women and minors in industries. Those laws were passed for health and humanitarian reasons, and have been well enforced with good results. They have not been declared unconstitutional. The act which is presented herewith is one readily adaptmg itself to the different emergencies which arise in connection with employment in paper industries. The law is so drawn that if enacted it will in no way interfere with the industries which have already adopted the eight-hour shift. In addition, how- ever, to requiring the twelve-hour two-shift industries to adopt the eight-hour three-shift system, it provides for the continu- ation of the system in plants already operating on that basis. We are of the opinion that the evil of the two-tour plan is so great that the few mills in the Commonwealth operating under it at the present time should be required, for the good of their employees, to adopt the three-tour plan. The Commission selected the paper-making industry more specifically for its investigation, because for the most part the demand for legislation has come through that industry. A per- sonal visit to the mills by day and at night enabled the mem- bers of the Commission to see for themselves the actual condi- tions under which some of the so-called "tour-workers" labored. Evidence gathered leads to the conclusion that the health and moral conditions of the paper workers have improved materially under the three-shift plan. The two-tour system does not allow the worker sufficient time for recreation. It is not conducive to the best development of home life. The hours Digitized by Microsoft® 1917.] HOUSE — No. 1850. 141 are so long that he is barely able to find time in which to sleep and eat. There is little if any time for the consideration of those duties that are associated with good citizenship. There seems to be no question but what there has been an increased eflSciency among the employees where the two-tour system has been abandoned in favor of the three-shift plan. We believe that the two-shift system is archaic and has little to commend itself, and while we fully recognize the disposition on the part of. a majority of the manufacturers of the Commonwealth voluntarily to adopt the eight-hour plan, we strongly advocate the adoption of the three-shift eight-hour system for all the tour-workers in the paper industry of Massachusetts. A number of workers who appeared at the hearings of the Commission were men who had worked for a considerable period of time under both the two and three tour systems. Most of these men were familiar with all branches of paper making, and had worked under all condit'ons existing in the paper industries. We were impressed with the intelligence displayed by the operatives who testified, and the frank manner in which they answered all queries put to them. Striking instances of decided improvement in the health of workers who had changed to the three-shift, shorter hour system, after hav- ing formerly worked on the two-tour twelve-hour schedule, were brought to the attention of the Commission. It was declared by some of the workers that they had experienced a decided gain of weight under the shorter hours of work, and they also maintained that they had gained in strength and vigor, and felt sure they were rendering better and more efficient service to their employers under the new regime than ever before. It seemed to be the unanimous opinion of all the operatives who were questioned by members of the Commission that under no circumstances would they return to the old two-tour plan. We are aware that even under the provisions of this bill men and women may be employed more than eight hours in paper mills in other than "tour work," and that tour-workers, men in the prime of health, will work eight hours, and women, not tour-workers, may work nine hours in the same mill. We recognize, however, that continuous employment in which Digitized by Microsoft® 142 SOCIAL INSURANCE. [Feb. employees work during some weeks on day shifts and during other weeks on night shifts is far more taxing than regular day employment. It has been found, further, in the paper industry, that the practical way to operate three shifts or tours is to divide the day into three equal parts, which division of neces- sity makes the shifts eight hours each. The fact that others, not tour-workers, work nine hours in the same mill is not a sound argument against a system of eight hours for the "tour- workers," or eleven and thirteen hours as the only alternate proposition. The shifts must, under present business methods, be either eight-hour shifts or eleven and thirteen hour shifts, and it is of more consequence to remedy the hardship of eleven and thirteen hour employment than to magnify the importance of the seeming inequality in eight-hour employment for tour- workers and nine-hour employment for day workers. JOHN P. MEADE. EDWARD G. MORRIS. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 143 STATEMENT OF ALLISON G. CATHERON AND EDEN K. BOWSER. The undersigned, while uniting with the majority in the opinion that the two-shift plan in industries operated continuously day and night results in excessive hours of labor for certain employees, and that, in the interest of public welfare, such employment should be prohibited, do not believe the correct remedy is one limiting by express statement the hours of labor to eight. Such a proposition can only be supported by evidence show- ing that it is injurious to public health and the general welfare to work for any period longer than eight hours a day, as, for instance, nine hours. In our opinion no evidence has been submitted to this Commission that employment of adult men for a period of nine hours a day is injurious to public health, nor do we believe such to be the fact. We are satisfied that there is sufficient evidence to show that employment for more than eleven hours as practiced in certain industries is excessive and injurious to health. What the least number of hours is which may properly be rega,rded as excessive we are unable to say, nor do we think it necessary to determine; but we are satisfied that ordinary employment for more than eleven hours a day is so excessive that it should be forbidden by law. The proper legislative approach to this problem we believe to be to forbid the thing which is wrong, namely, employment for a period known to be excessive, not to require that hours be limited to a period which may be considerably within the point at which excess begins. We therefore submit a bill (Appendix D, page 304) in accord- ance with our view. If such a law is enacted it is for the em- ployer to adjust his business to conform to it. It may be that the only practical way to do this is to adopt the three-shift plan, but such a question, we submit, is within the province of the employer to determine. In our opinion the bill which we propose is much more likely than the bills proposed by the majority to prove constitutional, and in actual operation will secure quite as valuable results. ALLISON G. CATHERON. Digitized byMBEM® K. BOWSER. 144 SOCIAL INSURANCE. [Feb. STATEMENT OF SENATOR McLANE. I desire to state my conclusions, as a member of the Com- mission on Social Insurance, in regard to the problems presented to the Commission for study and report. In common with the citizens of this Commonwealth I recognize that, without further study and investigation, the adoption of all the meas- ures presented by the majority of the members of this Commis- sion, within the limited and absolutely inadequate time at our disposal, would shake the foundation of our social, political and financial structure. In other words, I regret that all their efforts have been devoted to building an alluring superstructure with very little consideration given to the foundation. Even though I am in absolute sympathy with the object that is desired to be obtained, I maintain that no legislation on this matter is preferable, by far, to ill-timed, poorly considered and hastily drawn legislation with leads — no man knows where. I am emphatically in favor' of a recommendation for the adoption of the three-shift, so-called "tour-workers" bill in paper mills for the health and welfare of the employees. The subject-matter of this problem has been carefully discussed, investigated and weighed for the past three years. As to non-contributory old-age pensions, while I favor the proposition in the large, I also recognize that the importance of the subject demands further careful study, investigation and report, for the following reasons: • — • That the subject partakes of the character of national as well as State legislation, and might well be investigated jointly, in order to co-ordinate with the various forms of relief and charity now in effect and with the operation of the immigration and naturalization policy of the Nation. That we have not yet complete information as to the pensions now granted in both State and Nation. There should be a care- ful study on this subject in order to provide that all inequal- ities be removed and yet no injustice be done the individual. That the question must be first decided as to whether the granting of non-contributory pensions is constitutional or not. In this connection I s^mM)i\k^rcm^ to the opinion of the 1917.] HOUSE — No. 1850. 145 justices of the Supreme Judicial Court, 186 Mass. 603, on chapter 458 of 1904, on a so-called bounty act. While my sympathy must naturally be with any just system of relief for the producers of the State, I cannot be led astray by the illusion that a system of old-age pensions, more or less restricted, which may operate fairly well in the autocratic militarism of Germany, and which is questionable yet in the democratic monarchy of England, or the system in operation in New Zealand, which is overwhelming that country in debt, is going to fit itself automatically into the representative form of government in this Commonwealth without being a tremen- dous drain upon the laboring man in the form of taxes. I agree to a large extent with the opinion voiced by our labor- ing men: "If this be charity, we don't want it; if it be increase in wages, let us have it now." When the question of health and unemployment insurance has been properly studied and developed so that our fundamen- tal, economic structure may become stable to the extent that employment and labor can be co-ordinated in all their stages with existing conditions, it may be advisable to recommend then that such forms of insurance should be operated under State, or preferably Federal, control and management. As a final word, it may be opportune to suggest that this Commonwealth stands in the none too favorable position of having the second largest debt in the list of States, totaling net, $85,000,000, — an amount exceeded only by New York. Under the conditions I cannot but emphasize the need for further study and the fullest investigation of all the subjects, viz., health insurance, old-age pensions and unemployment, before committing the Commonwealth to any plan. WALTER E. McLANE. Digitized by Microsoft® Digitized by Microsoft® APPENDICES Digitized by Microsoft® Digitized by Microsoft® Appendix A. HEALTH INSURANCE. An Act to establish a System or Compulsoby Insueance to eue- NISH BENEriTS FOE EMPLOYEES IN CaSE OF DeATH, SicKNESS AND Accident, not covbeed by Woekmen's Compensation, and foe THBiE Dependents in Case op Sickness and Accident, and to FUENISH MATEENITY BENEFITS, AND TO PEOVIDE FOB CoNTEIBUTIONS BY Employees, Employees and the Commonwealth, and to CBEATE the HeALTH InSUBANCE COMMISSION. Be it enacted, etc., as follows: Part I. DEFINITIONS AND PEESONS INSURED. 1 Section 1. Recognizing that it is necessary to provide proper care 2 for employees during sickness and pecuniary support for themselves 3 and their families during periods of inability to work on account of 4 sickness, in order "to prevent the spread of disease and to protect the 5 health of the citizens of the commonwealth, and recognizing that 6 modern industrial and social conditions have a part in causing 7 sickness among wage earners, the general court judges compulsory 8 insurance against sickness to be for the good and welfare of this com- 9 mon wealth and of the citizens of the same. » Definitions. 1 Section 2. When used in this act : — 2 "Commission" means the health insurance commission. 3 "Fund" means a local or a trade fund as the case may be. 4 "Society" means an approved society, viz.: a labor union, a benev- 5 olent or fraternal society, or an establishment society, authorized to 6 carry insurance under this act. 7 "Hospital" includes sanatorium unless otherwise provided. 8 "Insurance" means health insurance under this act. 9 "Disability" means inability to pursue the usual gainful occupation. 10 "Employer" means a person, partnership, association, corporation, 11 the legal representative of a deceased employer, or the receiver or Digitized by Microsoft® 150 SOCIAL INSURANCE. [Feb. 12 trustee of a person, partnership, association or corporation and the 13 commonwealth or a municipal corporation or other political division 14 thereof. 15 "Home-workers" are persons to whom articles or materials are 16 given out to be made up, cleaned, altered, ornamented, finished or 17 repaired, or adapted for sale, in the worker's own home, or on premises 18 not under the control or management of the employer. 19 "Earnings " shall include actual expenditures for or reasonable value 20 of board, rent, housing and similar advantages given employees by 21 the employer. Compulsory Insurance. 1 Section 3. Every person employed in the commonwealth, except 2 those receiving regular salaries in excess of one hundred doUars a 3 month, unless exempted under section five of this act, shall be insured 4 in a fund or society as provided in this act. Bailment. 1 Section 4. For the purpose of this act, any person operating a 2 vehicle or vessel for hire, the use of which is obtained under a contract 3 of baUment, in consideration of the payment of a fixed sum or share 4 in the earnings or otherwise, shall be treated as an employed person 5 and the owner of the vehicle or vessel as an employer. Persons Exempt. 1 Section 5. The following persons shall be exempt from the pro- 2 visions of this act: employees of the United States; employees of the 3 commonwealth or of municipalities for whom adequate provision in 4 time of sickness is already made through legally authorized means; 5 inmates of charitable or reformatory institutions when employed for 6 the purposes of the institution, with or without maintenance, if pro- 7 vision for maintenance and medical attendance during sickness is 8 made; casual employees not employed for the purpose of the em- 9 ployee's trade or business; members of the family of the employer 10 who are not paid money "wages. Persons who may be Exempted. 1 Section 6. The commission may exempt: home-workers, who 2 owing to the irregularity of their work or other circumstances con- 3 nected with their work, cannot for administrative reasons be included 4 in the system of insurance; persons employed for periods of not over 5 one week at temporary employment; members of rehgious societies 6 employed in nursing, educational or other activities of public benefit, 7 who receive no money compensation. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 151 Voluntary Insurance. 1 Section 7. Subject to the conditions of this act, the following 2 persons may insure themselves voluntarily: self-employed persons 3 whose earnings do not exceed one hundred dollars a month on an 4 average; persons formerly compulsorily insured who, within one year 5 from the date on which they cease to be insured, apply for voluntary 6 insurance; members of the family of the employer who work in his 7 establishment without wages. Paet II. BENEriTS. Cases in which Benefits 'paid. 1 Section 1. Benefits as provided in this act shall be paid or fur- 2 nished in cases of sickness or accident, or of death or disability resulting 3 therefrom, except cases in which any liability or compensation or 4 other benefit is imposed by the workmen's compensation law, or in 5 which liability for damages, compensation or other benefits is imposed 6 by any act of congress. Reimbursement of Fund. , 1 Section 2. If benefits in the form of cash are paid to any person 2 by any fund or society under this act in any case under which liability 3 for compensation exists under the workmen's compensation law, such 4 fund or society shall to the extent of such benefits be entitled to 5 reimbursement out of such compensation, and upon notice to the 6 carrier under the workmen's compensation law the claim for reim- 7 bursement shall be a lien upon the compensation. If other benefits 8 are furnished by the fund or society in such a case it shall, to the 9 extent of the actual expenses incurred in furnishing such benefits, be 10 subrogated to the right of the employee or of the person furnishing 11 such benefits to reimbursement therefor under the workmen's com- 12 pensation law. When treatment in such case has been begun by or 13 through a fund or society the care of the case shall not be transferred 14 to the carrier under the workmen's compensation law except upon 15 the request of such carrier. Minimum Benefits. 1 Section 3. Every fund or society must provide for its insured 2 members as minimum benefits: medical, surgical, dental and nursing 3 attendance and treatment; medicines and medical and surgical sup- 4 plies; sickness benefit to the insured person or the dependent mem- 5 bers of his family; maternity benefit; funeral benefit; medical. Digitized by Microsoft® 152 SOCIAL INSURANCE. [Feb, 6 surgical and nursing attendance and medicines, and medical and sur- 7 gical supplies, for dependent members of their families. Beginning of Right. 1 Section 4. The right to benefits, with the exception of maternity 2 benefit, begins with the day of membership. The maternity benefit 3 shall be payable to any woman insured against sickness for at least 4 nine months during the twelve months preceding the confinement, 5 to the wife of any man so insured, and, as respects confinement for a 6 child of her husband, to the widow of any man insured for at least 7 nine months during the twelve months preceding his death. Medical, Surgical, Dental and Nursing Attendance and Treatment. 1 Section 5. AU necessary medical, surgical, and nursing attendance 2 and treatment shall be furnished by the fund or society to insured 3 persons and the dependent members of theu* famihes, from the first 4 day of sickness or the happening of an accident, provided notice has 5 been given; otherwise from the date of such notice. In case of dis- 6 ability such attendance and treatment shall not be furnished to the 7 same person for more than twenty-six weeks of disability in any 8 consecutive twelve months. All urgently necessary dental services 9 shall be furnished to insured persons, by the fund or society. In ease 10 the fund or society is unable to furnish the whole or any part of the 11 benefit provided in this section, it shall pay the cost of such service 12 actually rendered by competent persons at a rate approved by the 13 commission. Medical and Surgical Service. 1 Section 6. The fund or society, subject to the approval of the 2 commission, and to provisions of part five, section seventeen, of this 3 act, shall make arrangements for medical and surgical attendance 4 and treatment by means of either: 5 1. A panel of physicians to which all legally qualified physicians, 6 surgeons, hospitals, dispensaries and associations of legally qualified 7 physicians and surgeons, shall have the right to belong, and from 8 among whom the patients shall have free choice, subject to the right 9 of the physician or surgeon to refuse patients on grounds specified in 10 regulations made under this act: provided, that the commission, on 11 the recommendation of the medical advisory board, may limit in the 12 interests of the medical service- the maximum number of patients to 13 be allowed a panel physician. Such maximum may vary in different 14 districts. The payment of panel physicians shall be upon a visitation ' 15 basis. 16 2. On request of a fund or society, this commission, with the ap- 17 proval of the medical S/^Jfj^ff^y'^MI^BM^y permit in combination 18 with the panel system the employment of legally qualified physicians 1917.] HOUSE — No. 1850. 153 i9 on salary: provided, that freedom of choice by the insured persons 20 among salaried and panel physicians be maintained. Nursing Service. 1 Section 7. The fund or society, subject to the approval of the 2 commission, shall make arrangements with nurses, dispensaries, hos- 3 pitals or nursing organizations,, for nursing attendance and treatment. Laboratory Facilities and Specialists. 1 Section 8. The fund or society shall provide proper laboratory 2 and other facilities for diagnosis and treatment, and shall make 3 arrangements with specialists, including dentists, for consultations, 4 treatments, and operations. Medical and Surgical Supplies. 1 Section 9. Insured persons and the dependent members of their 2 families shall be supplied with all necessary medicines, medical and 3 surgical supplies, dressings, eyeglasses, trusses, crutches and similar 4 appliances prescribed by the physician or surgeon. The supplies 5 under this section shall not in any one year exceed fifty dollars for 6 an insured person and the dependent members of his family. Hospital Treatment. 1 Section 10. Hospital or sanatorium treatment and maintenance 2 shall be furnished, upon the approval of the medical officer of the fund 3 or society, instead of all other benefits (except as provided in Part II, 4 sections eighteen, twenty-three and twenty-eight) with the consent 5 of the insured member, or that of his family when it is not practicable 6 to obtain his consent. The fund or society may demand that such 7 treatment and maintenance be accepted when required by the con- 8 tagious nature of the disease, or when in the opinion of its medical 9 officer such treatment is imperative for the proper treatment of the 10 disease or for the proper control of the patient. Sickness benefit may 11 be discontinued (except as provided in Part II, section eighteen) 12 during refusal to submit to hospital or sanatorium treatment. Such 13 treatment shall be furnished during the period for which sickness 14 benefit is payable, and shall be provided in a hospital or sanatorium 15 with which the fund or society has made satisfactory financial! arrange- 16 ments approved by the commission, or in one erected and maintained 17 by the funds and societies with the approval of the commission. Medical Officers. 1 Section U. Each fund or society shall employ at least one med- 2 ical officer, who shall be a legally qualified physician and possess such 3 other qualifications as/^getffl^cfe^safeisory board may prescribe. 154 SOCIAL INSURANCE. [Feb. 4 The appointment of a medical officer shall be subject to the approval 5 of the local medical committee, but in case of failure or refusal to 6 approve an appeal may be taken to the medical advisory board, 7 whose decision shall be final. No medical officer shall practice in 8 any other capacity under this act. Duties of Medical Officers. 1 Section 12. A medical officer shall make such inspections and 2 reports as the local inedical committee shall direct, which reports, 3 if of violation of sanitary laws, ordinances or regulations, and all 4 other reports required by the health authorities, shall be forwarded 5 by the health officer upon such committee to the proper health au- 6 thority; and, upon charges of failure or neglect to make such inspec- ' 7 tions or reports a mfedical officer may be removed by the arbitration 8 committee after a hearing. The decision of the arbitration com- 9 mittee shall be final. Local Medical Committee. 1 Section 13. There shall be in each district formed in accordance 2 with Part JV, section one, and in which there is a panel, a local med- 3 ical committee of not less than seven or more than fifteen members. 4 The commissioner of health in each city in which there is a com- 5 missioner of health, or local health officer elsewhere, shall serve or 6 appoint a member of his staff, who shall be a physician, as a member 7 of the local medical committee of each district within his jurisdiction. 8 The other members shall be legally qualified physicians and shall be 9 elected for terms of three years, part by the physicians on the panel 10 of the funds in the district, part by the staffs of attending physicians 11 and surgeons of the hospitals which have made agreements with funds 12 in the district to treat insured persons. The commission, subject to 13 the approval of the medical advisory board, shall determine the pro- 14 portion of members of the local medical committee to be elected by 15 the panel physicians and by the attending physicians and surgeons of 16 said hospitals. The committee shall elect its own officers and shall 17 serve without compensation. Meetings of the Committee. 1 Section 14. The committee shall meet at least once every month 2 and may be called together at any time on three days' notice by the 3 chairman or by a call signed by five members. A majority of the 4 members of the committee shall constitute a quorum. Powers and Duties of the Committee. 1 Section 15. All regulations and contracts affecting medical, sur- 2 gical nursing or dental attendance and treatment made by the board 3 of directors of a fund of ^ciety shall be submitted to the local medical 1917.J HOUSE — No. 1850. 155 4 committee of its district, and shall not take effect until after the next 5 regular meeting, of the committee, unless sooner acted upon by the 6 committee, except that the board may issue temporary regulations for 7 the period of three months. Any dispute in regard to such attendance 8 or treatment or any charge brought against a physician because of 9 his work for a fund or society shall be referred to the local medical 10 committee of the district before action is taken by the board of di- ll rectors. If the committee and the board of directors cannot agree, 12 the matter shall be referred to the arbitration committee. Arbitration Committee. 1 Section 16. Any dispute between a fund or society and a physi- 2 cian, or any dispute submitted as provided in Part II, section fifteen, 3 shall be referred to an arbitration committee, one member appointed 4 by the board of directors of the fund, one member appointed by the 5 local medical committee, and a third member, who shall be chairman, 6 appointed by a judge of the superior court or by a justice of the su- 7 preme court in counties in which there is no county court. The 8 decision of the arbitration committee shall be final unless an appeal is 9 taken to the commission within ten days from the date on which the 10 decision is rendered. Sickness Benefit. 1 Section 17. A sickness benefit, equal to two thirds (sixty-six and 2 two thirds per cent) of the weekly earnings of the insured member, 3 shall be paid begianing with the fourth day of disability on account of 4 illness or accident. It shall be paid only during continuance of dis- 5 ability, and shall not be paid to the same person for a period of over 6 twenty-six weeks in any consecutive twelve months. This benefit 7 shall be paid to an insured woman when disabled on account of preg- 8 nancy, except that it shall not be paid to her during the period when 9 she is receiving cash maternity benefit. The weeks during which 10 sickness benefit is discontinued because of refusal to accept hospital 11 treatment shall be included in computing the period of twenty-six 12 weeks. Sickness Benefit to Dependents. 1 Section 18. A sickness benefit equal to one half (fifty per cent) 2 of the 'earnings of the insured member shall be paid to his family, if 3 any, or other dependents, if any, while he is in a hospital, sanatorium, 4 or other institution or while he refuses to submit to treatment, Certificate of Disability. 1 Section 19. A certificate of' disability shall be issued only by a 2 medical officer, and only after his personal examination of the patient 3 and upon a statement by the attending physician, if any. Sickness 4 benefits shall be paid onferf/B|»eK*«9S^^te of disability. A medical 156 SOCIAL INSURANCE. [Feb. 5 Officer may visit at any time persons recommended for or receiving 6 sickness benefits. Computation of Benefits. 1 Section 20. For the purpose of computing the sickness benefit, 2 weekly earnings shall be taken as the earnings during the last six days 3 on which the employee worked full time preceding disability, not 4 including earnings for overtime, unless such overtime is a regular 6 occurrence in the employment; but if this computation would be 6 unfair to the employee, his weekly earnings shall be taken as six 7 times his aver^age daily earnings for the days actually employed at 8 full time during the three months preceding disability. Periods of Payment. 1 Section 21. Sickness benefit shall be paid weekly where possible, 2 and in no case less frequently than semi-monthly. Maternity Benefit. 1 Section 22. Maternity benefit shall consist of : all necessary med- 2 ical, surgical, nursing and obstetrical aid, materials and appliances, 3 which shall be given insured women and the wives and widows of 4 insured men. A weekly maternity benefit, which shall be payable to 5 insured women only, equal to the regular sickness benefit of the in- 6 sured, for a period of eight weeks, of which at least six shall be sub- 7 sequent to delivery, on condition that the beneficiary abstain from 8 gainful employment during the period of pajmient. Benefits under 9 this section shall be in addition to all other benefits under this act. Funeral Benefits. 1 Section 23. The fund or society shall pay the actual expenses of 2 1;he funeral and burial of a deceased insured member, as arranged for 3 by the family or next of kin, or in absence of such by the officers of 4 th6 fund or society, up to the amount of one hundred dollars. This 5 benefit shall be paid in case of death of a former insured member 6 within six months after discontinuance of sicknesS benefits because of 7 the exhaustion of the time limit, provided he has not, within those 8 six months, become insured in another fund or society. Assignments and Exemptions. 1 Section 24. Claims for benefits under this act shall not be assigned, 2 released or commuted, and shall be exempt from all claims of creditors 3 and from levy, execution and attachment or other remedy for recovery 4 or collection of a debt, which exemption may not be waived. Benefits 5 shall be paid only to tSfe^M*r{#'ff(?fi«^^ entitled to receive the same. 1917.] HOUSE — No. 1850. 157 6 or to some person who is liable by law or in fact for the support of 7 such person or persons. Additional Benefits. 1 Section 25. A fund or society may grant the following additional 2 or increased benefits if the commission be satisfied that its income is 3 sufficient for the purpose: (a) extension of sickness benefit to exceed 4 twenty-six weeks but not to exceed fifty-two weeks; (6) funeral bene- 5 fits for members of the family; (c) increased amount allowed for 6 medical and surgical supplies and appliances; (d) increase in the 7 period of extended insurance; (e) dental work in addition to that- 8 provided under Part II, section five, either up to a certain amount 9 per year or by contribution of part of the cost. Extension of Insurance. 1 Section 26. When contributions cease on account of unemploy- 2 ment not due to sickness, right to benefit under this act shall continue 3 in force for one week if the insured person has paid contributions 4 during four weeks immediately preceding unemployment, and for an 5 additional week for each additional four weeks of paid up membership 6 during the twentj'^-six weeks immediately preceding unemployment. Prevention of Disease. 1 Section 27. Funds or societies, may, with the consent of the 2 commission, and for purposes approved bj'' the appropriate local or 3 state public health authorities, make appropriations for prevention of 4 disease and the education of its employer and employee members in 5 disease prevention and hygiene, and include the amount so appro- 6 priated aniong its expenses of administration. Pabt III. CONTBIBUTI(»fS. Apportionment of Contributions. 1 Section 1. The full cost of insurance provided by this act, in- 2 eluding contributions to the reserve and to the guarantee fund, shall 3 be borne by employers, employees and the commonwealth in the 4' following proportions: employers, two fifths; employees, two fifths, 5 and the commonwealth, one fifth, except as provided in section two. Contributions of Low-paid porkers. 1 Section 2. If the earnings of insured persons are less than nine 2 dollars a week the shares of the employer and employee of the amount 3 paid by them jointly shall be in the proportions indicated in the fol- 4 lowing table : Digitized by Microsoft® 158 SOCIAL INSURANCE. [Feb. !» Earnings ase Under — But not Under — Employer. Employeesi J9, S8, 60% 40% 8, . . . 7, 70% 30% 7, 6, 80% 20% 6, . . . . 5, . ... 90% 10% 5, . . . . 100% 0% 5 The contribution of the commonwealth shall remain one fifth of 6 the total. Amount of Contributions. 1 SECTioy 3. The amount of the contributions shall be computed 2 so as to be sufficient for the payment of benefits, the expense of ad- 3 ministration of the fund and its reserve, and the maintenance of the 4 guarantee fund. Payment of Contribution. 1 Section 4. Every employer shall, on the date on which he pays 2 his employees, or at least monthly, pay to any local or trade fund the 3 total contributions due from him and from his employees to such 4 fund. If such contribution is made at such time, he may deduct 5 from the earnings of any employee the share of that employee in the 6 contribution, which shall be in proportion to his earnings, but must 7 inform hijn, in a method to be approved by the commission, of the 8 amount so deducted. Approved societies shall provide by regula- 9 tion, to be approved by the commission, for the payment of contri- 10 butions by their members. The employer of each such paember shall 11 be excused from contributing in respect to him to the local or trade 12 fund, as above provided, only upon proof that such contributions to 13 an approved society have been duly made in respect to such member, 14 and not otherwise. Rates of Contributions. 1 Fection 5. In funds in which employees in several industries are 2 insured, contributions may be fixed at different amounts for different 3 industries according to the degree of sickness hazard in those industries, 4 and. shall be so fixed if the commission finds a substantial difference 5 in the degree of sickness hazard. Establishments with Excessive Rates of Sickness. 1 Section 6. If the establishment of any employer shows an 2 excessive rate of sickness, a fund may, subject to the approval of the 3 commission, increase the rate of contribution of such employer in Digitized by Microsoft® 1917.] HOUSE — No. 1850. 159 4 proportion to the excess of such rate of. sickness above the normal 5 rate. Such additional contributions shall be paid by the employer 6 without the right of deducting from the earnings of his employees. Pabt IV. ' CAHKIERS. Division of the Commonwealth into Districts. 1 Section' 1. The commission shall, within six months after this 2 act goes into effect, divide the commonwealth into districts, no one 3 of which shall contain less than five thousand persons subject to 4 compulsory insurance. ' Establishments of Fund. 1 Section 2. The commission shall, before April first, nineteen 2 huiidred and eighteen, hold one or more hearings in each district, 3 notice of which shall be given by advertisement in at least one news- 4 paper published in the district and by any other method approved by 5 the commission, and shall thereafter establish one or more funds, and 6 in their discretion may estabUsh one or more trade funds in such 7 district. The commission shall then provide in each district for the 8 election of delegates, half of whom shall be elected by employers, half 9 by employees affected, to conventions for each fund which shall have 10 power to adopt constitutions. The expense of the elections and con- 11 ventions shall be paid by the commonwealth as expenses of the com- 12 mission are paid. Consolidation or Division of District. 1 Section 3. The commission at any time on its own motion or on 2 the petition of the board of directors of any local or trade fund may 3 consolidate two or more districts or detach a territory from one dis- 4 trict and annex it to another, or create a new district from parts of 5 several districts or from one district, already in existence, and shall 6 make such disposition of the property of the dissolved fund as shall 7 seem to it proper. Establishment of Trade Fund. 1 Section 4. On application of employers whose principal place of 2 business or estabhshments are within the same district, and who 3 employ two hundred and fifty employees in the same trade or branch 4 of a trade, or on the apphcation of two hundred and fifty employees 5 employed in the same trade by employers whose principal places of 6 business or establishments are within the same district, the commis- 7 sion, after a hearing within the district, which shall be duly advertised Digitized by Microsoft® 160 SOCIAL INSURANCE. [Feb. 8 and notipe of which shall be sent to the boards of directors of the local 9 and trade funds within the district, may authorize the formation of 10 a trade fund, if there be no other trade fund within the district for 11 the trade or the branch of the trade, and if the establishment of the 12 new fund will not impair the solvency of any local or trade fund in 13 the district. The new fund shall receive a proportionate share, to be 14 determined by the commission, of the reserve and other property gf 15 each fund to which any of its insured members belong at the time of 16 becoming members of the new fund. Temporary Establishment Society. 1 Section 5. If a sufficient number of persons are employed tem- 2 porarily, the commission, of its own motion, or on the apphcation of 3 the board of directors of any fund affected, may order the creation of 4 an estabUshment society for the duration of the work. The com- 5 mission shall divide any surplus left in such fund between the em- 6 ployers and employees in proportion to the amount of their contribution 7 after h&vhag provided for all the obligations of the fund. Authorization by Commission. 1 Section 6. No fund shall begin business until it is authorized by 2 the commission. The commission shall authorise a fund only after ap- 3 proval and filing of its constitution and after the names and addresses 4 of the board of directors elected for the first year have been filed with 5 the commission. Dissolution of Fund. 1 Section 7. The commission maj^, after a hearing in the district 2 for which a fund is established, withdraw its approval and dissolve 3 the fund: if rendered necessary by the consolidation or division of a 4 district; if the number of insured members is so small as to endanger 5 the solvency of the fund; upon the petition of a majority of the 6 board'of directors or of the committee. 7 The assets and property of a dissolved fund, after provision for 8 benefits and for the payment of its obligations, shall be divided among 9 the funds and societies which its former insured members join, in 10 such proportions as the commission may determine. Continuation of Existence of Dissolved Fund. 1 Section 8. A dissolved fund shall, nevertheless, continue in exist- 2 ence for the purpose of paying any existing obligations, disposing of, 3 collecting and distributing its assets, and doing all other acts required 4 in order to adjust and wind up its business affairs, and may sue and 5 be sued for any of the purposes of this section. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 161 Powers of Funds. 1 Section 9. Funds shall be corporations and shall Jiave all the 2 power necessary to carry out their duties under this act, including 3 the power to verify by audit pay rolls of employer members for the 4 purpose of determining contributions for which emploj^er members 5 are liable. Constitution of Fund. 1 Section 10. Subject to the provisions of this act, the constitution 2 of a fund shall contain: name of the fund and location of its principal 3 office; if the fund is a trade fund, designation of the trade or trades 4 for which it is created; maximum percentages of earnings as provided 5 in sections thirty and thirty-one of Part IV of this act, at which the 6 regular contribution of employer and employee may be fixed; which 7 maximum, inclusive of the contribution of the commonwealth, shall 8 not exceed four per cent of such total, except with the approval of the 9 commission, and shall in no case exceed six per cent of such total; 10 nature and amount of benefits and length of time during which they 11 shall be given; manner of election, number, power, duties and time 12 of meeting of all committees; number, powers, duties and time of 13 meeting of the board of directors; method of amendment of consti- 14 tution, and such other provisions as may be directed by the com- 15 mission. Committee of the Fund. 1 Section 11. There shall be a committee of each fund which shall 2 consist of not less than twenty and not more than one hundred mem- 3 bers, to be elected in the manner provided in the constitution, one half 4 by the employer members of the fund, one half by the emp%ee 5 members. The committee shall cause an audit of the accounts of 6 the fund to be made each year and shall pass upon the same and upon 7 the annual report and budget of the board of directors. Employers' Votes. 1 Section 12. Each employer member shall have as many votes 2 for employer members of the committee as he employs workmen 3 subject to the insurance who are members of the fund, except that 4 no one employer shall have more than forty per cent of the total 5 votes unless otherwise provided in the constitution. Board of Directors. 1 Section 13. The board of directors shall consist of an even num- 2 ber of directors, not less than eight and not more than eighteen, one 3 half of whom shall be elected by employer members of the comniittee 4 and one half by employee members of the committee, and' in addition, Digitized by Microsoft® 162 SOCIAL INSURANCE. [Feb. 5 one director who shall be chosen for a term of three years by a ma- 6 jority vote of the directors so elected. No one shall be a member of 7 the committee and a director at the same time and aU dh-ectors must 8 be citizen's of the United States and a majority of both employers and 9 employee directors must be residents of the commonwealth. The 10 directors elected by the members of the committee shall be elected 11 for three years but the directors first elected shall by lot be divided 12 into classes so that as nearly as possible an equal number shall go 13 out of office each year. The compensation of the members of the 14 board shall be not more than five dollars a day for each day of atten- 15 dance upon the meetings of the board. No director shall hold any 16 other office under this act. Removal of Directors. 1 Section 14. If a board of directors violate or fail to comply with 2 this act, the commission may, after a public hearing, remove the 3 directors, appoint temporary directors, and call a meeting of the 4 committee to elect directors to fill the unexpired terms of the directors 5 removed. The directors appointed by the commission shall serve 6 until the directors thereafter elected by the committee qualify. Appointment of Directors by Commission. 1 Section 15. If at any time the number of directors be not suffi- 2 cient to carry on the affairs of the fund, and if after notice from the 3 commission, the committee fail to elect directors, the commission 4 may appoint directors who shall serve until those thereafter elected 5 by the committee qualify. Powers of the Board. 1 Section 16. The board shall fill vacancies in its own number for 2 unexpired terms, provided that only employers' representatives shall 3 vote for employer directors, and only employees' representatives for 4 employee directors; appoint aU officers and employees of the fund 5 and fix their salaries; elect a president and secretary from their own 6 number; make regulations necessary for carrying out the purposes of 7 the fund; make contracts with physicians, nurses, hospitals, dispen- 8 saries, pharmacists, institutions and associations, and any other per- 9 sons necessary for the business of the fund; prepare and submit to 10 the committee annually a financial account and a report for the past 11 year and a budget for the ensuing year; represent the fund and direct 12 and administer its affairs, except as otherwise specified in this act. Officers' Bonds. 1 Section 17. All officers of a fund who are intrusted with its moneys 2 shall be bonded for amounts to be determined by the board of directors 3 with the approval of tWSsM^Mm>^°f® 1917.1 HOUSE — No. 1850. 163 Resene. 1 Section 18. Every fund shall accumulate a reserve. The board 2 of directors shall transfer to such reserve one twentieth of the annual 3 income of the fund until such reserve is equal to one sixth of the total 4 expenditure for the preceding three years. Membership in Fund. 1 Section 19. Every person subject to insurance shall, by virtue of 2 this act and without regard to his physical condition, be an insured 3 member of the trade fund of the trade at which and in the district 4 in which he is employed, or, if there be no such fund, of such local 5 fund of the district, as provided by the regulations of the commission: 6 provided, that while he is a member of an approved society he shall be 7 excluded by the board of directors from membership in a fund. The 8 commission shaU provide by regulation for the cases of persons regu- 9 larly occupied at one trade but temporarily employed at another. 10 Membership in a local or trade fund shall cease as soon as the insured 11 person becomes a member of another local or trade fund. Every 12 employer shall, by virtue of this act, be an employer member of all 13 funds of which any of his employees are members. Membership in Societies. 1 Section 20. A person subject to insurance shall become a mem- 2 ber: — 3 Of an estabUshment society on the day of entering employment in 4 the establishment, and shall, except as otherwise provided by law or 5 in the constitution or by-laws, cease to be such member on quitting 6 employment in the estabUshment; 7 Of a labor union or a benevolent or fraternal society on being ac- 8 cepted by it, and shall cease to be such member on his resignation or 9 expulsion, except as otherwise provided by law or in the constitution 10 or by-laws. Membership during Disability. 1 Section 21. Insured membership shall continue during receipt of 2 sickness or cash maternity benefits or hospital treatment or during 3 discontinuance of sickness benefit because of refusal to accept hospital 4 treatment, except that no such insured member shall have a vote or 5 be included in the number of insured members on which the vote of 6 any employer member is based. Residents without the District. 1 Section 22. If an insured person reside in the commonwealth, but 2 temporarily or permanently outside of the district of the fund of 3 which he is a member, '^lf^«f^'^'f«fia°8P the same trade, or if there 164 SOCIAL INSURANCE. [Feb- 4 be none, the local fund in the district in which he resides, shall supply 5 the minimum benefits provided in this act and shall be reimbursed by 6 the fund of which the insured person is a member. Other benefits 7 shall be paid in cash if not provided for by agreements between funds 8 or otherwise. The commission shall provide by regulation for insured 9 persons residing permanently or temporarily without the common- 10 wealth. Determination of District of Employment. 1 Section 23. The district in which the establishment in which an 2 insured person is employed, or if he be not employed in an establish- 3 ment, the district in which the principal place of business of the 4 employer is located, shall be, for the purpose of this act, the disteict 5 of employment, but the commission may, for the convenience of 6 administration either permanently or temporarily establish as such 7 district that in which the insured member is actually employed or in 8 which his wages are paid. Voluntary Insurance. 1 Section 24. A person entitled to voluntary insurance must be 2 admitted on application to membership in the trade fund of his trade 3 in the district in which he is employed, or if there be no such fund, 4 then in such local fund of the district as is provided by the regulations 5 of the commission: provided, that except for persons who have been 6 compulsorily insured persons within one month the by-laws of any 7 fund may prohibit the admission to voluntary insurance of a person 8 who has not passed a satisfactory medical examination by its medical 9 ofiicers. 10 The contribution and benefits shall: (1) be based upon such an 11 amount of earnings, in the case of a person formerly compulsorily 12 insured, not exceeding the earnings upon which his contributions and 13 benefits were based immediately preceding the date upon which he 14 ceased to be so insured, and in the case of other voluntary members 15 upon not more than actual earnings, nor more than one hundred 16 dollars per month, as the member may elect; (2) be the same as for a 17 compulsory member of the same trade. The fuU contribution in the 18 case of a voluntary member shall be borne by the member and the 19 state in the following proportion: the member, four fifths, and the 20 state, one fifth. Loss of Voluntary Membership. 1 Section 25. A person voluntarily insured shall lose his member- 2 ship if he acquire membership, either voluntary or compulsory, in 3 another fund or society, or if he be in arrears for one month in the Digitized by Microsoft® 1917.] HOUSE — No. 1850. 165 4 payment of his contributions, unless this period be extended by the 5 fund or society. Fines and Penalties. 