Report, p. 30) remarked upon the fact that where an industry involving a certain amount of skill "brings a large number of workmen into close contact," it seems comparatively "easy to convert the natural craft thus existing into a formal and permanent trade union." In such cases, contiguity and common wage interests may be trusted, perhaps, to make men combine, even without the additional inducement of insurance. But in the building trade (which is one of the trades selected for the English experiment) I suppose the workmen are pretty widely scattered, and usually work in comparatively small groups. It would seem probable that in such a trade, characterised by what has been called "a high degree of decentralisation," the weakening of the insurance motive will have serious effects-far more serious, for instance, than in the engineering trade.

The natural fear which such considerations cannot but suggest is increased when we notice that of late years the unions in the building trades have found it impossible to keep up their numbers. The last figures available are those in the Fourteenth Abstract of Labour Statistics (1911). According to the statistics there given, the unions in the building trades reached their high-water mark in 1900 with 253,452 members (Labourers, 38,926; Others, 214,526). Since then they fell steadily every year, to 163,027 in 1909 (Labourers, 11,894; Others, 151,133). Compare these figures with those of the metal, engineering, and shipbuilding trades, which also fell off a little from the 342,079 of 1900 in the depression that followed, and have fluctuated since, but in 1909 numbered 357,112. There is no reason, I suppose, for imagining any decline in the building trades; indeed, it is often contended that they are growing relatively to our export trades, and that that is a sign of national prosperity. I observe that Sir H. Llewellyn Smith, in a Memorandum on the Bill, estimates the number of those employed now in "building and works of construction" as 1,321,000; while the Second Fiscal Blue Book (1904) gave only 1,133,000 for the building trades, "including lock, key, and gas-fittings makers" (Cd. 2337, p. 436).

It may be urged that many of the miners' unions give neither unemployed nor sick benefit, and that in the textile trades these benefits are small or non-existent, and that nevertheless in neither case do the unions show any signs of decay. But it must be remembered that not only are these industries marked by a high degree of aggregation, so that they don't need other inducements to the same extent, but also that "unemployment " -i.e., total unemployment-is nothing like so common in these

trades. Depression of trade is here largely met by short time all round; so that there is not the same need for unemployment insurance.

I have heard one suggestion by way of consolation. It is that the "labourers" in the building trades have always been in an unfortunate position; that they are very difficult to organise; and that, as a matter of fact, but few of them belong to unions. It has been urged that compulsory insurance will be (on a balance of considerations) a good thing if it improves the position of the labourers, even if it weakens greatly the unions among the more skilled workmen, on the principle of the greatest happiness of the greatest number. But we can hardly expect the unions to see the question in this way.

Before coming to the administration of the Act there is one further question of general policy which needs to be referred to. I mean the grave danger lest Unemployment Insurance should actually increase unemployment; which would not only be in itself a great evil, but would also disturb the actuarial basis. of the proposed scheme. Perhaps I might again refer to what I wrote last December in this JOURNAL (p. 572). It is interesting to see that, in the Bill before us, it is proposed to carry out the suggestion which I then ventured to make, and which probably had occurred to a good many other people, that an allowance should be made to employers who gave continuous employment. Whether the pecuniary inducement is large enough to have the desired effect I should not like to say. And I would like to suggest that employers will hardly care to pay in advance for specified individual workmen (Clause 70, and Memorandum, p. 5). Such an arrangement might quite conceivably interfere with the employer's legitimate control of his works; and it is also rather difficult to see what should be done when an individual workman, for whom the employer had compounded, chose to leave of his own accord to go to another employer during the course of the year. Would it not be possible to allow an employer to compound for a particular number employed every week throughout the year, though not necessarily made up of the same individuals? This would be an analogous (though not, indeed, the same) privilege as that offered (by Clause 73) to employers of casual labour who engage their hands through a Labour Exchange.

Come now to the problem of administration. The more one looks at it the more considerable do the difficulties appear of administering such a measure as is now proposed. Where the

prospective gains are so great, we need not, perhaps, allow ourselves to be deterred: the resources of administration are not yet exhausted, even in Germany. Yet the problems will have to be faced some time or other; and we may as well look at them now, with a view to the possible amendment of the Bill before it becomes law.

We are told by Sir H. Llewellyn Smith's Memorandum that the measure will apply to some 2,421,000 persons. Of these some 462,000 are members of unions-roughly, one in five. Only 350,000, indeed, belong at present to unions providing unemployed benefit other than travelling pay. But suppose we take the larger number in the expectation that all the existing unions in the insured trades will be encouraged by the Act to provide out-of-work benefit. We may perhaps assume that the distribution of out-of-work pay (union pay plus payment from the new fund) to unionists will, in the main, be efficiently and economically effected through the unions. It may, it is true, be noticed that in Ghent-whence we are going to borrow the plan of supplementing the union benefit-"the managers of trade unions are inclined to be somewhat generous in deciding what is voluntary unemployment" (Gibbon, p. 89); and "to make the check more effective," "a secretary-controller," appointed by the authorities of the fund, now "makes personal inquiries into each case, including inquiries at the home of the claimant, and, if necessary, inquiries of neighbours" (p. 88). But leaving the members of unions out of consideration, there will be, roughly, four times as many other workpeople who do not belong to unions, and will have to be dealt with through the Labour Exchanges and the new insurance machinery. And all the perplexities the Labour Exchanges have had hitherto to deal with will be as child's play to what they will have now to tackle.

