1909, and March, 1910) and of the reform propositions in Austria (December, 1904, and November 3, 1908).

Foreign countries may well be grateful to Germany for its many-sided pioneer labors. It has been made possible, without costly experiments, to utilize the practical applications; and they would do well to take into account, at the beginning, the ultimate good of the development and provide in good time for the reforms and extensions which will later be required.

Perhaps the most important objections against the "German system" abroad have been made on moral grounds. The charge was made that it weakens the sense of individual responsibility; that it intensifies the cupidity of the masses; that it demoralizes the working-people. Those objections were supported by reference to the continually rising costs of sickness insurance and of the sick-benefit funds, which have been exploited by the unemployed members who are in good health, and by reference to the increasing desire for pensions and the larger number of lawsuits for pensions.

The first reproach, that compulsory insurance undermines the sense of responsibility, the inclination to save, and the industrial efficiency and capacity for development of workers, can hardly be longer supported. The facts presented at the Congress at Rome (1908), and in statistical publications, do not favor this view. In any case it is better for the common welfare that the masses be educated by legal obligation to the fulfilment of their social duties than that they be left in lethargy and helplessness. The long experience of Germany, as compared with other countries, teaches10 that, on the average, the wage-earners are not able, without aid, to procure an adequate and sure support in cases of sickness, accident, invalidism, and old age; they need such a system as that of the German social-insurance laws, as well as the intellectual and financial co-operation of employers. If we desire to diminish and gradually to overcome the present social antagonism, we may look with hope to common effort on the humanitarian basis of social legislation, and to the works 1° See Uebersicht in Reichs-Arbeitsblatt, July, 1910.

of voluntary welfare-schemes which are closely connected with such legislation.

With good reason, the new imperial insurance ordinance, following the example of the invalid insurance and the Hungarian reform legislation, looks forward to an equal division of contributions and administrative rights of employees and employers in sickness insurance. Other considerations of economy and justice favor this measure. The division of premiums in the original law of 1883, according to which the employees paid two-thirds and the employers one-third, may have been appropriate to the simple industrial relations of that period, when the danger from general causes of illness seemed more important than the specific "occupational diseases" which have lately received more attention. At the present time, on the contrary, especially in consequence of the varied methods of chemical production, the development is in a different direction. Therefore it would be unfair to lay the principal burden on the wage-earners, since the risks of these increasingly dangerous "occupational diseases" should be logically regarded as risks of the trade, like accidents. The indemnities should be regarded in the same light as those for accidents, as is already done in the Swiss and English legislation, and in the projects of law in France and Russia.11 This holds good, even although, after the period of sickness indemnity, the invalid insurance, if only inadequately, offers some relief. To this must be added the consideration that, with the equal division of sickness-insurance premiums, it is proposed in the imperial ordinance of insurance to extend the sickness insurance to all agricultural and household industries, etc., and provide insurance for widows and orphans of wage-earners without increasing the payments of workmen.12 The conflict over the question of insurance doctors might, perhaps, have been avoided, or have taken a milder form, if from the beginning there had been complete equality of representation of employers and employees in the committees on sickness insurance. It has been apparent that the "free choice of doctors" demanded by physicians might in

"See Die Arbeiterversicherung im Auslande, IV, V, IX, XI ff.

"See Sonderbeilage des Reichs-Arbeitsblatts, 11.

troduce serious difficulties in social insurance in great cities and industrial centers; especially so long as preparation for this kind of medical service is not required by law. How little the legal introduction of "free choice of doctors" would relieve the economic need where the medical profession is crowded may be seen from the evidence presented at the congress at Rome and in the last international conference at The Hague (September, 1910).