1 Section 26. Funds or societies may fine their employer and 2 insured members and suspend insured members from benefit for viola- 3 tion of their rules or regulations or for fraudulent representations made 4 with the intent of securing or aiding another to secure benefits, in 5 accordance with rules approved by the commission providing for and 6 limiting such fines or suspension, but contributions will in every case 7 be required in respect to each suspended member. If an employer 8 fail or refuse to pay any contribution due to funds under this act, the 9 funds to which the contribution is due may recover from such employer, 10 the whole amount of such contribution due from such employer and 11 his employees with interest at six per cent by suit in a court of com- 12 petent jurisdiction, and the employer shall not be entitled to deduct 13 any part of such sum from the earniags of his employee or employees. Approved Societies. 1 Section 27. A labor union, a benevolent or fraternal society or an 2 establishment society shall be approved by the commission only after 3 hearing the local or trade funds affected and only if it is not carried 4 on for profit, but reasonable salaries paid officials shall not be con- 5 sidered profit; it is under the absolute control of the insured members 6 in so far as the insurance regulated by this law is affected, except that 7 the employer may appoint one half of the governing body of an estab- 8 lishment society; it shall satisfy the commission that it is in a sound 9 financial condition; it grants at least the minimum benefits provided 10 in this act; it has a membership of at least five hundred persons 11 insured for at least the minimum benefits provided under this act or 12 their equivalent, except that in the case of estabhshment societies 13 in which the employer satisfactorily guarantees the payment of bene- 14 fits, the minimum number of members may be determined by the 16 commission; its operation will not, in the opinion of the commission, 16 endanger the existence of any local or trade fimd; in case of an estab- 17 lishment society, a majority of the employees subject to insurance 18 request approval, and the employer's contribution be at least equal to 19 that of all the employees. 20 The approval of the commission may be withdrawn at any time 21 upon its finding, after hearing the society affected, that any of the 22 required conditions are no longer satisfied. The conunission may, 23 after a hearing, permit an establishment society to accept as members, 24 on conditions satisfactory to the commission, all persons subject to 25 insurance in its district. Digitized by Microsoft® 166 SOCIAL INSURANCE. [Feb. Employers' Contribidions. 1 Section 28. The commission shall assess upon every employer, 2 any of whose employees are insured in an approved society other than 3 an establishment society, a sum equivalent to the employer's con- 4 tributions had such employees been members of funds. This sum 5 shall be paid in monthly installments into the guarantee fund estab- 6 lished by the commission. Contributions of the Commonwealth. 1 Section 29. The commonwealth shall contribute to every approved 2 society, one fifth of its total expense for health insurance under this act, 3 subject to the provisions of section nine of Part V of this act. Wage Groups. 1 Section 30. A fund or society may, with the approval of the com- 2 mission, divide its members into wage classes, and fix the rates of 3 sickness and maternity benefits and the rate of contributions in each 4 class. Basis of Contribution and Benefits. 1 Section 31. A fund or society may, for the purpose of calculating 2 benefits and contributions under this act, estimate the average eam- 3 ings in any emplojTnent or grade or branch thereof, and on the approval 4 of the commission the average so determined shall form the basis for 5 the calculation of such benefits and contributions. Property of the Fund Tax Free. 1 Section 32. The property of a fund, and such part of the property 2 of any approved society as is used for the purposes of this act, shall be 3 exempt from all commonwealth, municipal or local taxes. Contributions a Preferred Claim. 1 Section 33. Contributions due and unpaid shall have the same 2 preference or lien, without limit of amount, against the assets of the 3 employer as is now or hereafter may be allowed by law for a claim for 4 unpaid wages for labor. Health Insurance Union. 1 Section 34. Two or more funds or societies may combine for the 2 administration of the medical benefit, subject to the approval of the 3 commission. The commission may, after notice to and hearing of the Digitized by Microsoft® 1917..] HOUSE — No. 1850. 167 4 parties in interest, withdraw its approval and dissolve the union, 5 making such, disposition of its property as may seem to it in the best 6 interests of the insured. Part V. COMMISSION. Health Insurance Commission. 1 Section 1. The health insurance commission is hereby created, 2 consisting of five commissioners, to be appointed by the governor, 3 one of whom shall be designated by the governor as chairman. Of 4 the five members, one shall be a wage earner, one an employer, and one 5 a physician. The term of office of members of the commission shall 6 be five years, except that the first members thereof shall be appointed 7 for such terms that the term of one member shall expire on January 8 first, nineteen hundred and nineteen, and one on January first of each 9 of the four succeeding years. Each commissioner shall devote his 10 entire time to the duties of his office, and shall not hold any position of 11 trust or profit, or engage in any occupation or business interfering with 12 or inconsistent with his duties as commissioner, or serve on or under 13 any committee of a poUtical party. The commission shall have an 14 official seal which shall be judicially noticed. Secreiary. 1 Section 2. The commission shall appoint and may remove a sec- 2 retary, at an annual salary of three thousand six hundred dollars. The 3 secretary shall perform such duties in connection with the meetings 4 of the commission, and its investigations, hearings, and the preparation 5 of rules and regulations under the provisions of this act, as the com- 6 mission may prescribe. Officers and Employees. 1 Section 3. The commission may appoint such officers, other as- 2 sistants and employees as may be necessary for the exercise of its power 3 and the performance of its duties under the provisions of this act, all 4 of whom shall be in the competitive class of the, classified civil service; 5 and the commission shall prescribe their duties and fix their salaries, 6 which shall not exceed in the aggregate the amount annually appro- 7 priated by the legislature for that purpose. Salaries and Expenses. 1 Section 4. The chairman of the commission shall receive an annual 2 salary of four thousand five hundred dollars, and each other commis- 3 sioner an annual salary of four thousand doUars. The commissioners Digitized by Microsoft® 168 SOCIAL INSURANCE. [Feb. 4 and their subordinates shall be entitled to their actual and necessary 5 expenses while traveling on the business of the commission. The 6 salaries and compensation of the subordinates and all other expenses 7 of the commission shall be paid out of the treasury of the common- 8 wealth upon vouchers signed by the chairman or one of the commis- 9 sioners designated by him for that purpose. Offices. 1 Section 5. The commission shall have its main office in the city 2 of Boston and may establish and maintain branch offices in other cities 3 of the commonwealth as it may deem advisable. Branch offices shall, 4 subject to the supervision and direction of the commission, be in im- 5 mediate charge of such officials or employees as it shall designate. Powers of Individual Commissioners. 1 Section 6. Any investigation, inquiry or hearing which the com- 2 mission is authorized to hold or undertake may be held or undertaken 3 by or before any commissioner, and the award, decision or order of 4 a commissioner, when approved and confirmed by the commission 5 and ordered ffied in its office, shall be deemed to be the award, de- 6 cision or order of the cominission. Each commissioner shall, for the 7 purpose of this act, have power to administer oaths, certify to official 8 acts, take depositions, issue subpoenas, and compel the attendance 9 of witnesses and the production of books, accounts, papers, records, 10 documents and testimony. Powers of Commission. 1 Section 7. The commission may adopt all reasonable rules and 2 regulations and do all things necessary to put into effect the provisions 3 of this act. The commission shall, upon presentation of evidence, 4 which shall have previously been presented to the medical advisory 5 board, that any physician, surgeon, dentist or nurse, practising under 6 the act, is incompetent, neglectful of his duty or dishonest, be em- 7 powered to suspend or debar such physician, surgeon, dentist or nurse 8 from practice under the act, and the decision of the commission shall 9 be final. Payment of Commonwealth Contributions. 1 Section 8. The commission shall estimate the contribution of the 2 commonwealth annually before the first day of January of each year 3 and shall, before that date, apportion it among the funds and societies, 4 in proportion to their estimated expenditures for the purposes of this 5 act during the year, and shall notify the treasurer of the commonwealth 6 of the sum to be paid on March thirty-first, June thirtieth, September Digitized by Microsoft® 1917.] HOUSE — No. 1850. 169 7 thirtieth, and December thirty-first of the current year to each fund 8 and society. The treasurer shall pay the amount out of the unex- 9 pended balance of any appropriation in his hands for the purpose. Guarantee Fund. 1 Section 9. The commission shall reserve ten per cenl of the con- 2 tributions of the commonwealth to the funds and societies and pay it 3 into a fund to be known as the guarantee fund, from which it may 4 contribute for the relief of any fund or society on the application of 5 its board of directors after investigation by the commission. A con- 6 tribution shall be made only where, in the judgment of the com- 7 mission, the necessity arises from epidemic, catastrophe or other un- 8 usual conditions, and shall never be made where, in the opinion of 9 the commission, the deficit is due to failure or refusal of the directors 10 to levy proper rates of contributions. When and so long as in the 11 opinion of the commission the guarantee fund is sufficient, the com- 12 mission shall make no reservation for this purpose. Treasurer of the Commonwealth, Custodian of the Fund. 1 Section 10. The treasurer of the commonwealth shall be the cus- 2 todian of the guarantee fund, and £(11 disbursements therefrom shall 3 be paid by him upon vouchers authorized by the commission and 4 signed by the chairman or another member designated by him in 5 writing. The treasurer of the commonwealth shall give a separate 6 and additional bond in an amount to be fixed by the governor and 7 with securities approved by the auditor of the commonwealth con- 8 ditioned for the faithful performance of his duty as custodian of the 9 guarantee fund. The treasurer of the commonwealth may deposit 10 any portion of the fund not needed for immediate use in the manner 11 and subject to aU the provisions of law respecting the deposit of other 12 commonwealth funds by him. Interest earned by such portion of the 13 guarantee fund deposited by the treasurer of the commonwealth shall 14 be collected by him and placed to the credit of the fund. Report of Commission. 1 Section 11. Annually, on or before the first day of February, 2 the commission s^iall make a report to the governor, which he shall 3 lay before the legislature, which shall include a statement of the ap- 4 portionment of the contribution of the comutnonwealth, statistics of 5 sickness experience under this act, a detailed statement of the ex- 6 penses of the commission, the condition of the guarantee fund, together 7 with any other matters which the commission deems proper to report, 8 including any recommendations it may desire to make. Digitized by Microsoft® 170 SOCIAL INSURANCE. [Feb. Health Insurance Council. 1 Section 12. The health insurance council shall consist of twelve 2 members, six of whom shall be elected by employer directors and six 3 by employee directors of the local and trade funds; their term of oflBce 4 shall be two years, except that in the first election three of the em- 5 ployer and three of the employee members of the council shall be 6 elected for one year; they shall receive a compensation of five dollars 7 a day for each day spent on the business of the council, and shall be 8 reimbursed for reasonable expenses incurred in connection with such 9 business, to be paid as other expenses of the commission are paid. Officers of Council. 1 Section 13. The council shall elect a president from its own num- 2 ber; the secretary of the commission shall act as secretary of the council. Meetings of Council. 1 Section 14. The council shall meet during the first week of January, 2 of April, of July, of September, each year. Special meetings shall be 3 called by the president on the request of at least five members of the 4 council or of two members of the commission, at any time. Duties of Council. 1 Section 15. The annual report and recommendations of the com- 2 mission shall be laid before the January meeting of the council before 3 transmission to the governor, and the councD may approve them or 4 make a separate report and recommendations to the governor. All 5 general regulations proposed by the commission shall be laid before 6 the council at a regular or speci&,l meeting for discussion before final 7 adoption, except in cases of urgency, to be determined by the commis- 8 sion, and in this case the regulation shall be laid before the next regular 9 meeting of the councU or a special meeting called for the purpose. Mediccd Advisory Board. 1 Section 16. There shall be a medical advisory board of eleven 2 members. The commissioner of health of the commonwealth and the 3 secretary of the state board of registration in medicine shall be ex 4 officio members of the board, seven members shall be chosen by the 5 medical society of the state, and two by the homeopathic medical 6 society of the state. The term of office of chosen members shall be 7 three years, except that the members first chosen shall choose by lot Digitized by Microsoft® 1917.] HOUSE — No. 1850. 171 8 three of their number to go out of office at the end of one year and 9 three at the end of two years. The board shall elect its own chairman 10 and other officers. Its members shall be paid necessary expenses, but 11 no salaries. Powers of Medical Advisory Board. 1 Section 17. AH regulations of the commission relating to phy- 2 sicians and to medical benefits shall be referred to the medical ^dvisorj' 3 board and shaU not be approved by the conunission until after the 4 first regular meeting of the board after such reference, unless sooner 5 acted upon by the board, except in case of an emergency, when the 6 commission may issue a temporary regulation for a period of not over 7 six months. The medical advisory board shall make recommendations 8 to the commission on standards for the hospitals and dispensaries 9 which provide service under the act; for admission to practice under 10 the act as speciaUsts; and for obstetrical care. Such recommendations 11 of the medical advisory board shall be effective on approval by the 12 commission. Meetings of the Medical Advisory Board. 1 Section 18. The board shall meet at least once every three months 2 and may be called together at any time on one week's notice by the 3 chairman or by a call signed by any five members or by the commis- 4 sion. A majority of the members of the board shall constitute a 5 quorum. Settlement of Disputes. 1 Section 19. All disputes arising under the act shall be determined 2 by the commission either on appeal or, in case of disputes between 3 funds and societies, by original proceedings. The commission may 4 assign any dispute except disputes in regard to medical benefit, for 5 hearing and determination to a dispute committee composed of one 6 employer and one employee member of the council, and a member of 7 the commission, as chairman, the members of the council to serve in 8 turn on the dispute committee for periods of one month. Either party 9 may appeal to the commission from the decision of the dispute com- 10 mittee within thirty days from the date of rendering the decision. Medical Disputes. 1 Section 20. AH disputes regarding medical benefit, which have 2 been appealed to the commission, shall be referred by the commission 3 to the medical advisory board, which shall report to the conmiission, 4 and the commission shall not decide any such dispute until after a 5 report has been made by the board. Digitized by Microsoft® 172 SOCIAL INSURANCE. [Feb. Nurses' Advisory Board. 1 Section 21. The state nurses' association shall choose a nurses' 2 advisory board of seven members, which shall be advisory to the com- 3 mission on all matters relating to nursing service. Suits at Law. 1 Section 22. Suits shall not be brought in any court on any matter 2 on which an appeal is allowed to the commission until after a decision 3 by the commission, or of a dispute committee and the statutes of 4 limitations shall not begin to run in such cases until after the decision 5 is filed. Part VJ. miscellaneous provisions. Limitations of Claims. 1 Section 1. No claim for benefit shall be valid unless made to the 2 board of directors of the proper fund or society within one year from 3 the time when the benefit was due. Disclosure prohibited. 1 Section 2. Information acquired by the commission or a fund, or 2 any of their officers or employees, from employers or employees pur- 3 suant to this act, shall not be opened to public inspection, and any 4 such officer or employee who, without authority of the commission or 5 pursuant to its rules, or as otherwise acquired by law, shall disclose 6 the same shall be guilty of a misdemeanor. Unauthorized Deductions from Wages prohibited. 1 Section 3. An employer shall not deduct from the wages or salary 2 of an employee any part of any contribution required to be borne by 3 the employer, or make any agreement with the employee for the re- 4 payment of any part of such contribution. Any employer who violates 5 this section is guilty of a misdemeanor and upon conviction shall be 6 punished by a fine of not more than ten dollars. Every deduction or 7 repayment in the case of each employee shaE constitute a separate 8 violation. Penalties. 1 Section 4. Any person who: (1) prevents or obstructs the audit 2 of a pay roU, as authorized by this act; (2) knowingly makes any false 3 statement or false representation for the purpose of obtaining any 4 benefit or payment under this act, either for himself or any other Digitized by Microsoft® 1917.] HOUSE — No. 1850. 173 5 person; or (3) wilfully violates or fails to comply with this act or any 6 regulation or order made by the commission, is guilty of a misde- 7 raeanor. Technical Rules of Evidence or Procedure not re quired. 1 Section 6. The commission or a deputy commissioner or dispute 2 committee, in making an investigation or inquiry or conducting a 3 hearing, shall not be bound by common law or statutory rules of evi- 4 dence or by technical or formal rules of procedure, except as provided 5 by this act, but may make such investigation or inquiry or conduct 6 such hearing in such manner as to ascertain the substantial rights of 7 the parties. When to take Effect. 1 Section 6. This act shall take effect immediately, except that the 2 provisions as to the payment of contributions shall not take effect until 3 April first, nineteen hundred and eighteen, and the first payment of 4 contributions by the commonwealth shall not be made until June 5 thirtieth, nineteen hundred and eighteen; the provisions as to the 6 benefits shall not take effect until July thirty-first, nineteen hundred 7 and eighteen: provided, that if a fund or society is authorized after 8 January first, nineteen hundred and eighteen, the provisions as to the 9 benefits shall not take effect until three months after authorization. Digitized by Microsoft® 174 SOCIAL INSURANCE. [Feb. REPORT ON HEALTH INSURANCE PROVISIONS AMONG LABOR UNIONS AND FRATERNAL ORGANIZATIONS IN MASSACHUSETTS.! I. Number of Laborers with Sickness Insurance. Of the 1,425 labor unions, comprising all the locals in the State, 399 sent in replies. Of these, 32.3 per cent. (129) pay some sort of sick benefit. Similar figures for 1908 show that 28.5 per cent, of the unions which re- plied paid a sick benefit.^ This shows an increase in eight years of 102 unions paying a benefit (if the figures of those replying to the inquiry are assumed to be representative of all the unions), while the total number of local unions was only increased by 169. It is estimated that 80,083' workmen are thus insured through labor unions, this being 5.3 per cent, of the number of persons eighteen years or over gainfully employed in Massachusetts, receiving annually less than $1,200.'* Possibly this percentage is not accurate because of the fact that, in general, the larger unions are more likely to be the ones which have a system of health insurance. The amount of sickness benefit paid is quite variable, ranging from $7 per week paid for sixteen weeks in any twelve months to $3 per week for six weeks. The average benefit paid is $4.30 for 14.5 weeks.= This is much less than that proposed in the standard bill, which would be ap- proximately $7.23 a week ^ for twenty-six weeks. In a good many trades the sick benefit is paid by the international union through the locals. This results in a uniformity of benefit for a given trade. Some of the trades which seem to have the most developed system of benefits are bakers, barbers, boot and shoe workers and plumbers. Other trades ap- parently have no locals giving benefits. Among these are brewery workers, musicians, painters and decorators, textile workers and theatrical em- ployees. There does not seem to be any relation between the average wage for a trade and the payment of benefits. Plumbers are highly paid while barbers have a relatively low wage scale. To the questions sent to the 314 fraternal organizations 113 replies were received. Of these 113 societies, 64.6 per cent. (73) paid a sickness benefit. The amount paid and the period of payment seemed to be very similar to that of labor unions. It is impossible to estimate the number 1 Based on repliee to a questionnaire sent out to 1,425 labor unions and 314 fraternal organiza- tions by the Special Commission on Social Insurance. 2 This was a reply from 937 out of 1,256 local unions to which the Bureau of Statistics sent in- quiries. ' Thirty-three per cent, of 242,677, — an estimate of the membership of labor unions in 1916 based on the figures for 1913 and 1914. ' This was estimated at 1,507,373 by the Bureau of Statistics. 6 These averages are computed with such unions as units. To be correct they should be computed on the basis of membership (i.e., giving more weight to the larger unions). B Estimated on the basis of 1564 average yearly wage of union members (Bureau of Statistics), i.e., $10,85 per week, and a benefit of 66^ per cent, of wages. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 175 of laborers who receive a sickness benefit in this way. It is a larger pro- portion of the organizations of this character than of the labor unions, but probably not a larger proportion of the total number of laborers in the State, From a very hasty perusal of the answers to questions sent to the manu- facturers in representative cities, it seemed quite evident that very few of them provided any sort of insurance for their employees, and that where they did, generally less than half took advantage of it. There are several conclusions which may be drawn from this investi- gation of the number of laborers at present coming under some health insurance system. In the first place, the systems in use are far from uni- form, and cover only a small proportion of the laboring population. Sec- ondly, the systems are prone to overlap one another. Also the particular disadvantage of the payment of sick benefits by labor unions to their members lies in the fact that if a man ceases to be a member, through removal or expulsion or any other cause, he loses the benefit of his past contributions, even though he may have been a member for a considerable time and paid the dues, which are necessarily high in a union which pays benefits to its sick members. II. Number of Labohees with Death Benefit. The payment of a death benefit was found to be much more prevalent, there being almost twice as many unions paying this as there were paying a sickness benefit. Of the 399 unions replying, 61.9 per cent. (247) pay a death benefit. This amount varies in different trades and between different unions in the same trade. It is generally also variable according to the length of time >a man has been a member of the union. Usually this reaches a maximum after five years of membership. For the 247 unions this maximum averaged $284.80. III. Economic Cost of Sickness in Massachusetts. Of the 129 unions reporting a sick benefit, 95 gave answers to the ques- tions with reference to the amount of sickness for which benefits were paid during the past year. From these answers it was found that there was an average per annum of 13.3 cases of sickness per 100 persons insured, with an average loss of 23.6 days per case, or 3.1 days per per- son annually insured. Considering sickness to be equally prevalent among other laborers, this would give a total of 4,672,856.3 days lost by the employed workers in the State. Considering the average wage of these workers as 1564, the total loss in wages by their sickness would be $7,209,549.72 per year. To complete the estimate of the economic loss to the State, it would be necessary to give the cost for medical service, etc. Before doing this I wish to comment on the figures given above, i.e., the report which gives 13.3 cases of sickness per 100 persons, with a loss of Digitized by Microsoft® 176 SOCIAL INSURANCE. [Feb. 23.6 days per case, or 3.1 per insured person. These figures are quite different from the data of similar character which Rubinow ^ gives from Austria and Germany. For Austria the figures are 53 cases per 100 persons insured, with seventeen days per case or ten days per person. In Germany it is 40 cases per 100, with twenty days per case, or eight days per person. It is hard to find the exact explanation of this discrepancy. It may lie largely in the fact that the benefit is paid only in the more serious cases of sickness. The truth of this assumption is borne out by the fact that the average number of days per case is larger than either that of Germany or Austria. Another fact which would help to explain the situation is that it is the more enterprising men who take advantage of the opportunity offered by the unions of Massachusetts, and therefore the ones who are more likely to be careful in regard to their health. Under the compulsory system all laborers are insured, and this includes, of necessity, many who are careless about their health, and who are really the ones to benefit most from the insurance. The figures of the Massachusetts labor unions are, therefore, not as valuable in determining the cost of sickness as are approximations made from Germany's figures. I shall follow the method of Mr. Rubinow.* Number of persons eighteen years and over gainfully employed and receiving less than $1,200 annually, . . 1,507,373 Estimated number of days lost at 8.5 per person, 12,812,670.5 Estimated loss in wages at $1.80 per day for six-sevenths of the days, $19,468,122. 40 Medical cost at $1 per day 12,812,670.50 Economic loss at 50 cents per day, ... . 6,489,374. 10 Total social and economic cost of sickness per annum among employees in Massachusetts, ...... $38,770,167.00 The above is an average of 125.70 per employee. Respectfully submitted, PAUL H. MEANS. 1 I. M. Rubinow: Social Insurance (Chapter XIII.), Henry Hall & Co., 1913, p. 214. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 177 REPORT ON ACCIDENT INSURANCE IN MASSACHUSETTS DURING THE YEAR 1915.i Population of Massachusetts in 1915, 3,600 000 Estimated number of employees over eighteen years receiving less than $1,200 a year, . ■ .... 1 507 373 Total number of unions in Massachusetts in 1915, . . 1,425 Total number of workers in these unions in 1915, . 243 535 Computed per cent, of unions carrying accident insurance, . . 2 32 Average monthly contribution for accident insurance, $1 . 12 Average weekly payment upon disability, . . . 4. 00 Average waiting period (days), ...... 7.42 Average (weeks), ..... . . 14 Note. — Strike insurance was found in 40 per cent, of the unions paying $7 weekly. Deductions: — Computed number of unions carrying- accident insurance, . . 456 Computed number of members, ... . 77,931 Computed number of unions not carrying accident insurance, 969 Computed number of members, .... . 156,604 Computed per cent, of accidents among union members, . . 3 Computed number of accidents per 1,000 population, . . 1.25 Computed average number of days of disablement per person, . 27 Computed average wage in Massachusetts in 1914, . . . $564 Note. — In 1914, $341,309,517 were paid to 606,698 workers. Computed economic cost to organized labor, . . . $296,664 Computed total economic loss in the State due to accidents, . $1,779,984 Accident insurance was found in 32 per cent, of the labor unions heard from, and of this about 3 per cent, was regular life insurance. Weekly- contributions ranged from 50 cents to $2 a month, and weekly pajonents for accidents ranged from 13.50 to $7 a week for nine to twenty weeks in a year. Since it is reasonable to imagine that unorganized labor has very little accident insurance, and since we have found only 32 per cent, having accident insurance among organized labor, it is fair to hazard the state- ment that only 5 to 15 per cent, of the working population of Massa- chusetts carry insurance against accident — ' = 5 per cent, approxi- 1,507,373 mately. One out of every 33 workers (3 per cent.) is found to suffer from accident for an average of twenty-seven days for each injured person every year, losing a total of 1,180,980 days (3,281 years), representing a loss in wages (rate $564 a year) of $1,779,984.00 a year. Respectfully submitted, A. E. 0. MUNSELL. 1 Based on figures obtained in 399 /3^{fe¥fif)&'li^'iaSflf^ions. ' In 1908, 20.5 per cent. 178 SOCIAL INSURANCE. [Feb. REPORT OF INVESTIGATIONS MADE BY DR. W. W. WALCOTT ON HEALTH INSURANCE. Report on Fbatebnal Oedees. In beginning the work on this Commission the first problem was to determine if possible how the insurance situation is being handled under existing conditions. The facts were obtained from the records and reports of the Bureau of Statistics, the State Commissioner of Insurance, the State Librarian, the State Board of Charity, the library of the Massa- chusetts General Hospital, the Boston Medical Library and the Associated Charities. From these sources it was first necessary to sort out the companies doing business in Massachusetts from other companies, and to sort out the Massachusetts policy holders from Companies chartered from other States but doing business in Massachusetts. As far as ordinary insurance companies are concerned, it was comparatively simple to obtain records of receipts, expenditures, death and sick benefits, etc., as practically all of these companies are required by law to file detailed reports with the Commissioner of Insurance. When we came to fraternal orders the problem was somewhat different. While every corporation wishing to apply for a charter to do any kind of insuralice business — health, life or accident — must apply to the State Commissioner of Insurance, presenting sample policy, a large number are incorporated under exemption of section 12, chapter 119, Revised Laws. This means that the company so exempted does not have to file a report with the Insurance Commissioner, and the Insurance Commissioner does not know when they cease to do business and has no way of finding out. There are 116 fraternal orders not incorporated under the exemption act with accessible tables giving the following information : — Date of incorporation. Location. Name of president and secretary. Income: — (o) Death and disability assessments. (6) All other sources. Disbursements: — (a) Death and disability claims. (6) All other. Membership and death claims. Admitted assets. Death claims. Disability claims. Borrowed money. There was certain additional information that it seemed desirable to ' have, and a circular letter was sent out to each of the fraternal orders in question. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 179 To the questions sent to the 314 fraternal organizations 113 replies were received. Of these 113 societies 64.6 per cent. (73) paid a sickness benefit. The amount paid and the period of payment seemed to be very similar to that of labor unions. It is impossible to estimate the number of laborers who receive a sickness benefit in this way. It is a larger pro- portion of the organizations of this character than of the labor unions, but probably not a larger proportion of the total number of laborers of the State. While the volume of business done by insurance companies above mentioned, and these fraternal orders that are not exempted under the exemption act from filing reports with the Insurance Commissioner, rep- resents a large percentage of the insurance business of this type, it does not by any means represent the majority of policy holders. A great many people, whose number it is impossible to estimate, are carrying, or have carried, for varying lengths of time, policies in companies or mutual benefit associations incorporated under the exemption act. This means that there was no way of getting records concerning them. The following table shows the exact condition of affairs as far as the exemption act is concerned: — ■ * Number applying for a Charter. Number incorporated under the Exemption Act. Insurance corporations authorized during 1910 Insurance corporations authorized during 1911, Insurance corporations authorized during 1912, Insurance corporations authorized during 1913, Insurance corporations authorized during 1914, 36 47 35 48 51 30 46 34 45 48 Totals 217 203 That means that for a five-year period 217 insurance companies doing health, life, death or accident benefit insurance applied for a charter from the Insurance Commissioner, and that 203 of them were incorporated under the exemption act. Obviously, no records of the latter are on file, and it is impossible to obtain satisfactory data regarding them. These companies are composed chiefly of mutual benefit associations among the foreign-born population, often having a very small member- ship, with officers changing at least every year and addresses changing oftener. A study of these societies among Itahans alone furnished a hst of 127, concerning which, however, little information could be obtained. Many of the societies have died after existing a comparatively short time; others have moved and changed their headquarters; officers have changed, moved or died, and, in short, while considerable time was spent Digitized by Microsoft® 180 SOCIAL INSUEANCE. [Feb. in securing a list of the Italian societies alone, the list was hot of any- practical use in getting information as to how this class of people was being insured, except in a very general way. Up to date (Sept. 1, 1916), from the facts at hand it would seem that while a large number of people are being insured under existing condi- tions, there are no available records kept to determine either the number of people or the manner of their insurance. While this study dealt only with the Italian societies, it is fair to as- sume that similar conditions exist among companies or societies with a membership of other racial origins. The study of the Italian situation revealed the futility of attempting to follow up this investigation among other societies. The following tables give certain essential facts concerning fraternal orders and the insurance companies in Massachusetts, as well as those companies chartered outside this State but doing business here. In the work the figures for 1914 had to be used, as the 1915 figures were not available. Fratbbnal Benefit Societies. Table No. 1. Name. Incorporated. Location. Massachusetts {Lodge System). American Benefit Society, .... Jan. 9, 1893 Boston. Degree of Honor of the A. 0. U. W. of MaasachuBetts, Inc. Foresters, Massachusetts Catholic Order of, . i May 25, 1905 Boston. July 30, 1879 Boston. Fraternal Helpers, American Order of, . July 13, 1892 Boston. Golden Star (Inc.), United Order of the, Apr. 17, 1900 Haverhill. Harugari, Gross-Loge des Deutschen Ordens der, . Apr. 17, 1881 Boston. Home Benefit Association, The, . . . . June 23, 1893 Boston. Independent Workmen's Circle of America, Inc., . Deo. 8, 1908 Boston. Labor League, Inc., . July 12, 1910 Boston. Loyal Knights and Ladies, June 18, 1895 Boston. New England Order of Protection, . Nov. 12, 1887 Boston. Pilgrim Fathers, United Order of the. Mar. 15, 1879 Lawrence. Portuguese Fraternity of the United States of America, Jan. 5, 1899 Somerville. Royal Arcanum, Nov. 5, 1877 Boston. Royal Michaelense Autonomic Beneficent Association, Inc. Scottish Clans (Inc.)f American Order of, Aug. 10, 1899 New Bedford. May 6, 1889 Boston. Sons of Israel, Independent Order, . May 26, 1914 Boston. Union Fraternal League, June 19, 1889 Boston. United Workmen, Grand Lodge of Massachusetts, Feb. 9, 1883 Boston. Digitized by Microsoft® 1917,] HOUSE — No. 1850. 181 Table No, 1 — Continued. Name. Incorporated. Location. Massachusetts {Miscellaneous). American Express Employees Aid Society, Arlington Police Relief Association, Inc., Boston Chamber of Commerce, Gratuity Fund, Boston Firemen's Mutual Relief Association, . Boston Fruit and Produce Exchange Beneficiary Asso- ciation. Boston Letter Carriers Mutual Benefit Association, Boston Post Office Clerks Mutual Benefit Association, . Boston Teachers Mutual Benefit Association, Brockton Firemen's Relief Association, . Brockton Masonic Benefit Association, Brookline Firemen's Relief Association, . Brookline Police Mutual Aid Association, Brotherhood of Israel, Inc., Cambridge PoHce Mutual Aid Association, Catholic Association, Corporation of the Members of the Chelsea Police Relief Association, Commercial Travellers Boston Benefit Association, Inc., Commercial Travellers Eastern Accident Association, . Fall River Fireman's Mutual ReHef Association, Haverhill Fireman's Relief Association, . Hermann's Benefit Association, Inc., Hibernian's Widows' and Orphans' Fund, Knights of St. Stanislaus, Inc., Lawrence Fire Department, Mutual Relief Association of the. . . Lawrence Perchers Relief Association, Inc., Lawrence Police ReUef Association, Lawrence Woolsorters Benefit Association, Inc., LaLigue des Patriotes, Lowell Firemen's Fund Association, Lowell Police Relief Association, Lynn Fire Department, Relief Association of the, Madeiran Alliance Protective Association, The, Marketmen's Relief Association, Masonic Casualty Company, . Michaelense Mutual Aid Society, Inc., . Monte Pio Luso-Americano Corp., . ... New Bedford Firemen's Mutual Aid Society, . . Digitized by Microo eft^ Mar. 14, 1898 Boston. Sept. 1, 1905 Arlington. May 22, 1885 Boston. Feb. 18, 1882 Boston. Nov. 1, 1888 Boston. May 18, 1889 Boston. July 19, 1894 Boston. Sept. 20, 1890 Boston. Nov. 7, 1887 Brockton. Jan. 3, 1894 Brockton. May 23, 1887 Brookline. Nov. 4, 1887 Brookline. June 10, 1913 Boston. May 20, 1884 Cambridge. Mar. 14, 1891 Lowell. Mar. 19, 1889 Chelsea. Mar. 7, 1901 Boston. Sept. 20, 1894 Boston. June 14, 1892 Fall River. Jan. 25, 1887 Haverhill. Dec. 20, 1901 Adams. Deo. 4, 1890 Marlborough. July 30, 1902 Chicopee. Mar. 18, 1878 Lawrence. Dec. 18, 1902 Lawrence. Apr. 11, 1889 Lawrence. June 11, 1901 Lawrence. Mar. 31, 1888 Fall River. Nov 22, 1887 Lowell. Apr. 5, 1889 Lowell. Mar. 25, 1886 Lynn. Oct. 10, 1913 Lowell. July 10, 1912 Boston. Oct. 7, 1895 Boston. Apr. 27, 1910 New Bedford May 7, 1885 New Bedford Sept 25, 1895 New Bedford 182 SOCIAL INSURANCE. [Feb. Table No. 1 — Continued, Name. Incorporated. Location. Massachusetts {Miscellaneoits) — Con. New Bedford Police Association, . ... Newton Police Benefit Association, New York, New Haven & Hartford Railroad Beneficial Association. Odd Fellows Beneficial CJorporation of Southern Massa- chusetts. 1 Odd Fellows Death Benefit Association, Brockton, Portuguese Azorian Operative Beneficent Association, Portuguese Beneficent Association of St. Michael the Archangel, Inc. Portuguese Beneficent Association of St. Peter, Inc Portuguese Benefit Society of Our Lady of Help, of Peabody, Inc. Portuguese Benevolent Society of St. Anthony, Progressive Max Levy Society of New Bedford, Inc., Quincy Firemen's Relief Association, Red Men's Fraternal Accident Association of America, Revere Police Relief Association, . Salem Police Relief Association, Somerville Firemen's Relief Association, Somerville Police Relief Association, Sons of Freedom, Inc.,* .... Southern Massachusetts Masonic Mutual Relief ciation. Springfield Police Relief Association, Stars of Jacob, « St, Antonio, Society of, ... St. Casimir, Society of, .... St. Francis Benefit Association, St. John the Baptist, National Benevolent Union of, St. John the Baptist Benevolent Society of Lowell, St. Jean Baptiste Society of Marlborough, St. Jean Baptiste Society of North Adams, . St. John the Baptist Mutual Benefit Association of Salem. St. John the Baptist, Society of, St. Jean Baptiste de Worcester, Massachusetts, Soci6t6 de Bienfaisance.* St. Joseph's Benevolent, Protective and Charitable Society. 6 Nov. Jan. July Mar. Nov. Sept. Jan. Oct. May Oct. Aug. May Aug. Sept. Sept. Mar. Jan. Dec. Dec. Feb. Nov. July Dec. Sept. Oct. Jan. May Oct. Jan. Sept. Jan. Apr. 1890 1907 1882 1900 1892 1911 1903 1908 1910 1896 1910 1886 1887 1907 1895 1890 1882 1895 1882 1893 1912 1891 1896 1896 1891 1870 1883 1894 1897 1891 1877 1891 New Bedford. West Newton. Boston. New Bedford. Brockton. Fall River. Fall River. Rehoboth. Peabody. Lowell. New Bedford. Quincy. Westfield. Revere. Salem. Somerville. Somerville. Boston. Taunton. Springfield. Worcester. Taunton. Worcester. Worcester. Haverhill. Lowell. Marlborough. North Adams. Salem. Webster. Worcester. Fall River. 1 Reincorporated Jan. 1, 1915, as a stock accident company, * No report. Receiver appointed Oct, 20, 1914. » No business transacted for one year. Charter voided June 5, 1915. * Becomes exempt June 1, 1915, under section 296, chapter 628, Acts of 1911. 6 Subject to section 29o, chapter 628, Acta of 1911, since Jan. 1, 1914. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 183 Table No, 1 — Concluded. Names. Massachusetts {Miscellaneous) — Con. St. Joseph Polish Society, Inc., Teachers Annuity Guild, .... United Hebrews of America (Inc.) Order, United Masonic Health and Accident Association Inc., Wellesley Firemen's Relief Association, . Winchester Firemen's Relief Association, Worcester Firemen's Relief Association, . Worcester Police Relief Association, Other States {Lodge System). Artisans Canadiens-Fcangais, La Soci6t6 des, Brith Abraham, Independent Order, , . Brith Abraham, United States Grand Lodge, Catholic Benevolent Legion, i Catholic Knights of America, , ... Catholic Mutual Benefit Association, Foresters, Catholic Order of, . . . Foresters of America, Endowment Fund, Golden Cross of the World, United Order of the, . Heptasophs, Supreme Conclave Improved Order, . Knights and Ladies of Honor, Knights of Columbus, Knights of Honor, Knights of Pythias Insurance Department, Ladies Catholic Benevolent Association, Loyal Association, Scottish Clans Order of Missouri, . Sons of Benjamin Independent Order, . St. Jean Baptiste de Amfirique L' Union, Workmen's Sick and Death Benefit Fund, Incorporated. Location. July 8 1902 Apr. 21 1893 Sept. 9 1904 Aug. 23, 1907 Feb. 5, 1914 Jan. 7, 1889 July 27, 1878 Jan. 23, 1889 Deo. 28, 1876 Aug. 2, 1894 Feb. 3, 1900 Sept. 5, 1881 Apr. 1, 1880 June 9, 1879 May 24, 1883 July 4 1876 Aug. 28 1878 Apr. 1, 1878 Mar. 29, 1882 Mar. 20, 1876 Aug. 5, 1870 June 28, 1890 Jan. 18, 1890 July 5, 1881 Sept. 13, 1880 May 7, 1900 Feb. 13, 1899 Thorndike. SomerviUe. Boston. Springfield. Wellesley. Winchester. Worcester. Worcester. Montreal, Can. New York. N. Y. New York, N. Y. Brooklyn, N. Y. St. Louis, Mo. Hornell, N. Y. Chicago, 111. Jersey City, N. J. Knoxville, Tenn. Baltimore, Md. Indianapolis. Ind. New Haven, Conn. St. Louis, Mo. Indianapolis, Ind. Erie, Pa. Jersey City, N. J. Boston, Mass. New York, N. Y. Woonsocket, R. I. NewYork, N. Y. Withdrew from Massachusetts March 12, 1915. Digitized by Microsoft® 184 SOCIAL INSURANCE. [Feb. Tahk No. 2. Income. DlSBUBSEMENTS. Mem- bership Dec. 31, 1914. NAME. Death and Disability As- sessments. All Other Sources. Death and Disability All Other. Massachusetts {Lodge System). American Benefit Society, . Degree of Honor of the A. 0. U. W. of Massachvisetts, Inc. Foresters, Massachusetts Catholic Order of.' Fraternal Helpers, American Order of. Golden Star auc). United Order of the, Harugari, Gross -Lege des Deutschen Ordens der. Home Benefit Association, i . Independent Workmen's Circle of America, Inc. Labor League, Tnc Loyal Knights and Ladies, New England Order of Protection, i Pilgrim Fathers, United Order of the, ' Portuguese Fraternity of the United States of America. ' Royal Arcanum, ' .... Royal Michaelense Autonomic Benef- icent Association, Inc. ' Scottish Clans (Inc.), American Order of. " Sons of Israel, Independent Order, Union Fraternal League, United Workmen, Grand Lodge of Mas- sachusetts. 1 $68,726 10,476 611,248 6,973 21,061 26,571 92,260 15,024 9,132 3,962 1,063,183 406,355 63,022 8,600,592 42,508 3,834 904 31,509 1,178,832 $13,708 3,074 57,645 2,431 1,666 2,931 28,568 10,070 5,305 443 68,562 21,983 4,812 667,122 4,936 575 629 12,681 43,944 $68,950 5,800 444,385 4,122 22,750 32,500 75,500 12,259 8,758 4,000 1,105,308 421,100 62,096 8,766,013 41,644 2,625 295 20,419 926,000 $11,313 2,168 25,551 2,307 906 1,060 24,112 9,444 4,808 569 60,649 22,641 4,102 309,162 4,992 354 550 12,768 37,693 6,674 1,677 39,856 396 888 2,033 5,514 2,423 1,939 192 51,717 10,107 6,002 245,986 4,571 343 2,362 2,096 25,706 Totals MassacKuseiis {Miscellaneous). American Express Employees Aid Soci- ety. Arlington Police Relief Association, Inc. Boston Chamber of Commerce, Gratu- ity Fund. Boston Firemen's Mutual Relief Asso- ciation. Boston Fruit and Produce Exchange Beneficiary Association. Boston Letter Carriers Mutual Benefit Association. Boston Post Ofiice Clerks Mutual Bene- fit Association. Boston Teachers Mutual Benefit Asso- ciation. Brockton Firemen's Relief Association, Brockton Masonic Benefit Association, Brookline Firemen's Relief Association, Brookline Police Mutual Aid Associa^ tion. $12,156,172 $14,993 47,052 42,470 10,700 11,845 14,222 6,099 3,167 $951,085 $426 101 6,807 863 603 16,236 11,095 7,814 1,768 106 1,343 1,241 $12,024,554 $8,468 38 62,500 44,000 9,960 16,484 13,430 12,683 863 3,176 689 247 $535,199 $725 13 355 401 381 1,696 917 1,108 264 90 498 255 409,481 1,161 12 887 1,326 487 1,193 1,212 755 96 347 108 72 1917.] HOUSE — No. 1850. 185 Table No. 2 — Continued. Income. Disbursements, Mem- bership Dec. 31, 1914. NAME. Death and DisabiUty As- sessments. All Other Sources. Death and Disability Claims. AU Other. Massachusetts {Miscellaneous) — Con. Brotherhood of Israel, Inc., . 17,292 S3,220 S4,000 $3,205 2,331 Cambridge Police Mutual Aid Associa- tion. Catholic Association, Corporation of the Members of The. Chelsea Police Relief Association, 6,204 6,254 4,397 1,922 6,236 2,664 1,795 1,097 4,017 94 157 810 41 Commercial Travellers Boston Benefit Association, Inc. ' Commercial Travellers Eastern Acci- dent Association. ' Fall River Firemen's Mutual Relief Association. Haverhill Firemen's Relief Association, 35,803 67,644 2,190 9,440 19,334 835 1,341 34,900 77,187 2,500 723 9,330 16,114 131 180 4,417 8,314 137 99 Hermann's Benefit Association, Inc., , 6,367 926 1,600 214 1,229 Hibernian's Widows' and Orphans' Fund. Knights of St. Stanislaus, Inc., 44,944 636 4,150 1,178 45,525 1,176 3,862 559 2,569 181 Lawrence Fire Department, Mutual Belief Association of the. Lawrence Perchers Relief Association, Inc. Lawrence Police Relief Association, 72 1,154 714 453 424 235 103 159 179 - 2,263 992 141 103 Lawrence Woolsorters Benefit Associa- tion, Inc. La Ligue des Patriotes 1,583 534 1,033 198 402 6,812 2,267 5,561 3,751 451 Lowell Firemen's Fund Association, . - 3,777 949 867 181 Lowell Police Relief Association, - 2,500 1,371 302 95 Lynn Fire Department, Relief Associa^ tion of the. Madeiran Alliance Protective Associsr tion, the. Marketmen's Relief Association, . 2,450 3,394 2,082 605 113 1,741 2,434 2,428 982 237 944 253 286 747 Masonic Casualty Company, ' 31,328 21,916 31,314 20,311 3,425 Michaelense Mutual Aid Society, Inc., . 7,483 2,319 8,705 1,174 635 Monte Pio Luso-Americano Corp., 5,535 4,091 5,106 4,204 387 New Bedford Firemen's Mutual Aid - 588 482 196 190 Society. New Bedford Police Association, . 447 1,958 400 368 112 Newton Police Benefit Association, 335 405 - 141 74 New York, New Haven & Hartford Railroad Beneficial Association. Odd Fellows Death Benefit Association, Brockton. „ Portuguese Azorian Operative Benefi- cent Association. Portuguese Beneficent Association of St. Michael the Archangel, Inc. Portuguese Beneficent Association of 32,045 2,382 6,801 8,112 82 1,404 147 4,996 4,664 53 31,686 2,423 6,413 7,900 52 3,993 129 3,533 4,442 73 994 294 936 1,055 41 St. Peter, Inc. Portuguese Beneficent Society of Our Lady of Help, of Peabody, Inc. 405 615 325 690 136 D/£DYgacldfe>allt(/d/stsi«fSfent. 186 SOCIAL INSURANCE. [Feb. Table No. 2 — Continued. Income. DXSBITBSBMENTS. Mem- bership Dec. 31, 1914. NAME. Death and Disability As- sessments. All Other Sources. Death and Disability Claims. All Other. Maasachusetts (Miscellaneous) — Con. Portuguese Benevolent Society of St. Anthony. Progressive Max Levy Society of New Bedford, Inc. Quincy Firemen's Kelief Association, . 13,716 $368 $3,594 $358 304 944 428 626 362 18S 373 946 1,081 174 93 Red Men's Fraternal Accident Assoicar tion of America. > Revere Police Relief Association, . 