1. The demonstrated inability to bring the neediest strata of the working class into the system by any measure short of compulsion. Under all voluntary systems the proportion of the insured in a definite labor group is in inverse ratio to its economic status. Ability and willingness to meet the cost of insurance presuppose the existence of some surplus in the budget and a sufficient cultural status for an appreciation of the advantages of the insurance principle. Both are least present in the lower strata of the wage-working class where disease is most frequent and the economic need caused by disease greatest. Experience has proved that only by compulsion can these be reached.

2. Shifting the burden of insurance. A study of the social causes of disease establishes at least a partial responsibility for illness on the part of industry and society. Justice would require that industry and society should share in the cost of sickness insurance. But besides this argument of abstract equity, there is the economic fact that for a large proportion of the wage-workers the earnings are such as to make the cost of insurance too heavy a burden. Both equity and necessity require that at least a part of the burden be shared by other classes in society. The subsidized voluntary system recognizes this, and endeavors to relieve the burden by a state or local government subsidy. But only through a compulsory system does it become possible to shift part of the cost upon the employer and upon industry at large. The essential feature of compulsion is exercised upon the employer who is forced to meet part of the cost.

3. Standardization of the insurance system. Not only the quantitative, but also the qualitative development of the insurance system must be considered. It is important that not only all strata of working men be insured, but that the services rendered by the insurance institutions be effective and capable of meeting the problems which call for sickness insurance. Under a subsidized system an effort is usually made to accomplish this result by exacting certain conditions before the result is granted. At best the requirements of a voluntary system cannot be far above the actual practice of the organizations existing at the time, or otherwise it is in danger. of failing entirely. It is necessary, as in Germany and Great Britain, to enforce definite minimum requirements, which are adjudged practical and necessary, while the very contribution from industry. makes a higher minimum possible.

269. The British National Insurance Bill

BY WARREN S. THOMPSON

The British National Insurance Bill is England's most momentous piece of social legislation, if indeed it is not the world's. It is largely the result of an extended visit which Mr. Lloyd-George made to Germany in 1908. He left Germany fully convinced that national insurance was the proper method of dealing with the conditions which the reports on the Poor Law showed to stand in dire need of immediate alleviation. The significant part of the bill is that which deals with health insurance. Only that part will be discussed here.

Under the provisions of the part relating to health all wageearners who receive less than £160 annually, are compelled to insure their health. Those exempted are for the most part in Government employ, and already entitled to benefits, and those who are not dependent upon their work as their chief means of livelihood. The best actuaries estimate that about 9,200,000 men and 3,800,000 women will become members of "approved societies" when the law goes into effect. It will be six months before any benefits are granted and two years before anyone will receive "disablement" benefits.

The contributions are payable weekly. They are divided between the employer, the workman, and Parliament, as follows: for the men, the employer pays 3, the workman 4, and Parliament 2, out of a total of 9 pence; for the women, the employer 3, the workingwoman 3, and Parliament 2, out of a total of 8 pence. Special provision is made in the case of those who receive very low wages for the employer and Parliament to pay either the entire contribution or all of it but I penny. The employer is held responsible for the payment, both of his own contribution and that of the employee. The payment is made by the use of stamps and the employer is authorized to deduct the employee's contribution from his weekly wage.

There are five benefits to be given: (1) Medical benefit. This includes medical attention and the necessary drugs when one is ill, and may be extended to the dependents of the injured person when the authorities have the means and deem it advisable. (2) Sanatorium benefit. This entitles a member who has tuberculosis or a similar disease to be treated in a sanatorium when it is needed. This benefit also may be extended to the dependents of the injured person. A definite amount, I shilling 4 pence is available for each. member annually for the payment of this benefit. This amount must not be exceeded unless the local authorities and the Treasury vote extra aid. (3) Sickness benefit. This is a cash payment made

weekly to the insured person or his dependents and continues for 26 weeks. In the case of men it is 10 shillings a week for the first 13 weeks and 5 shillings for the second 13 weeks; in the case of women 7 shillings 6 pence for the first 13 weeks and 5 shillings for the second 13 weeks. If the financial condition of the society permits, the benefits for the second 13 weeks may be increased. (4) Disability benefit. This is a weekly payment of 5 shillings to a member who is temporarily or permanently disabled as the result of sickness. or accident not in any way connected with his work. It lasts "so long as he is rendered unfit by the disease or disablement." (5) Maternity benefit. This is a lump sum of 30 shillings paid upon the birth of a child, either when the mother herself is insured or when she is the wife of an insured man. In addition to these, other benefits may be granted, if the financial condition of the society permits it. The benefits are decreased when the person is in arrears with his contribution, when he is under age and not married, and when he is past 50 at the time of becoming insured.

If a person is not so employed as to become a regular member. he may join a society as a voluntary contributor. The rate at which he pays is determined by his age at entrance. Adequate provision is made to allow the transfer of a member from the voluntary to the employed rate and vice versa. Since there is no contribution from the employer in the case of a voluntary member, this amount must be paid by the member. The contribution from Parliament is the same as in the case of the regular member, and the benefits he receives. are the same.