A claimant for unemployed pay makes his appearance at a Labour Exchange with his insurance book duly stamped for the proper number of weeks. It will then be the duty of the insurance officer to satisfy himself that he did not lose his employment through "misconduct," or leave it "voluntarily, without just cause" [§ 63, (2)], that he is "capable of work" (if not, I suppose he is to be turned over to the Sickness Insurance Fund), and that he is "unable to obtain suitable employment" [§ 62 (3)]. I cannot find it definitely stated in the Bill, but in the Memorandum it is definitely laid down that the test whether they are unable to obtain "suitable employment" is the inability of the Labour Exchange to "find suitable work"

for them (Mem., p. 4). Is, then, the Superintendent of the Labour Exchange to determine the "suitability," or the Insurance Officer? Perhaps they are to be the same person, though this seems hardly likely. If not, the responsibility will certainly have to be definitely placed on one or other pair of shoulders.

And, whoever has to decide this, he will want some indication or guidance as to the meaning of that blessed word "suitable." Has a man a right to be given work at his own trade? The demand will certainly be made, and Parliament had better face it. If Parliament follows the analogy of union out-of-work benefit, it will permit payment to be made, however much work there may be in other trades, so long as a man cannot get employ. ment in his own. And there will be a natural reluctance on the part of a man who has paid his contributions for years in an insured trade to take work in an uninsured trade. I see no provision in the Act to allow men to carry into uninsured trades any vested interests acquired in insured occupations; though this would not seem impossible to arrange. If, however, "suitable" is to mean "in a man's own trade," unemployment insurance (like trade unionism itself) will tend to check the mobility of labour. This will be a rather surprising result for Labour Exchanges to work towards; especially when we remember that their chief advocate in this country, Mr. Beveridge, expressly advocated them in order to increase the "fluidity of labour." "The ideal for practical reform," he told us (Unemployment, p. 237), is "to make reality correspond with the assumption of economic theory." I have always thought that there was a good deal to be said for making the assumptions of economic theory correspond with reality. And I don't know that I regard "mobility" as an altogether satisfactory ideal. So that I should not regard the effect of the Act in tying men more tightly to their original trades as necessarily an argument against it. But permanent membership of a trade is evidently not always easy to reconcile with the fluctuations of modern competitive industry.

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We have so far said nothing as to the relation of "suitability to standard or trade union rates of wages. A trade union member will, of course, be allowed to stick out for the trade union rate. But will the Labour Exchanges insist on a non-unionist taking work in a trade in which there is a union if it is offered to him below the union rate? All that the Bill says (§ 62) is that he shall not be expected to accept an offer "at a rate of wage lower than the rate which he habitually earns when in employ

ment." Apart from the difficulty, formidable enough, of ascertaining what men do habitually earn, there remains the consideration that non-unionists will, as a fact, often be fczni to have worked in the past below the union rate. That will be one reason, perhaps, why they will not have been unionists. And therefore, under the Act, the Labour Exchange will have the right to compel them again to work at less than union rates. I cannot see how we can avoid the conclusion that such an arrangement will play very conveniently into the hands of employers who habitually employ cheaper non-union labour. They cannot, certainly, apply to the Labour Exchange if they have a strike or lock-out going on (§ 62). But so long as they can steer clear of a strike, they can make a regular practice of getting their labour through the Exchange so long as there is a sufficient quantity of the cheaper labour to draw upon.

To other trade union conditions, besides wages, the Bill makes no reference. Apparently all the terms of the proffered employment are to be settled by the Labour Exchange (or Insurance Officer), just as it (or he) pleases, so long as nobody puts the claimant up to objecting. If he objects, the question will come before the Court of Referees, consisting in equal number of representatives of workmen and employers, with an appointed Chairman. In all probability, it will be the Chairman who will really have to decide. If the Court (i.e., the Chairman) and the Insurance Officer disagree, there will be an appeal to an Umpire appointed by the Board of Trade; and such appeals, according to the Memorandum (p. 4), "will serve to harmonise the principles on which Courts of Referees and Insurance Officers decide cases." It looks, therefore, as if the whole spirit of the working of the Act-whether this vast new machinery is to exert its influence in favour of or against trade union standards-will depend on the personality of the Umpires.

Fortunately, perhaps, for the working of the scheme, bye- or subsidiary employments are not so common in the English staple industries as in Germany. The difficulty, therefore, of adjusting the definition of "un-employment" to the way in which men actually pass their days will not be so great in this country as it would be there. But it will certainly arise here also. Can a bricklayer who has an allotment go on working on his allotment when he is in receipt of out-of-work pay? If so, can a bricklayer out of work who hasn't an allotment, hire a piece of land and work on it? How big a piece can he take, and how much of his produce can he sell, &c., &c.? But the Bill