33,857 25,747 464 29,387 222 23,576 4 3,698 22 Salem Police Relief Association, . - 2,055 1,320 98 59 Somerville Firemen's Relief Association, - 1,965 1,076 119 92 Somerville Police Relief Association, . - 3,484 4,098 99 67 Southern Massachusetts Masonic Mu- tual Relief Association. Springfield Police Relief Association, . 466 70 401 2,804 2,742 351 286 93 160 116 St. Antonio, Society of, ... 9,095 1,388 8,849 1,298 621 St. Casimar, Society of, . . ■ . - 1,761 863 394 204 St. Francis Benefit Association, . - 1,913 678 855 244 St. John the Baptist, National Benevo- lent Union of. St. John the Baptist Benevolent Society of Lowell. St. Jean Baptiste Society of Marlbor- ough. St. Jean Baptiste Society of North Adams. St. John Baptist Mutual Benefit Asso- ciation of Salem. St. John Baptist Society of Webster, . 5,192 88 1,507 63 6,824 121 10,913 291 491 15 8,971 3,130 9,608 2,520 563 S,693 2,318 4,526 1,922 506 8,628 3,773 2,095 1,486 4,583 4,074 2,073 1,041 579 323 St. Jean Baptiste de Worcester, Massa- chusetts Society de Bienfaisanoe. St. Joseph's Benevolent, Protective and Charitable Society. St. Joseph's Polish Society, Inc., . 2,094 6,200 48 788 1,058 375 2,264 6,778 254 361 1,306 163 195 658 101 Teachers Annuity Guild, 2 . - 30,116 18,012 910 1,220 United Hebrews of America (Inc.) Order. United Masonic Health and Accident Association, Inc. Wellesley Firemen's Relief Association, 5,536 9,036 13,000 8,634 2,974 15,460 17,048 267 15,705 42 14,672 139 2,847 30 Winchester Firemen's Relief Associa- tion. Worcester Firemen's Relief Association, - 189 4,609 76 1,931 6 167 23 251 Worcester Police Relief Association, 2,619 5,893 5,028 409 229 Totals $542,717 $284,266 $609,749 $165,763 55,949 Other States (Lodge System). Artisans Canadiens-Francais, La Sooi^tS des.i $712,065 $227,012 $417,674 $83,490 40,095 706,020 166,156 707,850 95,593 194,490 1 See detailed statement. Digitized by Microsoft® 3 Annuities. 1917.] HOUSE — No. 1850. 187 Table No. 2 — Concluded. Income. DiSBUHSEMENTS. Mem- bership Dec. 31, 1914. NAME. Death and Disability As- sessments. All Other Sources. Death and DisabiUty Claims. All Other. Other States (Lodge System) — Coa. Brith Abraham, United States Grand T-odse.' Catholic Knights of America, ' Catholic Mutual Benefit Association, ' . Foresters, Catholic Order of , ' Foresters of America, Endowment Fund. Golden Cross of the World, United Order of the. ' Heptasophs, Supreme Conclave Im- proved Order. ^ Knights and Ladies of Honor, ' . Knights of Columbus, ' . Knights of Honor, i . . . . Knights of Pythias, Insurance Depart- ment. ' Ladies Catholic Benevolent Associa- tion.' Loyal Association, ' . . . . Scottish Clans Order of Missouri, ' Sons of Benjamin Independent Order, . St. Jean Baptiste de Amerique L'Un- ion.' Workmen's .Sick and Death Benefit Fund. 1 t427,944 527,272 1,399,321 2,204,015 20,139 415,626 1,402,577 1,404,802 1,263,075 1,080,979 2,166,864 1,338,751 166,741 169,850 30,819 189,824 522,441 $99,195 88,709 170,326 337,019 466 67,723 133,709 157,044 487,740 121,857 638,662 228,217 20,790 33,301 25,436 94,808 80,581 $448,227 682,348 1,667,022 . 1,548,599 13,068 397,519 1,486,890 1,461,309 758,200 1,150,197 1,501,540 1,206,136 173,312 135,800 23,134 112,627 500,182 $57,007 28,149 90,347 156,639 54,938 98,915 123,803 316,774 61,530 346,494 87,820 17,137 20,781 35,253 61,797 31,014 71,642 18,220 64,079 143,914 189 17,252 66,887 65,855 107,479 15,169 71,816 143,139 6,504 16,873 742 26,983 51,286 Totals $16,148,125 $3,168,751 $14,291,634 $1,767,481 1,122,614 > See detailed statement. Digitized by Microsoft® 188 SOCIAL INSURANCE. [Feb. Table No. 3. Name. Admitted Assets. Death Claims. Dis- ability Claims Lia- bilities (Bor- rowed Money) Ad- vance Assess- ments. Miscel- laneous. Massachusetts (Lodge System). American Benefit Society, * Degree of Honor of the A. 0. U. W. of Massachusetts, Inc. Foresters, Massachusetts Catholic Order ot.> Fraternal Helpers, American Order of. Golden Star One), United Order of the. Harugari, Gross-Loge des Deutschen Ordens der. Home Benefit Association, * Independent Workmen's Circle of America, Inc. Labor League, Inc., . Loyal Knights and Ladies, New England Order of Protection, ' Pilgrim Fathers, United Order of the.i Portuguese Fraternity of the United States of America. ' Royal Arcanum, ^ . . . . Royal Michaelense Autonomic Be- neficent Association, Inc. • Scottish Clans (Inc.), American Or- der of. Sons of Israel, Independent Order, . Union Fraternal League, . United Workmen, Grand Lodge of Massachusetts. ^ 'S56,120 21,849 782,073 4,419 10,297 27,115 111,606 19,051 7,240 3,005 322,437 12,082 20,868 6,501,491 7,462 9,670 688 43,426 661,962 136,500 1,500 40,682 692 20,250 3,000 2,500 250 800 1,700 75,500 160,900 792,296 6,500 200 2,172 52,000 $119 440 465 25 723 $250 2,190 600 125 $15 235 147 - $289 648 1,3?8 48 1,266 710 86 125 3,663 970 229 Totals, Massachusetts (Miscellaneous). American Express Employees Aid Society. Arlington Police Relief Association, Inc. Boston Chamber of Commerce, Gra- tuity Fund. Boston Firemen's Relief Association, Boston Fruit and Produce Exchange Beneficiary Association. Boston Letter Carriers Mutual Bene- fit Association. Boston Post Office Clerks Mutual Benefit Association. Bcston Teachers Mutual Benefit As- sociation. Brockton Firemen's Relief Associa- tion. Brockton Masonic Benefit Associa- tion. Brookline Firemen's Relief Associa- tion. Brookline Police Mutual Aid Asso- ciation. Brotherhood of Israel, Inc., S8,622,861 $11,001 3,420 146,690 4,729 3,685 79,371 17,224 139,239 14,331 555 17,934 26,417 4,630 $1,197,342 $500 8,441 1,310 1,000 $1,772 $537 1.626 455 1,039= 111 $3,165 $900 $397 $6 26 $9,262 $300 15 ' See detailed statement. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 189 Table No. 3 — Continued. Name. Admitted Death Claims. Dis- ability Claims. Lia- bilities (Bor- rowed Money). Ad- vance Miscel- laneous. Maaaachusetts (Miscellaneous) — Con. Cambridge PoUce Mutual Aid Asso- . ciation. Catholic Association, Corporation of the Members of the. Chelsea Police Relief Association, . Commercial Travellers Boston Bene- fit Association, Inc. ' Commercial Travellers Eastern Acci- dent Association. ^ Fall River Firemen's Mutual Relief Association. Haverhill Firemen's Relief Associa- tion. Hermann's Benefit Association, Inc . , Hibernian's Widows' and Orphans' Fund. Knights of St. Stanislaus, Inc.,' Lawrence Fire Department, Mutual Relief Association of the. Lawrence Perchers Relief Associar tion. Inc. Lawrence Police Relief Association, Lawrence Woolsorters Benefit Asso- ciation, Inc. La Ligue des Patriotes, . Lowell Firemen's Fund Association, Lowell Police Relief Association, Lynn Fire Department, Association of the. Madeiran Alliance Protective Asso- ciation, the. Marketmen's Relief Association, Masonic Casualty Company, ' . Michaelense Mutual Aid Society, Inc. Monte Pio Luso-Americano Corp., . New Bedford Firemen's Mutual Aid Society. New Bedford Police Association, Newton Police Benefit Association, New York, New Haven & Hartford Railroad Beneficial Association. Odd Fellows Death Benefit Associa- tion, Brockton. ^ ;Portugue3e Aaorian Operative Be- neficent Association. _ , i Portuguese Beneficent Association of ■St. Michael the Archangel, Inc. - Portuguese Beneficent Association of " St. Petet, Inc. Portuguese Benefit Society of Our Lady of Help, of Peabody, Inc. Portuguese Benevolent Society of ' Bt. Anthony. ;Pr(ffiressive Max Levy Society of . 'New Bedford, Inc. $45,283 39,510 9,346 2,571 7,853 16,396 11,451 24,610 6,699 746 17,099 2,847 24,057 7,023 2,735 24,197 16,494 23,209 1,259 6,989 48,897 116 24,151 5,472 21,266 8,048 6,761 913 8,810 15,230 481 2,963 784 2,050 t5Q0 20,000 200 11,000 1,500 60 300 4,850 628 $231 7,254 11,179 $5,000 $307 625 $750 71 3,500 4,596 130 10,500 2,000 24 1,365 1,140 46 1 See detailed statement. Digitized by Microsoft® 190 SOCIAL INSURANCE. [Feb. Table No. 3 — Contin ued. Name. Admitted Assets. Death Claims. Dis- ability Claims. Liar bilities (Bor- rowed Money). Ad- vance Assess- ments. Miscel- laneous, Massachusetts (Miscellaneous) — Con. Quincy Firemen's Relief Associa- $7,603 - ~ -• ~ ^ tion. Red Men's Fraternal Accident Asso- 44,222 $700 $6,190 - $93 $4,890 ciation of America, i Revere Police Relief Association, . 3,016 ~ ~ ~ ~ Salem Police Relief Association, 23,623 - - - - - Somerville Firemen's Relief Associar 15,785 - - - - tion, Somerville Police Relief Association, 35,892 - - - - - Southern Massachusetts Masonic 7,828 161 - - - Mutual Relief Association. Springfield Police Relief Association, 20,354 - 45 ~ ~ St. Antonio, Society of, . 633 600 - - - - St. Casimar, Society of, . 7,802 - - - - - St. Francis Benefit Association, 3,230 - - - - St. John the Baptist, National Be- 40,327 . . _ 355 $15,000 - nevolent Union of. St. John the Baptist Benevolent So- ciety of LoweU. - - - - - - St. Jean Baptiste Society of Marl- borough. St. Jean Baptiste Society of North 29,657 2,463 1.58 - - 33,881 - - - - Adams. St. John the Baptist Mutual Benefit 24,633 - - - - Association of Salem. St. John the Baptist Society of Web- 18,138 338 71 ~ - - ster. St. Jean Baptiste de Worcester, Mas- 8,190 293 - - - sachusetts, Soci6t6 deBienfaisance. St. Joseph's Benevolent, Protective 3,919 500 - - - 180 and Charitable Society. St. Joseph's Polish Society, Inc., . 441 - - - - - Teachers Annuity Guild, 214,932 - 8,2102 - - - United Hebrews of America (Inc.) 18,679 1,000 _ _ 54 459 Order. United Masonic Health and Accident 11,215 200 3.235 - 979 Association, Inc, Wellesley Firemen's Relief Associa- 2,091 - - - - tion. Winchester Firemen's Relief Associa- 4,342 - - - - - tion. Worcester Firemen's Relief Associa- 29,748 - — - - - tion. Worcester Police Relief Association, 61,743 - - - - - Totals $1,577,472 $58,092 $45,429 $36,924 $3,455 $7,851 _ Other States (Lodge System). Soci4t« des. ' Brith Abraham, Independent Or- $2,641,309 $27,426 $4,509 - $3,382 $2,155,800 746,421 161,750 2,000 $8,000 _ 29,250 der.' Brith Abraham, United States 232,183 104,059 _ 7,500 1,695 • 4,386 Grand Lodge ' Catholic Knights of America, * 1,185,387 19,966 - - - 1,311 Catholic Mutual Benefit Associa- 1,918,445 295,763 _ _ _ 444 tion. ' Foresters, Catholic Order of , ' . 4,644,281 196,290 ~ - - 867 > See detailed statement. ' Includes $3,530 gratuities. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 191 Table No. 3 — Concluded. Name. Admitted Assets. Death ClaimH. Dis- ability Claims. Liar bilities (Bor- rowed Money). Ad- vance Assess- ments. Miscel- Ismoous. 0(ker States (Lodge System) — Con. Foresters of America, Endowment Fund. Golden Cross of the World, United Order of the. ' Heptasophs, Supreme Conclave Im- proved Order. ' Knights and Ladies of Honor, i Knights of Columbus, ' . Knights of Honor, ' . ^nights of Pythias Insurance De- Xadies Catholic Benevolent Associa^ tion.' Loyal Association, > . . . Scottish Clans Order of Missouri, ' . Sons of Benjamin Independent Or- der. St. Jean Baptiste de Amerique L'Union.i Workmen's Sick and Death Benefit Fund.' 118,829 230,990 684,136 627,210 5,348,293 531,228 7,013,691 3,053,059 110,500 252,047 6,513 751,784 832,703 $77,836 382,461 211,340 117,000 540,863 125,786 79,922 17,000 22,400 969 9,000 26,721 $1,770 8,625 $70,000 $293 20,477 1,927 176 $1,015 2,489 1,352 5,776 92 5,829,740 125 108 197 Totals, , Summary. Massachusetts (lodee system), . Massachusetts (miscellaneous). Other States (lodge system), . 130,829,009 18,622,861 1,577,472 30,829,009 $2,416,552 $1,197,342 58,092 2,416,552 $16,904 $1,772 45,429 16,904 $85,500 $3,165 36,924 85,500 $27,950 $397 3,455 27,050 $8,032,952 $9,262 7,851 8,032,952 Grand totals, . . . . $41,029,342 $1,671,986 $64,105 $125,589 $31,802 $8,050,065 1 See detailed statement. Digitized by Microsoft® 192 SOCIAL INSURANCE. [Feb. d CO OS CO S t«r § 1 oT ■* s 00 « eo 2" s 00 2f 3 CM s 3" 8 1 CO" s «. s OS 2 OS us 5 62 00 O n t^ to U3 o> F. C4 00 (M CO « CD S3 & -< •» CO CO w " SS M S *"* ^ to g •» 1 OS OS 00 us h- CO t- l-H GO ** CO OS ~m § =S. CO CO ui" us CO » s CO CO oT n i 'S ^ CO C4 U3 M t- CO OS OS CD o M CO CO (S 12: -!« CO 00 W t* 00 iC » OS ^ 00 !? » - 00 04 "*- cs •* CO a ^ i>r co co" t>r oT CO ■« CO us" 1^ a ^ s (M CO S3 OS c£ s o lO "?. CO U3 ua (M a» CO 09 OS s a CO CO CO 00 "* CD oT CO ■* us i-T N «» . Ol C4 o •^ w «» h; o s to OS Oi OO 10 b- CO r- 00 CD IM OS CO US CO os CD 00 i ^- OS ■* us co ■*- CO oT t* •* 0" CO ■^ ■^'■ M CvT 00 O -a -* cq *-* 00 ~^ ^ Oi CO 00 00 US 00 04 to s «o CO CI s CO -it a *-( ^ 5 €» z g E- OO ^ ^ s QO CO ^^ CO CO CD CD 00 ^ 00 CO S5 00 2 09 CO g" g £5 Ui s oT •OS eo ^'' CD- OS N CO i>r c- tr CO w us o CO ■^ eo CO CO »-l CO «= eo ^ ra t» ^ OO ci" ^ '^" 2 0» ■* ^" '^" s s ^ 53 o g s CO CO CO fc t^ S S o S ss ^ "i' o OT eo OS CO CD CO c5 CO '!*< us O s i g" S ^" s g §g 5 co f «■ s" s § ^ eo gg g us «3 00 us ■* "'. oa^ o co- t-.r cm" co" »-. gs 3 cc s S* (M :^ ^ t* -* CO CM co 00 M o CO o OO 00 CO s ~ E= K b" r- ^. CO s ^ ^ C>J Sg S CO s; M OO CO CO s N s 2 b: OS i>r o" N CO i>r OS s ^ « ^ ^ s o 35 s cS N (M OS CO CO CM CO CD o g 2 lO S9 s" S CO CO oT t*r CO «- tc «» CM OS us CO ■*• CO CO (N t- w (N CD CM us eS 00 . w 0O~ S CM OO 00 -*< s co O) 00 ui OS »o CM OO OD CD S3 us -, £: ta "* o CO »o lO us C4 05 OD a OT ea OD ". CO o_ M o CO CD M eo CO s N s' £f OS co" t>r oT CO 00 CO ^-- cT CO w w s ^ OT s ". *H 04 CO «o ~»~ CO b- ^^ CO t^ t^ OS t«. OO C4 ■* «* us OT ■>. o w 00 kO ■* rt* us o C4 S US o SD t^ OS CO CO OS "^ OO CO e^ S CD i S g gf ftS eS s" Tj4 s OS gg oS oT CO o o oT CM ^ eS IS £ OJ CO "* r s s S5 s S* i eo CQ CO ■^ CM IS «& Q0~ e, s E- OS ^ »-H « to 00 us ^ eo OS US ^^ -* eo OS OT «o CO o> o t- - CS OS OO OS OT OS t» QO ea o CO •^ o CO us eo 5 eo cs CO OO , o» 00 «r oT CO OS t^ ^ WS ■* t^ s' tc o OO o (N cq O C31 CM CO CD CO t- •^ »o CO • CO 2! "s" o> ^ T-t o CO OO s ^ « ^ "eo" CO ^ ^ CM US ^ w «5 ■^ CO ■»*< C. OT ■* m CO 09_ ^ ■^t CD OS t> 04 o CO la eo CO g CM S ca M OS o »o CO eo i>- «o CO eo «5 t- r- us ■ ea a" I-T us CO eq . 00 us t-T OD sC S OS CO QC ■* OJ c» ■* 00 CO M QO 55 OS_ OT m" «• w to •« ^ ~~ t^ ~»o~ ""^ 00 ^ CO o i ■3 £ 1 1 oft® 1 1 1 1 a S a 1. i" 1 1 1 1 194 SOCIAL INSURANCE. [Feb. a a > ^ 8 a 'a i - s a s J S •I =1^ § s i ■? * a § 1° ^•5 ^ 1 ^ s o o o g s s OD tH C4 CO CQ U3 *-i eo eo ■^ CO o o s s w S SCO oo s i s a CO d CO 00 ca s s s S S §3 S S § S i g i ^- oo a i U9 3 i i i § g i i S8 i lA lO 1-1 in ^ in ra fx> s s S3 S 1-1 ^- s s 1-1 cq ^ ?fl PC In s a s i oo s s S r^ 3 oo s U3 N CO T-l 1^ i 3i s I S 1 S s O S i a. I .1 (^D9^iti&d4y^ic^s6m)^ Ii9 O O w S W H 1917.] HOUSE — No. 1850. 195 i'i CI 1 s eo S B 3 1 § i i 1 1 g 1 to i.e t0 1 i 1 r* to CD 3 CM Os" o i «* ' •*' 1 !- i §"* »o s kO o *-4 to 5 3 ef s S IS 00 g i S g 1 1 i 00 ¥ CO 3 ' i CO 3 1 to CO s" i S 3 i i g g S3 5 ^ i S SC g g" CO CO i. 1 » CO s S oT sf S 1 s s § t>r •• 2 g s" i 3 « t0 s 1 i 1 ■g B i S s CO S :3l I "l 00 i CO s S S eo eo 3 GS tC S" "" g eo S i § s" eo g i i i i i 00 s g ' i 1 i § g i s i s 1 s i i S § g s §' s s {; g s s i" s U3 «- s o" s t^ CO « (N s A K s s" s 00 i §8 S5 ss eo s s" lA (O i 3" eo s s" 5" r^ w M w 1 s S S R i i i U3 ' s g e 00 s 1 00 s a a 00 ll CO 1 3 1 i § =1 US* i U3 1 So" 1 i" 5" CO 5 1 s I S CD i s S 1 !- ©1 to t- J^ Ui Ol 1 oo OS eo l" CO a C4 ~~" t. ^ 5 69 «5 00 § !> s i>r OS g s CO oT 5 tC 1 ^. S. *H eo d lO OS CO 00 ea CI 1-* C4 s S CO N 04 MS " eo B g So CO s g g eo. g 1 « s s ~^ s i CO s sg OS C4 S 3 CQ ** "* A «3 CO C4 CO CD S' i S ^ o t^ tH o CO 3 oo «■ «o tc WS CO s CO b- lO r- u? OS l-H s to fro eo oo oo 1-^ U3 o t* OS co ■^ M3 S- »o Si Ttt 94 i ^" IC ec s oT o o ^« ^ tC o 04 lO CO N 00 •-t OS ■<*< CD »H ^ o m CO IH eo d eJ Si a t^ *H a •-« ^ CO U3 00 1 oo g CO *fi 00 rH *-l S CO t^ s 2 99 at ta (O us « lO OS CO c5 t- o 00 s o o « o ^ 00 o» i» eo ■^ ^. s O c* OS M of t-T rC «" csT CO t-T tC cf tc CO C4 oo S Er oo 3 -* o OS t* oo N F- CO -« <3 ^ .w o e^ eo t^ oo o>_ r- U3 Ol lO esi C4 ^ PI O) s" s §■ CO ^ s eo OS o OS C4 ^" OO OS s & &■ ^ ^ eS n w »-< CO OS ■w i> e CO eo ^ -* ■^ w t> o esT ; i • s i; ; ; ■H ^ . to ») . 1 1 1 ■ n 11 ^ 1 1 1 1 1 1 1 4^ 1 SizM II 1 t •s 1 3S0 1 1 ■3 n i 1 ^ , 196 SOCIAL INSURANCE. [Feb. Report of Inquiry conducted in the Middle West. In October and November of this year certain plants in Chicago, De- troit, Flint and Pittsburg, where establishment funds or employees' bene- fit associations are maintained, were visited with Dr. B. S. Warren of the United States Public Health Service. The various plans and types were studied, compared and analyses made. All had many points in common, and to avoid repetition and needless detail four only will be discussed fully, one each in Chicago, Detroit, Flint and Pittsburg. The essential points of variation in the other funds will then be brought out. The following summary of the administration of the establishment fund and employees' benefit association of an automobile company, which represents a certain type, is of interest : — The object of the society is the establishment and management of a fund to be Icnown as the "benefit fund," for the payment of definite amounts to employees contributing thereto, who are to be known as "members," when under the regula- tions they are entitled to such payment; and the establishment and administration of a service pension fund and the establishment of such other funds or plans as may, from time to time, be determined upon by the company, the general man- ager or advisory committee. The general manager appoints a superintendent who has charge of all business pertaining to the society. He employs such clerks and other assistants, subject to approval of the general manager, as are necessary, prescribes the forms and blanks to be used, certifies all bills and pay rolls of the society, signs all warrants for pay- ments of benefits and other authorized expenses, furnishes the committee such re- ports as they require, decides aU questions properly referred to him, and exercises such other authority as is conferred upon him by the general manager or by the committee. There is a medical director and one or more medical examiners, and such other attendants as are required, appointed by the general manager. The medical director, subject to the control and approval of the superintendent, has general supervision of the medical and surgical affairs of the society. The medical director and medical examiners make the required physical exam- inations of applicants for membership and changes in class in the benefit fund, report the condition of sick and injured, advise and prescribe for sick members at the office of the society, or elsewhere, as the superintendent directs, decide when members are disabled and when they are able to work, and perform such pro- fessional and other duties as is required by the superintendent. The medical director and medical examiners render professional service only in the medical examiner's office, unless otherwise directed by the superintendent, and do not accept fees or other remuneration for such, or other service, under any circumstances. The benefit fund consists of contributions from members thereof, income derived from investments and appropriations, loans or gratuities by the company or others. The moneys received for the benefit fund are held by the company in a separate account in trust for the society. The committee directs the investment of money which is not required for immediate use. The tompany, being the trustee and guarantotof the benefit fund, the invest- L917.] HOUSE — No. 1850. 197 nents are in such securities as are approved by the general manager, and are in the name of the company " in trust for the society." If the amount contributed by members of the benefit fund, with interest and other income, is not sufficient to pay the benefits as they become due, the company ad- rances from its own treasury whatever sums may be necessary for this purpose, reimbursing itself with interest at the rate of 5 per cent, per annum when the con- tributions of members and other income are sufficient therefor. If at any time there is a surplus, after making due allowance for liabilities, greater than seems necessary to meet current benefits and to provide a reasonable contingent fund, such surplus is used in reducing the rates of contribution or in- creasing the benefits to members in such a manner as is determined by a vote of two-thirds of a quorum of the committee. The condition of the account books of the benefit fund at the close of each fiscal year is audited and reported upon by a competent person or persons, selected for that purpose by the committee. There is an advisory committee. of 20 members and a chairman, all of whom, to be eligible, must be members of the benefit fund, constituted as follows: — The general manager of the company is ex officio a member and chairman of the committee, and he has power to appoint any other person to represent him as chairman and cast his vote at any meeting of the committee which he is unable to attend. The other members of the committee are chosen annually in November to serve one year from the first day of January next succeeding, or until their successors are chosen, as follows: — One-half is appointed by the general manager, and one-half elected by the em- ployees who are members of the benefit fund, from among themselves pn basis of membership, in the different departments, as provided in the following regu- lation: — The members of the committee chosen by members of the benefit fund are elected by ballot. One member is elected from each of ten subdivisions of the works and offices known as "election districts," such districts being apportioned and rear- ranged annually according to membership in the benefit fund, and duly announced by shop bulletin notices a reasonable time before each annual election: provided, however, that the division of the works known as the body plant is represented by at least two members, and that division of the works known as the is represented by at least two members. The ballots are taken and the count certified, under oath, by tellers. The member receiving the greatest number of legal ballots in and from his individual district is declared elected. The members to serve upon the committee for the first year are chosen by the general manager from the various election districts, restricted in accordance with section 16 of these regulations. The election tellers are selected by the shop members of the advisory committee, but no member of the fund known to be a candidate for membership on the advisory committee, nor any member of the advisory committee, is eligible for appointment as a teller. No officer, foreman, assistant foreman, inspector, boss or office employee of the company is eligible for election to represent the members. In balloting for members of the committee each member of the benefit fund in good standing is entitled to cast one vote, but no voting by proxy is pennitted. In event of termination of service of any member of the committee, or of his withdrawal from or loss of membership in the benefit fund, his membership on the committee thereupon terminates. Any vacancy among the members elected by the contributing employees is filled by the succession to the position of the employee who received the next highest number of votes of members of the same district from which the retiring member was elected at the last election, and in default of any such person the majority of Digitized by Microsoft® 198 SOCIAL INSURANCE. [Feb. the elected members of the advisory committee fills the vacancy by electing a member from the same district as the retiring member. Any vacancy among the members chosen to represent the company is filled by appointment by the general manager. Such members, and the members as chosen by the general manager for the original committee, serve until their successors are chosen as above provided. The superintendent is ex officio secretary of the committee, but not a member thereof. The committee has general supervision of the operations of the society, and sees that they are conducted in accordance with the regulations. The committee holds stated meetings once in three months, at such time and place as the chairman determines, and meets at other times at the call of the chair- man. A quorum of the advisory committee consists of ten members and the chairman. Not less than five members who have been elected, and five who have been appointed by the general manager, are necessary to constitute a quorum at any meeting. It is the duty of the chairman to call special meetings of the committee upon the written request of five of its members. Amendments to the regulations of the society are proposed to the committee at any meeting by any member of the committee. Amendments so proposed are acted upon at any subsequent meeting, but no amendment is operative unless adopted by a vote in the affirmative of a majority of the whole committee, and duly announced by the superintendent; and any amendment so adopted and announced is binding upon the members of the benefit fund and all persons claiming through them from the date specified in the announcement of the same. Membership in the benefit fund is based upon an application in the following form: — Principal Application pok Mbmbekship in the Benefit Fund op the Com- pany. To the Superintendent of the Mutual Benefit Society. I of in the county of and State of now employed by Company at its works, do hereby apply for member- ship in the benefit fund of the Society, and consent and agree to be bound by the regulations of said society, which regulations I have read or have had read to me, and by any other regulations of said society hereafter adopted and in force during my membership. 7 alio agree, That the said company, by its proper agents, and in the manner provided in said regulations, shall apply, as a voluntary contribution from any wages earned by me under said employment, the sum of cents per week for the purpose of securing the benefits provided in the' regulations foT a member of the benefit fund of the class. Unless I shall hereafter otherwise designate in writing, with the approval of the superintendent of the Society, death benefit shall be payable to my wife (name in full) if I am married at the time of my death, provided I have given written notice of my marriage to the superin- tendent of the benefit society; or if I have no wife living, then to my children collectively, each to be entitled to an equal share; or if there be no such children living, then to my (friend or relative) name of if living; and if not living, then to my father and mother jointly or the survivor; or, if neither be living, then to my next of kin, payment in behalf of such next kin to be made to my legal representatives; or, if there be no such next of kin, the death benefit shall lapse and the amount thereof shall remain as a part of the benefit fund without claim for the same, o/g/fegd by Microsoft® 1917.] HOUSE — No. 1850. 199 Any funeral or other expenses incident to my death, which shall have been paid by the superintendent of the Society, in accordance with the regu- lations, shall be held to be in part payment of said death benefit, and shall be deducted from the total amount thereof before pasoment to the person or persons entitled to receive the same. I also agree, That this application upon approval by the superintendent of the society shaU make me a member of the benefit fund on and from the date specified in such approval, and constitute a contract between myself and the said company; and that the same shall not be voided by any change in the character of my service, or locality where rendered, while in the employment of said company, nor by any change in the amounts applicable from my wages to the benefit fund, which I may hereafter consent to; and that the agreement that the above-named amount shall be appropriated from my wages shall also apply to any other amounts which I may agree to pay under the provisions of said regulations by reason of changes made as aforesaid, and shall constitute an appropriation and assignment in advance of such portion of my wages, to the said company in trust for the benefit fund, for the purpose of maintaining my membership therein, which assignment shall have precedence over any other assignment by me of my wages, or of any claim upon them on account of habilities incurred by me. / also agree, For myself and those claiming through me, to be specially bound by regulation numbered , providing for final and conclusive settlement of all claims for benefit or controversies of whatsoever nature by reference to the superintendent of the Society, and an appeal from his decision to the advisory committee. I also agree. That any untrue or fraudulent statement made by me to the medical examiner or to the medical director, or any concealment of facts in this application, or any attempt on my part to defraud or impose upon said benefit fund, or my resigning from, or leaving the service of said company, or my being relieved, in- definitely suspended or discharged therefrom, shall forfeit my membership in said benefit fund, and all benefits, rights or equities arising therefrom, except that such termination of my employment shall not (in the absence of any of the other fore- going causes of forfeiture) deprive me of any benefits to the payment of which I may be entitled by reason of disability beginning and reported before and con- tinuing without interruption to and after such termination of my employment, as provided in said regulations. / certify. That I am correct and temperate in my habits; that, as far as I an» aware, I am iiow in good health, and have no injury or disease, constitutional or otherwise, except as shown on the accompanying statement made by me to the medical officer, which statement shall constitute a part of this application. In witness whereoj, I have signed these presents at in the county of , State of this daV of , A.D. 191 , this application to take effect at once, or on such subsequent date as may be designated by said superintendent: provided, however, that if I become disabled before said date and continue disabled beyond said date this application shall not take effect until the first day after my recovery. Signature of Applicant. No Department. Witness: Residence The foregoing application is approved at the office of the superintendent at this day of A.D. 19 . Superintendent of Society, The application in the foregoing form which is made by an employee is known a his "principal appUcation.'^.g.^^^^ ^^ Microsoft® 200 SOCIAL INSURANCE. [Feb. Upon the approval of the principal appUcation by the superintendent the appli- cant is a member on and from the date specified in such approval, and the super- intendent issues to him a certificate of membership attached to a copy of the regu- lations then in force. A special form of supplementary application is used by members applying to enter higher classes. If any applicant for membership or for change in membership has any physical defect which precludes the approval of his application if presented unconditionally, his appUcation may nevertheless be approved, provided that he executes an agree- ment in writing, satisfactory to the superintendent, to the effect that he is not entitled under his membership to any benefits for disability caused by, arising from, or growing out of such defect, such agreement to be attached to and made a part of his said application, and such modification of the foregoing prescribed forms of principal application and supplementary application is hereby authorized. In case an applicant for membership, or for change in membership, should be rejected solely on account of unfavorable health history, either family or personal, or for other just causes, he may be eligible for partial membership on recommenda- tion of the medical director and the approval of the superintendent. For such partial membership he contributes at the regular rates for the full membership, and is eligible for half rate for disability or death benefits. All male employees of the company under the regulations are contributors to the benefit fund, and are designated as "members of the benefit fund." In referring to employees of the company the word "service" means emplosonent by this company, and the service of any employee is regarded as continuous for the time during which he is continuously in the employ of this company. There are three classes of members. The highest class in which an employee may be a member is determined by the findings of the physical examination, and by the amount of his average monthly earnings, as follows: — Monthly Pay, Class. Less than $40, 340 or more, but loss than SSI, S81 or more, First. Second. Third. Any male employee who is in the employ of the company on , upon' approval of his application by the superintendent becomes a member in the highest class allowed by his pay, or in any lower class. Any member not over sixty years of age upon passing a satisfactory physical examination, and approval of his application by the superintendent, changes to any higher class allowed by his pay, such change becoming effective thirty days after formal approval by said superintendent. Any member may, upon the first day of any month, change to a lower class, upon written notice to the superintendent on the prescribed form, before the fifteenth day of the month preceding. An employee cannot remain a member in a higher class than that allowed by his pay. If a member declines to effect a proper reduction of class under the foregoing, the superintendent has authority to cancel his membership. The superintendent has authority to reduce the class or to cancel the member- ship of any member upon receiving reliable evidence of habitual or frequent drunken- ness, disreputable or unlawful conduct at any time, or for persistent disregard of 1917.] HOUSE — No. 1850. 201 the regulations of the society by such member when disabled. Written notice of such cancellation of membership is given the member, and refund of contribution, if any be due, accompanies the notice and is specifically mentioned therein. Any member who is furloughed, suspended or otherwise temporarily relieved from the service for a specified time, not to exceed two months, retains his mem- bership during such absence, subject to the approval of the superintendent, by paying his contribution in advance. Ho notifies the superintendent at the be- ginmng of such absence, specifying the time set for return to duty, and if at that time the member does not return to duty his membership in the benefit fund there- upon terminates unless otherwise previously arranged by him with the superin- tendent. If any member, who is furloughed, suspended or otherwise temporarily relieved from the service for a specified time, but retains his membership during the period of such furlough, suspension or rehef from service, engages his services to any other person, firm or corporation for hire, and during the continuance of such service and in the performance of the duties thereof sustains injuries, partially or totally dis- abling him, then he is not entitled to draw benefits. When a member resigns from the service, or leaves the service without notice, or is relieved or discharged therefrom, or indefinitely suspended from duty, his membership in the benefit fund terminates with his employment, and he is not entitled to any benefits for time thereafter, except such as he is entitled to by reason of disability begiiming and reported before and continuing without in- terruption to and after such termination of employment. When any member absents himself from duty for a period of six days without the permission of his employing officer previously obtained, or without giving, mean- while, reasons for absence satisfactory to his employing officer, he is held to have left the service without notice, and his membership is held to have terminated on the day preceding such absence. If such member is reinstated in the service he is also reinstated in membership upon approval of the superintendent. If a member is relieved from the service and is afterwards re-employed he be- comes a member of the benefit fund, although then over sixty years of age, upon apphcation at the time of his employment, upon passing a satisfactory physical examination in which his physical condition at the termination of former employ- ment is given due consideration, and upon approval of his apphcation by the superintendent. When a member is in arrears for four weeks his membership thereupon ceases. If a member resumes work for the company before he has been in arrears four weeks he is protected from the time of resuming work, subject to the approval of the medical director and the superintendent, and the arrears are paid on the next pay roll. Members keep the superintendent of the benefit society informed of their ad- dresses and of any change therein. A member's place of residence when on duty is held to be the last address given the benefit society. The word "contributions," wherever used in these regulations, is held and con- strued to refer to such designated portions of wages payable by the company to an ;mployee as he agrees in his application that the company apply for the purpose )f securing the benefits of the benefit fund or of making such cash payments as t is necessary for a member to make for said purpose. Contributions for full membership are made each two weeks on the company's egular pay day, in advance, at the following rates: — First class wages, less than $40 per month, 10 cents per week. Second class wages, $40 or more, but less than $81 per month, 20 cents per week. Third class wages, $81 and upwards per month, 30 cents per week. If a member's contribution is omitted from the pay roll in error, the fact that uch deduction has not been made does not debar him or his beneficiaries from •enefits to which they would otherwise be entitled. Digitized by Microsoft® 202 SOCIAL INSURANCE. [Feb. When a member has no wages on the pay roll, any contribution due from him must be paid in cash to the superintendent, otherwise he is in arrears. No member falls in arrears for contributions while drawing benefits for disabiUty, and the payment of contributions by the member is not required during any period in which said member is drawing payments for disability. No deduction on account of benefit fund is made from the pay of an applicant for membership, and no increase or deduction is made from the pay of an applicant for increase of class, without instructions from the superintendent, and any deduction made to the contrary is held to be in error, and is due him as a refund if the applica- tion is not approved. When a member's service terminates there is due him as a refund any excess of contribution he made above what is necessary to adjust his accounts to, and in- cluding the last day of the week in which he leaves the service, but no refund is due on the death of a member. Any refund of contributions due a member is payable upon application therefor by such person, if made within twelve months after termination of membership, and is made, by warrant or otherwise, in conformity with the financial methods of the society upon surrender of membership certificate. Wherever used in these regulations the word "disability" is held to mean (a) physical inability to work by reason of sickness, or (b) physical inability to work by reason of accidental injuries. The word "disabled" applies to members thus physically unable to work; the decision as to when members are disabled and when they are able to work rests with the medical officers. The decision as to whether any disability shall be considered a relapse or an original disability rests with the medical officers. When a disability is classed as a relapse the time of such dis- ability is considered a part of the original disability in determinirg the length of time for which benefits are payable. In considering the question of disability, sub- jective symptoms or alleged feelings are given due weight, but the^e in themselves, unsupported by objective and discoverable sjTuptoms, do not entitle a member to be considered disabled. When a member becomes disabled he notifies the superintendent immediately, or causes him to be notified. In reporting disability the member also gives his house address. If he fails to give notice until he recovers he is not entitled to benefits unless he proves his disability to the satisfaction of the superintendent, and gives satisfactory reasons for failure to give notice. If he gives notice during his disability, but delays in so doing, he is not considered disabled before the day on which notice is given unless he proves his disability before that day to the satis- faction of the superintendent, and gives satisfactory reasons for delay in giving notice. When a member becomes disabled it is his duty, unless incapacitated therefrom by his disability, to report immediately in person to the medical ex- aminer at his office during office hours. It is the duty of a disabled member, not confined to the house by disability, to report at the medical examiner's office from time to time as requested, and to keep any other appointment made by that officer or the superintendent. Members who avoid the medical officers, or neglect to report or keep appointments as herein provided, are not entitled to benefits. If a member who has been notified by the medical officer as able to work is not able to on the day set, he immediately communicates with the medical officer, re- porting to him in person if possible; otherwise he is not considered disabled on or after the d^y set for his return to work. When a member becomes disabled during definite suspension, furlough or leave of absence, and while away from his usual place of residence when on duty, he is not entitled to benefits unless he reports his disability immediately as required by the regulations, and proves his disability while absent to the satisfaction of the superintendent. In case a disabled member wishes to absent himself for any length of time from his usual place of residence when on duty he first sees the superintend- ent and medical director, and obtains approval of absence for a specified time. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 203 He furnishes to the medical director a satisfactory certificate, informs him of his address and reports to him immediately on his return. If such disabled member goes away and remains away without previously consulting the medical director or superintendent, and obtains approval of absence for a specified time, or over- stays his leave, he is not entitled to benefits for any time of absence unless he proves his disability while absent to the satisfaction of the superintendent, and gives sat- isfactory reasons for failure to consult the medical director before leaving. A member is not entitled to receive benefits continuously for more than twenty- seven weeks for any disability. In case of, and during continuance of, disabiUty after payment of twenty-seven weeks' benefits, a member retains title to death benefit for one year from date of expiration of limit of disability benefits, provided he keeps the superintendent in- formed of his address, and furnishes him monthly satisfactory evidence of con- tinued disability; otherwise his membership terminates. After a member has sufficiently recovered from disability, for which twenty- seven weeks' benefits have been paid, to resume work, he is not restored to mem- bership, nor is he eligible for benefits, until his complete recovery is assured by thorough physical examination by the medical examiner, and his membership formally restored in writing by the superintendent. A member who has drawn twenty-seven weeks' continuous benefits is not re- quired to make full contribution until restored to full membership. A member is not entitled to benefits for disability from any cause while still disabled from a preceding cause. If a disabled member declines to accept benefits he does not make contributions nor retain title to benefits. If such member afterwards accepts the benefits to which he is entitled, a proper adjustment of contribution is made. In any case of grave injury or chronic sickness, where the member desires to accept a lump sum in lieu of the benefits which might become due to him or his account, and in full of all obligations of the society arising from his membership, the superintendent has authority to make full and final settlement with such mem- ber on such terms as may be agreed upon in writing. All such settlements are reported to the committee at their next meeting. In computing benefits the term of disability is considered as beginning upon the first day upon which no wages or less than one day's wages are paid because of disability, and this day is called "first day wages not paid." Benefits are paid in conformity with the financial methods of the society and on warrants drawn by the superintendent (or in his absence by such other person as is authorized by the general manager), upon his receiving satisfactory certificates respecting the claim required of him. Benefits on account of disability are payable each two weeks or dftener, on a day designated by the superintendent. Benefits payable on account of the disability of a member are payable only to such member or, in accordance with his written order when approved by the super- intendent, to his legal representative. When, in the opinion qf the medical director, a member is mentally incompetent, disability benefits due him are, at the discretion of the superintendent, paid to his wife or to some member of his family, or to his employing officer, for the use and benefit of the member, and such payment is a bar to any subsequent claim on the part of the member or his legal representative for the amounts so paid. Benefits are not payable for disability directly or indirectly or partly due to intoxication or to use of alcoholic liquors as a beverage, or to immoderate use of stimulants or narcotics, or to unlawful acts or immoralities or venereal disease, however contracted, or to the results thereof, or to orchitis, except when directly due to and in connection with an attack of mumps, or to epididymitis, stricture, urethritis, glandular swelling or abscess in the groin, however caused, or to fighting, unless in self-defence against unprovoked assault, or to any other encounter, such as wresthng, fooling, shufiiing and the like, or to injury received in any brawl or Digitized by Microsoft® 204 SOCIAL INSURANCE. [Feb. any liquor saloon, gambling house or any disreputable resort. During disability called under this regulation, members who keep the superintendent informed of their addresses and furnish him monthly satisfactory evidence of continued dis- ability retain title to death benefit for a period of thirty-nine weeks; otherwise, and after such period, their membership terminates. Benefits are not due on account of disability beginning or death occurring while a member is in arrears. Members are not entitled to benefits if they decline to permit the medical officer to make or to have made by any other physician such examination as he may deem necessary to ascertain their condition when disability is claimed. Disabled members must take proper care of themselves and have suitable medical treatment; benefits are discontinued if members refuse or neglect to comply with the recommendations of the officers of the benefit society as to proper care and treatment. Unless a member previously arranges with the superintendent for absence in foreign lands, benefits will not be paid on account of disabiUty or death occurring at any place outside of the continental United States, except, however, that the provisions of this section do not apply in cases of death occurring in the Province of Ontario, Dominion of Canada. Any claims for disability to be valid must be made within thirty days from the time when such benefits accrue, and any claim for death benefit to be vaUd must be made within six months from death of member. A person entitled to benefits for disability beginning before and continuing after termination of service is not entitled to benefits on account of disability beginning or death occurring after such termination, unless directly due to the sickness or injury occurring during the disability, which existed before and at the time of such termination of service. The following benefits are paid to members or beneficiaries entitled thereto: — Payment is made for each day, not including Sunday, of disability classed as due to sickness or accident, except as restricted by the provisions of this section. No benefits are paid for any disabilities classed as due to sickness which does not incapacitate the member for a period of at least seven days, but if the incapacity extends beyond a period of fourteen days payment is made from the first day of such disability, but for a period not longer than twenty-seven weeks, at the follow- ing rates: — To a member of the first class, ..... Sl.OO per working day. To a member of the second class, ... . $1.50 per working day. To a member of the third class, ..... S1.75 per working day. No member has authority to contract any bills against the society, and nothing herein is held to mean or imply that the society is responsible for the payment of such bills as a member may contract or his surgeon may charge. To establish a claim for benefits due to accident disability the accident must be reported immediately upon its occurrence, and there must be external, positive and visible evidence of physical injury by accident sufficient to cause immediate dis- ability, and whenever possible the injured party must call at once, or as soon as practicable thereafter, at the medical examiner's office for examination. In case of alleged sprain, strain, wrench and the like, where external physical proof of disabling injury is lacking, the member must furnish substantial history, satisfactory to the medical officer, of violence accidentally inflicted sufficient and liable to cause disabling injury; otherwise benefits will not be allowed. When a member meets with any accident from which disability may result, and on account of which he wishes to reserve the right to claim benefits, he reports the accident to the superintendent immediately upon its occurrence, and also reports in person to the medical officer when possible. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 205 A member who has drawn benefits continuously for a period of twenty-seven weeks, and remains disabled, retains title to his death benefit for one year from the date of expiration of limit of benefits without making contributions during the continuance of that disability, provided he keeps the superintendent informed of his address and furnishes him monthly satisfactory evidence of continued dis- ability; otherwise his benefit terminates. If such member' resumes work for the company he does not resume contributions nor titles to benefit until formally accepted by the superintendent after physical examination by and approval of the medical director. No member is entitled to benefits for sickness, nor are death benefits payable for death resulting from sickness, unless said disability begins not less than fifteen days Sitter date of formal acceptance as a member. To establish a claim for sick benefits there must be positive evidence of acute or constitutional disease sufficient to cause disability. No member who has received sick benefit for a period of twenty-seven weeks continuously is entitled to benefits for the same disease until after the expiration of six months from the time his recovery, or return to work, is reported. PajTnents in accordance with the conditions prescribed in the regulations upon the death of a member are as follows: — . For members of the first classt . ..... $150 For members of the second class, ., . .... 200 For members of the third class, . . ..... 250 Death benefit is not payable in case of death due directly or indirectly to unlawful acts of the deceased member, or at the hands of justice. Death benefits, together with any unpaid disability benefits, are payable to the beneficiary of a deceased member upon proof of claim. A part of the death benefit is, at the discretion of the superintendent, paid before final settlement to meet funeral or other urgent expenses incident to the death of a member. In any controversy, claim, demand, suit at law, or other proceeding between any member, his beneficiary or legal representative and the company or the benefit society, the certificate of the superintendent as to any facts appearing in the records of the benefit society or of the company, or his statement that any writing is a copy taken from said records, or of any instrument on file in ofBce of said society, or with the company, or that any action has or has not been taken by the committee or by the company, is prima facie evidence of the existence of such records and their accuracy, and of all the facts therein stated. All questions or controversies of whatsoever character arising in any manner, or between any party or persons in connection with the benefit society or the operation thereof, as to any claim for benefits preferred by any member or his legal representative or his beneficiary or any other person, or as to the construction of language or meaning of the regulations, or as to writing, decision, instruction or acts in connection with the operation of the society, is submitted to the determina- tion of the superintendent, whose decision is final and conclusive thereon, unless an appeal is taken to the committee within thirty days after notice of such decision given to the parties interested. When an appeal is taken to the committee it is heard by said committee at their next meeting, or at such future meeting or time as they designate, provided twenty-four hours' notice of said meeting be given to the appellant, and is deter- mined by a vote of the majority of a quorum, or of any other number not less than a quorum, of the members present at such meeting, and the decision arrived at thereon by the committee is final and conclusive upon all parties without excep- tion or appeal. The company may at' any time elect to withdraw its support of the society as Digitized by Microsoft® 206 SOCIAL INSURANCE. [Feb. defined in these regulations by a written notice addressed to the advisory committee at least ninety days prior to the date of such withdrawal. The existence of this society is terminated at any time by a majority vote of the advisory committee, and in that event the moneys in the fund are held by the company, in trust, for the payment of outstanding claims and liabilities, and upon the completion of such payments the money then remaining in the fund is divided into shares of uniform amount equal in number to the total weeks' membership of all the members in good standing on the date of termination and existence, and reimbursement is made such members on the basis of one share for each week for which they have been contributors to the fund. This following account of the administration of an employees' benefit association is of interest because it includes a detailed account of the ad- ministration of their pension fund: — EMPLOYEES' BENEFIT ASSOCIATION IN A COMPANY HAVING PLANTS IN SEVERAL DIFFERENT STATES. In this association the members are divided into two classes: — Class A includes all members not employed at the manufacturing plant, mills or mines, and all others not entitled to benefits under any workmen's compensation law or the company's industrial accident plan. Members of this class are entitled to claim from the benefit association the benefits provided by its regulations for sickness, injuries and death, occurring whether on or off duty. If any member of Class A shall claim, or be entitled to claim, under any work- men's compensation law or the company's industrial accident department plan,- benefits for injury or death arising out of and in the course of his employment, such members shall not receive benefits from the benefit association on account of such injury or death. Class B includes all members employed at the company's plants, twine mills and mines, and all others who are, or may hereafter become entitled to benefits under, any workmen's compensation law or the company's industrial accident depart- ment plan. Members of Class B or their beneficiaries shall be entitled to receive from the benefit association, subject to its rules and regulations, benefits for sickness and for injury or death occurring while off duty. The contributions from members of Class A shall be If of the wages received. The contributions from members of Class B shaU be IJ per cent, of the wages re- ceived. This was the only establishment fund investigated where the contributions were on a percentage basis. This association also provides for disabili^ due to pregnancy, which shall be limited to three months, and said benefit shall be paid in a lump sum, provided in aU cases, however, claimant shall have been a member of the benefit association for nine months. In regard to accident benefit, the plan is somewhat more complicated, as follows: — 1. Payment for each working day or part of working day, during disability classed as due to accident, for a period not longer than fifty-two weeks, shall be one-half of member's average pay on the basis of the last sixty days worked. Any member who has received accident disability benefits continuously for a period of fifty-two weeks, as provided in section 28, shall be entitled to no further benefits of any nature whatsoever, and his membership shall cease unless it ia continued for death benefits only, as provided in section 15. If, after recovery, said member resumes active work with one of the companies, he shall be considered Digitized by Microsoft® 1917.] HOUSE — No. 1850. 207 by the association as a new employee, and shall be subject to all conditions of sec- tion 13. Accident benefits provided in this section are payable to the members of Class A for accidents occurring either on or off duty, provided, if any member of Class A shall claim, or be entitled to claim, under any workmen's compensation law or the company's industrial accident department plan, benefits for injury resulting from an accident arising out of and in the course of his employment, such member shall not be entitled to receive from the benefit association any benefits on account of such injury. To members of Class B accident benefits will be paid only for accidents occurring while off duty and accidents not arising out of and in the course of the employ- ment. - Note. — Benefits for accidents to members of Class B, occurring while on duty and in the course of their employment, are provided by workmen's compensation laws or the company's industrial accident department plan. 2. To establish a claim for accident benefits, the accident must be reported immediately upon its occurrence, and there must be external, positive and visible evidence of physical injury by accident sufficient to cause immediate disabihty. In cases of alleged sprain, strain, wrench, and the like, where physical proof of disability is lacking, a member must furnish substantial history, satisfactory to the superintendent, of violence accidentally inflicted sufficient and liable to cause disabling injury; otherwise accident benefits will not be allowed. Special provisions are made for serious accidents, such as loss of limbs, eyes, etc. (a) Feet and Hands, — If a member receives accidental injuries producing the immediate severing of, or necessitating, in the opinion of a medical examiner of the association, the amputation of, a hand or foot at or above the wrist or ankle, he shall receive a total amount equal to one year's average wages. In case of loss of both hands or both feet, or of one hand and one foot, he shall receive twice the above benefits, or a total amount equivalent to two years' average (6) Eyes. — If a member receives accidental injuries resulting in the total and irrevocable loss of sight of one eye he shall receive a total amount equal to one-half his average yearly wage. For the total and irrevocable loss of the sight of both eyes he shall receive the total amount of two years' average wages. Special benefits provided in this section are payable to the members of Class A for accidents occurring either on or off duty, provided, if any member of Class A shall claim, or be entitled to claim, under any workmen's compensation law or the company's industrial accident department plan, benefits for injury resulting from an accident arising out of and in the course of his employment, said member shall not be entitled to receive from the benefit association any benefits on account of such injury. Ifote. — Benefits for accidents to members of Class B, occurring while on duty and in the course of their employment, are provided by workmen's compensation laws or the company's industrial accident department plan. In case of any grave injury or chronic sickness, where the member desires to accept a lump sum in lieu of the disability benefits which might become due to him or on his account, and in full of all obligations of the benefit association arising from his membership, the superintendent shall have authority to make full and final settle- ment with such member on such terms as may be agreed upon in writing. All such settlements shall be reported to the board of trustees at its next meeting. This association maintains also pension systems which were established by the directors of the company as an evidence of their appreciation of the fidelity, effi- ciency and loyalty of the employees. The following is a brief summary of the administration, eligibility, pension allowances and conditions. Digitized by Microsoft® 208 SOCIAL INSURANCE. [Feb. The administration of the pension fund shaU be in charge of a pension board consisting of five members, who shaU all be officers or employees of this company or of affiliated or subsidiary companies, and shall be appointed annually by the board of directors of this company to serve for one year and until their successors are appointed and shall qualify. The pension board shall elect a chairman and a secretary from among its members, and the treasurer of this company shall be ex officio treasurer of the fund. The board may make and enforce rules for the efficient administration of the pension fund, subject to the approval of the board of directors. The pension board shall control the payment of pension allowances under the rules hereinafter stated. A majority of the pension board shall constitute a quorum for all purposes. The members of the board shall be so chosen that the principal departments of the business shall have representation. The treasurer of the company shall be the custodian and treasurer of the fund, and additions shall be made to said fund yearly, or from time to time, according to the aggregate pension allowances and the amount available in the pension fund for payment of the same. Should the aggregate pension allowances exceed in any one year such sum as the board of directors may have designated as available for this purpose, then, unless the board of directors increases the yearly amount usable for pensions, a new rate shall be established proportionately reducing all allowances. Payments from this fund shall only be made in accordance with and by direction of the pension board. As to eligibility, the following is noted: — The pension board may authorize the payment of a pension to any retired employee on the following basis: — (a) All employees of this company, and of subsidiary and affiliated companies engaged in any capacity, are eligible to pensions as hereinafter stated. (6) All male employees who shall have reached the age of sixty-five years, and have been twenty or more years in the service, may, at their own request, or at the discretion of the pension board, be retired from active service and become eligible to a pension. (c) All male employees who have been twenty or more years in the service shall be retired at the age of seventy years on the first day of the calendar month follow- ing that in which they shall have attained said age, unless at the discretion of the pension board some later date be fixed for such retirement. Persons occupying executive positions are exempt from the maximum age limit. (d) All female employees who shall have reached the age of fifty years and have been twenty or more years in the service, may, at their own request, or at the discretion of the pension board, be retired from active service and become eligible to a pension. (e) All female employees shall be retired at the age of sixty years on the fijst day of the calendar month following that in which they shall have attained said age, unless at the discretion of the pension board a later date shall be fixed for such retirement. Persons occupying executive positions are exempt from the maximum age limit. A temporary lay-off on account of illness or of reduction of force is not to be considered as a break in the continuity of service, but when such absence exceeds six consecutive months it shall be deducted in computing the length of active service. If a person, after leaving the service for more than two years, shall be re-employed he shall be considered, in his relation to the pension system, as a new employee. The sums which the board of pensions may authorize to be paid monthly to employees retired at the age limit shall be as follows: for each year of active service an allowance of 1 per cent, of the average annual pay during the ten years next preceding retirement; but no pension shall exceed $100 per month or be less than $21 per month. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 209 (o) Pension allowances shall be paid on the first of each month from the date of retirement until the death of employee. (b) At the discretion of the pension board these allowances may be continued to widows and orphans of a pensioner for a Umited period. (c) Pension allowances shall be non-assignable, and an attempted transfer or pledge of the same shall not be recognized by the pension board, and may in its discretion work a forfeiture thereof. (d) Pension allowances may be suspended or terminated by the pension board in cases of gross misconduct or of any violation of the rules, or, at its discretion, may be paid to some member of the family. (e) The acceptance of the pension shall not debar any retired employee from engaging in any other business which in the judgment of the pension board is not prejudicial to the interests of this company or of any affiliated or subsidiary com- pany, but he cannot re-enter service. (f) No payments for pensions shall be approved by the pension board until payments from any reUef fund operated by this company, or any affiliated or subsidiary company, shall cease. The amount of pension granted on account of advanced age will depend, as before stated, on two conditions, — the number of years the person has served the company, and the amount of his average wages per year for the ten years next preceding retirement. Thus, for illustration, if the average pay per year for the last ten years of active service equals $600, and if the service has been continuous for twenty-five years, the pension would be 25 per cent, of $600, or $150 per year, or $12.50 per month. Since the minimum pension has been fixed at $21 per month, then to this regular percentage $8.50 would be added, making the minimum sum of $21. In special cases, where the term of service is less than twenty years, the pension and the amount of same, if any, will be determined solely at the discretion of the board of pensions. In special cases, where the term of service is twenty years or less, and the employee is obUged to discontinue work before arriving at the age of sixty-five years on account of total disability, the pension board may, at its discretion, grant a pension. In special cases, where the employee occupies an executive, or a semi-executive position, and where on account of advancing years his retirement is advisable, the pension board may, at its discretion, grant a pension, provided the employee has been twenty or more years in the service, and provided, further, that the employee's superior officer approves of the retirement on a pension. In* determining the amount of the pension to be paid, the pension board may, at its discretion, add to the actual length of service the number of years represented by the difference be- tiyeen the age of the employee at the time the application is made and sixty-five years. Department heads are expected to keep informed of the whereabouts and physi- cal condition of former employees receiving pensions, and are required to advise the secretary of the board of pensions of the death of the pensioner and of any other circumstances which would affect his monthly payment. A physical examination by a company surgeon, or, in case of female employees, by a surgeon approved by the board of pensions, will be required of employees who wish to be retired on a pension allowance because of incapacity. An employee wishing to apply for a pension should first take up the subject with the superintendent at the works where he is employed, or with the head of the de- partment in which he is serving, or with a member of the pension board. A form will then be furnished which must be filled out and signed, giving the necessary information regarding the applicant's age, length of service and wages. This formal application must be signed by the work's superintendent, or head of de- partment employing applicant, and then sent to the secretary of the pension board at his office. ' Digitized by Microsoft® 210 SOCIAL INSURANCE. [Feb. Neither the establishment of this system nor the granting of a pension, nor any other action now or hereafter taken by the pension board or by the officers of this company, shall be held or construed as creating a contract, or giving to any officer, agent or employee a right to be retained in the service, or any right to any pension allowance, and the company expressly reserves, unaffected hereby, its right to discharge without liability, other than for salary or wages due or unpaid, any em- ployee, whenever the interests of the company in its judgment may so require. The Flint Vehicle Factories Mutual Benefit Association is of special interest because it is the only one, so far as I have been able to find out, that is maintained and managed entirely by the employees. The employers contribute nothing and have no word in the management. In addition, the association manages a club with a comfortable house, with sleeping quarters, gymnasium, reading and lounging rooms, etc. The dues are merely nominal, but one must be a member of the association to be eligible for membership. The following is a copy of the Constitution and By-Laws of the Flint Vehicle Factories Mutual Benefit Association: — IMPORTANT BEAD THIS AGREEMENT. You will be responsible for notification to the secretary in case of sickness or accident: ffll out the enclosed "Notice of Disability," signed by your foreman, and mail to the secretary within one week. Be sure and notify the secretary, at the Vehicle Workers' Club Rooms, 128 East Kearsley Street, Bell Phone 313, and give residence, street and number, also what factory employed. (See Article V, section 4.) Dues are to be paid each two weeks in advance. If they are not deducted on the regular pay days it is your duty to pay them to the secretary. If your dues are not paid you will not receive benefits in case of disability. CONSTITUTION AND BY-LAWS. . CoNSTITtlTION. Article I. Section 1. This association shall be known as the Flint Vehicle Factories' Mutual Benefit Association. Article II. Section 1. The object of this association shall be the relief of its members in case of sickness, injury or disability which may unfit them for their daily labor, and to provide funeral benefits in case of death. Article III. Section 1. The regular meeting of this association shall be held annually on the second Tuesday in January. Section 2. Twenty-five members shall constitute a quorum for the transaction of business. Article IV. Section 1. The board of trustees of this association shall be constituted as follows: One trustee from each factory: J. B. Armstrong Manufacturing Com- pany, Buick Motor Company, Nos. 1, 3, 4, 5, 6, 7, 9, 10, 11, 12, 15, 16, 17, 18; Digitized by Microsoft® 1917.] HOUSE — No. 1850. 211 Champion Ignition Company, Chevrolet Motor Car Company, Dort Motor Car Company, Durant-Dort Carriage Company! Flint Varnish Works; Greissell Bread Company; Imperial Wheel Company; Mason Motor Company; Michigan Motor Castings Company; Marvel Carbureter Company; W. A. Paterson Company, Nos. 1, 3; W. F. Stewart Company; Walker- Weiss Axle Company; Weston- Mott Company, Nos. 1, 4, 5; and one trustee from each factory that may hereafter become connected with the association, to be known hereafter as the "Associated Factories." The present board of trustees shall hold office for the term they have been elected, or until their successors have been elected. At the annual meeting of the association the required number of trustees shall be elected by ballot to serve for two years, to fill all vacancies on the board of trustees. ' Each trustee shall be An employee of the factory he represents; also a member of this association. Section 2. The board of trustees shall, at the first meeting after their election in each year, elect the officers of the association, consisting of a president, » vice- president, a secretary and a treasurer, each of whom shall be a trustee of the asso- ciation, except the secretary, who may or may not be a trustee. Said officers shall hold their office for one year, or until their successors are duly elected and qualified, except the secretary and treasurer, who shall hold their offices until March 1 of that year. Section 3. The board of trustees shall have the management and control of the affairs and business of the association, subject, however, to the limitations contained in these By-Laws. Five members of the board of trustees shall at all times be necessary to constitute a quorum for the transaction of business. Section 4. The regular meetings of the board of trustees shall be held at least once each month, the time to be fixed by said board. Section 5. Upon the retirement of any officer of the association the board shall elect his successor. Any vacancy occurring in the board of trustees shall be filled by appointment by the board, the appointee to serve until his successor shall have been chosen at any regular or special meeting of the association. By-Laws. Article I. Section 1. The president shall preside at all meetings, and shall call special meetings at the request of the majority of the board of trustees. He shall sign all orders on the treasurer for money. He shall, on the second Mondays in December and June, appoint an auditing committee, consisting of three members of the asso- ciation, whose duty it shall be to avidit the books of the secretary and treasurer, and make its report at the next regular meeting of the board of trustees. The president shall enforce all rules of the association and perform such other duties as shall be required. Section 2. The vice-president shall perform the duties of the president in the al}sence of the latter. Section 3. The secretary shall keep and preserve all records, receive and deUver to the treasurer all moneys due the association, take a receipt therefor, issue notices of the meetings, make a report of each regular meeting of the association, and perform such other duties as the office may require. He shall give a bond of $1,000, and shall receive for his services a salary as determined by the board of trustees. At the expiration of his term of office he shall deliver to his successor, books, papers and other property that belong to the association. Section 4. The treasurer shall receive and deposit in some banking institution to be selected by the board of trustees, all moneys belonging to the association, and shall pay it out by check on orders signed by the president, secretary and one trustee, and all checks must be signed by the treasurer and countersigned by the Digitized by Microsoft® 212 SOCIAL INSURANCE. [Feb. president. He shall give a boDd as specified by the board of trustees, the expense of procuring said bonds to be borne by the association. He shall receive for his services $50 per year. He shall make a report at each regular meeting of the association. Section S. Any member in good standing being disabled, and giving notice to the secretary as required by Article V, section 1, this association shall accept the certificate of the claimant's attending physician in regard to such disability, sub- ject, however, to the provision of section 6 of Article I. Section 6. No member shall be entitled to receive any benefits on account of sickness, unless he or she is confined to the house on account of such sickness, nor for a longer period than ten days after his or her conanement to the house on account of such sickness ceases, except by permission of the claims committee. Section 7. It shall be the duty of the secretary, on receiving notice of disability of any member in good standing, to call on such member at least once each week during disability, and to refer all doubtful claims to the regular committee for settlement. If they think it necessary they may employ a physician to examine the claimant, and report on such disability. If said claimant refuses such exam- ination, his claim against the association shall be void. Section 8. The board of trustees may levy an assessment on the members of the association to meet the contingencies of excessive sickness or accident: -pro- vided, however, that such assessment shall not exceed 75 cents for Class AA, 50 cents for Class A, and 25 cents for Class B members, and that such assessment shall not be levied more than twice in one year. Further assessments may be levied by a two-thirds vote of the members present at a regular or special meeting, notice of such proposed action being stated in a call for said meeting. Article II. Section 1. Any person in good health, entering the services of any of the associated factories for other than temporary employment, may become a member of this association upon the next regular pay day of the company by whom he is employed, and by accepting employment and joining the association he authorizes the company employing him to deduct from his pay on regular pay days the amount of his dues,' and to pay the same to the secretary of the association. The policy shaU bear date of the new member's appUcation for membership, and dues shall be collected from said date. Section 2. No member of the association shall be entitled to benefits from sickness until he or she has been a member for twenty-one consecutive days before such sickness occurs. Any member wUl be entitled to benefits in case of accident occurring after being a member for five consecutive days. Section 3. Membership shall cease upon the suspension or expulsion of a member; upon his ceasing to be in the employ of the associated factories for ninety days, or for his leaving the city for more than thirty days; or upon his neglecting to pay his dues; and it shall be the duty of the secretary to cause the name of the above classes to be erased from the roll of membership. Temporary suspension from work shall not be considered as ceasing to be in the employ of the company. Section 4. You will be responsible for notification to the secretary. In case of sickness or accident, fill out the enclosed "Notice of Disability," and mail to the secretary within one week. Be sure and notify the secretary, at the Vehicle Workers' Club Rooms, 128 East Kearsley Street, BeU Phone 313, and give residence, street, number, also what factory employed. (See Article V, section 4.) Dues are to be paid each pay day in advance. If they are not deducted on the regular pay days it is your duty to pay them at the secretary's office. If your dues are not paid you will not receive benefits in case of disability. Digitized by Microsoft® 1917.] HOUSE — Np. 1850. 213 Article III. Section 1. The funds of the association shall consist of the weekly or monthly dues of members, assessments and any special gift to the association. Arlide IV. Section 1. Membership shall be divided into three classes, — AA, A and B classes, AA class to consist of those whose average weekly pay is $12 or more; A class to consist of those whose average weekly pay is $7 or more; B class, of those whose average weekly pay is less than $7. Members whose average weekly pay is $12 or more may take either the AA or A class, whichever they desire. Section 2. The dues in the AA class shall be 15 cents per week; those in A class 10 cents per week; and in B class 5 cents per week, to be paid to the secretary in advance. Section 3. All money received shall be placed in one general fund. Section 4. That the association set aside 50 per cent, of the earnings of the money at interest to be used in taking care of tuberculosis cases. Article V. Section 1. Any member of the association unable to attend to his or her duties through sickness or disability must notify the secretary within one week from the date of such sickness or disability, and, upon the written recommendation of the attending physician, shall be entitled to receive from the association out of the fimds then on hand, if a member of the AA class, $1.50 per day; of the A class, $1 per day; and if of the B class, 50 cents per day, Sundays excepted, for a period of not more than thirteen weeks. Section 2. When a member is entitled to benefits the secretary shall issue an order on the treasurer, countersigned by the president and one trustee, and such benefit shall be paid weekly in such amounts as the By-Laws provide. Section 3. No member shall be entitled to draw benefits for the first five days of disability, Sunday not included, but thereafter shall be entitled to benefits, as provided by the By-Laws, Article V, section 1. Section 4. Any member failing to notify the secretary within one week from the date of commencement of sickness or disability shall be considered to be on the sick list only from the date of which notice is given to the secretary, except when quarantined. Section 5. If any member entitled to benefits, and having drawn same and returned to work, is again taken sick within a period of one week, such second sickness shall be considered as a continuation of the first sickness, and the member shall be only entitled to benefits for such a number of days as, added to the previous term of sickness, shall make thirteen weeks. Section 6. Any member, having drawn benefits for the full term of thirteen weeks, shall not be entitled to further benefits, except death, imtil he or she shall have been at work for a period of not less than four weeks; and no one shall draw during one year benefits for more than eighteen weeks of disability dating from time of commencement of first disability during the previous twelve months; and any member drawing for eighteen weeks' disability during twelve months shall not be entitled to further benefits on account of disability until she or he shall have been at work for a period of sixty days. That any member who shall, have received the maximum benefits as provided in this section, and who shall thereafter be continuously totally disabled, shall, without the payment of further dues, be considered in good standing and entitled to receive the funeral benefits herein provided for; provided they report to the secretary every two weeks. Digitized by Microsoft® 214 SOCIAL INSURANCE. [Feb. Section 7. No benefits shaU be paid for any sickness or injury resulting from hernia, lumbago or lame back, straining of the lumbar muscles, sciatic rheumatism, neuritis, venereal diseases, intoxication or violating the law, fighting or scufHmg. Sickness and accident indemnity: Monthly benefits shaU range from $26 to $40 per month, according to the class, A or AA. The foUowing is a partial list of the diseases covered by our policies, for which we pay indemnity not to exceed eighteen weeks in one year, contracted after policy has been in force twenty-one consecutive days: lagrippe, infla.mmation of the lungs, erysipelas, enteritis (inflammation of bowels), felons, freezing, fever and ague, diabetes, dysentery, diarrhea, cerebro- spinal fever, diphtheria, Bright's disease, bihous fever, cancer, carbuncle, whooping cough, pleurisy, piles, catarrhal fever, cholera, congestion of the brain, conjunctivi- tis, mumps, bronchitis, boils, blood-poisoning, appendicitis, anthrax, abscess, tjrphoid-fever, influenza, intermittent fever, laryngitis, lockjaw, malarial fever, yellow fever, peritonitis, scarlet fever, membranous croup, meningitis, neuralgia- pneumonia, inflammation of pancreas, inflammation of brain, inflammation of liver, heart disease, gastria fever, inflammation of eyes, sore throat, smallpox, sun- stroke, summer complaint, tonsilhtis, typholitis, tuberculosis, shingles, perity- phlitis, rheumatism (inflammatory). Accident indemnity: dislocations, fractures, bruises, broken bones, cuts, crush- ing or manghng, gunshot wounds, burns or scalds, bites of dogs or other animals, sprained ankle, stroke of lightning, surgical operation, injuries received at home, in the ofiSce, shop, factory, yard or on the street; injuries inflicted by robbers or highwaymen, traveling on passenger trains, steamboats or street cars; walking, riding, driving, bicycling, going' to or from work, and in all the ordinary vocations of life. Section 8. The board of trustees may refuse to grant benefitsto a member if it is shown on investigation that he or she is not entitled to such benefits. No member shall leave the city while on disability list without a permit from the secretary. Section 9. On the death of any member in good standing, who has been a member at least nipety consecutive days at the time such occurs, a funeral benefit shall be paid his legal beneficiary, or payment direct to the undertaker and other creditors shall be a proper compliance with this section whenever the association deems it proper to do so, — if a member of AA class, $75, or if a member of A class> $50, or if a member of B class, $25, payable within thirty days after due notice has been given to the secretary. Section 10. In the event of the death of any member suitable flowers shall be procured at a cost not to exceed $5 and presented to the relatives or friends of th& deceased by the association. Section 11. Any person detected in obtaining or attempting to obtain benefits fraudulently shall be expelled from the association. The board of trustees may cause the name of any such member to be erased from the roll of membership. Section 12. All properties of the association held by officers of the association at the expiration of their term of oflice must be turned over to their successors. Section 13. A semiannual statement of the financial condition of the associa- tion shall be posted in some prominent place in the works of the associated factories. Section 14. The bonds required to be given by the secretary and treasurer shall be given to such person as the board of trustees may designate, who shall hold the same in trust for the association and who shall be entitled, in case of default in his own name, to bring all necessary suits or proceedings to enforce the same for the benefit of the association. Article VI. Section 1. The Constitution, By-Laws and Special Rules of the association may be amended or repealed at the annual meeting by a two-thirds vote of the members present at such meeting; provided, however, that two weeks' notice of suoh intended action shall be given to the secretary by the board of trustees and Digitized by Microsoft® 1917.] HOUSE — No. 1850. 211 inserted in the call for such meeting, and that notice of the meeting shall be posted for at least one week previous to the meeting, in the prominent places of each ol the associated factories, and all proposed amendments shall be voted on as posted also for the transaction of such other business as may legally come before the meeting. O. J. Schneider, President. F. W. BoswELL, Secretary. 128 East Keahsley Street, Bell Phone 313. Remember, if your dues are not paid you will not receive benefits in case of disability. The following is a detailed account of the supplementary compensation plan of the Flint Vehicle Factories' Association: — The supplementary compensation plan was the outcome of a desire on the part of the manufacturers to extend aid to those of their employees who are still sick and in need of financial assistance after they have received the thirteen weeks' benefits provided by the policies of the Flint Vehicle Factories' Mutual Benefit Association. The only conditions necessary for a workman to avail himself of the provisions of this plan are — (o) That he (or she) be an employee of one of the above-named factories at the time the sickness began. (b) That he (or she) be a member in good standing (i.e., with all dues paid in full) of the FUnt Vehicle Factories' Mutual Benefit Association at the time the sickness began. (c) That he (or she) shall have been unable to work for a period exceeding thirteen weeks, during which time he (or she) shall have drawn all benefits provided for by the provisions of the Flint Vehicle 'Factories' Mutual Benefit Association policy, or, in case death occurs at any time, the dependents will immediately be eligible to draw benefits in either Class 1, 2 or 3, as the case may be, subject to conditions (d) and (e) below. (d) That the need of assistance either by the workman himself, or, in case_ of his death, by his dependents, be shown to the satisfaction of the executive com- mittee. (e) That the continued dependence of the beneficiaries be shown at any time the executive committee may request such proof. (f) That formal appUcation for compensation be made on blanks to be furnished by the Manufacturers Association of FUnt. Please note that there are no fees to pay and no disagreeable conditions to be met. For the purpose of this plan, workmen enjoying compensation thereunder will be classified under three heads, to be known as Class 1, Class 2 and Class 3. Cass 1 . — Single man (or woman) or married man (or woman) with no dependent children. Under this class the dependents are wife (or husband), parents, brothers and sisters, as the case may be. Class S. — Married man (or woman) with one dependent child under fifteen years of age (or over fifteen years of age if physically or mentally incapacitated for earning). Under this class the dependents include the dependent child in addition to those enumerated under Class 1. Class 3. — Married man (or woman) with two or more dependent children under fifteen years of age (or over fifteen years of age if physically or mentally incapacitated for earning). Digitized by Microsoft® 216 SOCIAL INSURANCE. [Feb. Under this class the dependents include the dependent children in addition to those enumerated under Class 1. The maximum amount of compensation to be paid each class will be as follows: — For death, or for total disability from sickness from causes covered by certificate of the Flint Vehicle Factories' Mutual Benefit Association during a period which cannot exceed one hundred and four weeks: Class 1, $7; Class 2, $8; Class 3, $9 per week. Note. — Maximum compensation, both as regards amount paid and time limit of payment, will be paid in exceptional cases only, as our intention is simply to relieve suffering and distress temporarily, not to provide support for two years or any part thereof. For partial disability from sickness from causes covered by certificate of the Flint Vehicle Factories' Mutual Benefit Association: Such payments will be made as seems fair in each individual case. In order that the supplementary compensation plan, as it is called, may accom- plish Uie good intended, we will need the active co-operation of the entire member- ship of the FUnt Vehicle Factories' Mutual Benefit Association^ and as the conditions imposed, in order that your members may avail themselves of these benefits, are not at all arduous, we feel sure that you will do all you can to bring the workings of this" plan to the attention of each and every factory employee, that they and their families may be eligible to relief in case prolonged illness or death visits them. Nearly four years have passed since the supplementary compensation plan was first put in operation, and over $30,000 have been spent to relieve suffering and want, and 68 of our employees and their families have been aided. METHOD OF ADMINISTRATION OF THE RELIEF DEPARTMENT OF A LARGE PITTSBURGH MANUFACTURING PLANT MAKING ELECTRICAL APPARATUS. The "reUef department" is a department of the company's service in executive charge of a superintendent, whose directions in carrying out its regulations are comphed with, subject to control of the president, except in such matters as are under control of the advisory committee. The object of the department is to administer a trust fund known as "the relief fund" for the payment of benefits to employees contributing thereto who are known as members of the relief department, when under these regulations such benefits are awarded for total disability due to causes other than accident occmring while performing duties as an employee of the company, and for the payments of benefits to their dependents, next of kin or beneficiaries designated by them, with the approval of the superintendent, when under these regulations such benefits are awarded on account of death due to causes other than such accident; also to perform such other duties and functions as are prescribed in these regulations or may be imposed by the board of directors. The "relief fund" consists of contributions from members, income derived from investments and from interest paid by the company, and appropriations, advances or gratuities by the company or others. The moneys received for the relief fund are held by the company in trust for the members of the department and their dependents, next of kin or other beneficiaries, to whom benefits have been or shall be awarded against such fund. The company, being the trustee of tho relief fund, any part of the fund may be invested by the treasm'er in such secmities as are approved by the president and executive committee, and are in the name of the company "in trust for the relief fund." , If the amount contributed by the members of the relief department, with interest Digitized by Microsoft® 1917.] HOUSE — No. 1850. 217 and other income, is not sufficient to pay the benefits as they become due, the com- pany advances from its own treasury whatever sums may be necessary for this purpose, reimbursing itself, with interest at 3 per cent, per annum, when the con- tributions of members and other income are sufficient therefor. If at any time there is a surplus after making due allowance for liabilities over and above what is required to provide for the full and prompt payment of all benefits and a reasonable contingent fund, such surplus is applied to increase the benefits to members in such manner as is determined, upon advice of an actuary, by a vote of two-thirds of the committee, approved by the company. The condition of the account books and the relief fund at the close of each fiscal year is, on behalf of the members, audited and reported upon by a competent person or persons selected for that purpose by the committee who represent the members of the relief department, and the company's auditor makes an independent audit on behalf of the company. The company has general charge of the department; provides for the fulfilment of its obligations; has the custody of all moneys and assets belonging to the relief fund, and is responsible for their safekeeping and investment; pays into the fund interest at the rate of 4 per cent, per annum on monthly balances in its hands and all interest or other earnings derived from investment of moneys of the fund; supplies the necessary facilities for conducting the business of the department; and pays all operating expenses thereof. The president appoints a superintendent, who has charge of all business per- taining to the department. He employs such clerks and other assistants, subject to approval of the presideiit, as are necessary, prescribes the forms and blanks to be used, certifies all bills and pay rolls of the department, signs all warrants for payment of benefits and other authorized expenses, furnishes the committee such reports as they may require, decides all questions properly referred to him, and exercises such other authority as is conferred upon him by the president or by the committee. There is a medical director and one or more medical examiners or other medical officers. The medical director is subject to the control and approval of the superintendent, and has general supervision of the medical and surgical affairs of the department. The medical director and medical examiners or other medical officers make the required physical examinations of applicants for membership ; report the condition of sick and injured members; determine when members are disabled and the cause and extent of disability, and report when they are able to work; pass upon proof of the fact and cause of death; and perform such other duties as are required by the superintendent. The medical director and medical examiners, or otfier medical officers as such, render professional service only in their respective offices, and do not accept fees or other remuneration for such or other service under these regulations under any circumstances. Note. — The company does not undertake to furnish free medical treatment, but in case of sickness while on duty, renders first aid, and in case of accident while on duty, in addition, furnishes such other medical and surgical treatment as is set forth under the company's accident compensatioij plan. There is an advisory committee of eighteen members and a chairman, all of whom to be eligible must be members of the relief department, constituted as follows: — The president of the company is ex officio a member and chairman of the com- mittee. The other members of the committee are chosen annually in December to serve one year from the first day of January next succeeding, or until their successors are chosen, as follows: — One-half is appointed by the president and one-half elected by the employees, who are members of the relief department, from among themselves, on the basis Digitized by Microsoft® 218 SOCIAL INSURANCE. [Feb. of membership in the different subdivisions, as provided in the following regu- lations : — The members of the committee chosen by members of the relief department are elected by ballot, one member to be elected from each of seven subdivisions of the shops and offices known as "election districts." Such districts are apportioned and rearranged annually according to membership in the rehef department, and are duly announced by bulletin notices a reasonable time before each annual elec- tion. The ballots are taken and the count certified under oath by tellers. The member receiving the greatest number of legal ballots in and from his individual district shall be declared elected. "fhe tellers are elected by the elected members of the advisory committee, but no member of the relief department known to be a candidate for membership on the advisory committee, nor any member of the advisory committee, is eligible for an appointment as teller. No officer, foreman, assistant foreman, inspector or boss of the company is eligible for election to represent the members. In balloting for members of the committee each member of the relief committee in good standing is entitled to cast one vote, but no voting by proxy is permitted. In event of the termination of service of any member of the committee, or of his withdrawal from or loss of membership in the reUef department, or of his employ- ment by the committee in the capacity making hiih ineligible for membership on the committee, his membership on the committee thereupon terminates. A vacancy among the elected members is filled by the succession to the position of the employee who received the next number of votes of members of the same district from which the retiring member was elected at the last election, and, in default of any such person, the majority of the members of the advisory committee elected by the members fills the vacancy by electing a member from the same district as the retiring member. A vacancy among the members chosen to represent the company is filled by appointment by the president. The superintendent is ex officio secretary of the conmiittee, but is not a member thereof. The committee has general supervision of the operations of the department, and sees that they are conducted in accordance with the regulations. The committee holds stated meetings once in three months at such time and place as the chairman determines, and meets at other times at the call of the chair- man. A quorum of the advisory committee consists of five members who have been elected to represent the members, and five who represent the company. It is the duty of the chairman to call special meetings of the committee upon the written request of five Members thereof. Amendments to these regulations are proposed at any meeting of the com- mittee by any member thereof, and are acted upon at any subsequent meeting, a, majority of the whole committee being necessary to pass the same. No amendments take effect untU approved by the board of directors and pro- mulgated by the superintendent; when so made, approved and promulgated an amendment binds the company, all members of the relief department and all persons claiming benefits on account of disabiUty or death incurred after the date specified in the promulgation of the same. Membership in the reUef department is confined to employees of the company residing in the United States, excluding Alaska and other outlying territory, and is based upon an application in the following form : — To the Superintendent of the Belief Department. I of in the county of and the State of now employed by the company, do Digitized by Microsoft® 1917.] HOUSE — No. 1850. 