A deposit contributor is one who cannot obtain admission to an approved society either as an employed or a voluntary contributor. He deposits his savings in the post office in a manner similar to our Postal Savings Bank system. From his deposit, after it is subsidized by Parliament, the proper amount is deducted to entitle him to medical and sanatorium benefits. For the other benefits he can merely withdraw the remainder of his subsidized deposit.

There are two separate organizations for the administration of benefits. A local Health Committee is established for each county and county borough. This committee in conjunction with the local authorities already existing administers the medical and sanatorium benefits. The other benefits are administered by approved societies. The reason for this division of labor is that Friendly Societies, having millions of members, already give benefits of various sorts. It is intended not to interfere with the other activities of these societies, but to have them establish separate branches to administer the remaining health insurance benefits. Any society which does this may

become an approved society, provided it is not carried on for profit and is subject to the control of its members. The approval rests with the Insurance Commissioners.

Many details of the scheme are fully set forth in the bill, but many others are left to the Insurance Commissioners. Their rules and regulations are, of course, subject to the approval of Parliament. Strange as this delegation of legislative power seems, there is little doubt that it will contribute much to the initial success of the scheme. The commission will be able to adapt many of its regulations to exigencies as they arise and thus correct at once many of the defects which are bound to appear upon the launching of this mighty scheme.

270. Old-Age Pensions in New Zealand16

BY W. P. REEVES

Though dire poverty in New Zealand is almost confined to the aged, to disabled workers, to deserted wives and children, still even the Fortunate Isles have not escaped the cause of pauperism. The State has not only to provide hospitals, but also to furnish what in the colonies is called Charitable Aid. Even under a liberal system of poor relief pauperism is keenly felt by the better class of the aged poor. Hence public opinion was quite ready for the proposal of an Old Age Pension Law.

When such a law was at length proposed, opposition to it, as expressed in the debates, seems to have been based on the contention that it was likely to burden the colony needlessly and increasingly sap the springs of self-reliance, and tax the thrifty for the benefit of the improvident. On behalf of the Act supporters dwelt with considerable force upon the ups and downs and inevitable accidents of colonial life. They pointed out that in New Zealand, as in all countries occupied in growing raw materials for Europe, times of prosperity are invariably followed by periods of contraction and depression, when the savings even of the most thrifty of the poorer classes may be inevitably swallowed up in struggling with unemployment. Much stress was laid upon the uncertainty of investments into which work-people are constantly tempted to put their small savings. The House was reminded of notorious instances in which the very thrift of careful workers had led to their ruin by exposing them to the calls levied by the liquidators of bankrupt financial companies in which they had invested their money. Speakers suggested that the virtues of thrift in the case of married 1oAdapted from State Experiments in Australia and New Zealand, 243-281 (1902).

work-people might easily be exaggerated, since to bring up a half dozen children decently required a breadwinner's whole earnings.

The act, as finally passed, is not universal. Every deserving old man and old woman who has lived in the colony for twentyfive years continuously is entitled to a state pension, the maximum of which is £18 a year. But the proviso and conditions with which the act is hedged about are such that not more than 40 per cent of the aged are at all likely to be found entitled to it. Nor did those who passed the act intend that any larger proportion should be. The full £18 is paid only to those whose yearly income from all source is less than £34. From £34 to £52, £1 is taken off for every £1 of income. Old women have exactly the same title to the pension as old men. Applicants must not have been absent more than two years altogether from New Zealand during the quarter of a century preceding the application. They must be subjects of His Majesty, and, if naturalized subjects, must have been naturalized five years. The would-be pensioner, moreover, must bring evidence that he or she for the previous five years has led a sober and reputable life, and is of good moral character: A pensioner may at any time forfeit his pension, if convicted of serious crime, or if proved to be leading a drunken, riotous, or spendthrift life.

The criticisms which have been brought against the act are: first, that it permits designing persons to impose on the government; second, that its cost is too heavy; and third, that it discourages thrift. Opponents of the policy have claimed that many of the pensioners have wasted in drink money that they should have saved. Another complaint has been that children wealthy enough to support poor parents without serious inconvenience have taken advantage of the Act to transfer this duty to the State. The case has been cited of an old couple divesting themselves of their property, deeding it to a daughter who is married, and after this applying for a pension. It is said that they now live with the daughter on the land that was their own, and drive in a ponychaise once a month to draw the money.

The cost of the system, two hundred thousand pounds a year, is a substantial burden. But times are very good in New Zealand just now, and a prosperous colony with a growing revenue can afford to be bold.

On the vexed question of the effect of free pensions upon thrift among the poor, it may be pointed out that no contributory scheme is perfect. This act certainly does not offer any direct and specific encouragement to thrift. Yet, so meager an allowance as a shilling a day deferred to an age which most people do not reach.