In the field of accident insurance, the principle of equality, contrary to the view of Bismarck, has been broken down, to the extent that the wage-earners, in case of decisions at the first hearing, as contrasted with both hearings in the higher courts, are excluded. This has produced two evils: on the one side the workingmen show great distrust of the employers' associations, in spite of the larger indemnities; and, on the other hand, the imperial insurance office, in contrast with the invalid-insurance office, for which it has merely powers of revision, having to decide appeals, is burdened with the re-examination of facts in disputes of little importance, and is unable to give full attention to its tasks as a supreme court. The imperial insurance ordinance seeks to overcome this error of the earlier legislation by making the first court (as an “insurance office") equally representative of both parties, as has already been done from the beginning by Austrian, Hungarian, and Luxemburg legislation; by clothing the intermediate court with greater powers of final decision as to facts, as a "superior insurance office," and by treating the imperial insurance office as the court of final revision for all branches of social insurance, including sickness insurance, which has not hitherto been in its jurisdiction. This overburdening of the imperial insurance office with annually increasing appeals in a gratuitous procedure, and the fact that, in spite of the benevolent legal decisions of the imperial insurance office, scarcely I per cent of the almost one-half million annual decisions of appeals from the employers' associations have been reversed-in itself a striking proof of their justice are regarded abroad as certain evidence of the weakness of the German insurance system; evidence, that is, of the disappearance of a sense of re

sponsibility and justice of those who are obliged by law to insure, of the increasing unrest and eagerness to receive pensions on the part of those injured by accidents, of the abuse of the gratuitous procedure, and of the demoralization of the workingmen by unscrupulous shyster lawyers. The fact is often overlooked that a compulsory insurance, with nearly twenty-four million insured persons, must include many from the lower social classes; that, considering this vast number, the abuses mentioned are entirely exceptional; and that they might, perhaps, have been avoided if such regulations as the imperial ordinances of insurance now contain, and which would supply gratuitous official legal counsel for the benefit of the wage-earners, had been included in the original laws.13 In any case these evils can without difficulty be cured by better instruction of the persons interested, by elevating their plane of culture, by giving a hearing to the workmen in the court of first instance, by stricter management of the costs in case of appeals to litigation without cause, and by avoiding too generous awards by courts.

Incomparably greater dangers of a moral and financial kind may arise where neither compulsory insurance nor gratuitous judicial settlement exist; as may be seen in the experience with the English accident insurance. There the employers, from fear of the terrible costs of litigation, bring hardly I per cent of cases of industrial accidents before the courts. In most cases of litigation, when the activity of unscrupulous advocates and complaisant physicians is certain, they prefer to pay an injust compensation rather than run the risk of a suit.14

In general, the acts of the international social insurance congresses, especially that of Rome in 1908, in connection with the twenty-five years of experience in Germany, have shown conclusively that without legal compulsion the social and economic purpose of a thorough social insurance cannot be attained; and that individual cases of abuses should not be given too great weight; they are simply passing and by no means unavoidable accompaniments of the great scheme. Such general human weak"See Die Arbeiterversicherung im Auslande, XVII, 15* ff.

"Ibid., V, 35 ff., Bulletin des assurances sociales (Conférence Internationale de la Haye, 1910), I, 135 f.

ness may be observed also in the case of voluntary and all other kinds of insurance. The German principle, furthermore, is superior to the liberté subsidiée in this, that it involves both parties, workmen and employers, in the cost of premiums, and so places the entire insurance system on a firmer, clearer, and juster basis, and makes it evident to the workmen that the contribution of the employer is not a "subvention" but something which they have themselves earned. A glance over the survey15 proves, however, that the legislation of scarcely one of the countries there treated shows an exclusively obligatory or voluntary insurance; rather both kinds of insurance run side by side in independent laws for each branch of insurance and trade, or they supplement each other in the same laws. In recent development of social insurance, in the German projects and in the plans for insuring private officials, the tendency is observed to follow the lines of the agreement at the congress in Rome; that is, to provide the minimum required by necessity in the way of compulsory insurance and open the way of voluntary insurance for a maximum which may be accessible and desirable to some individuals and callings.

In fact, in this way, by opening up to the more intelligent and strong a more complete means of caring for themselves, in addition to the necessarily obligatory method with the weaker members of society, the defects in the present system may most securely be overcome. 16

That all modern civilized states are striving toward this common goal is shown in the general survey already mentioned, and that, in consequence of international migration of laborers, the points of contact multiply, is proved by the increasing number of treaties on the principles which were first recognized by the Franco-Italian labor agreement of April 15, 1904, and there developed into a program.17

The next international social-insurance congress will be held in 1913 in the United States, where, of late, numerous studies

" Reichs-Arbeitsblatt, 1910, No. 7.

"See Professor Piloty-Würzburg, Der Versicherungszwang in der deutschen Arbeiterversicherung und die Thesen von Dr. Zacher, Stuttgart, 1910.

"Die Arbeiterversicherung im Auslande, VI, 132 ff.