219 hereby apply for membership in the reUef department of said company, and consent and agree to be bound by the regulations of said relief department, which regula- tions I have read or have had read to me, and by any and all amendments thereto and by any other regulations of said department hereafter adopted and in force during my membership. Unless I shall hereafter otherwise designate in writing, with the approval of the superintendent of the relief department, a beneficiary, any death benefits payable in a lump sum shall be payable to my wife (or husband) (name in full) provided I have given written notice of my marriage to the superintendent of the relief department; or if I leave no wife (or husband) me surviving, then to my' children collectively, each to be entitled to an equal share; or if there be no such children living, then to (name in full) of if living, and. if not living, then to my father and mother jointly or to the survivor; or, if neither be living, then to my next of kin, payment in behalf of such next of kin to be made to my legal repre- sentatives; or, if there be no such next of kin, the death benefits shall lapse and the amount thereof shall remain as a part of the relief fund without claim for the same. I certify that I am years of age, correct and temperate in my habits, that as far as I am aware I am now in good health, and have no injury or disease, constitutional or otherwise, except as shown on the accompanying statement made by me to the medical officer, which statement shall constitute a part of this applica- tion. In untness whereof, I have signed these presents at in the county of State of this day of A.D. 191 .... , this application to take effect at once, or on such subsequent dates as may be designated by said superin- tendent: provided, however, that if I shall become disabled before said date, and continue disabled beyond said date, this application shall not take effect until the first day after my recovery. Signature of Applicant. Check or Pass No Section or Department Witness The foregoing apphcation is approved at the office of the superintendent at ; in the county of State of this day of..'.. A.D. 191 Signed Superintendent of Relief Department. The last application in the foregoing form which is made by an employee is known as his principal application. Upon approval of the principal application by the superintendent the apphcant is a member on and from the date specified in such approval, and the superintendent issues to him a certificate of membership attached to a copy of the regulations then in force. The applicant is required to answer any questions that may be put to him by the medical examiner or the medical director concerning his physical condition and family history, and if he makes any untrue answer thereto, or conceals any facts from the said medical examiner or medical director, or attempts to defraud or itnpose upon the relief department, or make any untrue statement either verbally or in his application, he forfeits his membership in the reUef department and all benefits, rights or equities arising therefrom. Digitized by Microsoft® 220 SOCIAL INSURANCE. [Feb. If an applicant for membership has a physical defect which would preclude the approval of his application if presented unconditionally, his application may nevertheless be approved, provided that he execute an agreement in writing satis- factory to the superintendent, to the effect that he shall not be entitled under his membership to any benefits for disability caused by, arising from, or growing out of such defects; such agreement is attached to and made part of said application, and such. modification of the foregoing prescribed form of principal application is hereby authorized. If an employee entitled to become a member upon passing a satisfactory physical examination, and who has not previously been examined and rejected, has executed a prescribed form of "preliminary application," but has not had an opportunity to be examined before the date specified thereon for his application to take effect, he is protected by such preliminary application under and in accordance with the terms of the prescribed form of principal application from said date until he has had opportunity to be examined: provided, however, that he is only entitled to benefits payable on account of injuries or death caused solely by accident occurring while off duty, and if his principal application is not approved his rights and obliga- tions in the reUef department cease from the time of physical examination; and if he refuses or neglects to be examined when opportunity for examination is offered, his rights and obligations in the relief department thereupon cease. An applicant protected in accordance with the foregoing against accident only, contributes at half rate while so protected. rJo applicant is admitted at an age beyond fifty years or without a physical examination. Every member of the relief department must enter the class corresponding to his regular wage or salary, in order to be entitled to the benefits thereof and to be eligible to enjoy for himself and his family the privileges and benefits of the service pensions. The class of every member is determined by the superintendent. An employee upon joining the reUef department must enter the class to which his salary or wages makes him eligible, omitting overtime and occasional loss of time; further change in class is only made at the request of the member himself, and then but to the class his salary or wages shall at such subsequent time entitle him to belong. There are six classes of members, as follows: — MoNTHiT Pat. Class. Less than $30, Half rate. S30 or more, but less than {45, First. S15 or more, but less than J60, Second. S60 or more, but less than $75, Third. $75 or more, but less than $95, Fourth. $95 or more. Fifth. No employee is required to become a member of the relief department; but only members of the relief department are eligible for service pensions. In case of claim for benefits the class of the member is determined by the con- tribution made by or for him immediately prior to disability or death. An employee cannot remain a member in a class other than that allowed by his pay. The superintendent is authorized to change the class and contribution of a member when his wages or salary call for it. If a member declines to permit such change his membership terminates. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 221 A member may withdraw from the reUef department at the end of any month upon giving written notice to the superintendent before the fifteenth day of that month on the prescribed form of withdrawal notice, copy of which is furnished on request. The membership of an employee guilty of habitual or frequent drunkenness, disreputable or publicly unlawful conduct, may be terminated at any time. A member whose furlough is suspended, or who is otherwise temporarily relieved from the service for a specified time not to exceed two months, may retain his membership during such absence, subject to approval of the superintendent, by paying his contributions as they fall due. His foreman or head of department notifies the superintendent at the beginning of such absence, specifying the time set for return to duty, and if at that time the member does not return to duty his membership in the relief department thereupon terminates, unless otherwise previously arranged by him with the superintendent. When a member leaves the service of the company for any cause whatever, his membership in the relief department terminates, and he is not entitled to any benefits for time thereafter, except such as he may be entitled to by reason of dis- ability beginning and reported before and continuing without interruption to and after such termination of employment. A member absenting himself from duty for a period of six days without per- mission of his employing ofiBoer previously obtained, or without giving, meanwhile, reasons for absence satisfactory to his foreman or head of his department, is held to have left the service, and his membership is held to have terminated on the day preceding such absence. If such member is reinstated in the service he is also reinstated in membership upon approval of the superintendent. A member relieved from the service and afterwards re-employed may again, become a member of the relief department, although then over fifty years of age, upon application at the time of employment, upon passing a satisfactory physical examination in which his physical condition at the termination of former employ- ment is given due consideration, and upon approval of his application by the superintendent. When a member is in arrears for two months his membership thereupon ter- minates. A member resuming work for the company before he has been in arrears two ■ months is protected from the time of resuming work, subject to the approval of the medical director and the superintendent, and the arrears are paid on the next pay roll. Members keep the superintendent of the relief department informed of their addresses and of any change therein. The word "contributions" wherever used in these regulations is held and con- strued to refer to such designated portions of wages or salary, payable by the com- pany to an employee, as is provided in these regulations, or that the company shall apply for the purpose of securing the benefits of the relief fund, or to such cash payments as it may be necessary for a member to make for said purpose, or donations by the company to the relief fund. Contributions are made by members monthly at the following rates, and contmue to be paid during disability: — Half rate, wages less than S30 per month 80.25 First class, wages 30 or more, but less than $45 per month, . . -50 Second class, wages 845 or more, but less than $60 per month, . .75 Third class, wages $60 or more, but less than $75 per month, . . 1-00 Fourth class, wages $75 or more, but less than $95 per month, 1 ■ 25 Fifth class, wages $95 or more per month, ^-^ The amount of the average monthly wages or salary is determined by the superin- tendent, subject to review b}5/^f^'^«J^cr%°s^"^^- 222 SOCIAL INSURANCE. [Feb. Contributions for each month are due on the first day of that month, but are ordinarily deducted from the member's wages or salary on the first pay roll of the following month; or if not then deducted are paid to the superintendent. If deduction of a member's contribution from his wages or salary is omitted from the pay roll in error, the fact that such deduction has not been made does not debar him or his beneficiary from benefits to which they would otherwise be entitled; _ but such deduction is made from wages or salary payable thereafter. When a member has no wages or salary on the pay roll, any contribution due from him must be paid in cash in advance to the superintendent; otherwise he is in arrears. No member falls in arrears for contributions while drawing benefits from the relief fund for disability, provided he has fully complied with the regulations during his disability. A sufficient amount may be withheld from benefits to pro- tect dues for one month in advance during continuance of disability for which benefits are payable, provided an insufficient amount is due the member on the company pay roU. In determining the contribution for a part of a month the amount for each day is one-thirtieth of the amount for one month, and the amount for any other part of a month is determined by multiplying the amount for one day by the nirmber of days in such part, adding to make even cents when fractions occur. In determining the number of days in the part of a month for which contri- bution is collected, the actual calendar 'days are computed, beginning on the day on which the application takes effect. When a member's service terminates there is due him as a refund any excess of contribution he has made above what is neces- sary to adjust his accounts to, — not including the last day of service, — but no refund is due on the death of a member. Any refund of contributions due a member is payable on application therefor by such person, if made within twelve months after termination of membership upon the surrender of membership certific,ate; if not claimed within such period it reverts to the relief fund. Wherever used in these regulations the word ' ' disability ' ' is held to mean physical inability to work, by reason of sickness or accidental injury, while not performing duties as an employee of the company, and the word "disabled" applies to members thus physically unable to work; the decision as to when members are disabled, the cause and extent thereof, and as to when they are able to work, rests with the medical officer, subject to review by the superintendent and the committee. Whether disability at any time shall be classified as due to accident occurring while not performing duties as an employee of this company or to other causes is passed upon by the medical officer, who transmits the same with his recommenda- tions to the superintendent, and, if he deem it necessary, transmits the same to the committee, determination by which is final. In considering the question of disability, subjective symptoms or alleged feeUng are given due weight, but these in themselves, unsupported by objective and discoverable symptoms, do not entitle a member to be considered disabled. A member, becoming disabled, notifies the superintendent or his local repre- sentative immediately, or causes him to be notified. In reporting disability the member also gives his house address. If he fails to give notice until he recovers he is not considered disabled before the day on which notice is given, unless he proves his disability before that day to the satisfaction of the superintendent and gives satisfactory reason for delay in giving notice. A member, becoming disabled, unless incapacitated therefor by his disability, reports immediately in person to the medical officer. If he is unable to do so he must advise the superintendent or his local representative in writing, informing him of the nature of the disability, and also stating the name and address of his attending physician, if any. It is also the duty of a disabled member, not confined to the house by disability, to report at the medical officer's office from time to Digitized by Microsoft® 1917.] HOUSE — No. 1850. 223 time as requested, and to keep any other appointment made by that officer or the superintendent or his local representative. Members who avoid the medical officer, or neglect to report or keep appointments as herein provided, are not entitled to benefits. If a member who has been reported by the medical officer as able to work is not able to work on the day set, he immediately communicates with the medical officer, reporting to him in person if possible; otherwise, he is not considered disabled on or after the date set for his return to work. A member becoming disabled during definite suspension, furlough or other leave of absence, and while away from his usual place of residence when on duty, is not entitled to benefits unless, in addition to reporting his disability immediately as required by the regulations, he proves his disabiUty while absent to the satis- faction of the superintendent or his local representative. A disabled member, desiring to absent himself for any length of time from his usual place of residence when on duty, first sees the superintendent or his local representative and medical officer, and obtains approval of absence for a specified time; he furnishes to the medical officer satisfactory certificates of disability during absence, keeps him informed of his address and reports to him immediately on his return. If such disabled member goes away and remains away without previously consulting the superintendent or the medical officer and obtaining approval of absence for a specified time, or overstays his leave, he is not entitled to benefits for any time of absence unless he proves his disability while absent to the satisfaction of the superintendent, and gives satisfactory reason for failure to consult the medical officer before leaving. After a member has sufficiently recovered from a disability, for which benefits or compensation have been paidi to resume work, he is restored to full membership if he is immediately re-employed by the company. A member is entitled to receive from the relief fund benefits continuously after the first week during any total disability due to sickness; he is likewise entitled to receive benefits from the first day during any total disability due to accident occurring while off duty; in neither (jase, however, are benefits paid beyond the day when such disabled employee is awarded a service pension by the company. A member is not entitled to benefits from any cause while totally disabled from a preceding cause and receiving benefits therefor. While wages or salary are received from any source whatsoever during disability, a member is not considered totally disabled within the meaning of that term as employed in these regulations, and no benefits for total disability are paid: provided, that after the fact of such total disability is established, the earning of less than one-sixth his full wages or salary is not deemed to terminate such total disability. Should a disabled member under the regulations, be unable or otherwise decline to accept benefits he does not thereafter make contribution. If sjich member afterwards accept the benefits to which he is entitled, a proper adjustment of contribution is made. In any case of grave injury or chronic sickness, where the member desires to accept a lump sum in lieu of ^ the benefits which might become due to him or on his account, and in full of aU obhgations of the department arising from his member- ship, the superintendent has authority to recommend full and final settlement with such member for such amount and on such terms as may be agreed upon in writing. All such proposed settlements are based upon computation of commuted value of the benefits by an actuary, and are not effective until approved by the committee after ten days' written notice setting forth in, detaU what the benefits are, the proposed commutation and the reason therefor. The time of disability is considered as beginning upon the first day upon which no wages or salary, or less than one-half day's wages or salary, are paid because of disability, and this day is called "first day wages not paid." Benefits are paid in conformity with financial methods of the department, and Digitized by Microsoft® 224 SOCIAL INSURANCE. [Feb. on warrants drawn by the superintendent or assistant superintendent upon his receiving satisfactory certificates respecting the claim and such releases as are required by him. Benefits on account of continued disability are payable monthly. Benefits for short periods of disability are paid as soon as the amounts due can be ascertained after return to duty. Benefits payable on account of the disability of a member are payable only to such member, or in accordance with his written order when approved by the super- intendent, or to his legal representative. When, in the opinion of the medical director, a disabled member is mentally incompetent, disability benefits diie him may, at the direction of the superintendent, be paid to his wife or to some other member of his family, or to some other person in law charged with or in fact assuming his care and custody, for the use and benefit of the member, and such payment bars any subsequent claim on the part of the member or his legal representative for the amounts so paid. Benefits are not paid for disabiUty to a member directly, indirectly or partly due to his intoxication or to his use of alcoholic liquors as a beverage, or to his immoderate use of stimulants or narcotics, or to his unlawful acts or immoralities, or to venereal diseases (syphilis, gonorrhea, chancroids), however contracted, or their complicatioiis (orchitis, epididymitis, stricture or bubo) ; or for his disabiUty from fighting (unless in self-defense against unprovoked assault), or from injury received in a liquor saloon, gambling or any disreputable resort. During disability classed as non-beneficial under this regulation, members who keep the superintend- ent informed of their addresses, and furnish him monthly satisfactory evidence of continued disability, retain title to death benefits; otherwise their membership is held to have terminated. Benefits are not paid for disability bfeginning or death occurring while a member is in arrears. A member is not entitled to benefits if he decUnes to permit the medical officer to make or to have made by any other physician such examination as he deems necessary to ascertain his condition. A disabled member must take proper care of himself and have suitable medical or surgical treatment. The payment of benefits is discontinued if he refuses or neglects to comply with the recommendations of the officers of the reUef depart- ment as to proper care and treatment. Claim for disabiUty benefits is made within thirty days after they accrue, and claim for death benefits is made within one year after death. To estabUsh a claim for disability benefits the case must be reported immediately to the reUef department. In case of accident there must be positive and visible external evidence of physical injury sufficient to cause disabiUty. In case of sick- ness there must be positive evidence of acute or constitutional disease sufficient to cause disabiUty, and, whenever possible, the sick or injured member must caU at once or as soon as practicable thereafter at the medical officer's office for examina- tion. A person claiming benefits for time after termination of service is not entitled to such for a disability arising from any cause occurring after such termination, nor in any case unless directly due to a cause which arose out of the disabiUty existing at the time of such termination. Pending determination whether disability at any time shaU be classed as due to accident occurring while not performing duties as an employee of the company, or to other causes, benefits are paid from the relief fund, and if upon final determina- tion any sum or sums shall prove thus to have been paid from the reUef fund which should have been paid by the company, the latter shaU reimburse the reUef fund. In case of alleged sprain, strain, wrench and the Uke, where external physical proof of disabUng injury is lacking, the member must estabUsh substantial history Digitized by Microsoft® 1917.] HOUSE — No. 1850. 225 satisfactory to the medical officer of violence accidentally inflicted sufficient and liable to cause disabling injury. When a member meets with an accident from which disability may result, and on account of which he wishes to reserve the right to claim disability benefits, he reports the accident immediately upon its occurrence, and in person, if possible, to the medical officer. The payment by the company of any amount in compromise of a, claim for damages or compensation arising from or growing out of an injury to, or the sick- ness or death of, a member bars any and all claims for benefits from the relief fund. No member is entitled to benefits for sickness, nor are death benefits payable for death resulting from sickness if said disability begins less than thirty days after date of formal acceptance as a member. Benefits are paid for each calendar week and fractional parts thereof pro rata, except for the first week of total disability, during the continuance of such total disability, but not beyond the day when the disabled member is awarded a service pension at the following rates: — Per Week, To a half-rate member, . ... . ,¥2 75 To a member of the first class, . . . 5 50 To a member of the second class, . 8 25 To a member of the third class, . 11 00 To a member of the fourth class, . . 13 75 To a member of the fifth class, . , ... 16 50 Provided that no benefits are paid for anj'' period in which such member is in receipt of wages or salary. Disability resulting from infection of a cut, abrasion, scratch, puncture or other wound, or from any injury not immediately disabling 6r not reported at the time of the occurrence of the accident causing injury, or from poison however taken into or acting upon the body, or from any overdose of medicine or drug, or from surgical operation necessary for removal of some defect which would otherwise probably produce disability, or from sunstroke or frostbite, shall be classed as due to sickness. In case of relapse in sickness, disability occurring within two weeks, the first seven days are not deducted in computing time of sick benefits. Payment upon the death of a member is made of a sum to be determined according to the class of the member, as follows: — Members half rate, . . $50 Members of first class, . 100 Members of second class, . 125 Members of third class, . 150 Members of fourth class, . • 150 Members of the fifth class, • 150 The company voluntarily and as a free gift contributes an amount equal to that paid, as above, by the relief department in the event of death. The company, however, reserves the right to discontinue such voluntary contribution at any time it may deem advisable. Death benefits are not paid in case of death due directly or indirectly to unlawful acts of the diseased member or at the hands of justice. Death benefits or any unpaid disability benefits are payable to the beneficiary upon proof of claim and execution and delivery of the necessary releases. A part or all of the death benefits, but not exceeding SlOO, is, at the discretion of the superintendent, paid before final settlement to meet funeral or other urgent expenses incident to the death of a member. Digitized by Microsoft® 226 SOCIAL INSURANCE. [Feb. No employee of the company, except authorized department officials, has au- thority to contract any bills against the department, and nothing herein is held to mean or imply that the department is responsible for the payment of such bills as any other employee of the company may contract or his physician or surgeon may charge. In any controversy, claim, demand, suit at law, or other proceeding between any member, his beneficiary or legal representative and the company or the relief department, the certificate of the superintendent as to any facts appearing in the records of the relief department or of the company, or his statement that any writing is a copy taken from said records, or of any instrument on file in said de- partment or with the company, or that any action has or has not been taken by the committee or board of directors, is prima facie evidence of the existence of such records and their accuracy, and of all the facts therein stated. All questions or controversies of whatsoever character arising in any manner or between any parties or persons in connection with the relief department or the operation thereof, as to any claim for benefits preferred by any member or his legal representative or his beneficiary or any other person, or as to the construction of language or meaning of the regulations, or as to any writing, decision, instructions or acts in connection with the operation of the department, is submitted to the superintendent, whose decision is final unless an appeal is taken to the committee within thirty days after notice of such decision is given to the parties interested. When an appeal is taken to the committee it is heard by said committee at their next meeting, or at such future meeting as they may designate, provided five days' notice of said meeting be given to the appellant, and is determined by a vote of a majority of the quorum, or any other number not less than a quorum, of the members present at such meeting, and the decision reached by the committee is final, except that it is reviewable by a court of competent jurisdiction, by an action brought within thirty days after notice of the decision of the committee has been given to the appellant or mailed to him at his last known post-office address, as to the right of any party to recover a benefit. The action of the board of directors in establishing the relief department, in adopting these regulations, and in making contributions is not held to create a contract between the company and any employee or other persons, or vest in him or any of them any interest prior to or other than an actual award of benefits, or to confer upon any such employee a right to be retained in the service of the com ■ pany, or to oblige the company to continue the relief department or the relief fund by making further contributions thereto for the benefit of persons other than those to whom benefits have been awarded: provided, that no such discontinuance affects the company's liability as regards benefits awarded except that the com- pany may at any time be released from further disability thereunder by — (a) Nominating by and with the approval of the judge of a court of record of County State of '. of competent jurisdiction, a trustee for the relief fund, to hold and administer the same as herein provided for the benefits of all persons to whom benefits are awarded, and transfer to such trustee funds and securities at least in value to all benefits awarded and then in force as determined by the actuary of the State insurance department of or — (ft) Purchasing annuities for all persons to whom such benefits are awarded and are then in force for amounts equal to such benefits and payable for the same respective terms from a life insurance company licensed to do business in the Stated In either of such cases the remainder of the relief fund, and in any case when valuation discloses a surplus of that fund over all requirements, the surplus of the relief fund, is distributed equitably among its then members. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 227 Summary of Relief Department. Classes, Dues and Benefits. Classes. Monthly Wages. Monthly Dues. Weekly Disability. Benefits (Death).' Half Rate Less than $30, $0 25 $2 75 $50 Ist $30 to $45, . 50 5 50 100 2nd $45 to $60, . 75 8 25 125 3rd $60 to $75, . 1 00 11 00 150 4th $76 to $95, . 1 25 13 75 150 5th $95 and over. 1 50 16 60 150 IfiNANCiAL Statement foh Seventh Fiscal Year, ending Dec. 31, 191.3. Receipts. Balance Jan. 1, 1913, ... . S73,161 83 Contributions from members, 49,649 87 Interest on surplus in treasurer's hands, . . 3,134 95 Disbursements . Sick benefits, Accident benefits. Death benefits. $125,946 65 $24,901 77 16,654 60 2,825 00 $125,946 65 As provided for in the regulations. Rule No. 4, the company paid all operating expenses, as follows : — Salaries, supplies and other necessaries, . .... $15,778 59 Duplication of death benefits, . . . . 2,825 00 Total,, . . . $18,603 59 It is worth while to compare the following financial statement of a small employees' benefit association which has only one-fourth as many members as the one just referred to having plants in several States: — EMPLOYEES' BENEFIT ASSOCIATION OF A CERTAIN TYPE. Balance Sheet, Dec. 31, 1915. Assets. Investment in bonds (at cost) : — $10,000 (par value) City of Omaha Waterworks 4i% gold bonds, $5,000 (par value), Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. 4i% consolidated gold bonds, series 1, . . . $10,000 (par value) Chicago, Milwaukee & St. Paul Ry. Co. refund- ing mortgage gold bonds, series A, . $9,875 00 5,056 25 9,650 00 $24,581 25 1 The company voluntarily and as a free gift contributes an amount equal to that paid as above, by the reUef department, in the event of death. The company, however, reserves the right to discontinue such voluntary contributions at any time it may deem advisable. Digitized by Microsoft® 228 SOCIAL INSURANCE. [Feb. Cash: — In bank $32,361 06 In hands of American Steel Foundries (contributions for the last half of December, 1915, deducted from wages due employees) , . . 2,403 15 $34,764 21 Accrued interest on bonds, ..... ■ 431 25 $59,776 71 Liabilities. Benefits due, not paid: — • Death: — Sickness, $6,590 00 Accident, 1,611 50 Total death benefits, . $8,201 50 Sickness, . 1,554 43 Accident, 87 10 Total benefits due — not paid, . . . . $9,843 03 Doubtful benefit claims made but not yet allowed : — Death: — Sickness, Accident, Total death benefits, . . . Sickness, Accident, . . Loss of eyesight, . . . Total doubtful benefits. Surplus : — As per balance sheet of Dec. 31, 1914, Net income for the year 191S, per income and expend- iture account, ....... EMPLOYEES' BENEFIT ASSOCIATION IN A COMPANY HAVING PLANTS IN SEVERAL DIFFERENT STATES. Statement of Operations fob the Year 1915. Revenue : — Contributions by members, ... . $286,409 65 Interest on cash balances, etc., .... 21,747 07 $1,680 00 2,780 00 . $4,460 00 584 10 45 60 390 00 $36,385 76 8,068 22 5,479 70 44,453 98 $59,776 71 $308,156 72 Expenditures: — Benefits allowed. Death claims due to sickness. . $89,787 40 Death claims due to accident, . 11,400 81 Death benefits only, . . 31,959 40 Disability claims due to sickness, $95,205 60 Disability claims due to accident, . 11,271 85 $133,147 61 $106,477 45 Special benefit claims, ... . 1,520 65 Digitized by Microsoft® $241,146 71 1917.] HOUSE — No. 1850. Administration expense: — Salaries, ... S15,691 43 Printing and stationery, 1,413 97 Traveling expenses, . . 51 93 Office furniture and fixtures, 167 18 Miscellaneous, ... 1 492 12 229 $18,816 63 Medical examiners : — < Salaries and expenses, . 18,969 46 Hospital and medical, . . 8,206 99 Avtotomobile maintenance, 142 gg $46,136 06 ■ ■ $287,281 77 Net income from operations, ..... S20 874 95 Contribution of International Harvester Companies, . . 50^000 00 Balance available for disability and mortality fluctuations Dec. 31, ^^]^' • . . 416,226 49 .^ , . $487,101 44 Deduct increase in reserve for impaired risks, . . . 150,000 00 Balance available for disability and mortality fluctuations Dec. 31, l^^S ... $.337,101 44 Financial Statement Dec. 31, 1915. Ill vestments: — • Bonds, $135,970 00 Farm loans, . . . . 44,000 00 $179,970 00 Accrued interest on investments, . . . 2,462 49 Cash 436,508 76 $618,941 25 ' Liabilities. Death claims pending settlement, . . . $25,221 57 Accounts payable, . . . . 6,618 24 Reserve for pajonent of benefits for disabilities occur- ring prior to and continuing after ,Ian. 1, 1916, . 50,000 00 Reserve for impaired risks, ... * . 200,000 00 $281,839 81 Balance available for disability and mortality fluctuations, Dec. 31, 1915, . . . 337,101 44 $618,941 25 Death Alaims pending settlement : — 5 beneficiaries unknown; no claims filed. 27 awaiting proof of heirship, including 13 whose beneficiaries reside abroad. 32 on which there is a liability of $25,221 57 Digitized by Microsoft® 230 SOCIAL INSURANCE. [Feb. Accounts payable: — Disability and death benefits allowed, but not paid, as members and beneficiaries cannot be located, . . . $4,955 23 Unclaimed checks, ... . 456 36 Miscellaneous, .... 1,206 65 $6,618 24 Reserve for continuing benefits: — On Dec. 31, 1914, a reserve of $50,000 was provided to pay benefits to 166 members disabled at that time, whose disability continued into 1915; also to pay benefits on claims made after Jan. 1, 1915, for disabilities occurring during 1914. The above amount was all used during 1915 for the purpose stated above. On Dec. 31, 1915, 207 members were disabled on account of accident and sickness, and the association may reasonably anticipate that as large a sum will be required to meet these , liabilities in 1916: therefore the amount of $50,000 is again provided to liquidate such liabilities 50,000 00 Reserve for impaired risks: — Balance Dec. 31, 1914, $50,000 00 Add provision for 1915, . . 150,000 00 200,000 00 $281,839 81 Sickness Disability Benefits. The total number of cases of sickness reported among the members of the associa- tion during 1915 was 1,931, of which number 1,849 drew sickness disability benefits. In the other 82 cases death occurred within seven days of the date of disability. The number of cases reported in 1914 but carried into 1915 was 155. Of the total number of 2,086 sickness cases, 150 died and 194 were still disabled Dec. 31, 1915. The average length of disability due to sickness (not including the first seven days) was thirty-six days, and the average amount of each disability claim was $47.61. During the year 78 members drew sickness benefits for fifty-two weeks, 110 members drew benefits for six months or more but less than twelve months, and 92 members drew benefits for three months or more but less than six months. The total time paid for on account of sickness (exclusive of the first seven days) was 72,148 days. The sickness disability cases are in the proportion of 8.5 per 100 members. The average time paid for, distributed over the entire membership (22,755), was 3.17 days per member. These figures do not take into consideration the first seven days of sickness disability for which no benefits were paid. Accident Disability Benefits. The total number of accident cases reported among the members of the associa- tion during 1915 was 471, of which number 463 drew accident disability benefits. In the other 8 cases death was immediate. The number of cases reported in 1914 but carried into 1915 was 11. Of the total number of 482 accident cases 12 died and 13 were still disabled Dec. 31, 1915. The average length of disability due to all accidents was 15.5 days, and the average amount of each disability claim was $23^78. The total time paid for on account of accidents was 7,354 day?. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 231 Special Benefits. The following special benefit claims were allowed during the year 1915:- Deering, loss of right eye, McCormick, loss of sight of both eyes, amputation of right foot. Death BENEriTs. $355 65 1,169 00 1,080 00 $2,604 65 The death rate due to sickness during the year, based on the average member- ship of 22,755, was 6.59 per 1,000 members. The death rate due to accidents during the year, based on the average member- ship of 22,755, was 5.27 per 10,000 members. The death rate from all causes during the year, based on the average member- ship of 22,755, was 7.12 per 1,000 members. COMPABATIVE TaBLE. 1911. 1912. 1913. 1914. 1915. Average membership. 2g,546 29,257 30,125 24,878 22,755 Percentage of employees in mem- bership. Percentage of membership in manufacturing plants. Number of sickness cases in the 75.1 74.8 75.7 79.5 78.4 84.0 3,550 86.0 3,553 85.3 3,700 90.9 2,321 89.0 1,849 Average length of sickness dis- ability per case (days). Average amount of sickness ben- efits per case. Sickness disability oases per 100 members. Total days paid for on account of sickness. Number of accident cases in the 22.6 $29 68 12.1 87,084 643 24.44 $30 45 12.3 93,821 676 26.7 $35 51 12.5 104,506 725 33.89 $43 90 9.6 86,286 563 36.0 $47 61 8.5 72,148 463 Average length of disability on account of accident, per case |K (days)-. Average amount of accident ben- 11.9 13.6 13.3 13.6 16.5 $16.97 $17.36 £13.43 $18.90 $23.78 efits per case. Total days paid for on account of accidents. Number of death claims paid and allowed. Death rate per 1,000 members, . 7,983 179 6.66 9,432 177 5.47 9,770 199 6.54 7,803 163 6.39 7,364 162 7.12 Total benefits .... $265,265 03 $263,562 70 $310,524 74 $249,063 66 $241,146 71 Total expenses $41,364 86 $47,240 60 $51,997 61 $49,450 04 $46,136 06 Balance available for disability and mortality fluctuations. $241,859 36 $326,940 48 $344,779 71 $416,226 49 $337,101 44 (o) The reduction of forces in the works due to the curtailment of export trade resulting from the war in Europe has materially affected the membership of th'e association, so that the average for the year 1915 was 22,755 as compared with 24,878 for the year 1914. (b) Members who were laid off on account of the unusual situation were allowed to continue their memberships in full force during extended absence, as authorized by the board of trustees. Digitized by Microsoft® 232 SOCIAL INSURANCE. [Feb. (c) The board of trustees carefully considered the subject of reserve fund for impaired risks, and believing the amount of $50,000 inadequate, unanimously voted to increase this reserve to $200,000, and to invest the fund in approved interest-bearing securities. The campaign against tuberculosis has been, continued in co-operation with the companies. During the year 78 new cases were recorded, 56 of which received sanatorium care. The record of the 56 sanatorium cases is as follows : — • Died at sanatorium, ... .5 Left sanatorium and died, . . 4 Lump sum settlement, ..... .1 Left sanatorium and drew fifty-two weeks' benefits, . 5 Recovered and returned to work, . . . ' 14 Still disabled at sanatorium, . . . 20 Left sanatorium, but still disabled, . . . .7 56 The record of the 22 cases which did not receive sanatorium care is as follows: — Died, . . ... 1 Lump sum settlements, ..... 3 Recovered and returned to work, . . 5 Still disabled . .13 22 The following balance sheet of this association for the year 1915 is of interest: — Balance Sheet. Assets. It will be noted that there was invested in bonds $24,581.25, and there was at the credit of the association in the bank as of Dec. 31, 1915, $32,361.06, and that an additional sum of $2,403.15 was in the hands of the American Steel Foundries on that date. The latter amount represents contributions which were not col- lected at the time the account books of the association were closed. As soon as an accounting could be made by the company of these collections the money was turned over to the association and deposited to the credit of its account in the bank. Liabilities, The total liabilities of the association as of Dec. 31, 1915, were $15,322.73, as follows: — Benefits due, not paid, $9,843.03. This amount represents claims which had accrued for the second biweekly period of December, and were paid shortly after the 1st of January, 1916, together with a number of death claims, payment of which was withheld pending receipt of proper claim papers. Doubtful benefit claims made, but not yet allowed, $5,479.70. This item repre- sents the association's responsibility for several claims, payment of which had not been definitely decided. Surplus. Of the net income for the year the portion derived from contributions was $6,580.64, or 15.5 per cent, of the total contributions for the year, which compares with corresponding income for previous years or periods as follows: — Digitized by Microsoft® 1917.] HOUSE — No. 1850. 233 Percentage of Income to Contributions. Per Cent. Period, Sept. 1, 1911, to Dec. 31, 1912, . . . 32 i Year, Jan. 1, 1913, to Dec. 31, 1913, Ig'o Year, Jan. 1, 1914, to Dec. 31, 1914, . . , ]^3 3 Year, Jan. 1, 1915, to Dec. 31, 1915, . . . 155 Average for total period, . . . . 20 5 The percentage of gain from contributions was slightly in excess of 1914, although the total of contributions for the year was less. This is accounted for by the fact that the average contribution per member was approximately 31 cents more than in 1914, and those receiving sick benefits were, on an average, members of lower class rating; also the amount of special benefits paid was about $1,300 less than in the preceding year. General. The association's contribution rate contemplated 5 deaths per 1,000 members per year. The average rate during the present fiscal period was 7.26 deaths per year. The amount of the contribution charged for protection by the association was fixed on a probable absence from work by each member of four days per year in excess of the first weekly period. During the fiscal period covered by this report only 3.02 days per member were lost on account of disabihty. During the year 1915 the association paid benefits as follows: — Claims for sickness, 456 Claims for accidents, . . .25 Claims for death, ... 27 Total, ... .... . 508 The average amount of each claim for sickness was $29 . 80 The average amount of each claim for accident was 47 . 40 The average amount of each claim for death was 780 . 00 Company's Contribution. It may be of particular interest to know that during the twelve months ending Dec. 31, 1915, the company disbursed, on account of actual out-of-pocket expenses for managing the affairs of the association, $9,911.89. This amount does not include salaries of the employees of the accounting department, either at the Chicago office or at the plants, who have contributed largely to the work of the association ; nor any charges for rent, stationery and many other miscellaneous expenses. If these items had been included the total e^fpense to the company would have amounted to a much larger sum. Except for the sum of $78.36 for special expenses incurred in the interest of the association, possibly to avoid payment of large disability or death claims, all of the money disbursed and shown on the financial statement was spent on account of claims. The following tables show rates of contribution and benefits in two establishment funds, representing the only fundamental points of dif- ference as compared with the funds of associations already discussed: — Digitized by Microsoft® 234 SOCIAL INSURANCE. [Feb. Schedule of Contributions and Benefits of the Employees' Benefit Associ- ation of about 6,000 Members. [Monthly earnings of members govern the highest class, they may enter.] NUM- BBK OF Class. 1^ >> s 1 i 1-^ Daily Accident and Sick Benefit (ex- cept Sunday). i 1 •o a il I' 1, . S20 00 so 30 $0 40 1240 $480 J240 ■ $480 $120 $480 2, . 25 00 38 50 300 600 300 600 160 600 3. 30 00 46 60 360 720 360 720. 180 720 4, 35,00 54 70 420 840 420 840 210 840 5, 40 00 60 80 480 960 480 960 ■ 240 960 6, . 45 00 68 90 540 1,080 540 1,080 270 1,080 7. . 50 00 76 1 00 600 1,200 600 1,200 300 1,200 8, 55 00 84 1 10 660 1,320 660 1,320 330 1,320 9, . 60 00 90 1 20 720 1,440 720 1,440 360 1,440 10, . 65 00 98 1 30 '780 1,500 780 1,560 390 1,560 11, . 70 00 1 06 1 40 840 1,680 420 1,680 420 1,680 12, . 75 00 1 14 1 50 900 1,800 900 1,800 450 1,800 13, . 80 00 1 20 1 60 960 1,920 960 1,920 480 1,920 14, . 85 00 1 28 1 70 1,020 2,040 1,020 2,040 510 2,040 15, . 90 00 1 36 1 80 1,080 2,160 1,080 2,160 540 2,160 16, . 95 00 1 44 1 90 1,140 2,280 1,140 2,280 570 2,280 17, . 100 00 1 50 2 00 1,200 2,400 1,200 2,400 600 2,400 18, 125 00 1 88 2 60 1,500 3,000 1,500 3,000 750 3,000 19, . 150 00 2 26 3 00 1,800 3,600 1,800 3,600 900 3,600 20, . 166 66 2 50 3 33 2,000 4,000 2,000 4,000 1,000 4,000 Montiily contributions are based on IJ^ per cent, of the monthly earnings. Wages between classes may be included in the next highest class, e.g., if average wages amounted to $52 per month, appUcant for membership shall be entitled to enter the association under Class 8, or at the rate of $55 per month. Schedule of contributions and benefits for new employees forty-five years of age and over, same as shown above, excepting that the death benefit shall be only $100. Schedule of contributions for death benefits only, 20 cents per month for each $100 of death benefit. The following table of an employees' benefit association shows another way of classification of contributions and benefits : — Digitized by Microsoft® 1917.] HOUSE — No. 1850. 235 Schedule of Contributions for Members under Forty-five Years of Age. Weekly Pay of Em- 4^ 1 CO i Accident of sigh ! Hand by Sever e Wrist, or of On ) at or above th otal T,nRS through Accident of Sigh of Both Byes, or T^aa of Both Hand by Severance at or above the Wrists or of Both Feet by Severance at o above the Ankles, or by Severanc of One Hand at or above Wrist an One Foot at or above Ankle. ployees GOVEHN- g 'S p „S-3S ING Highest Class THEY MAY BNTEH. 5 O 1 1 ' a 3 d "S 1 o a 1 Ota! Loss throiig of One Eye, of ance at or above Foot by Several Ankle. Z ^ & n H Eh f 1 $0 15 $3 00 $200 00 S400 00 8800 00 2 20 3 00 400 00 400 00 800 00 $13.50 and under. 3 30 4 50 600 00 600 00 1,200 00 4 30 6 00 400 00 400 00 800 00 I 5 40 6 00 800 00 800 00 1,600 00 Over $13.50 and not over $18. Over $18 and not over 6 50 ' 9 00 800 00 800 00 1,600 00 7 75 13 50 1,200 00 1,200 00 2,400 00 $30. Over $30, . g 1 00 18 00 1,600 00 1,600 00 3,200 00 Additional death benefits (as allowed by rules), 5 cents per weeji: for each S200. To continue membership death benefit only after leaving service requires three years' service, one year's membership, five days' notice. (See Rule 25.) Cost, 5 cents per week for each $200. In case of accident, weekly benefit for one hundred and four weeks. In case of sickness, weekly benefit after the first six working days for fifty-two weeks, and half weekly benefit for additional fifty-two weeks. Reasonable surgical bills will be allowed in accident cases, but no medical or surgical bills will be allowed in cases of sickness. Schedule of contributions for members forty-five years of age and over, as follows: — Members joining between the ages of forty-five and fifty years, one and one-half times above contributions. Members joining between the ages of fifty and fifty-five years, one and four- fifths times above contributions. Members joining between the ages of fifty-five and sixty years, two and three- tenths times above contributions. The following analyses of three different employees' benefit associations in thi-ee different cities are made according to the ssrstem of Dr. B. S. Warren of the Federal Health Service. By comparing one with the other it is evident that even with the form as complete as this, detailed comparisons of the different establishment funds leave much to be desired. Digitized by Microsoft® 236 SOCIAL INSURANCE. [Feb. iNrORMATION REGARDING EMPLOYEES' BENEFIT FUNDS AND MeDICAL ReUEF. 1 Name of Company. City, Chicago, State, 111. 2. Average total number of employees. 29035. 3. Average total number of employees entitled to benefits or medical relief or both in 1914. 22,755. 4. Total number of employees to whom sick benefits were paid for sickness or non-industrial accident during 1914.^ 2,312. 5. Total niunber of days lost on account of sickness or non-industrial accident, as shown by the records of benefit association or medical relief system during 1914.2 79,S02. 6. Average number of days lost on account of sickness or non-industrial accident per SICK or DISABLED person in 1914. S,4S4- 7. Average number of days lost on account of sickness or of non-industrial accident per EMPLOYEE entitled to benefits or medical relief or both during 1914. 353. 8 Rate of contribution by company 350,000 anrmally, and by employees; Class A, 1.75% wage; Class B, 1 . 50% wage. 9. Character of benefits: (o) Amount paid beneficiary per day or per week in case of disability from sickness or non-industrial accident. ^ wage. (&) Amount paid in case of death from sickness or from non-industrial accident. Sickness 1 yr^a wage. Accident 2 yr's wage. (c) Cost per employee entitled to benefits of medical relief systems. (d) Kind of medical and surgical relief provided. None except Tb. Other Information desired. Annual or other reports, financial statements, constitution, by-laws, rules and regulations, etc., relating to benefit associations of employees providing sick benefits, and to medical and hospital relief systems maintained for employees. NAME OF ESTABLISHMENT ADDRESS Chicago NO. OF EMPLOYEES 29,086 in 1915 NO. OF MEMBERS OF FUND 22,755 CLASSES OF BENEFITS PROVIDED Cask Only. A. MeTTtherskip. 1. Compulsory. No. a. Medical examination. b. For all. c. For certain classes. 2. Voluntary. Yes, u. Restrictions on entering fund. (1) Age. Not over ^5. Employees over J^5 on, passing medical examination may, on approval of Superinte7ident be members except that the death benefit shall only he $100. (2) Sex. No. (3) Occupation. No. (4) Medical examination. Yes. (5) Personal statement as to health. Yes, (6) Length of employment. 9 months only in disability due to pregnancy. (7) Initiation fee. No. (8) Moral conduct. b. Restrictions on continuance in fund. (1) Payment of dues. Yes, (2) Forfeit membership on leaving company. Yes, except by death, (a) All rights. No. (6) Retain life ins. After one year's membership. (3) Moral conduct. * If the same person was sick more than one time during the year for which benefits were paid, he should be counted as two or more persons according to the number of times he was sick. * This can be computed by dividing the total amount paid in the form of benefits by the amount paid for each day of sickness,. PJease state whether or not Sundays are included in the days for which benefits were psKS! ^ iVIicrosoTm) 1917.] HOUSE — No. 1850. 237 B. Contributions. 1. Employers total per year. $50,000 if menibership 76% of total employees. a. Amount per employee. b. Per cent of total receipts. 2. Employees. a. Amount. ^ Class A, 1.75% wages. Class B, 1.50% wages. Semi-monthly. (1) Initiation fee. No. (2) Weekly. (3) Semi-monthly. (4) Yearly. h. Proportion of wages. 2 See A, 3. Exemptions or reatrictions in payment of contributions. «. By employers. (1) Conditioned on state of funds. (2) Conditioned on per cent of employees who are members. $25,000 if memherehip 5% of total employees: $50,000 if membership is more than 76% of total employees . b. By employees. (1) When fund reaches a certain total. (2) When fund reaches a certain per capita amount. (3) Durins sickness. None. 4. Assessments or increased contributions. I*. Employer. (1) Death assessments. (2) Loans in case of deficit. Yes. b. Employees. (1) Death Assessment. No. (2) To make up deficit. No. 5. Collections of contributions. a. Employer. (1) Monthly pajTnents. (2) Annual payments. $60,000. b. Employees. (1) Deductions from payroll. Yes. (2) Collections by society. Where not on pay roll. (o) Fines for non-payment of dues. No. (6) Forfeiture of benefits for non-payment of dues. Yes, when not on pay roll . (c) Forfeiture of membership for non-payment of dues. C. Cash Benefits for Sickness.^ 1. Amount per week. J/^ wage on basis of last 60 days pay. a. Full period. 62 weeks in any consecutive 3 yrs. — after which death benefits only. If recovered may be admitted as new member. b. Extended period. No. 2. Period. c*. Full benefit. 62 weeks in any consecutive 3 yrs. — after which death benefits only. If recovered may be admitted as new member. (1) Beginning with 8th day. (a) When are limitations removed? (2) Ending with 6B wks. (a) Any one illness. 6B weeks in any consecutive 3 yrs. — after which death benefits only. If recovered may be admitted as new member. (&) Any one 36 months. 62 weeks in any consecutive 3 yrs. — a^ter which death benefits only. If recovered may be admitted as new member. ' Class A all not in class B. Class B all employees at manufacturing plants, tvnne miUs, steel miUs, mines and aU others who are or may hereafter become entitled to benefits under any working man's com,pensation act or the company's industrial accident plan. 2 Alt with salary of over $2,000 assessed on $2,000 basis. * When a member receives over $2,000, benefits cannot exceed rate of i-^ of $2,000. Digitized by Microsoft® 238 SOCIAL INSURANCE. [Feb. h. Partial benefit (for extended period). No. (1) Beginning with (a) When are limitations removed? (2) Ending with (a) Any one illness. (6) Any one 12 months. c. Limitations to a certain amount within given period. 3. Special restrictions. a. Payment, of dues. (1) For what period before being entitled to benefits. At once, 9 moB.for pregnancy. (2) Prompt payment. 6. Special causes of disability. (1) Accidenla. (a) Industrial. Class A. (6) Non-induatrial. Class A & B. (2) Chronic diseases. (3) Venereal diseases. No. (4) Use of Uquor. No. (5) Maternity. Yes, after 9 months. c. Evidence of illness. (1) Certificate ©f. (a) Physician. Yes, of assoc. M. D. (6) Committee. (2) Statement of applicant for benefit. Yes. (3) Provisions as to. (a) Other employment during disability. No. (6) Confinement to home. No. 4. Extensions. No. a. By special action in individual cases. b. To individuals prevented from coming to work by quarantine of others. 5. In case of death. Sickness 1 yr.'s average wage. Accident 2 yr.'s average wage, a. Cash payment of. ^ b. Restrictions. D. Medical Benefits. 1. Character of medical and surgical relief and method of payment. Physical exam. only. a. Fund physician. Yes. (1) Salary. Yes. (2) Fee: Per capita. Per visit. h. Company physician. Member medical and hospital relief for Tb. (1) Salary. (2) Fee: Per capita. Per visit. c. Family physician. (1) Fee: Per capita. Per visit. d. Hospital care. (1) What extra charge. e. Niirsing. (1) Visiting. (2) Home. /. Supplies and appliances. (1) By fund. (2) By company. 2. Period during which medical benefits arc provided. a. Length in 12 months. b. Extension of period. 3. Special restrictions. a. Payment of dues. * (1) For what period before being entitled to benefits. (2) Prompt payment. 1 Class A receives death benefits for all accidents. Class B receives death benefits for only non^ industrial. Digitized by Microsoft® 1917.] HOUSE — No. 1850. 239 6. Special causes of disability. (1) Accidents. (a) Industrial. (i>) Non-industrial. (2) Chronic diseases. (3) Venereal diseases. (4) Use of liquor. (5) Maternity. 4. Extensions. o. By special action in individual cases. b. To individuals prevented from coming to work by quarantine of others. E. Administration. 1. General character of control. Joint. a. Cash benefits. Joint. b. Medical benefits; joint; by employer; by employees, 2. Control by employer. a. 'Method. b. Do employees contribute part or all ? 3. Control by employees. a. Method. b. Does employer contribute part or all ? 4. Joint control. Yes, SS Trustees. u. Method. Board of Trustees, J^ elected by members, ^ appointed by Company; Pres* of Co. ex-officio Chairman and entitled to vote, b. Proportionate contribution. 5. Are whole-time medical officers employed ? Yes. 6. Appeals: Provision for. Yes. 191 B. Contribution of menibers, ... . . $286,409 65 Contribution of Company, ... . 50,000 00 Amount in Cash, Bal., etc., . ... £1,747 07 Expenditures in 1915, ... . . . . $287,ISS1 77 Reserve Dec. 31, 1915, . . .... . . 160,000 00 Bdlanceavailable for expenditure December SI, 1915, . . . . 837,101 44 At McCormick works to certify disability for 90,000 members 1 full time Asso. physician {mem- bers not scattered). At another plant one physician for 1 ,200 {members widely scattered) . NAME OF ESTABLISHMENT ADDRESS Pittsburgh, Pa NO. OF EMPLOYEES 22,000 1916. NO. OF MEMBERS OF FUND 12,000. . CLASSES OF BENEFITS PROVIDED Cash. . A. Membership. Compulsory. a. Medical examination. b. For all. c. For certain classes. Voluntary. Yes. a. Restrictions on entering fund. Employees. (1) Age. SO. (2) Sex. No. (3) Occupation. No. (4) Medical Examination. Yes. (5) Personal statement as to health. Yes. (6) Length of employment. No. (7) Initiation Fee. No. (8) Moral conduct. No. Digitized by Microsoft® 240 SOCIAL INSURANCE. [Feb. 6. Restrictions on continuance in fund. (1) Payment of dues. Deducted from payroll. (2) Forfeit membership on leaving company. Yes. (o) All rights. Yes. (6) Retain life ins. No. (3) Moral conduct. Yea. B. ContribtUions. 1. Elnployer's total per year. a. Amount per employee. h. Per cent of total receipts. 2. Employees. .25, .60, .75^ $1.00, S1.25, S1.50, per month, according to class. u. Amount. (1) Initiation fee. (2) Weekly. (3) Monthly. .S5, .50, .76, $1.00, $1.25, SI. 60, per month, according to claes (4) Yearly. h. Proportion of wages. 3. Exemptions or restrictions in payment of contributions, u. By employers. (1) Conditioned on state of funds. (2) Conditioned on per cent of employees who are members. 6. By employees. \ (1) When fund reaches a certain total. (2) Wlien fund reaches a certain per capita amount. (3) During sickness. 4. Assessments or increased contributions. o. Employer. (1) Death assessments. (2) Loans in case of deficit. h. Employees. (1) Death Assessment. (2) To make up deficit. 5. Collections of contributions. , a. Employer. (1) Monthly payments. (2) Annual payments. h. Employees. (1) Deductions from payroll. Yes. (2) Collections by society. (a) Fines for non-payment of dues. (b) Forfeiture of benefits for non-payment of dues. ye*. (c) Forfeiture of membership for non-payment of dues. 2 Mos. C. Cash BeiieJitB for Sickness. Amount per week. S2.7o, $5.60 §8.25, $11.00, $13.75 and $10.60. a. Full period. During disability or until service pension granted, h. Extended period. , Period. u. Full benefit. (1) Beginning with (a) When are limitations removed? (2) Ending with (a) Any one illness. (6) Any one 12 months. b. Partial benefit (for extended period). (1) Beginning with (a) When are limitations removed? (2) Ending with (a) Any one illness. (6) Any one 12 months. V. Limitations to a certain ^^(jyj^EJi^iB^i^W&r^^l^ 1917.] HOUSE — No. 1850. 241 3. Special restrictions. a. Payment of dues. (1) For what period before being entitled to benefits. (2) Prompt payment. 6 Special causes of disability. (1) Accidents. Co) Industrial. (6) Non-industrial. Yes. (2) Chronic diseases. No, (3) Venereal digeases. No. (4) Use of liquor. No. (5) Maternity. u. Evidence of illness, yes. (1) Certificate of (a) Physician. Yes, if requested. ' (b) Committee. (2) Statement of applicant for benefit. Yes. (3) Provisions aa to (a) Other employment during disability. (&) Confinement to home. 4. Extensions. a. By special action in individual cases. 6. To individuals prevented from coming to work by quarantine ot others. 6. In case of death. $60, $100, $125, $150. a. Cash payment of. &. Restrictions. D. Medical Benefits. ' 1. Character of medical and surgical relief and method ot payment. a. Fund physician. Yes. (1) Salary. (2) Fee: Per capita. Per visit. 6. Company physician. (1) Salary. (2) Fee: Per capita. Per visit, o. Family physician. ^ (1) Fee; Per capita. Per visit, d. Hospital care. ' (1) What extra charge. e. Nursing. '•(1) Visiting. (2) Home, /. Supplies and appliances. (1) By fund. (2) By company. 2. Period during which medical benefits are provided. o. Length in 12 months. . h. Extension of period. 3. Special restrictions. a. Payment of dues. , (1) For what period before being entitled to benefits. * (2) Prompt payment. h. Special causes of disability. (1) Accidents. (o) Industrial. (6) Non-industrial. (2) Chronic diseases. (3) Venereal diseases. (4) Use of liquor. (5) Maternity. 4. Extensions. a. By special action in individual cases. h. To individuals prevented from coming to work by quarantine of others. ^ None. Digitized by Microsoft® 242 SOCIAL INSURANCE. [Feb. E. Administration. 1. General character of control, o. Cash benefits; joint; by employer; by employees. b. Medical benefits; joint; by employer; by employees. 2. Control by employer. Yes. a. Method. Superintendeni in charge chosen by the president of company. Advisory com- mittee: 14 selected by members, }4 appointed by company. b. Do employees contribute part or all ? 3. Control by employees. a. Method. b. Does employer contribute part or all ? 4. Joint control. a. Method. b. Proportionate contribution. 5. Are whole time medical ojB&cers employed ? Yes. 6. Appeals: Provisions for. Information regarding Employees' Benefit Funds and Medical Relief. 1. Name of Company. City, Chicago, State, III. 2. Average total number of employees. 6 J 57. 3. Average total number of employees entitled to benefits or medical relief or both in 1914. 5,^13. 4. Total number of employees to whom sick benefits were paid for sickness or non-industrial accident during 1914. ^ 608. 5. Total number of days lost on account of sickness or non-industrial accident, as shown by the records of benefit association or medical relief system during 1914.* 11,816. 6. Average number of days lost on account of sickness or non-indug^trial accident per SICK or DISABLED person in 1914. £3.26. 7. Average number of days lost on account of sickness or of non-industrial accident per EMPLOYEE entitled to benefits or medical relief or both during 1914. 3.16. 8. Rate of contribution by company, operating expenses, and by employees, S0.30-S2.60 per week. 9. Character of benefits: (a) Amount paid beneficiary per day in ease of disability from sickness or non-industrial accident. $0.40-83.33. (6) Amount paid in case of death from sickness or from non-industrial accident. Sickness 1 yearns pay. Accident 2 years' pay. (fi) Cost per employee entitled to benefits of medical relief systems. ,(d) Kind of medical and surgical relief provided. Otheb Infobmation desired. Annual or other reports, financial statements, constitution, by-laws, rules and regulations, etc., relating to benefit associations of employees providing sick benefits, and to medical and hospital relief systems maintained for employees. NAME OF ESTABLISHMENT ADDRESS Chicago NO. OF EMPLOYEES 6,757 NO. OF MEMBERS OF FUND 6,475 CLASSES OF BENEFITS PROVIDED Cash Only. 1 If the same person was sick more than one time during the year for which benefits were paid, he should be counted as two or more persons according to the number of times he was sick. 2 This can be computed by dividing the total amount paid in the form of benefits by the amount paid for each day of sickness. Please state whether or not Sundays are included in the days for which benefits were paid. Digitized by Microsoft® 1917. HOUSE — No. 1850. 243 A . Membership, 1. Compulsory. Xo. a. Medical examination. b. For all. c. For certain classes. 2. Voluntary. Yes. tt. ReBtriction on entering fund. (1) Age. Not over 65. (2) Sex." (3) Occupation. (4) Medical examination. Yes, (5) Peraonal statement as to health. Yes. (6) Length of employment. (7) Initiation fee. (8) Moral conduct. b. Restrictions on continuance in fund. (1) Payment of dues. Yes. (2) Forfeit membership on leaving company. (a) All rights. Except death benefits if a member for one year. (b) Retain life ins. (3) Moral conduct. Classified according to earning: — Classes 1 to 17 vary from $20 per month to SlOO per month by S5 a class; class 18, $125 per month; class 19, $150 per month; class SO, $166. B. Contributions. 1. Employe's total per year. OperoUnp. a. Amount per Employee. h. Per cent of total receipts. 2. Employees $0.30-$2.50 a class. ^ a. Amount. $0.S0~$B.50 a class. (1) Initiation fee. No. (2) Weekly. No, (3) Monthly, S0.S0-SS.60 a class. (4) Yearly. No. b. Proportion of wages. 3. Exemptions of restrictions in payment of contributions. t*. By employers. (1) Conditioned on state of funds, ; (2) Conditioned on per cent of employees who are members, b. By employees. (1) When fund reaches a certain total. (2) When fund reaches a certain per capita amount. (3) During sickness. No. 4. Assessments or increased contributions. No. a. Employer. (1) Death assessments. No. (2) Loans in case of deficit. Yes. b. Employees. (1) Death Assessment. No. (2) To make up deficit. No. > CLASS. Manth's Due. $0 SO 1', ss IB, 46 13, H U. SO 16, 68 IX. 76 "■, u IS, 90 19, 98 20, CLASS. Month's Due. 81 oe 1 u 1 m 1 28 1 36 1 u 1 60 1 88 Classes 1 to 17 vary from $0.40 0i§^ised43^ifMeremfHE^O.lO per day according to class; class IS, tg.BO; class 19, SS; class 20, $S.3S. 244 SOCIAL INSURANCE. [Feb. 5. Collections of contributions. a. Employer. (1) Monthly payments. (2) Annual payments. b. Employees. (1) Deductions from payroll. Monthly. (2) Collections by society. When nothing due on payroll, (a) Fines for non-pajTnent of dues. No. (6) Forfeiture of benefits for non-payment of dues. Yes. (c) Forfeiture of membership for non-payment of dues. No. C. Cash Benefits for Sickness. 1. Amount. Per working day, S0.40~SS.S3. a. Full period. In any 52 weeks consectUive, after which death benefits only. If recovered may be admitted as new member. b. Extended period. No. 2. Period. a. Full benefit. 6S weeks. (1) Beginning with 7th working day. (a) When are limitations removed? (2) Ending with 6Bd week. (a) Any one illness. S8 weeks in any consectUive , after which death benefits only. If recovered may be admitted as new member. (6) Any one 12 months. After which death benefits only. If recovered may be admitted aa new member. b. Partial benefit (for extended period). No. (1) Beginning with (a) When are limitations removed ? (2) Ending with (a) Any one illness. (b) Any one 12 months. c. Limitations to a certain amount within given period. 3. Special restrictions. a. Payment of dues. // no wage on payroll. (1) For what period before being entitled to benefits. At once. (2) Prompt payment. b. Special causes of disability. Yes. (1) Accidents. Yes, (a) Industrial. Yes, unless covered by State law, (b) Non-industrial. Yes. (2) Chronic diseases. No, if member dies within six months after joining. (3) Venereal diseases. No. (4) Use of liquor. No. (5) Maternity. No. c. Evidence of illness. (1) Certificate of. (a) Physician. Asso. (6) Committee. (2) Statement of applicant. Yes, for benefit. (3) Provisions as to. (a) Other employment during disability. (6) Confinement to home. 4. Extensions. a. By special action in individual cases. b. To individuals prevented from coming to work by quarantine of others. 5. In case of death. Sickness 1 year's pay. Accident 1 yearns pay. Limit on wage $2,000. a. Cash payment of. h. Restrictions. Dis., etc. Digitized by Microsoft®, 1917.1 HOUSE -No. 1850. 245 D. Medical Benefita. 1. Character of medical and surgical relief and method of payment. Physical exam. only. a. Fund physician. Yes. (1) Salary. Yea. (2) Fee: Per capita. Per,visit. b. Company physician. (1) Salary. (2) Fee: Per capita. Per visit. c. Family physician. (1) Fee: Per capita. Per visit. d. Hospital care. (1) What extra charge. e. Nursing. (1) Visiting. (2) Home. / Supplies and appliances. (1) By fund. (2) By company. 2. Period during which medical benefits are provided. a. Length in 12 months. b. Extension of period. 3. Special restrictions. a. Payment of dues. (1) For what period before being entitled to benefits. (2) Prompt payment. b. Special causes of disability. (1) Accidents. (a) Industrial. - (h) Non-industrial. (2) Chronic diseases. (3) Venereal diseases. (4) Use of liquor. (5) Maternity. 4, Extensions. ■ a. By special action in individual cases. h. To individuals prevented from coming to work by quarantine of others, E. Adminiatration. 1. General character of control. Joint. a. Cash benefits. Joint. 6. Medical benefits; joint; by employer; by employees. 2. Control by employer. a. Method. b. Dd employees contribute part or all? 3. Control by employees. b. Does employer contribute part or all? 4. Joint control. Yes, SO Truateea. u. Method. Board elected ^ by members and ^ appoiTited by Co. Pres. of Co. ex-offieio chairman and entitled to vote. &r Proportionate contribution. 5. Are whole time medical officers employed? Yes, 6. Appeals: Provisions for. Yea. In investigating the establishment funds of the middle west, one com- mon factor was noted in all, namely,- that there were no figm'es available on sickness insurance. The reason for this was obvious. Without ex- ception, the establishment fimds were managed from the office end with a minimum clerical force, and only such figures aa were absolutely neces- sary from this point of vie^,^^f g^pj^rosoA® 246 SOCIAL INSURANCE. [Feb. Ample material for valuable tables was in the files of all the establish- ment funds, but not in such form as to be of any practical use. In order that certain figures and tables on sickness insurance might be obtained, Dr. Warren is trying to make arrangements for the services of additional clerks, at the expense of the Federal government, to tabulate much of this material. He has devised, for exaihple, a 3 by 5 inch index card, giving the following information: Serial No., age, sex, native or foreign born, color, class No. or weekly wage and occupation, as well as a disability record of sickness and non-industrial accident, which gives the date, time paid for and diagnosis. If this plan succeeds within a year we shall have nearly 100,000 of these cards on file at Dr. Warren's office in Washington. At a meeting of the American Public Health Association in Cincinnati, in the 'section on industrial hygiene, where the subject of social insurance was freely discussed, it was interesting to note the various types interested in the subject. Besides the representatives of the American Association for Labor Legislation there were present practicing physicians, lay and medical representatives of local boards of health, industrial physicians and surgeons, insurance men, economists, statisticians, actuaries, business men and social workers. It was apparently the sense of the meeting that social insurance was coming sooner or later, and that health insurance was the most logical form to consider first . A maj ority of those present believed in the principle of social insurance, but when it canie to a consideration of the form, method of administration, etc., there were wide differences in opinion, and many suggestions were made, some of doubtful value and some most unique. Only one man advocated social insurance as an emergency measure. Some believed it should come next year; some in two, three or five years; whUe many of the more conservative advocated a most careful study of the whole situation, and what it would mean directly and in- directly, before drafting legislation, especially as there were such wide differences of opinion as to the estimated cost. On the whole, there seemed to be a decidedly conservative attitude. Several stated frankly in the informal discussions during the week that when social insurance did come they would like to see it in some other man's State first. For example, a very keen advocate of the principle in New York said he hoped the Massachusetts Legislature the coming year would pass a bill for social insurance. When asked whjj^ he did not advocate one for the New York Legislature, he replied that New York would be in a better position to introduce a bill after the plan had been tried out in Massachusetts for a year or two, and that his Legislature could profit by the mistakes of the Massachusetts Legislature. Because of the many points giving rise to wide differences of opinion among the interests concerned, several advocated the introduction of a broad general bill, which would allow these various differences of opinion to be settled later as administrative details. * Digitized by Microsoft® ' 1917.] HOUSE — No. 1850. 247 This plan did not meet with hearty approval, as the majority considered administrative details under these conditions to be dangerous and subject to varied methods of interpretation. DESCRIPTIVE ACCOUNT OF NATIONAL HEALTH INSURANCE SYSTEMS IN FOREIGN COUNTRIES. (Prepared by the Massachusetts Bureau of Statistics.) The term "health insurance" broadly defined, and as used in this report, embraces all so'called "sickness insurance systems" or "health insurance systems" whether they provide merely for the payment of cash benefits in case of sickness or, in addition thereto, for the payment of maternity benefits, accident benefits for limited periods of time, and funeral expenses, and for the furnishing of medical attention, nursing and therapeutic appliances. In at least 16 European countries systems of health insurance under governmental supervision and regulation have been established. These countries are as follows : Germany. , Luxemburg. Netherlands. Russia. United Kingdom. Norway. Switzerland. Belgium. Austria. Servia. France. Denmark. Hungary. Roumania. Italy. Sweden. In all of these countries except Belgium, Denmark, and Sweden, com- pulsory systems have been established. In France, Italy, and Russia, the compulsory features apply only to persons employed in certain specified occupations, but in the "other ten countries having compulsory systems all wage-earners and salaried employees earning annually less than a stated amount (with ■ certain exceptions) are required to insure. The cost of insurance in each of the 13 countries having compulsory insurance systems is met by joint contributions, but the proportions borne by the employers, the employees and the State vary greatly in the several countries, and in all except the United Kingdom the contributions vary according to the amount of wages earned by the insured persons, and the benefits granted vary according to their contributions. In the United Kingdom uniform contributions are made by all persons insured, and uniform benefits are granted irrespective of their earnings. Ordinarily, district or trade funds under mutual management are established as "insurance carriers" (in connection with both compulsory and voluntary insurance systems) and in nearly all of the countries private or semi- ofiicial associations, labor organizations, and societies are also authorized to carry health insurance, provided they meet certain requirements made ' of "approved societies." In Belgium, Denmark, and Sweden voluntary health insurance systems under eovemment supervision have been established, but no compulsory viiivvv.* 6, jT Digitized by Microsoft® 248 SOCIAL INSURANCE. [Feb. system has yet been established in these countries. In several of the countries having compulsory systems, provision is also made for volun- tary health insurance, and in connection with all of these voluntary sys- tems it is customary for the government to grant substantial subsidies and to render further assistance by bearing a portion of the expenses of administration. Experience has shown, however, that in no country has voluntary health insurance appealed to. any large percentage of the population, and that the very persons who are most in need of the pro- tection afforded by such insurance are usually those who will not, volun- tarily, insure. t In the following paragraphs of this report the health insurance systems in the several countries have been discussed in the order of the countries named above. The compxilsory systems have received &st consideration, except where a country may have both a compulsory and' voluntary sys- tem, in which case both have been discussed in connection with that country, while the voluntary subsidized systems in Belgium, Denmark, and Sweden have received later consideration. Wherever possible the original sources such as the reports of the government insurance departments and other official reports have been consulted in order to ascertain the more important faqts conceimng the date of the establishment of the several systems; the classes of the population covered; the methods of administration; the cost to the per- sons insured, to employers, and to the State; and other important data with reference to the operation of the systems. For tte use of the CoDunission an extensive bibliography, both on old-age pensions and health insurance, was prepared by the Bureau of Statistics, but because of Umitations of time and space it has not been found advisable by the Commission to publish it in connection with this report. Germany. A comprehensive system of social insurance, including sickness, accident, old-age and invalidity insurance, was established in Germany during the period 1883-1889 by a series of acts, of which that relative to sickness insurance passed in 1883 was the first, followed in 1884 by an act providing for accident insurance, and in 1889 by an act providing for old-age and invalidity insurance. These acts, with later amendments, were codified into a single social insurance code in 1911. The present social insurance system in Germany is the result, there- fore, of about 30 years of careful experiment. Each feature of this system has been developed in such manner as to best correlate it with the others, consequently no single feature can be properly discussed without some reference being made to those with which it is intimately related. Health insurance is required of all wage-earners and salaried employees whose annual earnings are less than a stated amount. Those to whom the compulsory features of the law do not apply, may voluntarily insure, subject to certain provi- sions of the code. Various types of "sick funds" are provided for, including "district funds", "establishment funds", "guild sick funds", "miners' funds", etc., but the "district funds" provide insurance for a majority of the insured persons. Premiums are paid by employers and employees, two-thirds of the cost of insur- ance being borne by the employee and one-third by the employer, except in the case of the "guild sick funds" toward which employers and employees contribute equally. The government coStffflJMWirfWil^Osiafi^xtent of paying certain expenses 1917.] HOUSE — No. 1850. 249 ■of supervision. The employer is held responsible for the total amount of the premiums, but he may deduct the employee's share from ike wages. Payment by the employer is made by means of stamps afiixed weekly to receipt cards, which the insured persons are required to possess, except that under certain regulations the eiuployer may make payment directly to the society by which his employees are insured. The amount of the premiums and the cash benefits granted are cal- culated as percentages of wages. Certain minimum benefits must be granted, of which the principal ones are medical care, partial wages during illness, maternity benefits, and funeral benefits. Hospital care may be given as a substitute for home treatment. Nearly all of the societies furnish more than the minimum benefits required by law. The system includes all forms of sickness and also disability for 13 weeks, when such disability is the result of an industrial accident. From the third day of illness a cash benefit of 60 per cent of the average daily wages is given during a period of 26 weeks, which may be increased to 75 per cent of the daily wages, and payment may be extended over a period of one year. Should the illness continue longer than one year, the case is cared for under the invalidity insurance laws. One-half of the cash allowance may be paid to the dependents of a patient in certain cases. In addition to these benefits the insurance societies provide various other benefits. For example, medical attention, nursing, and hospital care are often continued during convalescence beyond the usual period of 26 weeks; medicines and thera- peutic appliances are commonly furnished; operations are sometimes paid for; treatment at a sanatorium (especially for tubercular cases) is frequently provided; and occasionally dental care is given. Insured women receive as maternity benefits dash allowances for two weeks before and six weeks after delivery, or a nursing benefit up to twelve weeks after confinement, or home nursing, or hospital care with one-half the cash aid. The societies may also provide similar benefits for the wives of insured men. Since the war the German government has considered it an imperative State duty to furnish additional benefits for the wives of insured men serving at the front. By a decree of December 3, 1914, it voted 2,000,000 marks ($476,400) a month to be expended for maternity benefits of 25 marks ($5.96) to meet the cost of childbirth; 1 mark ($0,238) a day for a period of 8 weeks, of which 6 weeks at least must be after confinement; 10 marks ($2.38) for additional medical care; and a nursing allowance of i mark ($0.1191) per diem for 12 weeks to breast-feeding mothers. The total maximum cost of these grants is thus raised to 133 marks ($31.68). Funeral benefits of from 20 to 50 times the average daily wages are paid, and provision may also be made for the payment of such benefits in the case of de^ pendents of insured persons. A minimum of 50 marks ($11.91) is fixed, but this amount may be increased. Local insurance societies and other organizations not operated for profit are designated as "insurance carriers" Subject to the supervision of the Imperial Insurance Office, these societies are administered jointly by employer and employee, the employees having two-thirds of the voting power and the employer, one-third. The number of sickness pensions in force on January 1, 1912, was 11,569. The total amount paid as pensions on account of sickness during the year was 3,201,735 marks ($762,653), and the average pension was 207.46 marks ($49.42). The number of pensions in force on January 1, 1914, was 16,555, but data as to the amount paid were not available. Aside from the beneficent results from the standpoint of individuals aided, the health insurance system in Germany has been of great value as a stimulus to the p eventive health movement. In connection with the administration of the insur- ance system, preventive measures have been adopted and taken the form of public lectures on. avoidable diseases, of educational tracts distributed by the insurance authorities, and of conferences between physicians and workpeople. These measures have had a general educational effect resulting in a demand for better Digitized by Microsoft® J50 SOCIAL INSURANCE. [Feb. housing, sanitation, and hygienic living. The great reduction in the tuberculosis death rate during the last two decades has been considered by authorities to be a direct result of the establishment of the health insurance system, and of these pre- ventive measures. Similarly, although to a less extent, the death rates from other serious diseases have decreased. There has also been marked improvement in the general health of the wage-earning population, which is recognized to be an important factor in the military activities of the Empire. United Kingdom. The British Act of December 16, 1911, established com- pulsory sickness insuranc6 for all working people between the ages of 16 and 70. The act was amended on August 15, 1913, in several particulars, namely: certain exemptions permissible; the abolition, reduction and extension of certain benefits; and certain minor matters of administration. The act was subsequently amended on September 18, 1914, November 27, 1914, and March 16, 1915, in regard to war compensations and reduction of benefits in the case of persons entitled to pensions for total disablement. Under the British system invalidity is treated as part of the insurance against sickness. The British law also holds that, if an avoidable and curable disease occurs too frequently in any place, the insurance authorities may be permitted to recover a considerable part of the cost occasioned by this excessive sickness from the local authorities or from the employer who allowed conditions to exist that caused this particular disease. The act applies to all sick- ness and accidents not covered by any other law, and becomes compulsory for wage- earners whose total annual income is less than £160 ($778.64). Persons already receiving a pension or income of £26 ($126.53) or more, and persons wholly de- pendent on some one else, are exempt from the law. Except for the first six months aflSr the act became effective, no waiting period for medical aid has been established. The benefits granted consist of a provision for medical treatment and attendance; the supply of medicines and certain prescribed therapeutic appliances; and treat- ment at sanatoria for all forms of tuberculosis. Medical aid and dental care furnished to dependents are optional. Free choice is permitted from a panel of physicians, but other arrangements are allowed if the number on the panel is insufficient. Remuneration for medical service is arranged by the insurance committees according to official regulations. A cash benefit is granted for 26 weeks from the first, second, or third day after the commencement of the disease or incapacity. If the illness continues beyond this period, a disablement benefit of 5s. ($1.22) a week is given; but the right to the disablement and money benefits ceases in the case of insured persons Who have already attained the age of 70. Cash aid may be continued during convalescence or may be increased for persons who have children dependent upon them; or niay be granted in the form of a dis- ablement allowance to persons not totally incapable of working, or of an allowance to persons who cannot attend work on account of infectious disease. The ordinary rate of sickness benefit is 10s. ($2.43) a week for men, and 7s. 6d. ($1.82) a week for women, throughout the whole period of 26 weeks. In the case of single niinors, 6s. ($1.46) a week is granted to boys, 5s. ($1.22) a week to girls, during the first 13 weeks, while boys receive 5s. ($1.22) a week, and girls 4s. ($0.97) a week, during the second 13 weeks. The disablement benefit to girls is 4s. ($0.97) a week. To married women the sickness benefit granted is 5s. ($1.22) a week, during the first 13 weeks, 3s. ($0.73) a week, during ,the second 13 weeks. They also receive a disablement benefit of 3s. ($0.73) a week. These two benefits are not payable during two weeks before and four weeks after confinement, except in those cases where disease or disablement are neither directly nor indirectly connected with childbirth. A maternity benefit of 30s. ($7.30) is paid for four weeks to women insured or to wives of insured men, provided that 26 weekly contributions have been previously paid. No provision is made, however, for free medical treatment or attendance during confinement. No funeral benefit is paid. The cost of insurance is divided among the insured, the employer, and the Digitized by Microsoft® 1917:1 HOUSE — No. 1850. 254 Government. The proportion paid by each varies according to the daily wage earned and the sex of the employed. In Ireland special rates of contributions are prescribed. In the case of exceptionally low-paid workers the contributions levied on employer and State are proportionately increased, so that the workingman actually pays less under the British system than he would have to pay under any other. The following table gives the proportion of rates paid : WEEKLY Con- tributions. Weekly Wages UP TO Is. 6d. ($0.37). Weekly Wages Is. 6d. TO 2s. ($0.37 TO $0.49). Weekly Wages 2s. TO 2s. 6d. ($0.49 TO S0.61). Men. Women. Men. Women. Men. Women. PaU by: — Insured, . Employer, State, 6d. (S0.12) Id. ($0.02) 5d. ($0.10) Id. ($0.02) Id. ($0.02) 5d. ($0.10) Id. ($0.02) Id. ($0.02) 4d. ($0.08) Id. ($0.02) 3d. ($0.06) 4d. ($0.08) 3d. ($0.06) 3d. (80.06) The employer is responsible for the payment of insurance but may recover advances by deducting from the daily wage of his employees the amount of contri- butions paid by him in their behalf. When the Act establishing compulsory sickness-insurance was^ passed in 1911, there were among the influential social forces interested in these measures Friendly Aid Societies. The British Government decided to recognize those fulfilling the requirements of the Insurance Act, and to make societies, not operated for profit the administrative organ. These societies are controlled by the members, and, supervised by the County Insurance Commissioners who control and manage the National Health Insurance Fund. All contributions received and all sums provided by Parliament must be paid into this Fund, which grants all benefits and disburses all administrative expenses. Any surplus not required to meet current liabilities may be made over to the National Debt Commissioners for temporary investment in securities authorized by Parliament as secure investments for Savings Banks funds. The accounts of the National Health Insurance Fund are audited by the Comptroller and Auditor-General. Austria. The Austrian compulsory sickness insurance Act was passed on March 30, 1888, and was amended on April 4, 1889, and February 11, 1913. The Act is closely modelled on the German Act and embraces all industries except agriculture, forestry, home work, and domestic service. For administrative employees the salary limit is fixed at 2,400 crowns ($486). The Act provides for benefits for all forms of sickness and for payments during the first four weeks of disability caused by industrial accidents. When illness continues more than three days no waiting period is demanded either for cash or medical benefits. The cash benefit is 60 per cent of the normal daily wage and during any one illness this grant is paid for 20 weeks and may be given for 52 weeks. To dependents one-half the cash benefit may be allowed. Insured women receive obstetrical care and a maternity cash benefit for four weeks after delivery. The funeral benefit amounts to at least 20 times the average daily wage but is never more than $20. Medical aid consists of medical treatment, hospital care, medicines, and therapeutic appli- ances. Medical treatment to dependents is optional. Insured persons are permitted free choice among the physicians who are under contract. The weekly contribution levied on the employee is two-thirds of one per cent of wages, to which the employer adds one-half per cent. On small ships, however, the employer is required to bear the entire cost. , Sickness insurance is paid out from district funds and other mutual funds, such Digitized by Microsoft® 252 SOCIAL INSURANCE. [Feb. as establishment and guild funds, not operated for profit. Employers constitute two-thirds and employees one-third, respectively, of representation in the adminis- trative boards. The funds are supervised by local and provincial officials under the authority of the Minister of the Interior. Hungary. Sickness insurance was first introduced in Hungary by the Act of 1854 which made insurance compulsory for workmen in government and privately operated mines. The Act of 1891 extended compulsory sickness insurance to all employees earning less than 2,400 crowns ($486) annually, exclusive of those in agriculture and domestic service. This Act was amended in 1907 so as to include employees of government tobacco factories. The Act covers all kinds of sickness during the first 10 weeks of industrial accident disability. Medical and nursing assistance and treatment are given. Medical treatment and hospital care are also granted to dependents. A maternity benefit for six weeks after delivery is allowed to wives of insured members. Cash aid of 60 per cent of t%e normal daily wage is paid for 20 weeks' illness and such payment may continue for one year. Dependents are paid one-half of the cash benefits. In case of death a funeral benefit of 20 times the usual daily wage is given. Both employer and employee contribute equal shares of the cost. In the case of miners two-thirds of the dues are paid by the workman and one-third is paid by the employer. The State, as employer, bears from 60 to 62 per cent of the cost of insurance for goverrmient miners. Insurance is administered throu^ miners' fimds, local mutual aid societies, and the establishment funds of government tobacco factories. Supervision over these funds is exercised by the Government Insurance Office. Luxemburg. General compulsory sickness insurance was proposed in Luxem- burg as early as 1887 but the Act was not adopted until 1901 and went into effect on July 31 of that year. The law closely follows the German law and applies to all employees except those in agriculture and domestic service; all salaried persons receiving more than 3,000 francs ($579) per year, with the exception of government and municipal employees already entitled to 13 weeks of sick-aid. The Act provides for all kinds of sickness. There is no waiting period for medical benefits, which consist of medical and nursing assistance and treatment, of medicines and therapeutic appliances, and hospital care. Medical benefit to dependents of insured persons is optional. In all cases medical aid is paid until the expiration of the thirteenth week, and in cases of invalidity may be given for an additional term of 13 weeks after cash allowance expires. Free choice of physician is permitted, or of physicians who are under contract. The waiting period for cash benefit is three days after the commencement of illness. It must be paid for 13 weeks but can never be paid for more than one year. The cash grant amounts to one-half the normal daily wage of the insured, but is never more than three-fourths of that wage. An immediate payment of one-half the cash allowance may be made to dependents. Payment of one-eighth of daily wages may be granted to insured persons having no dependents. Maternity benefit is given any insured woman for four weeks and not more than six weeks after delivery, provided she has been insured for at least six months in the year preceding confinement. This benefit is optional to wives of insured men. Funeral benefit is paid except in the case of suicide. The amount is 20 times the daily normal wage, with the maximum payment fixed at 80 francs ($15.44). Two-thirds of this sum may be granted to an insured member at the death of his wife and one- . half of this benefit at the death of a child. ' The employee pays two-thirds of the cost of insurance, to which the employer adds one-third. Responsibility of insurance rests with the employer. No contri- bution is levied during illness. Insurance against sickness is carried by the district funds, by mutual aid societies not operated for profit, and rBpggmjedlMSBj^kj&inds, such as miners', guild and 1917.] HOUSE — No. f850. 253 establishment funds. Two-thirds of their committee members are chosen by the insured and one-third by the employers. The National Insurance Commissioner supervises these funds. Norway. The Acts of September 18, 1909, and April 1, 1911 made sickness insurance compulsory in Norway for urban workmen earning less than 1,575 marks ($375.17) and for rural workmen earning less than 1,350 marks ($321.57) annually. Medical aid and hospital care are given for a period of 26 weeks but no extension of this time is permitted in any one year. Free medical care is also provided for either husband or wife and for children under 15 years of age. The cash benefit amounts to 60 per cent of the daily wage. Wives of insured members receive a maternity allowance for six weeks. The funeral benefit paid is 25 times the daily wage, with the m?,ximum limit fixed at 50 kroner ($13.40). Insurance is carried by the National Insurance Fund, but workmen may insure themselves with local sick-benefit funds and recognized mutual aid societies. These societies may determine the actual dues which shall be paid. As a rule, however, the workman contributes 60 per cent of his wages and the employer 10 per cent. Under no other compulsory insurance system is the employer's share so small. The commune grants a subsidy of 10 per cent and the State one of 20 per cent for the cost of insurance in order to justify the Crown in somewhat more extended powers of administration. In 1913 there were 762 «ocieties with an enrollment of 370,567 members who contributed 6,065,656 kroner ($1,625,596) during the year. The average benefit received per member was 21.55 kroner ($5.78) . The State subsidy in 1913 amounted to 1,212,820 kroner ($325,036.00), and the communes contributed 798,406 kroner ($213,973.00). Serria. The compulsory sickness insurance system was adopted by Servia on June 29, 1910, and went into effect on July 12, 1910. It applies to all workmen engaged in trade and commerce. The law provides for all sickness. Medical treatment as well as hospital care are furnished and the daily cash benefit paid corresponds to the degree of disability. The amount is usually 50 per cent of the daily normal wage. A maternity benefit consisting of medical and cash aid for 12 weeks is granted to insured employees. Any funeral benefit is entirely optional. The cost of insurance is divided equally between employer apd employee. The State contributes in addition an annual subsidy of 80,000 marks ($19,056.00) to the National Organization. The insurance is paid out of local mutual sick-funds and miners' and establish- ment funds, consolidated into a National Organization of Sick-funds and supervised by the Minister of the Interior. Roumania. By an Act passed January 25, 1912, and subsequently amended on February 14, 1913, April 4, 1913, and June 5, 1913, Roumania adopted, in connection with old-age pensions, a sickness insurance system compulsory for all employees. No official data are available as to the effect of this law. ■ All forms of sickness are provided for, but in cases of industrial accidents the regular benefits are given for the first two weeks only. The cash grant furnished for married workers is one-half of the average wage if the patient is cared for at home, and one-fourth if hospital treatment is given. In the case of single workers the cash aid receivied is 35 per cent and 10 per cent, respectively. The right to this allowance is forfeited when sickness is caused by drunkenness. Both cash and medical benefits are received for a maximum period of 16 weeks. Medical treatment, hospital care, and the free supply of medicines, as well as of therapeutic appliances, are also furnished. These benefits are also ac- corded to wives and children of insured persons, if Uving with them. A matermty benefit is given for six weeks on condition that at least 26 weekly contributions shall have been paid. This grant of assistance may be prolonged up to three months, provided the woman herself nurses the child. The funeral benefit is graded accord- Digitized by Microsoft® 254 SOCIAL INSURANCE. [Feb. ing to the five wage-groups into which the workers are divided, and granted only after at least 52 weekly contributions have been made. This benefit amounts to 60 lei (311.58) for the first class, and rises to 100 lei ($19.30) for the fifth class. The entire cost of insurance is borne by the workman, according to the rate estabhshed for his particular wage-group. The weekly contribution for each group is .05 lei ($0.01), .20 lei ($0.04), .30 lei ($0.06), .45 lei ($0.09), .60 lei ($0.12), respectively. The employer is responsible for the payment of contributions which he may deduct from the wages of his employees. The insurance is carried by local sickness-funds under the supervision of the Central Office of the National Insurance Fund. Netherlands. On June 5, 1913, the Netherlands adopted compulsory sickness insurance. The law applies to all workingmen except domestic servants, govern- ment and railroad employees already entitled to sickness-pay under approved systems, property and income-tax payers in excess of certain limits, and men serving with the colors. Exemption may be claimed, however, by persons earning less than 0.4 florins ($0.16) a day, or invalid at the time the law went into effect. The law covers all sickness, including pregnancy and childbirth, but excepts sickness caused by industrial accident which is cared for under the accident insurance laws. A cash benefit of 70 per cent of the mean rate of wages is granted from the third day of disability, and continues up to the limit of six mouths. This allowance may be increased to 90 per cent and payment of it continued for one year. As medical benefit is not compulsory, arrangements must first have been made for providing medical attendance and medicines in order to receive sick-pay. Maternity benefit is paid immediately. No funeral benefit is given. The insurance is payable by the employer, who may recover by deducting one- half of one per cent from the wages of his. employees. For special risks of sickness special rates of premiums are fixed, which are based on a certain percentage of the mean rate of wages. Workmen are divided into seven wage-groups — men earning less than 0.7 florins ($0.28) per diem in group I to those earning more than 3.50 florins (.?1.41) per diem in group VII. The State subsidy is used to defray the salaries of three district insurance commissioners as well as of certain labor council officers. The insurance is carried by the labor councils and the district insurance com- mittees exercise supervision over a number of these councils. Two of their four unsalaried members are elected by employer and employed in equal proportion, while the State appoints an impartial chairman and three unsalaried memoers. There must be a deputy for each member of the Insurance Committee. Switzerland. The first Swiss law on. subsidized sickness insurance, passed on October 5, 1899, was rejected by an overwhelming majority on referendum. May 20, 1900. In 1906 the Federal Council again took up the question of unifying the various isolated legislative acts into a national system and proposed compulsory sickness insurance in government institutions with a monopoly of insurance. The new law framed was adopted on June 13, 1911, to take effect about January 1, 1914; but no statistics are available with regard to its operation. Cantons and com- munities may enforce sickness insurance for their population, or for certain classes of it only, and may organize public insurance institutions in co-operation with existing mutual aid societies. Swiss wage-earners of either sex and enjoying at least fairly good health must have an opportunity to join » sick-benefit society. Under certain conditions they may transfer from one society to another without loss of privilege. For new members the iieriod of probation after entrance must not be less than three months. .'^ick members are permitted to choose from a panel of physicians and druggists under contract with the societies. The Federal Governipent fixes schedules of pa>-ment for medical and pharmaceutical aid, in order to guarantee suoli choice, and prevent excessive demands in cost of service. The waiting period after a person becomes ill must not exceed three days. The minimum cash benefit is fixed Digitized by Microsoft® 1917.] HOUSE — No. 1850. 255 at 1 franc (.$0,193) per diem, and may be given for not more than 180 days in any period of 360 days. Instead of a money grant medical and pharmaceutical help may be furnished from the first day of illness for at least six months. If this assis- tance has been continued for 270 days in any one year, the societies need not defray more than three-quarters of the expense incurred on this account. Treat- ment at hospitals and at sanatoria is optional. Maternity benefits must, be granted for at least six weeks, where contributions have been paid for at least nine months. A minimum nursing allowance of 20 francs ($3.86), which may be increased to 40 francs i$7.72), is given for another month. No funeral benefit is provided. Cantonal and communal authorities may compel employers to be responsible for the contributions levied on such of their employees as are members of govern- ment insurance institutions. No insurance contributions can; however, be demanded from employers. The State subsidy fluctuates according to the benefits granted. It is 3.5 francs ($0.68) for children under 14 years of age; 3.5 francs ($0.68) for each male adult; 4 francs ($0.77) for each female adult, if either the minimum sick-benefit of 1 franc ($0,193) per day or medical aid is furnished; and it is 5 francs ($0.97) if both benefits are provided. An additional amount of 50 centimes ($0.10) is paid if sick-benefits are continued for 360 days. This sum is increased to a sum of from 3 to 7 francs ($0.58 to $1.35) per member in mountainous districts where medical aid cannot easily be had. In cased of confinement the State gives a subsidy varying from 20 to 40 francs ($3.86 to $7.72). The total amount of State grants may never be more than one and one-half times the sum received by the insurance societies from membership contributions for the year. Cantons and communities who make sickness insurance compulsory for their population, and who pay in part or wholly the contributions of needy persons, receive an additional State subsidy amounting to one-third of their expenses on this account. Government institutions and recognized mutual aid societies are the insurance carriers. These societies must be Swiss corporations, and must accept applicants irrespective of political or religious qualifications. The annual balance sheets of such socifeties must be submitted to the Federal Council. Any controversy arising is referred to the cantonal courts for decision; and any exceptions taken are then submitted to the Federal Insurance Court, appointed by the Federal Council. The judges of this court are chosen by the Federal Assembly, and serve for a term of six years. France. The French Act of June 29, 1894, introduced compiilsory sickness insurance for seamen and railway employees only, and for miners earning up to 2,500 francs ($482.50) per annum. In all other industries sickness insurance rests entirely with the workman. The Old Age Pension Act of 1907 includes invalidity and fixes the maximum annual invalid pension at 360 francs ($69.48). Since 1910 France has paid insignificant State subsidies to recognized voluntary sickness insurance societies. These grants for the most part, however, cover the cost of funeral and sick-benefits only. With regard to the cost of compulsory insurance, employees contribute two- thirds of one per cent of wages, to which the employer adds one-third of one per cent. Miners pay up to two per cent of wages, or 48 francs ($9.26) a year, while their employer gives a subsidy equal to one-half of his employee's share. No recent information is obtainable concerning benefits granted, the adminis- tration of insurance carriers, or government supervision of voluntary sickness insurance societies. Italy. By the Act of 1896 the Italian government required railway employees to insure themselves against sickness. Within recent years proposals for general compulsory sickness insurance have been under discussion. It is, therefore, all the more creditable that in the absence of any national sickness insurance system the country adopted on July 17, 1910, a compulsory maternity insurance law, applicable to all married and unmarried women between the ages of 15 and 50. Digitized by Microsoft® 256 SOCIAL INSURANCE. [Feb. No medical benefit is granted, but cash aid is given for four weeks after delivery or for not less than 21 days. To this cash benefit of 30 lire ($5.79) the State adda a flat subsidy of 10 lire ($1.93) for each case. The cost of insurance is shared in equal parts by employer and employed. The total contribution thus equally divided amounts to one lira ($.193) for women between the ages of 1.5 and 20, and two lire ($0.39) for those from 20 to 25 years old. There is no distinction in rates for married and unmarried women. The National Insurance Fund (Cassa Nazionale di Providenca) carries the insurance and its offices are responsible for administration and supervision. Russia. In Russia sickness insurance has been compulsory for factory and mine employees only, and in 1888 it was extended to railway employees. The new compulsory sickness insurance Act of June, 1912, applies also to employees in navigation, and to all the above-named workmen both in European Russia and the Caucasian Provinces. The act is closely modelled on the German insurance law. The provision for medical aid has been for many decades a direct function of the employer who still bears the entire cost for a maximum period of four months. The cash benefit for workmen with dependents is from one-half to two-thirds of the daily wage, but single workingmen receive from one-fourth to one-half of their wage. The cash benefit begins on the fourth day of illness, or earlier, and a sum up to lOp per cent of the wage is given for six weeks. The maximum time limit for cash aid is fixed at 26 weeks and rojay be extended to not more than 30 weeks iiL the year in case of repeated illness. This cash allowance is also given for the first 13 weeks in case of industrial accidents. A maternity cash benefit varying from one-half to the full amount of wages is paid for two weeks before and four weeks, after delivery. This assistance, however, is granted only to members of three months ' standing. In case of death, funeral aid from 20 to 30 times the daily wage is given, but this is optional to dependents. Toward the cost of insurance the employee contributes two-thirds of one per cent of his wages, while the employer pays one-third of one per cent in addition to the entire cost for medical aid or hospital treatment. Persons earning more than, five roubles ($2.57) a day or more than 1,500 roubles ($771.90) a year are assessed on the daily wage rate. Sickness insurance is carried by local mutual insurance organizations and estab- lishment funds. In February, 1914, there were in existence 1,096 such funds with a membership of 833,973 persons. Supervision is exercised by the Workmen's^ Insurance Council. Belgium. Belgium has a voluntary sickness insurance system, but by an act of 1851, the State made regulations for recognized mutual sickness insurance- societies. Since 1904 the State has appropriated annually the sum of 115,000 franco ($22,195) for distribution among societies providing sick-benefits after the first six months. The State subsidy is comparatively small and is given to improve rather than extend the system of voluntary sickness insurance. About five per cent of the population are members of these societies. In 1913 proposals to introduce general compulsory sickness insurance were under discussion, but no information on the subject has since been obtainable. Denmark. Denmark has no general compulsory sickness insurance. Since 1892 the State has granted a flat subsidy to recognized voluntary mutual aid societies, amounting to one-fifth of their revenues from dues, with a. maximum limit of two kroner ($0.54) independently of the number of members. In 1914 there existed 1,547 such recognized societies in the country which received a State subsidy of 2,764,989 kroner ($741,017), and a communal subsidy of 205,043 kroner ($54,952) for that year. Such a, State benefit for any one year is always paid over to the society in the year following. No recent information is obtainable- with regard to membership in recognized societies, or benefits granted by them, or their methods of administration. Digitized by Microsoft® 117.] HOUSE — No. 1850. 257 By the Act of April 24, 1913, which went into effect on January 1, 1914, widows' nsions, as distinct from poor relief or compulsory insurance, were established, le State and the local commune together pay .for each ohUd under two years of e an annual maximum allowance of $27; for children between two and 12 years, 1.60; and for children aged 13 and 14, $16.20. The total amount disbursed by e State for this purpose in 1914-1915 was 96,921 kroner ($25,975). Sweden. The Swedish system of voluntary sickness ' insurance received in 191 a new stimulus through direct government subsidies granted to recognized )kness insurance funds. These subsidies were augmented in 1898 with an appre- ible effect on the growth of registered societies and their membership. In 1912 there were registered 2,063 recognized mutual aid societies, with a embership of 637,049, who contributed in fees a total of 6,907,972 kroner 11,851,337). The administration of these societies cost 758,256 kroner ($203,213), id the State subsidy received by them represented 853,536 kroner ($228,748). he following disbursements for the year were made: Sick benefits 6,494,605 roner ($1,740,554); funeral benefits 711,303 kroner ($190,629); medical benefits 11,596 kroner ($56,708). Approximately 10 per cent of the population avail themselves of voluntary iBurance against sickness. Proposals for general compulsory insurance are now ader discussion, but no definite information can be procured at present. Digitized by Microsoft® 258 SOCIAL INSURANCE. [Feb. Appendix B. OLD-AGE PENSIONS. DESCRIPTIVE ACCOUNT OF NATIONAL OLD AGE PENSION SYSTEMS IN FOREIGN COUNTRIES. Prepared by the Massachusetts Bureau of Statistics. Intboductoet. In nearly all of the leading countries with the exception of the United States statutory provision for old age insurance or pensions has been made. The widely varying insurance' and pension systems adopted are of three general types: Voluntary insurance; compulsory (contributory) insurance; and non-contributory pensions. In the present review no extended consideration will be given to the first type, that of voluntary insurance, because already in Massachusetts, by Chapter 561 of the Acts of 1907, provision has been made for the establishment of a system of savings bank hfe insurance and, therefore, voluntary old age insurance is not deemed to be a subject fot special consideration by the legislature at this time. Accordingly, the present survey is confined primarily to a consideration of existing systems of compulsory (contributory) old age insurance and of non-contributory old age pensions which have been estabhshed by national governments. No general system of old age insurance or pensions has been established by the United States Government nor by any of the individual States, although there are in operation special pension systems covering certain classes of public employees, such as veterans, retired army and navy officers, State employees (in Massachusetts), and firemen, policemen, teachers and certain other municipal employees; but these systems hardly come within the scope of the present inquiry. Thus far, in the United States, the establishment of pension systems covering large groups of the population has been confined, principally, to certain im- portant railroad systems and other industrial corporations. To a limited extent, the operations of these systems have pre-emptied the field, and the establishment of any general national or State system of old age pensions would therefore result in some duplication as respects beneficiaries were the corporation systems stiU to continue in operation. During re- cent years, also, there has been a marked increase in the number of in- dustrial insurance policies issued in this country, while many fraternal organizations and several important national labor organizations have Digitized by Microsofi® 1917.] HOUSE — No. 1850. 259 established pension systems for the benefit of their superannuated mem- bers. Nevertheless, it is true that no very considerable portion of the population of this country, or of any of the States, is yet covered by any system of old age insurance or pensions. VOLUNTABY OlD Age INSURANCE. The primary purpose in establishing State systems of voluntary old age insurance is to induce wage-earners to provide for their old age by affording them opportunities to secure, at low cost, old age insurance with a certainty that the payment of pensions is guaranteed by the government. Usually the system adopted provides for the estabUshment or designation of an agency which shall collect the premiums, care for the reserve fund, and make payment of specified benefits or pensions. In most instances, the expenses of administration are met by the govern- ment and liberal subsidies are granted, thereby reducing the cost of in- surance to the policy holders. In Belgium, where the subsidies in 1912 constituted about 40 per cent of the benefits paid, the system has proved ' more popular than in other countries where less liberal subsidies are granted, and indeed it appears to be true that the success of any voluntary old age insurance system is largely determined by the extent to which it has been subsidized by the government. In Great Britain, Belgium, France, Italy, Spain, Canada, and Massa- chusetts, systems of voluntary old age insurance have been provided for by law. In Great Britain, a system of postal insurance and annuities was first instituted in 1864, and is still in operation although it has been some- what modified by later legislation, and has in a measure been supplemented by the more recent non-contributory old age pension system estabUshed in 1908; and in France, in addition to a voluntary, contributory, old age insurance system first established in 1850, and a system of State aid for incapacitated and superannuated workers which became effective in 1907, a compulsory, contributory system was also established in 1910. The estabhshment in Great Britain and France of other pension systems which are in a sense supplementary to the voluntary systems previously established indicates that, notwithstanding the low cost at which old age insurance has been furnished, a considerable portion of the population of these two countries has failed to make provision for old age by this means, and the failure of many other countries to establish voluntary old age pension systems may be taken as an unfavorable commentaiy upon the success of such systems in those countries where they have been adopted. CoMPULSOKT Old Age Insueance. In those countries where old age insurance is made compulsory for certam classes of the population (usually wage-earners and persons re- ceiving small salaries) it has not been found practicable to attempt to Digitized by Microsoft® 260 SOCIAL INSURANCE. [Feb. raise more than 50 per cent of the necessary funds from the persons insured, and, therefore, except for the provisions of law making insurance ob- ligatory, these several systems are quite analogous to the voluntary sys- tems under which large subsidies are granted by the government. Even in Germany, where the compulsory system has become fully operative, the insured persons contribute only 40 per cent of the funds disbursed, and in other countries, which have adopted compulsory systems, the con- tributions by the beneficiaries rarely exceed 30 per cent of the total dis- bursements. The value of the contributory principle, therefore, has not been demonstrated as particularly important in so far as the amount of the contributions is concerned, and, when the cost of collecting the con- tributions is taken into consideration, it is held by many who favor a non- contributory system, that the latter will provide equal benefits without much additional cost to the State over the former, and at the same time will not require the establishment of elaborate administrative machinery for the collection of contributions, and for the recording of facts for a long period of years, with reference to the contributors. If, however, the num- • ber of countries which have adopted a compulsory, contributory system of old age insurance is any criterion, then such a system appears to be more generally favored than either a voluntary or a non-contributory system. The list of such countries includes at least eleven in all, namely: Germany, Erance, Sweden, Austro-Hungary, Russia, Italy, Roumania, Netherlands, Greece, Luxemburg, and Iceland. As the compulsory, contributory system in Germany was the first of its kind established, and is, without question, the most comprehensive and most widely known, it has been selected as the first to be discussed and the other ten countries in this group wiU be considered in the order as named above. Germany., The old-age and invalidity insurance system, established in Ger^ many in 1889, formed a part of a comprehensive system of social insurance which also included sickness insurance, established by an act of 1883, and accident insur- ance, established by an act of 1884. By subsequent legislation the system was extended in scope and perfected in detail, and, in 1911, the several acts and amend- ments were consolidated into a single code, and a new feature, that of "survivors' insurance" was added. Because of the fact that old-age, invalidity, and survivors' insurance are administered as a single system, no one feature of this system can be properly discussed without some reference to the other features, nor can data with reference to the operation of the old-age insurance feature be presented sep- arately, so as to enable one to make comparisons (which may not be misleading) between the costs, etc., of old-age insurance in Germany and in other countries. As the law now stands (Code of 1911) insurance is obligatory for all persons, from the sixteenth to the seventieth year of age, whose annual earnings do not exceed 2,000 marks ($476) and who are gainfully employed as: (1) Workmen, helpers, journeymen, apprentices or servants; (2) Establishment officials or foremen; (3) Clerks or apprentices in commercial establishments; (4) Actors or musicians; (6) Teachers or tutors; (6) Masters or seamen of seargoing or inland vessels. Digitized by Microsoft® 1917.1 HOUSE — No. 1850. 261 Certain classes of public employees, otherwise provided for, are exempt. Volun- tary insurance is open to employers engaged in small business enterprises, to salaried employees who earn not more than 3,000 marks ($715) per year, and to wives who were insured before marriage, but the number who take advantage of these voluntary provisions is negligible. The number of persons compulsorily insured, on the other hand, embraces substantially the entire wage-earning population of the Empire. The total number of persons insured in 1914 was 11,798,922, or about 17.9 per cent of the total population of 66,096,000. The insurance funds are derived from three sources: Insured employees, employers, and the Imperial revenues. The employer is held responsible for the insurance of all persons employed by him and for the payment of the premiums, being authorized to deduct the employee's share of the premiums from his wages. He receipts the employee's payments by affixing government insurance stamps to the employee's receipt cards. The Imperial Government contributes a fixed sum each year toward every pension and also bears the expenses of administration and of the payment of pensions through the post-offices. For administrative purposes the insured employees are grouped in five wage classes, determined by total annual earnings, and their contributions are made weekly in accordance with the following graded scale: Class. Annual Earnings. Weekly Contribution. I P Ill IV V Less than 350 maTks ($83.37). 350 to 550 marks ($131.01). 550 to 850 marks ($202.47). 850 to 1,150 marks ($273.93). More than 1,150 marks ($273.93). 16 pfennige ($0,038). 24 pfennige ( .057). 32 pfennige ( .076). 40 pfennige ( .095). 48 pfennige ( .114). In 1912 the total receipts from all sources was 399,938,100 marks ($95,265,255), of which amount 34.2 per cent was contributed by employers, 34.2 per cent by em- ployees, 13.8 per cent by the Imperial Government, and 17.8 per cent was in the nature of interest on accumulated reserves and miscellaneous receipts. The benefits comprise: (1) Old-age pensions; (2) Invalidity pensions; (3) Sick- ness pensions; (4) Widows' and orphans' pensions, and (5) Medical care. The old-age pension is payable from the seventieth birthday to a person who has made at least 1,200 weekly contributions, but payment of contributions may be omitted without loss of rights during sickness, accidental disability, or military service. The required term of insurance is so long (over 23 years) that no person could have obtained a pension before 1914. To meet this objection the required term was reduced by forty weeks for each year of age over 40 at the time the act became operative. Thus a man who was already 70 years of age in 1891 could claim an immediate pension. An old-age pension is made up of two parts: (1) The Imperial subsidy of 50 marks ($11.91), which is the same for all pensions, and (2) The insurance annuity, which is 60 marks ($14.29) for the first wage class and increases by steps erf 30 marks ($7.15) for each succeeding class. The entire pension thus ranges from 110 marks ($26.20) per year in the lowest to 230 marks ($54.79) in the highest class. If a pensioner has been a member of different wage classes at different times, the insurance annuity is prorated. Whatever the amount, pensions are paid monthly, in advance. The total number of old-age pensions in effect on January 1, 1914, was 87,261. The number of old-age pensions has decreased from year to year due to the increased Digitized by Microsoft® 262 SOCIAL INSURANCE. [Feb. number of invalidity pensions held by persons 70 years of age or over. By way of explanation it should be stated in this connection that when an insured person who is receiving an invalidity pension reaches the age of 70, he has the option of choosing an invalidity or an old-age pension, and the former is usually chosen because, ordinarily, it is of a larger amount. The average amount of all old-age pensions granted in 1914 was 167.99 marks ($40.02), or about $3.33 per month. The average has slowly risen, having been 124 marks ($29.54) in 1891, 145.54 marks ($34.67) in 1900, and 166.15 marks ($39.58) in 1908. The increase is attributable to two causes: (1) Wages have been rising and the proportion of persons in the lower wage classes has consequently decreased, and (2) pensions granted during the "transitional period" (1891 to 1914) were necessarily kept low because of the small number of contributions which had been paid in by the pensioners. Each year up to 1914 the number of contributions increased and consequently the sums granted as pensions were automatically increased. The pension age (70 years) is so high that very few live to enjoy the old-age benefit, consequently compulsory old-age insurance would naturally be unpopular were not this objection met by the granting of an invalidity pension in case of permanent disability before the pension age. Because of the interdependence of old-age and invalidity insurance, the latter should be also discussed in this con- nection. Invalidity is defined as inability, through accident or disease, to earn one-third of the normal wages earned in the same occupation and locality. Accidental injury sustained in the course of emplojonent is excluded, since incapacity from that cause is otherwise provided for. An invalidity pension can be drawn only after 200 weeks' insurance and after the payment of at least 100 weekly contributions. An invalidity pension consists of: (a) The Imperial subsidy of 50 marks ($11.91); (b) A basic insurance annuity of 60 marks ($14.29) for the first class, increasing by 10 marks ($2,38) for each succeeding class; and (c) A supplementary amount equal to the number of weekly contributions which the pen- sioner has paid, multiplied by 3 pf. (S.007) for the first class, 6 pf. (S.014) for the second. 8 pf. ($.019) for the third, 10 pf. ($.024) for the fourth, and 12 pf. ^$.029) tor the fifth class. Under this arrangement an invalidity pension will be greater or less than an old-age pension, according to the length of the insurance period prior to invalidity. Since 1906, however, invalidity pensions have averaged higher thaii old-age pensions. The Code of 1911 provides a further allowance of 10 per cent of the invalidity pension for each child under 16, but such allowance is limited to 50 per cent in all. Of 130,609 invalidity pensions granted in 1914, 27,112 carried such allowances. The smallest invalidity pension is 116 marks ($27.63) yearly. The average of such pensions in 1914 was 200.81 marks ($47.83), as compared with an average of 167.99 marks ($40.02) for old-age pensions. The average is increasing for the same reasons which operate in the case of old-age pensions. The number of invalidity pensions in force at the close of 1914 was 998,339, as compared with only 87,261 old-age pensions. The number has risen steadily from 31 in 1891 to 405,335 in 1900, and 868,086 in 1908. As already explained, this increase has been accompanied by a decrease in the number of old-age pensions. The aggregate payments on account of invalidity pensions in 1912 was 158,715,621 marks ($37,806,061) as compared with an aggregate of 14,061,878 marks ($3,349,539) for old-age pensions. The relative importance of invalidity pensions has increased and that of old-age pensions has correspondingly decreased year by year. The aggregate expenditures for these two benefits stood as 1 to 2 in 1894, as 2 to 1 in 1900, as 8 to 1 in 1908 and as 11 to 1 in 1912. In fact, the greater part of the invalidity pensions are in reality old-age pensions. Out of 103,200 invalidity and old-age pensions granted dur^.^m^^to^CTsoi^f 50 years of age or over, only 1917.] HOUSE — No. 1850. 263 28,702, or 27.8 per cent were to persons of 70 years of age or ovsr while 50,677, or 49.1 per cent were to persons under 65. These figures indicate that incapacity from old age more often begins before 65 than after 70 years of age. Ordinary cases of sickness are oared for at the expense of the sickness insurance funds. But if disability continues beyond the twenty-sixth week, a temporary invalidity or "sickness" pension l^Krankenrente) is granted. Sickness pensions are identical in amount with invalidity pensions, and the definition of disability is the same — • inability to earn one-third of nor,mal wages. The number of such pensions in force January 1, 1914, was 16,555; the entire cost during 1912 was 3,201,735 marks ($762,653) and the average pension was 192.3 marks (S45.81). Under the law of 1891 the only death benefit was the return of contributions to the dependents of an insured person who died before receiving a pension. This left, not only orphans, but aged and invalid widows without provision. This defect in the system was remedied, to some extent, by the widows' and orphans' pensions established by the Code of 1911. A pension is payable only to an invalid widow, but "widow's money,'' equal to one year's pension, is paid in any case upon the death of the husband. The widow's pension consists of the Imperial subsidy of 50 marks ($11.91) and of three-tenths of the insurance annuity to which her hus- band would have been entitled at the time of death. Aged women are, therefore, not as well provided for as aged men, in that the pension is only about one-half as much as that granted in case of actual invalidity. There is no "old-age" pension, as such, for women. The widow's pension provisions became operative in July, 1912. In 1914 pen- sions were granted to 9,834 widows, the average amount having been 78.85 marks ($18.78) per annum, and 30,223 orphans' pensions were granted, the average amount having been 78.12 marks ($18.61). Whenever it is believed that a case of invalidity can be benefited, or impending invalidity prevented, a course of treatment may be given, the expenditure being charged to the invalidity and old-age fund. Preventive treatment, in fact, has become one of the most beneficent activities of this branch of social insurance. Sixty-five or more sanatoria are maintained, at which about 70,000 persons are treated annually. The great cause of premature invalidity is tuberculosis, and nearly 60 per cent of all the cases treated are tubercular. The efficacy of the treat- ment is indicated by the fact that more than 80 per cent of the patients are dis- charged with "disability removed." The expenditure for invalidity pensions increased from 7,250,000 marks ($1,726,950) in 1912 to over 9,000,000 marks ($2,143,800) in 1914, whUe the cost of sickness pensions rose from 24,000 marks ($5,717) in 1912 to about 360,000 marks ($85,752) in 1914. The decrease in expenditures on account of old-age pensions was, on the other hand, 400,000 marks ($95,280). Invalidity and old-age insurance is administered by forty-one territorial and special "institutes" under the general supervision of the Imperial Insurance office. The total cost of administration in 1914 was 24,156,658 marks ($5,754,116). The cost per 1,000 marks ($238.20) of total expenses in 1914 was 81 marks ($19.29) as against 83 marks ($19.77) for the years 1912 and 1913. The Central Office, a branch of the Imperial Insurance Institute, is administered by highly trained experts. The published reports are, therefore, the most comprehensive of their kind anywhere issued. The most striking feature of old-age relief in Germany is its correlation with a comprehensive scheme of workingmen's insurance. Accidental injury in the course of employment, sickness, child-birth, permanent invalidity, premature death and old age all are provided for by compulsory insurance. EspeciaUy significant, in the present connection, is the interdependence of old age with invalidity and survivors' insurance. When it is understood that 60 per cent of the insured persons die before attaining the seventieth year, and that of all old-age and invalidity pensioners 88 per cent are un(fiiS*ft9«feal*sMai®8afii®i 54 per cent are under 60 upon 264 SOCIAL INSURANCE. [Feb. first receipt of pensions, it is clear that the old-age pensions alone would afford a very unsatisfactory degree of protection, nevertheless they do constitute relatively large returns upon the investment made in the form of premiums paid by those insured. Whatever may be the beneficial effects of social insurance in the case of individual pensioners, it cannot be denied that this system has resulted in improved standards of health and work of the general wage-earning population, and to it has been due in some large measure the remarkable industrial development of Germany in recent years. France. The compulsory old-age insurance law of 1910 prescribes insurance for practically all working people "of whatever nationality" who earn less than 3,000 francs ($579) per annum (including those State employees who do not come under the regulations of civil and military pensions) . The receipt of a pension is conditioned upon the regular payment of premiums for 30 years, except that the number of payments is reduced to 28 for all men who have performed at least two years' military service; and for women the birth of each child is reckoned as one year's insurance, which may be deducted from the prescribed 30 payments. There are three groups of premiums depending upon age or sex, and corresponding to three wage groups for insurable wage-earners as follows: men, 9 francs ($1.74) per year; women, 6 francs ($1.16) per year; minors under 18 years of age, 4.5 francs ($0.87) per year. Responsibility for payments of premiums rests with the employer who must duplicate his employees' contri- butions, which are receipted for by means of stamps aflSxed to cards. The original State subsidy of 60 francs ($11.58) was increased to 100 francs ($19.30) by an amendment in 1912. This annual grant is paid in those cases where the 30 prescribed subscriptions have been made, and is increased Cne-tenth for every insured person of either sex who shall have brought up at least three children to the age of 16. If premiums are paid less than 30 but more than 15 years, the State subsidy is calculated on a basis of 3.33 francs ($0.64) for each year of complete payments. If less than 15 annual payments were made, the State allows no pension subsidy whatsoever. The pensionable age is 65, but pensions may be drawn at 55 years of age, subject to a proportionate reduction both in amount of pension and of State grant. In case of death, if three-fifths of contributions were paid in and no pension had been re- ceived, children of Ihe deceased may receive 50 francs ($9.65) a month for from 4 to 6 months; in case there are no children, the widow may receive this amount for 3 months; in case of divorce, when the exclusive fault of the husband was the ground for divorce, the wife may receive this sum. All persons who, in 1910, were already 35 years of age must insure. If between 35 and 40 years old, the State grant of 60 francs ($11.58) is not diminished; if 46 years old, it is raised to 62 francs ($11.97). The grant increases 2 francs ($0.39) thereafter for every additional year of age at which insurance begins. In accordance with provisions of the Act of 1905 persons over 65 years of age receive such a.pension, exceeding 100 francs ($19.30) but less than 240 francs ($46.32), as their needs may require. The Old Age Pension Act of 1907 includes invalidity, and the maximum invalidity pension is 360 francs ($69.48) per year. In addition to compulsory insurance, a system of optional insurance has been extended to private persons receiving small income, employers engaged in small enterprises, peasant proprietors, independent workingmen, and to wage-earners whose annual income is more than 3,000 francs ($579) but less than 5,000 franca ($965). The voluntary annual contribution rate is from 9 ($1.74) to 18 ($3.47) francs. The estimated number of persons to be insured under this Act is from 10 to 12 ' millions. The niunbpr of persons insured in 1913 was 7,854,132 and the income from the sale of stamps was 45,525,540 francs ($8,786,429). On June 30, 1910, the tot^^^^^eg^^^D^jgj)^ pensioned under this Act was 1917.] HOUSE — No. 1850. 265 569,456, and on September 30, 1912, this total had increased to 640,532. It ia estimated that about one-third of the total number of French working men were actually insured 18 months after this law became effective. The Act secures substantial incomes for many who could not be induced voluntarily to provide for their old age through private institutions, and it accomplishes this without inviting thriftlessness in the decade before receipt of a pension. Putting the pen- sionable age at 65 instead of at 70 brings a much heavier charge upon the French Treasury. The amounts paid as old-age pensions are slightly higher than those paid in Germany, but under the German system certain additional benefits accrue to the insured. Sweden. The Swedish old-age insurance law of 1913 is more comprehensive than that of either Germany or France. The French and German systems are practically confined to persons gainfully employed, while the Swedish law applies to the whole adult population, including married women. Every Swedish man or woman from the sixteenth to the sixty-sixth year, inclu- ■~sive, pays an annual tax, or premium, of 3 crowns ($0.80). For incomes over 500 crowns ($134) a surtax is imposed, ranging up to 10 crowns ($2.68) for incomes over 1,200 crowns ($322) per annum. Additional voluntary payments may be made, not to exceed 30 crowns ($8.04) per year in all. Members (and their wives) of the military, naval, and civil service, who are otherwise provided for, and permanently disabled persons, are exempt. If a pensioner receives poor relief, then his pension must be paid in part or in whole to the public charity organization in order to reimburse it to the amount of the relief given to such pensioner. If institutional care is given, the institution or hospital may claim the pension to reimburse itself to the amount charged for such care of a pensioner. If a pensioner is a convict, or imprisoned for more than one month, his pension is withheld during that time; his dependents may, however, claim it for their support. Habitual drunkenness and voluntary idleness are dis- qualifications. Moreover, a pension reverts to the general insurance fund if it is not claimed within one year after it becomes due. An old-age pension is payable, without respect to incapacity, from the sixty- seventh year. An invalidity pension is payable at any age in case of permanent disability. The annual amount of the pension is 30 per cent for men, and 24 per cent for women, of the whole amount that has been paid in by the beneficiary. In addition, the government grants a subsidy of 150 crowns ($40.20) per annum for men and 140 crowns ($37.52) for women whose whole annual income does not exceed 50 crowns ($13.40). This subsidy is reduced by one-half of the pensioner's income over 50 crowns ($13.40), and ceases altogether when the income reaches 300 crowns ($80.40) for a man or 280 crowns ($75.04) for a woman. It will be seen that for the lower wage classes the government subsidy will be the chief component of the pension. For a generation to come, the government subsidy will be nearly the sole constituent of all pensions. At least thirty years must elapse before the insurance annuity will amount to any considerable-sum. In 1914 the number of pensions granted was 33,138 and the total amount paid was 1,875,457 crowns ($502,622), or 56.6 crowns ($15.17) per capita. Records further show that pensions were granted to 10,565 men, totaling 623,120 crowns ($166,996) , or 58.98 crowns ($15.81) per capita; and to 22,573 women to the amount of 1,252,336 crowns ($335,626), or 55.48 crowns ($14.87) per capita. The total number of persons insured under the Act in 1914 was 3,225,700. They contributed a total of 14,571,000 crowns ($3,905,028). The number of voluntary cases insured in 1914 was 628. Austro-Hungary. The Austro-Hungary compulsory old-age msurance law of 1906, in force since January 1, 1909, is restricted to salaried employees, and does not, therefore, make general provision for the aged. In the Austrian mining industry operated by the State, a compulsory old-age Digitized by Microsoft® 266 SOCIAL INSURANCE. [Feb. pension fund was established as early as 1854, and the State, as employer, pays one-half of the contributions. Russia. In Russia no general provision is made for invalidity and old-age insurance, but in 1881 an Act was passed which provided for compulsory old-age insurance of employees in the government mines. Old-age insurance systems, established as early as 1858 by private railroads, were made compulsory in 1888 for such railroads, and in 1894 for State railroads. In 1914 the government paid 117,994 roubles ($60,694) for pensions, which is an increase of 1,824 roubles ($939) over the amount for the preceding year. Italy. The Italian National Institution for the Insurance of Workers against Invalidity and Old Age dates from 1898 and is modeled rather closely upon the French National Retirement Fund. In 1899, a law was passed providing that employees in the tobacco industry should be insured in this Institution. In 1904, a bin for uniform insurance was introduced and became law, and in 1905, this law was extended to employees of government engraving and printing offices, and in the same year to employees of the government salt works. In 1908 the com- pulsory pension system was extended to include government railway employees: in 1910 to include persons engaged in the shipping industry, and in 1913 to include sailors. The pensionable age is 60 years for men, and 55 years for women. The monthly contribution from the wage of an employee is 2 lire ($0.39) for men, 1 lira ($0,193) for women. The smallest pension granted is 480 lire ($92.64) for men, 300 lire ($57.90) for women. The total annual subsidy of the State and the Institution given in every case is 34 lire ($6.56) for men, 22 lire ($4.25) for women. Boumania. In 1912, compulsory old-age and invalidity insurance was estab- lished by law, but there is po evidence at hand to the effect that the system has yet become operative. The act appears to be modelled upon both the German and the French acts. Under this act, invalidity is defined as inability to earn one-third of normal wages, and in this respect the act follows the German precedent. The pensionable age is 65 years. The French method of uniform weekly contributions for all classes of insured persons was adopted. The weekly rate is 45 bani ($0.87) for the first 10 years from the date the act becomes effective, and employer, employee and the State contribute equally. The employer is responsible for the worker's share, which he may deduct from the wages. The normal old-age pension granted is 150 lei ($28.95), and in order to receive it, contributions must have been paid altogether for at least 1,200 weeks. The invalidity pension is increased by 10 bani $0,193) for every weekly contribution exceeding 200 contributions. It is paid to any insured person after he has been ill for 16 consecutive weeks. The number of persons insurable in 1913 has been estimated at 150,000. Netherlands. An act passed in 1913 provided that old-age and invalidity insurance should be compulsory for all "workers" (with certain exceptions) earning less than 1,200 florins ($482) per year. Those insured under the act are entitled to a pension on attaining the age of 70, or earlier, if incapacitated, incapacity being defined as-inability to earn one-third of normal wage. Surviving children of insured persons also receive annuities until they reach the age of 13 years. In order to be eligible, a pensioner must be needy and deserving, and must not have received public charity. Persons convicted of crimes, drunkards, • and those who lead a dissolute life are disqualified. Continuous residence of at least 20 years and con- tinuous citizenship of at least 5 years are necessary qualifications. Insured persons are grouped in five wage classes, determined by total annual earnings as follows: First class, . . . , Second class, . Third class Fourth class Fifth class j. . . . . Digitized by Microsoft® less than 240 florins ($96.48). 240 to 400 florins ($160.80). 400 to 600 florins ($241.20). 600 to 900 florins ($361.80). 900 florins and over. 1917.] HOUSE — No. 1850. 267 Military conscripts serving with the colors are assigned to the second class and their contributions are paid by the State. The weekly contributions for the re- spective classes are 20 cent. ($0.08); 24 cent. ($0,096); 32 cent. ($0,129); 40 cent. ($0,161); and 48 cent. ($0,193). Contributions are payable generally by the em- ployers who may deduct from the wages of each employee a portion of the contri- bution paid in his behalf, the proportion varying according to the wage class of the employee. Contributions are paid by means of stamps affixed to cards, or in cash to the Local Labor Council. The amount of the pension, whether on account of old age or invalidity, is computed as follows: a sum described as the "basis" of the pension is first deter- mined by multiplying the aggregate amount of the contributions paid by 325; the product is then divided by the number of weeks during which the insurance has continued. The mmiber of weeks during which invalid pension has been paid, and the premiums paid in respect of such weeks, are not taken into account in making such computation. The "basis" of the pension is then increased by a sum equal to 14 per cent of the total amount of premiums paid, but this sum must in no case be less than a fifth of the "basis." In accordance with this formula an insured person who has paid 48 weekly contributions each year from the age of 20 to the age of 70, and whose wages were $5 a week up to the age of 25, $6 a week up to the age of 30, and $7 a week thereafter would be entitled to a pension of about $2.30 a week at the age of 70. In the event of his becoming incapacitated at the age of 30, he would from that time onward receive about $1.25 a week. Should such incapacity not occur until his 40th year, he would receive about $1.50 a week, and if it did not occur until his 50th year, he would receive about $1.80 a week. Medical or surgical treatment at home or in a hospital may be provided when it is believed that an insured person might, without such treatment, become per- manently incapacitated. If such person has 150 weekly contributions to his credit, provision may be made for the payment on behalf of his children under 13 of two- thirds of the estimated amount of the invalidity pension to which he may be entitled. Provision is also made for the granting of invalidity and old-age pensions. To persons who voluntarily insure, contributions of two florins ($0.80) may be paid whenever the insured desires, but no more than 80 contributions are to be taken into account for any year. The amount of the pension is to be 1.5 per cent of each contribution for each half-year which shall have elapsed between the dates of the payment of the contribution, and the receipt of the pension, excluding, how- ever, years during the major portion of which invalidity pension was received. An annual State subsidy of 10,000,000 florins ($4,020,000) is to be paid for a period of 75 years. Before 1914 the government paid the districts a subsidy of 50 florins ($20.10) per pension. The estimated cost for 1914 for invalidity pensions was 9,500,000 florins ($3,819,000), and for old-age pensions 4,750,000 florins ($1,909,500), a total of 14,250,000 florins ($5,728,500) for all pensions paid in 1914. Pensions are paid through the State Insurance Bank and Local Labor Councils. Greece. A compulsory invalidity and old-age insurance act was passed in 1907. It is restricted to Greek sailors and the cost is borne in equal shares by the insured, the employer, and the government. No statistics as to the operation of this act are available. Luxemburg. Compulsory invahdity anc! old-age insurance laws were pa^jsed in 1911 and 1912. All person#having an annual income of not less than 3,000 marks ($715) must insure. The pensionable age is 68 years. Invalidity is defined as inability to earn two-thirds of normal wag^. Institutional care to prevent per- manent invahdity and support of dependents may be granted. In the event of death before a pension becomes due, death benefits may be paid to the widow or the children of a pensioner. The contributions are at the rate of 2.1 per cent of ihe wage earned, and are paid in equal shares by the insured and the employer. The State pays a subsidy of 48 marks ($11.43) for every insured man and 38.40 marks ($9.15) for every insured woman. Compulsory insurance may be augmented by Digitized by Microsoft® 268 SOCIAL INSURANCE. [Feb. voluntary insurance for persons receiving an annual income not exceeding 3,600 marts ($858). Iceland. Under a law dated July 11, 1890, a compulsory system of old-age and invalidity insurance was established. All servants between the ages of 20 and 60, all day laborers, and persons working with their parents must annually con- tribute to this fund 1 krone ' ^$0.27) for men, and 30 0re ($0.08) for women. The male head of each household must pay this contribution for every person who resided with him during the year, but he may deduct it from the wages of his employees. For non-payment pf these contributions, property may be attached. The only persons exempt from paying contributions are those without means who are responsible for maintaining one or more dependents who are unable to provide for themsehes; those unable to earn wages on account of sickness or other causes; and those who have provided for their old age by purchase of an annuity of at least 150 kroner ($40.20). Pensions are granted to persons over 60 years of age who have received no poor relief during a prior period of ten years. The minimum pension is 20 kroner ($5.36) and the maximum pension granted may not exceed 200 kroner ($53.60). For the first 10 years after the establishment of these relief funds all contributions plus accrued intercot must be added to the funds. In later years one-half of such contributions plus interest is added to the funds, while the remainder is distributed in pensions. Funds are administered in cities by the magistrates, in rural conmiunities by the parish council, and these officials may set aside, as their salaries, 4 per cent of all contributions levied. They must also elect two persons who audit the annual balance sheet of the respective funds. NON-CONTEIBUTOBY OlD-AgE PENSIONS. Although non-contributory old-age pension systems have been adopted in only a very few countries, the operation of these systems is being con- sidered with a great deal of interest, particuliarly since the passage, in 1908, of the act which provided for the payment ia the United Kingdom of old- age pensions on the non-contributory plan. This pension scheme, while not' yet fully perfected, appears to have worked surprisingly well, and it has, therefore, been discussed at some length. Similar systems, previously adopted iu Denmark, New Zealand, Australia, and New South Wales, have also been considered. This form of old-age relief is justified by its advocates on the ground that all persons who have, for a considerable portion of their adult lives, engaged in honorable labor are entitled to freedom from anxiety on account of their physical needs during their declining years. Accord- ingly, in all such systems deserving persons only, who are without prop- erty or sufficient income to provide for immediate necessities, are eligible to receive pensions. United Kingdom. The British old-age pension act was passed in 1908 and revised in 1911, and was the result of earnest consideration for at least twenty-five years during which five parliamentary commissions had investigated the subject and many different plans had been proposed. The non-contributory plan was adopted because that was the plan favored by the labor party and because there was urgent need of immediate relief. About one-fifth of the whole population of the United Kingdom above the seventieth year were actually paupers when the act was passed, and it was re Quarters Ending — Number Re- porting. Unemploted — All Causes. e , Unemploted Owing to Lack OF Work or Material. Unions. Member- ship. Mem- bers. Percent- ages. Mem- bers. Percent- ages. March 31, 1908 June 30, 1908 September 30, 1908, . December 31, 1908, . March 31, 1909, . June 30, 1909 September 30, 1909, . December 31, 1909, . March 31, 1910, ..... June 30, 1910 September 30, 1910, December 31, 1910, 256 493 651 770 777 780 797 830 837 841 Digitil^ 66,963 72,815 83,969 102,941 105,059 105,944 113,464 107,689 117,082 121,849 11,987 10,490 8,918 14,345 11,997 6,736 5,451 10,084 8,262 8,518 ,«^6,624 '«^2,517 17.9 14.4 10.6 13.9 11.4 6.4 4.8 9.4 7.1 7.0 6,6 10.2 10,832 9,128 7,349 11,302 9,980 4,913 3,873 5,248 6,186 6,570 4,687 8,938 16.2 12.5 8.8. 11.0 9.5 4.6 ■ 3.4 ' 4.9 5.3 5.4 4.0 7.3 1917.] HOUSE — No. 1850. 279 Table I. — Number and Membership of Organizations, etc. — Concluded. NUMBBB Re- Unemployed — Unemployed Owing to Lack QtlAHTERS EnDIKQ — POKTING. All Causes. or WoBK OR Material. Unions. Member- Mem- Percent- Mem- Percent- ship. bers. ages. bers. ages. March 31, 1911, . 8S9 122,002 12,738 10.4 9,120 7.5 June 30, 1911, . September 30, 1911, . 897 975 135,202 133,540 8,927 7,627 6.6 5.6 5,669 4,904 7,568 4.2 3 7 December 30,' 1911, . 905 125,484 12,167 9.7 6!o March 30, "1912, 942 161,825 22,738 2 14.1 8,185 5.1 June 29, ' 1912, . September 30, 1912, . 974 134,940 7,088 5.3 4,540 4,407 3.4 972 146,673 6,952 4.7 3.0 December 31, 1912, . 994 174,359 15,914 9.1 11,164 6.4 March 31, 1913 1,022 170,970 19,329 11.3 12,493 7.3 June 30, 1913, . 1,037 172,343 11,116 6.4 7,473 4.3 September 30, 1913, . 1,059 177,267 12,010 6.8 7,537 4.3 December 31, 1913, . 1,081 178,182 18,574 10.4 13,069 7.3 March 31, 1914, .... 1,082 173,327 22,347 12.9 15,917 9.2 June 30, 1914 1,095 183,202 18,122 9.9 12,576 6.9 September 30, 1914, . 1,010 186,816 18,302 11. 14,140 8.5 December 31, 1914, . 1,024 165,762 30,258 18.3 24,629 14.9 March 31, 1915, . 1,076 171,997 28,486 16.6 21,951 12.8 June 30, 1915 1,092 162,315 17,262 10.6 12,241 7.6 September 30, 1915, . 1,052 175,754 12,328 7.0 6,325 3.6 December 31, 1915, . 1,026 168,122 14,389 8.6 6,709 4.0 March 31, 1916 1,029 178,434 15,484 8.6 7,010 3.9 June 30, 1916; . September 30, 1916, . 1,017 173,179 7,358 4.2 2,323 1.3 1,021 180,557 7,046 3.9 3,358 1.9 Average for 1808, _ _ _ U.e _ IB.l Averaue for 1909, - - - 8.0 -. 6.6 Average for 1910, - - - 7.6 _ 5.6 Average for 1911, - - - 8.1 _ 5.4 Average for 1912, - - - 8.S - 4.5 Average far 1913, - - - 8.7 - 6.8 Average for 1914, - - - IS.O - 9.9 Average for 1915, - - - 10.7 _ 7.0 Average for 1918, ' ~ ~ ~ ~ ~ In the above table, facts are presented not only with reference to the percentages of unemployed for all causes, but also the percentages rep- resenting the numbers unemployed because of lack of work or material, The latter percentages indicate more adequately the condition of the labor market than the former, because such factors as unfavorable weather, strikes and lockouts, disability, and other causes, which have no special significance as indices of general prosperity or depression, are eliminated. For this reason the percentages unemployed owing to lack of work or ma- terial may more properly be discussed in this connection. On reference to the last column in the above table, it will be observed that the percentage (16.2) unemployed at the close of March, 1908, because of lack of work or material was the highest percentage recorded during the entire period 1908-1916, indicating that the industrial depression ' Owing to the fact that the respective dates — . December 31, 1911, March 31, 1912, and June 30, 1912 — fell on Sunday, the date chosen for the returns in each case was the day preceding. 2 In explanation of this unusually high percentage unemployed for all muses it should be stated that over 9,000 organized textile ©/gBitaisd*jLft#elb»d*f@rere involved in a strike pending on March 30 were included in the aggregate number reported as unemployed on that date. 280 SOCIAL INSURANCE. [Feb. during the winter of 1907-1908 was rather more severe than that of the winter of 1914-1915, when the corresponding percentage for the close of December, 1914, was 14.9, and for the close of March, 1915, was 12.8. Another significant fact brought out by the percentages is that the per- centages for the close of December and March in each year are uniformly higher than the corresponding percentages for the close of June and September of the respective years. This fluctuation represents seasonal inactivity which is confined largely to the building trades. B. Causes of Unemployment. In Table II an endeavor has been made to analyze the unemployment statistics so as to show the relative weight which the number of unem- ployed for any single cause bears in the aggregate number of unemployed. Table II. — Percentage Unemployed, 1908-1916: By Causes. Qtjartbhs Ending — All Causes. Lack of Work or Material. Unfavor- able Weather. Strikes or Lockouts, Dis- ability. Other March 31, 1908, . June 30, 1908, . September 30, 1908, December 31, 1908, March 31, 1909, . June 30, 1909, September 30, 1909, December 31, 1909, March 31, 1910, . June 30, 1910, September 30, 1910, December 31, 1910, March 31, 1911, June 30, 1911, . September 30, 1911, December 30,' 1911, March 30," 1912, . June 29," 1912, . September 30, 1912, December 31, 1912, March 31, 1913, . June 30, 19131 September 30, 1913, December 31, 1913, March 31, 1914, . June 30, 1914, . September 30, 1914, December 31, 1914, March 31, 1915, . June 30, 1915, September 30, 1915, December 31, 1915, March 31, 1916, . June 30, 1916, September 30, 1916, 17.9 14.4 10.6 13.9 11.4 6.4 4.8 9.4 7.1 7.0 6.6 10.2 10.4 6.6 5.6 9.7 14.1 5.3 4.7 9.1 11.3 6.4 6.8 10.4 12.9 9.9 11.0 18.3 16.6 10.6 7,0 8.6 4.2 16.2 12.5 8.7 11.0 9.5 4.6 3.4 4.9 5.3 5.4 4.0 7.3 7.5 4.2 3.7 6.0 5.1 3.4 3.0 6.4 7.3 4; 3 4.3 7.3 9.2 6.9 8.5 14.9 7.6 3.6 4.0 3.9 1.3 1.9 0.2 0.1 20.0 0.5 0.1 ^0.0 0.1 2.4 0.1 20.0 0.1 1.2 0.7 0.2 0.2 1.6 1.0 20.0 0.1 0.6 0.5 0.1 0.5 0.7 0.7 0.3 0.2 1.1 0.4 0.7 0.6 1.1 1.0 0.3 0.1 0.7 0.3 0.5 0.7 0.2 0.3 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.5 0.3 0.1 0.4 0.3 0.6 1.6 0.7 0.6 0.5 0.6 0.7 0.5 0.1 1.0 0.6 1.2 1.5 1.9 0.8 0.3 0.7 1.2 1.2 1.2 1.3 1.2 1.1 1.2 1.4 1.2 1.3 1.2 1.4 1.2 1.2 1.3 1.3 1.3 1.2 1.2 1.4 1.2 1.2 1.4 1.6 1.2 1.5 1.5 1.9 1.5 1.4 1.8 1.6 1.5 1.5 0.1 0.3 0.2 0.5 0.3 Q.3 0.1 0.8 0.2 0.3 0.1 0.4 0.7 0.5 0.2 0.7 0.4 0.2 0.1 0.3 0.5 0.1 0.2 0.5 0.8 0.8 0.3 0.7 0.5 0.2 0.2 0.2 0.2 0.3 0.1 ' Including vacations, temporary shut-downs for repairs, stock-taking, etc. 2 Less than 0.05 per cent. ■ Owing to the fact that the resp4fefea«to'-'lfe»!S^6® 31, 1911, March 31, 1912, and June 30, 1912 — fell on Sunday, the date nhnaan fnr t.hn rotu mn in nnnh no an ,.,0= < ■!.„ J. 1917.] HOUSE — No. 1850. 281 The principal cause of unemployment at the close of each quarter, as shown in the table, is almost invariably lack of work or material, and as has ab-eady been stated, these percentages indicate primarily the condi- tipns of the labor market, and special significance may, therefore, be at- tached to the fluctuations observed. The percentages unemployed on account of weather usually show but little fluctuation except at the end of the last quarter, and occasionally at the close of the first quarter of each year. Except for the high percentage (6.3) unemployed on account of strikes or lockouts at the close of March, 1912 (due principally to a succession of strikes of textile workers, of which those in Lawrence and Lowell are most memorable), there were no considerable fluctuations in these per- centages during the period under consideration. In no other iilstance did the percentage unemployed for this cause exceed 1.9 — the percentage for the close of March, 1916. C. Unemployment in Municipalities. On examination of the percentages unemployed for the leading cities in the State, it appears that in Boston, which city ordinarily includes fully one-third of the total membership reporting each quarter, and in which there is a fairly general representation of all organized industries and occupations in the State, the percentages unemployed correspond rather closely with the percentages unemployed for the State as a whole. The usual increase in unemployment during the winter months, which is reflected in the percentages for the State as a whole, is true also of the percentages for the city of Boston. With few exceptions, however, the other leading cities in the State show no uniform correspondence of this nature; in fact, in those cities which are indu.strially more specialized, practically no uniformity whatever will be observed, the percentages un- employed in any such specialized city rising and falling usually with the rise and fall of the percentages of unemployment in the major industry of that city. In Table III are presented data on which these conclusions are based. Digitized by Microsoft® 282 SOCIAL INSURANCE. [Feb. 05 05 I 5 CO Os t§ 53 CL, y ^o-*oo MI>.0«D WeDNO cot^oo-* eo^-co^- CO»lOt- ta^-^ta n3°°^ to CO CO t~ uscO-iHeS r-io-^oj 1-H CO cot- t--*03W cooDt-oa -j cow* Tl^cO^-N COU3COU3 toi-Hcgio cot- OS l>- «iOO0t- ^ocoo wscocm" lr~(N(M(0 C0CM"<*H«O OOiO-^t* ^^^co t-.i-'C^t^ t'-'^ 1(3 to eo000 T-tOi-'J'OO loot--* co-^eocq ' '«^ iOr-ipqos COCOi-HM =o-=,g3 ■*■-««-< CO C0MC««O COM'^t- »OTtl(MO» co«a>-ijf (M— l-^JICJ COW-HO U3iq<01^ ■*ooo»o OeOOON MiOMOi eq-^t^eo S^'-S intNOco 00-*-* 10 00 -OP 00 CO SSSi? 1 CQ C<7 CO ■^1-HW)0 ^-l-^lCl-^ ooomu:i Oaeooi^ 00 CM t- 10 NOTtieO ■^OSkCt* mcot-t* GO CO oa 00 00«O-*'*t «00O00 ^00-*t- 00-HO>t- 2 oe-^oto W— lOQO COCOOO oa>u30 COCMiQO) OOt-'*C-CM go^oi QOt*aoo> O-JSOWS Ji OiM«OM OOlOi-H>. -(.-HUSrH 0-*0t^ i-lOOCI ocoeoio t»WOSO fgS33 r-iococo osr-c--* eoeoooo =,^00 coooo—t •^1*C»OCO l-t l-HCO ffi 1 ^"'"■2 (MCOU3-* eOUiiO'^ OTt(— ir^ eOi-t"*— 1 COCfl-*-* WOCOCO M«i-1CO cocoeqcq Ob-C^CS t-cqeoa>o (MIOIOW5 tOCOOOf-t . Moeowsw ■^eoeo-^" t-ltSi-ICO o-«(;oQeo t-l>lCCO ooeoco OOtJHCOIO co-Tjt-^eo dsas OS— t CON i-;co^Oi 00 CO 10 03 i-(00O.-i ^-■*«ooo 10 CO OS -"H I>IOCO»H t-00»U3 i-HOt-Iu3 0) » OSTtitOOa t^TlJoflO ^coTiJoi rHOtOCQ oeoifsos i-jeot-i-H 2* US-* OS CO-* CO-* 1-^' to too aoaoco CMoi^'oo i 1 » "'"'2 ill III! Ml •25S If _OS'~' 2a ^osc^co lill 2" 4|| ^ •2s ^h3 CO 1917.] HOUSE — No. 1850. 283 CO-*CC 00-«; odoicq 1-1 -tt* coo CftOOO oooo iOTjfCO •teuton 00 -^i*! cqocDua OOOM i-ieo»c 16.1 8.1 3.8 2.3 ^COO co»-ii-i OC5«M ^lOOO t^"*OQ CJCOM 27.6 12.7 7.6 i.g COOO ocdco 13.9 12.1 6.8 9.5 eoasoso COOCo^OO «5«OJ COTtHCC March 31, 191^, June 30, 1915, . September 30, 1915, . December 31, 1915, . to" to 1 g a I 0,0 5,§ eg p, - as II Si .'3 oS.s a S.t; s-2 rs ^^j! a ^■a « g 01 S's)^ a ° 5 .1 .a a 9 S « St.. g t, o S ja |0 +^+3 - •eJ3 ii»ta§ ■It; o CO o ° 013 C.92 a » a ::3"-^ OJ ft o Q,^ a 5^- §^ III-- go SS'S a 9j QJ ^ Qj S QJ 5 ^■^ aS 0.S nS l«£§2-g,a2a3gSg 3-9 fta.gS.S.S'S.S ^.s ^ - - o" -g- fyt^H^-bM Microsoft® ■a js a S a Si 284 SOCIAL INSUKANCE. [Feb. D. Unemployment in Vakious Industries. The percentages unemployed in the several industries do not correspond closely with the percentages for aU industries, except in the case of the building trades, which include each quarter a fairly large proportion of the aggregate membership represented by the returns; and for aU of the principal industries there may be noted a wide range of unemployment. In the following table are shown, for the period under consideration, the percentages unemployed in the six leading industries at the close of the respective quarters. Table IV. — Percentage of Membership Unemployed (All Causes) at the Close of Each Quarter, 1908-1916: By Principal Industries. Boot and Trans- portation (Steam and Electric). Iron and Printing QuARTEBS Ending — AU In- dustries. Building Trades. Shoe Manufac- Textiles. Steel Manufac- and Allied turing. turing. Trades. March 31, 1908, . 17.9 25.2 8.0 43.9 13.3 16.6 9.0 June 30, 1908,' . 14.4 18.3 18.2 13.6 8.9 17.8 10.5 September 30, 1908, . 10.6 9.3 17.1 15.5 4.8 16.0 12.6 December 31, 1908, . 13.9 21.2 6.4 20.9 5.7 16.3 9.4 March 31, 1909, . 11.4 18.5 12.8 6.7' 4.3 9.8 6.4 June 30, 1909, . 6.4 5.0 8.0 6.9 3.7 7.6 5.6 September 30, 1909, . 4.8 3.1 7.1 5.1 2.9 3.5 4.4 December 31, 1909, . 9.4 17.8 3.3 12.6 2.2 10.9 3.6 March 31, 1910, . 7.1 8.9 7.4 8.7 5.2 4.2 3.6 June 30, 1910, . 7.0 4.2 9.6 17.9 4.9 3.9 3.8 September 30, 1910, . 5.6 4.5 7.9 7.5 3.1 5.0 3.7 Der,ember31, 1910, . 10.2 18.0 5.0 8.6 4.0 14.3 4.0 March 31, 1911, . 10.4 19.3 12.0 9.7 4.1 6.3 4.6 June 30, 1911, . 6.6 6.4 4.4 21.3 2.8 13.4 4.5 September 30, 1911, . 5.6 5.0 4.5 11.9 2.4 7.5 6.6 December 30,1 ign, 9.7 20.9 2.3 7.5 3.0 12.6 6.0 March 30, 11912, June 29,'i 1912, . September 30, 1912, . 14.12 17.0 13.9 29.12 1.9 7.8 5.7 5.3 2.7 8.3 2.4 2.6 10.7 6.4 4.7 2.5 9.2 5.3 1.9- 10.5 3.9 December 31, 1912, 9.1 14.9 4.6 12.9 3.2 11.9 3.7 March 31, 1913, . 11.3 13.4 14.9 14.7 3.9 7.4 2.9 June 30, 1913, . 6.4 7.9 5.5 12.8 2.5 9.2 >4.5 September 30, 1913, 6.8 9.2 • 6.2 13.0 2.1 8.1 4.2 December 31, 1913, 10.4 23.9 4.0 5.9 4.1 18.2 5.0 March 31, 1914, 12.9 29.7 14.4 5.1 3.6 11.5 5.0 June 30, 1914, . 9.9 12.4- 12.9 6.4 3.5 13.1 9.8 September 30, 1914, 11.0 13.8 13.3 11.6 4.5 13.8 7.8 December 31, 1914, 18.3 33.8 14.7 21.2 6.8 18.5 12.1 March 31, 1915, . 16.6 26.3 22.4 10.1 8.8 11.8 9.8 June 30, 1915, . 10.6 13.2 10.9 6.9 4.4 12.2 10.5 September 30, 1915, . 7.0 8.5 5.5 3.6 3.2 16. 2> 5.7 December 31, 1915, 8.6 17.6 2.2 4.0 7.0 12. 3> 5.9 March 31, 1916, . 8.6 22.0 5.1 4.3 3.2 5.4 7.9 June 30, 1916, . 4.2 7.6 3.4 3.1 3.8 2.1 3.0 September 30, 1916, . 3.9 3.7 4.7 2.2 4.2 1.6 3.7 Mean, 9.1 13.1 7.9 8.7 3.8 10. S 5.4 Average, . 9.4 13.9 8.9 11.2 4.3 10.5 6.1 ■ Owing to the tact that the respective dates — December 31, 1911, March 31, 1912, and June 30, 1912 — fell on Sunday, the date chosen for the returns in each case was the day preceding. ' In explanation of this unusually high percentage unemployed for all causes it should be stated that over 9,000 organized textile worlcers in Lowell who were involved in a strike pending on March 30 were included in the aggregate number reported as unemployed on that date. • This high percentage was due principally to the unemployment of a very large number of machinists in Worcester who were on strike. With the strikers eliminated the percentage for this group of trades would have been only 3.8 for the close of September, and 3.3 for the close of December, 1915 . Digitized by Microsoft® 1917.J HOUSE — No. 1850. 285 In the building trades the highest percentage reported unemployed during the period was 33.8 on December 31, 1914. Other percentages exceeding 20.0 were 29.7 on March 31, 1914; 26.3 on March 31, 1915; 25.2 on March 31, 1908; 23.9 on December 31, 1913; 22.0 on March 31^ 1916; 21.2 on December 31, 1908; and 20.9 on December 30, 1911. The influence of the weather conditions is more marked in the building trades than in any group of trades, and it will be observed that in this group the highest percentages unemployed are either for the close of December or March. During periods of depression, it is also true that conditions in the building trades are by no means satisfactory even during the summer and fall. In boot and shoe manufacturing, the highest percentages unemployed were 22.4 on March 31, 1915; 18.2 on June 30, 1908; and 17.1 on September 30, 1908; but for no other quarter during the period did the percentage unemployed in this industry exceed 14.9 (March 31, 1913). Usually it will be observed that there is a slack period in the spring and another in the fall of the year, representing what is commonly known in the trade as "between seasons." In the textik industry, the highest percentage unemployed during the period was 43.9 on March 30, 1908; other high percentages were reported as follows: 29.1 on March 30, 1912; 21.3 on June 30, 1911; 21.2 on Decem- ber 31, 1914; and 20.9 on December 31, 1908. In this industry the effects of the industrial depression in 1907 and 1908 were very keenly felt, and, although there was some recovery during the second and third quarters of the year 1908, the high percentage, 20.9, at the close of December, 1908, indicated that the recovery was by no means complete even at that time. The very high percentage (29.1) on March 30, 1912, was due to the un- employment of a large number of textile workers who were involved in strikes on that date. In this connection, it should be pointed out that, owing to the comparatively small percentage organized of the aggregate number of textile workers in Massachusetts, the returns for this industry are, admittedly, very meagre. Organizations which report, however, are composed principally of the more skilled workmen in this industry on the progress of whose work depend those processes on which unskilled labor is principally employed. The facts, therefore, may be taken as represent- ative of general conditions in the industry from time to time, but no claim is made, that they constitute an absolute index of the amount of unemployment throughout the entire industry at any one time. For transportation, in which group are included steam and electric railway service, the only high percentages unemployed were 13.3 on March 31, 1908; 8.9 on June 30, 1908; and 8.8 on March 31, 1915. Ordi- narily raih-oad employees are rather continuously employed, and the percentages unemployed are, therefore, usually low and fairly constant. Furthermore, it is a practice of the railway companies to place their em- ployees on "short time" rather than to reduce the forcff whenever condi- tions are such as to necessitate a curtailing of expenses during periods of Digitized by Microsoft® 286 SOCIAL INSURANCE. [Feb. depression. For this reason the comparative percentages do not indicate fully the measure of unemployment in this industry during such periods. In the iron and steel manufacturing industries, the percentages unem- ployed were high during the entire year 1908, and again during the de- pression of 1914-1915. On the other hand, since the outbreak of the European war in 1914, the great demand for munition workers has resulted in reducing the percentages unemployed almost to a minimum, and, except for a certain amount of unemployment due to strikes, the effects of, which at the close of the third and fourth quarters in 1915 were reflected in fairly high percentages unemployed in this industry, highly satisfactory conditions have maintained. In the printing and allied trades, high percentages were reported as unemployed at the close of each quarter 'n 1908, and again during the depression in 1914-1915, but an examination of the unemployment per- centages for the period 1909 to the close of 1914 shows a comparatively uniform percentage unemployed at the close of each of the respective quarters. E. Unemployment in the Vaeious Occupations. An examination of the statistics of unemployment in the various oc- cupations discloses a very wide range in the percentages unemployed. In the same occupation there may be at one time practically no unem- 'ployment among the members of the organizations reporting, while at another time the percentage may reach a high figure. A comparison of the percentages for one occupation with those of another may also disclose a wide variation in the amount of unemployment in the occupations compared. Again, in certain occupations the percentages unemployed may continue fairly constant for a long period, then abruptly rise to a high point. For the occupations in the building trades (carpenters, bricklayers, painters, etc.) much seasonal imemployment is usually re- ported at the close of March and December in each year. While the percentages of unemployment by occupations may prove of comparative value in certain instances, they should be used with caution, particularly where comparisons are made between percentages in those occupations for which, owing to the small number of employees reporting, the returns may not have been properly representative. On the whole, comparisons based on percentages unemployed in the several more im- portant industries are to be recommended in preference to comparisons on an occupational basis. Percentages in detail by occupations for the period 1908-1916 are pre- sented in Table V below. Digitized by Microsoft® I»1/.J JblUUWE — JNo. 1850. 287 cq 05 C? ^ ^ o s !S g •it* -« ^ a A 1^ 1 to .w. Co g •c* •2 ftn C to -§ f 1^ '^ ^ ^'^ ^"^ ri^^ ^ ^ ^f^ '^ *n n ai w^ 06 1^ e^ CO to cce^o 04 -^uif-^eo 06 1-* 06 ei -<«ooMoOi-4e4(MU3eoc4cooOr-4>-i^c<4ooOv-tooMoaoi>-Loaiu3U W3C050fHCC«00DOO00»- IOOOiO.-C^r ' OiCqiOO^Ttt t>-0'noo>-n>4icif-ioqc^eci-imco<-4c<30C-it^Oto<-H ^-t-OOOOsO^MOO,l-lOOaiOS^nl-lmo^^Cfl^Ol-^^OOOi^OO«^-OOCCOO^- »HO00^0000MOT-HTj<'*ONffQCl^ oocooor-Oioeoot^osioooit^oot^OTttMNQDcccqususcoO'^as^rQOiooio 30c^kOcoci-<0^t^OO^t>-^U30>00 ■^'^th-' coe40»t}403«>ooot^ct«t~-4400oo>n'«-4 to-^Mioeo <0i0C(IMi-(N^000aT-4 M 00 th ec M 03 in '-I CO o co a 2 . cu .■a m ■ S 2 a oj _ (S S S .Pi .SB . . -^'"1!ll|gi|||i:ii:ll!l|g|||SI i^nfi 288 SOCIAL INSURANCE. [Feb. Ot-ioeooooosoOOec^oot*^>- Us e««OMMWmi-c*t-«0t^<000^^CC'^M0S00lCMCOOT|4ta wu^«o^loa^oa^H^^cl^o^-co□D^coo>^>cou^01^aal>^e40>o^«oooo>u^ I ecus liO« OdOit^'^'tft^^OvHAUSOCO^ ■4 00 CO oo aa OS C4 CO c^ o o i 1-1 N ■4cooc>ir<^oo>c^ aei c40co-^e«]->4eqoOTt4coeo-«eQi>ieS'«THt^oo>ou3v-««o«ot~u3eo e4coc40>oo»ustQoe^^eQOis^otO'>i«c4^e4vHt^co u^r^u^cooooo^ccTt•cQaoou^^TK^oo^>^-aako^f9l^3oovHoo1-l^»rHA^-oa«o t^COTl|C^lOU3«OCOt»OOi-IOOr^«0-^Ot~i^U3COCO "-« lO -ijt 1-t lO -^ CO »- CO ^Oe u3c<]m*44eot'>oatr«cOr-(xnoot>*-ia>io«&ec>Of-4dot~>o «n ,2 .E&1 ;&S • -SSla --l^-. -all 1 11 . 'ja ' S9 ' 13 ) ^ g3 03 O O fh h m fe P n ^ fe 11-3 III '^^ illl Q'a ii:ai|| ^5 • p. ^ -^ ■ • iu « (D d °° § M« gSS 0.S8 I'S mmii-^Mm 1917.] HOUSE — No. 1850. 289 a 1" 03 g" «co'*M'-l,iO ^H CI C 05 COlCCOi-HCi iTtH^coMO»-'N-i>-oco>ftcaooo»c.(o- OS" rt-iOt^^HOi:oE^»f:iosoocoMOmiooc«iOffC-^«3oco>««oooO!Nr-coiiQO-Oi-<>-^»-;Ci ^T-H-iJHC'l'— 1 C'lC^C^IN'^'— I •—I si h. P to M i O O (H M rf I . :i| J S Ha ■■fts i i E -3 S -^ ^ " g A & '^ ^ »-■ -< -, CJ ci of) Q'' X 'M (- -J '3 O.^ S 5 Am® S 03 03 a m e ^ w) "^ S ^ H « o 2 C3 -^^ O p- ;S =3 0) V . .a an ao "~~ — -■ -^ ^ »! / r' ■'i ■- '-~ " * •<• ** / «!.-; 2v: .-..r .--— ■ ..r.. / <' -■ '" / 1 '■■=' -v^- '—.: "^ ?■** -- ^ J r;^ :.~- ~' --^ "'- — — — -X .__' "N" =^ •«< S;: «^ / m — •-: r.' > \ % > ' ( -•'- -■- ■'- u.-. ^v^ ■^■. '■■^ *V "»^ ^-' '■" ) 1 J 1 1 1 ? rf* i/ ^•^ \ ^- :;: _.— ^■ V V. u-S. X 1 — ■ — — -■■- "•- S5 ^ I NEW YORK STATE— all causes NFW YOBK <;TATF — r*l-l- ""=^= EXCLUSIVE OF INtW YUKr- blAlt. (labor DISPUTES & DISABILITY MASSACHUSETTS — all causes MASSACHUSETTS — lack of work UNITED KINGDOM — lack of work GERMANY — lack of WORK ,.- .-T- --• r:-- •■- — • ~" 7 ? ; "~~ -■"- ■■- iiv? ^■i* ^ •^ -y 5^ \ "ST" . r.-.T -.rr-. rr.-. r.-.T ■■'■'■■■ •«N •^ ( ~ ^._. "■- •- -• -- -.■- .•^: .-:^ '<" v.. \ ) ..- -.-. r;.-^ --> ' ^ *■■' -^ ....• 1 y \ -^ ~" ri n^ -^i «^ i ■X '' ^ > ^. ;.> .... ^ ' , (71 — ^.- -- i ■•'■ ^ ■^ *^' ^; — ,:^ ■'■: .■•■■ *'* / i ~" ill 1 ■~ ~*7 r.-*' s s \ — __^ ,-■'• ■■.r. -■» ^ 2 ' N I— ; ~~ _^, ...r.-. ^ ^ ^ \ 4 "■ V- ■;i. u J. J ^— ^ 5~ at 5"~ o- M C s ■ o ^ o ^ n r >» 5 ■« =) « S ' s rH ■•1 2 » x> »t" '-^ to this rule is found at a high point reached at the close of March, 1912, by the curve for all causes, due to the unemployment directly and m- directly resulting from the series of textile strikes to which reference has •^ , Digitized by Microsoft® been made. ^ ^ 292 SOCIAL INSURANCE. [Feb. While no comparison of the general level of the several curves can be safely made, owing to the varying nature of the returns on which they have been based, it may be proper to add that the generally high level of the two curves for New York State has been attributed to the relatively large representation in the returns for that State of certain trades in which usually there is apt to be considerable unemployment, as, for example, in the garment trades in New York City. For purposes of showing the fluctuations in unemplo3Tnent in the prin- cipal industries of the State, the chart appearing on the following page has been prepared. In general, the curves for the six principal industries follow the trend of the curve representing the fluctuations of unemploy- ment in all industries. For convenience in making the comparison, the curve representing unemployment in all industries for all causes has been again reproduced on the second chart, and it appears at the bottom of the chart. Attention may be called to the more significant facts brought out by the fluctuations in the curves for the respective industries. Thus in the case of the building trades, one will observe the effect of seasonal inactivity due to unemployment during the winter months. In boot and shoe manu- facturing, "between seasons" periods are represented by high points occurring quite uniformly in the spring of the year. In textile manufac- turing no special uniformity in fluctuations will be observed. The high point in the spring of 1912 represents for this industry the unemplojrment due to strikes in the principal textile centers to which reference has already been made. The curve representing unemployment in transportation, with the exception of fluctuations upward at times of depression, shows uni- formly a low percentage unemployed. In iron and steel manufacturing, marked fluctuations may be noted, and the effect of industrial depression likewise is to be observed. In the print- ing and allied trades, as is true of transportation, no marked fluctuations are to be observed, except those which are due to periods of industrial depression. By way of general summary, it may be stated that the transportation industry, and the printing and allied trades show usually less imemploy- ment than any of the other trades, and even in times of depression, the proportion of wage-earners thrown out of work as represented by the percentages and by the upward fluctuatioiis in the curves, is by no means as large as in the case of the other industries. These facts throw some light upon the question as to which industry should be the first to receive consideration, were the State to establish any system of unemployment insurance, or to provide for the regularization of industry, and, if the returns made by labor organizations are to be taken as representative of conditions' generally thi-oughout the Commonwealth, the industries which should receive first consideration, in the order of their relative importance from the standpoint of the unemployment problem, would appear to be Digitized by Microsoft® 1917.] HOUSE — No. 1850. 293 Chart II, — Percentages of Trade Union Members Unemployed in Massa^ chusetts, 1908-1915: By Principal Industries. 1908 tB09 lajo 1911 1912 I9l3 191-4 1915 1916 1917 BUILdiNC TRADES , \ A \ \ \ \ \ j ^ T \ I \ V \ . \ 1 \ k V \ V \ / \ \ , \i \ V \ W \/ 1906 1909 1910 1911 1912 IQI3 t9l'1 ir>i5 1916 1317 1 ! i BOOT & SHOE M^NurACTi..niNG __ J ^ 1 A- -Tx 1 hr La-jA— N-^ \ A /^;A / \ -^ ^ / ^ \ Vk ^ 1 -s i 1 i 1 1 1 TEXTILE MANUFACTURING \ I y 1 A j w A /\ '^-v / \ / ^\ J \ / \ / \ W / ^ \ 1 TRANSPORTATION steam a electric \ V y\ 1 ■ ^^ ^^^ • IRON & STEEL manufacturino y 1 \-J \/^ \ , \ I \N \r^ vl sy \ 1 V » PRINTING a ALLIED TRADES y\ J S V /- l^ J VJ ISoa 1909 ISIO 1911 \3\Z 3 I9I4 1915 1916 1917 l9oa 1909 ISIO 1911 1912 1313 1914 1915 1916 1917 1 1 ALL INDUSTRIES \ k , / \ J -A A , A ' i ^ W ^-7 W \J |90fl 1909 1910 1911 1912 1913 1914 1915 1916 1917 as follows: (1) BuUding trades; (2) textHe manufacturing; (3) boot and shoe manufacturing;l(4) iron and steel manufacturing; (5) printing and allied trades, and (6)itransportation. Digitized by Microsoft® 294 SOCIAL INSURANCE. [Feb. Ghakt III. — Relation between Unemployment and Crimes against PropeHy. Note. - In the chart below, the ourve with reference to sentences for crimes against property has been superimposed upon the curve representine the fluctuations mune;npIoyment donng the period 1908-19^5. It ^U be observed that the fluctuations in each of the two curves ^.r^ pond in a measure, indicating that there is some relationship between ""■"\°'''''?'/°ir^'", ployment. It is a matter of general knowledge that daring t,mea of depression he numb« of arrests on account of vagrancy and minor thefts is much greater than f """f ^XcwTficlw^n The sentences for these causes (vagrancy and minor thefts) are included m the "1'';;"° "Sentences for crimes against property," but the data with reference to such ="-- «« °° classified in such detail as .0 permit of a segregarion of the sentences for v|^«°«y ^"^ imnor thefts. In making the comparison, therefore, between the two curves, it should be borne m mind that the correspondence in fluctuations U merely indicative, not conclu^ve, evidence as to the relationship between crime and unemployment. .Sis' A' TE/<^CE-S aooo A s^ 7000 i \ i GOOO < ,1 if ^ \ Tl^A/T£r '^^^ "22^ sj^ * sooo \ i 1 \ 4000 \ !/ \ \ il \ \ 3000 \ \ 1 \ ~<^2'i \!.oy/^t^ •'^^ .<-f-' \ Zooo ^'< >^ /ooo uA/er7ft.oy£D /e IS 14 /3 /z // /o 9 8 7 of-work benefit may also be made in the form of immediate payments for travel or removal, assistance towards rent, or of gifts in kind. Members refusing other work offered them, receiving poor-relief or sick-aid, and members in prison are granted no benefits. Under the old law recognized associations with a yearly minimum membership of 50 received for their special unemployment fund an annual State subsidy of one-third the total amount of premiums paid by members up to a maximum limit of 250,000 kroner ($67,000), while the communal and municipal reimbursements amounted each to one-sixth of such premiums. Under the new law these subsidies are increased to one-half and one-third, respectively; provided that, if necessary, the State grant may be reduced or withheld in any year so as not to exceed the total of 999,538 kroner ($267,876) given in 1913-1914; and that the amoimt paid by the communes to societies within their districts may equal one-third of total contributions of full members. In 1914 the dues paid by 139,500 members amounted to 1,658,648 kroner ($444,518) and the 57 recognized associations received in that year a communal subsidy of 448,701 kroner ($120,252). The supervising authority is vested in a salaried Government Inspector under the Minister of the Interior. This inspector is also Chairman of the Insurance j Commission. Its six representatives, of whom four must be members of the Danish Parliament, are selected from among the delegates sent to the annual meeting by each association. They hold oflBce for six years, three retiring every third year. Germany. The Imperial Government has thus far not undertaken insurance against unemployment, and when the subject came up for discussion in the Keichs- tag, the Government was not favorable to schemes of assisted insurance. The question was also discussed in the parliaments of some of the Federated States, but proposals made in 1910 were rejected by Saxony and Wilrtemberg. The general feeling is that the Imperial Government should take the initiative in measures regarding this branch of insurance. A number of large German municipalities adopted the Ghent system of unemploy- ment insurance, or a modified form of it, and their schemes are carried out in close connection with labor exchanges. Organizations have existed in Cologne since 1896; Leipsic, since 1905; Strassburg, since 1906; Erlangen and Mtihlhausen since 1909; Freiburg, since 1910; Heidelberg and Niirnberg, since 1911. Each organization has its own method of administration and assistance. Plans for municipal unemployment insurance are under consideration in Berlin, Hamburg, Munich, and other cities. Bel(;iuiii. Voluntary insurance against unemployment is assisted in Belgium by the communes, the t>rovinces, and the State through subsidies to trade unions giving out-of-work benefits. This systeni of liberal subsidies was first developed in 1901 in Ghent, and has been adopted since then by all municipalities with a population of over 35,000. Later the provinces joined in the scheme, and since 1907 the State has granted a small subsidy to insurance effected through communal unemployment funds and trade unions affiliated to communal funds, and to recognized unaffiliated associations giving out-of-work benefits. By order of January 30, 1911, a permanent committee of 15 was established under the supervision of the Minister of Industry and Labor. The members of this committee are chosen from among the recognized trade imions, the labor exchanges, and the institutions insuring against involuntary unemployment. They hold ofi&ce for four years and may meet four times a year. The function of this committee is to assist the Government in advising and developing the most Digitized by Microsoft® 1917.] HOUSE — No. 1850. 309 effective means of guarding against the consequences of involuntary unemploy- ment. The communal funds pay subsidies through the trade unions, with the exception of LiSge, where the grant is paid to individual trade-unionists after the system adopted at Ghent. Since the aistribution is effected through the unions, the admin- istrative cost for the communal schemes is comparatively low. Each province has its own method of distributing its subsidy. The State grant is in proportion to the unemployment beneBt disbursed. It usually equals 60 per cent, but cannot exceed 100 per cent, of the original allowance paid and is not paid to the same person for more than 60 days in any one year. France. Unemployment insurance in France is assisted through existing trade unions in about 14 departments, 86 communes, and a number of large munic- ipalities. Among the latter are Paris, Lyons, Limoges, Dijon, Armentiferes, and Roubaix, some of which adopted the Ghent insurance system. The State has granted a small annual subsidy since 1905 to unemployment insurance associations. As a temporary war measure a National Fund for Unemployment was proposed on August 20, 1914, and estabh'shed together with communal and departmental funds, by three Acts in 1914. In 1914, also, a central labor exchange for unemployed and refugees was opened. State grants, fixed at 33 per cent of the benefits dis- bursed, may be paid out of the National Fund to these other funds, provided the communities have a population of at least 10,000. It is expected that in the future better industrial conditions will make the continuance of this measure unnecessary. For the present, individual benefits during periods of unemployment must not be more than 1.25 francs (S0.24) for every unemployed head of a family, and 50 centimes ($0,10) for every dependent or out-of-work person living in the family. Netherlands. Since 1906 insurance against unemployment in. the Netherlands has been assisted (following the Ghent plan) by at least 25 municipalities, includ- ing Amsterdam, The Hague, Leyden, Zwolle, Utrecht, Haarlem, and others. As early as 1907 the Government proposed payment of a subsidy to assisted insurance; but no action was taken in the matter at the time. In 1914, however, the State contributed for this purpose 555,672.63 florins ($223,380) and voted' in 1915 to spend 12,297,525 florins ($4,943,605). In 1914 there were 28 comfaunal and 306 affiliated and other insurance funds against unemployment, with a total membership of 34,533. The benefits paid in that year amounted to 1,331,010.78 florins ($535,066). Twenty-nine labor exchanges in the kingdom found in 1914 employment for 46,055 men and 39,195 women. Norway. In 1904 a commission was appointed to make a preliminary study of unemployment insurance in Norway. On June 12, 1906, an act, modelled on the Ghent system, was passed to take effect October 1, 1906, subject to revision in 1911, granting State subsidies to voluntary trade unions providing out-of-work benefits. The act was amended on July 25, 1908, in respect of increase in the rates of State subsidy. On August 15, 1911, the act was renewed to remain in force until December 31, 1914. It was again renewed August 6, 1915. The act applies to all trade unions which grant insurance. against unemployment to their members, as well as to recognized trade unions, if one-half of their revenue consists of members' contributions paid for at least 26 successive weeks. Any wage-earner desiring insurance against unemployment, and following the same trade as a union member, must be admitted to regular membership, irrespective of his objection to the general policy of the trade union. But such a member can neither vote nor par- ticipate in administering funds; and can be required to pay from 10 to 25 per cent more toward the cost of administration. The maximum limit of out-of-work benefit is one-half the usual normal wage, and is paid only to members of six months' standing. Payment begins on the third day of unemplojrment and continues for not more than 90 days in the year to the same person. It is limited by law to Norwegian citizens or to those who have been residents in Norway for five consecutive years; to insured persons whoso Digitized by Microsoft® 310 SOCIAL INSURANCE. [Feb. unemployment is due only to want of work; and to -wage-earners who are members of not more than one aaaociation. No allowance is paid during unemployment caused by strike or lock-out; or to members refusing work offered them by the administration of the association. The original State subsidy of one-quarter of the annual unemployment benefit disbursed, was raised by amendment in 1908 to one-third of the amount. This sum is paid in the frrst instance by the central government, but two-thirds of the grant are annually recovered from the local, rural, or urban authorities, except in the case of workmen employed on public railways, roads, and similar works. The trade unions are closely allied in their control of unemployment with existing public labor exchanges. The administration, in turn, is controlled by communal insurance commissioners elected for a term of three years, and supervised by the central Government. In 1913, 18 trade unions received from 30,329 members fees amounting to 211,392 kroner ($56,653) ; communal subsidies of 35,528 kroner ($9,522), and a State grant of 7,612 kroner ($2,040)^ Out-of-work benefits amounting to 180,922 kroner ($48,487) were paid to 5,027 members for 98,395 days of unemployment. The cost of admmistration in that year was 6,744 kroner ($1,807). Italy. A few large municipalities in Italy .grant subsidies to trade associations having unemployment insurance funds. In Milan a privately endowed philan- thropic fund, the Humanitarian Society, has paid an unemployment subsidy since 1905. Padua first voted a subsidy in 1909; Brescia, in 1910; Turin, Modena, and other towns are having proposals under discussion. In Jxily, 1910, a bill passed the Italian Chamber proposing a State subsidy of 4000 lire (J>772) to associations having at least 50 members and paying out-of-work benefits. This bill passed the Senate in October, 1910, but no official statistics are available relative to its operation. The subsidy paid at Milan is at the rate of 50% of the out-of-work benefit which may be given for 60 days in the year. The system is managed by a committee of four members, two representing the Humanitarian Society, and two the a£Bliated. associations. Switzerland. Schemes of compulsory insurance against unemployment were proposed in the Town Council of Zilrich in 1898, but were not then adopted. On December 21, 1914, the Cantonal Council of Ziirich, however, voted a grant of 15,000 francs ($2,895) for the assistance of trade union vmemployment funds. I^roposals relative to such insurance were made to the legislative body at Basle, and a bil^ was passed by the Great Council in 1899, but on being submitted to referendum this bill was decisively rejected. A private scheme of unemployment insurance, established in 1901 by the Basle Labor Federation had to be abandoned ultimately. St. Gall is the only place where insurance against unemployment was made compulsory. It became operative in 1894, and was continued for some years. As it was administered by the Poor Law Department and therefore connected in the minds of the people with poor-relief, the better class of workmen bitterly opposed the plan. This resulted in its failure and its early abandonment. In 1904 Geneva founded a scheme on the Berne model to be operated in connection with the labor office, but the city finally relinquished it as the workmen did not respond to it and trade-unions were hostile. Subsidized unemployment insurance has been more favorably accepted in Switzerland. The first municipal unemployment insurance fund was established by Berne in April, 1893. This fund is connected with the labor exchange and both are administered by a committee of nine members, holding office for fotu: years. The plan is restricted to workmen under 60 years of age, who are Swiss citizens and residents of Berne. The rate, of contribution is low, and the same rate is paid by skilled and unskilled workers. Benefit is received for not more than 60 days in a year. It is paid for vmemployment only during the winter months, and is somewhat higher for members with dependents. No benefit is granted for the Digitized by Microsoft® 1917.] HOUSE — No. 1850. 311 i!- uTa °* unemployment. In Geneva in 1909 the scheme adopted in 1904, ■which had utterly failed, was replaced by one following the Strassburg example, in accordance with which assistance is guaranteed for ten years at the rate of 60% of benefits disbursed, to associations providing insurance against unemployment. . Their members must have resided at least one year in Geneva, and benefits are paid to the same person for not more than 60 days in any one year. After the earlier failures of 1899 and 1901 the cantonal government of Basle again considered the unemployment problem. The Great Council, after considering preliminary pro- posals, enacted the law of December 16, 1909, establishing a State Unemployment Fund, to take effect May 2, 1910. Any wage-earner over 17 years of age may insure himself if he has resided at Basle for at least six months previous, and if he is npt already a member of a private unemployment fund. Contributions vary according to work, earnings, and family circumstances and benefits are in proportion to these varying rates of contribution. From the fourth day of involuntary unemployment full benefit of not more than two-thirds of the normal wage is paid for 35 days; for the remaining 35 days, half-benefit is paid. A special traveling benefit is paid to those taking up work offered them outside the canton. The State defrays the cost of establishing and administering the Fund, and grants an annual subsidy limited to 35,000 francs ($6,755) for the first three years. The Fund is controlled by a committee of eleven members, who hold office for three years and who are under the supervision of the Department of the Interior. The Executive Council of Basle appoints six of these members, and the other five are chosen by the insured persons from among themselves. Members receive two francs ($0.39) for every meeting attended. The Fund grants two kinds of subsidies to voluntary associations providing imemployment insurance. A subsidy of from 20 to 40% of membership dues is paid into a reserve fund providing for periods of crises. If this reserve fund exceeds a certain fixed limit, the subsidy may be suspended. The other subsidy of from 30 to 60% of out-of-work benefits disbursed may be spent at will by the association for purposes of insurance against unemploy- ment. Payment of this grant may be discontinued if the total property of the association exceeds a certain fixed amount. St. Gall has also paid a small municipal subs'dy since 1905. Of more importance, however, are the measures taken by the Swiss lace and embroidery industry. An employers' association was formed at St. Gall which proposed to subsidize special " crisis funds " providing against industrial depression. The three trade-unions promoted the scheme warmly, so that by December, 1908, fifty such "crisis funds " had been formed. The rates of contribution are slightly lower for women than for men. An allowance is given to the same person from the second day of unemployment up to a maximum of 1.50 francs ($0.29) per day for 50 days in the year. Thus the subsidy paid by the employers' association is 60% of the benefit provided. Appenzell &-Rhin also pays a cantonal subsidy of 50% of unemployment benefit to "crisis funds" in the embroidery industry. Digitized by Microsoft® Date Due ] ! ' Remington Rand nc.Cat. no. 1139, • li , Cornell University Library HD7123.M4 Report of the Special commission on soci 3 1924 002 705 162 Digitized by Microsoft® Digitized by Microsoft® Digitized by IVIicrosoft®