One point deserves special mention in connection with the assertion that compulsory insurance would be impossible unless all states introduced it at the same time, since the manufacturers of the state having compulsory insurance would have to carry heavier premiums than the managers in states which have not such laws. A part answer to this argument is found in the fact that already the cost of accidents must be borne in gifts, taxes for poor relief, and various schemes to which employers contribute for the relief of disabled men; and further, it may be claimed that insurance so greatly increases the contentment, steadiness, and efficiency of the insured workmen that premiums are largely returned in an equivalent of some kind. It may be added that if compulsory insurance were introduced in one state its advantages would soon be seen to be so great that public sentiment, reinforced by trade unions, would speedily make the law general in all industrial states. Still further, it is precisely those states, as Massachusetts and New York, which lead in social legislation which retain the first rank as industrial states. To all this we may add certain facts furnished by casualty companies which tend to diminish the fears of timid capitalists that compulsory insurance would place them at a disadvantage as compared with the employers of other states; the fact being that already, in consequence of the differences of court interpretation and legislation, the cost of employers' protection varies greatly in different states, without any of the dreadful things happening which are feared. Thus if we take the cost of liability insurance for the whole country as one, on the average, the cost for several states would be relatively as follows: The figures are stated on a basis of a loss cost of I for the United States as a whole. If then the relative loss cost of a state is given as 1.2, the meaning is that the loss cost in that state is twenty per cent. (20 per cent.) greater than for the United States as a whole. A relative loss of 2 designates a loss cost twice as great as that for the United States as a whole. A relative loss cost of .80 designates a loss cost eighty per cent. (80 per cent.) of that for the United States as a whole. The loss cost of one state relatively to another may be ascertained by taking the ratio of their relative loss cost. Thus, the loss cost in Tennessee is four times as great as the loss cost in Pennsylvania, the relative loss cost of Tennessee being 2, that of Pennsylvania being 0.50, and the ratio 2÷ 40.50. TABLE OF RELATIVE LOSS COSTS TO EMPLOYERS IN THE SEVERAL STATES BY REASON OF THE LIABILITY IMPOSED BY LAW UPON THEM FOR DAMAGES ON ACCOUNT OF BODILY INJURIES OR DEATH ACCIDENTALLY SUFFERED BY THEIR EMPLOYEES* TABLE OF STATES LISTED ALPHABETICALLY * Frank E. Law, A Method of Deducing Liability Rates (1908). The differences between the states are due to differences in the law and in the judicial decisions interpreting the law. The above table is founded in the main on combined experience of the companies composing the Liability Conference, an association of companies engaged in the business of liability insurance. Where changes in the law have occurred subsequent to the period embraced by the experience, comparative studies of the laws have been made and corrections made in the table accordingly. The table represents accurately the relative costs at the date of writing. The ratios are constantly changing. It is worth while to consider the probable part which the casualty companies will play in the immediate future in relation to the development of accident and sickness insurance, especially if permissive or compulsory laws should be passed in any of the states. 12 This matter has already been seriously considered. It is well known that in England under the Compensation Act and recently in France under a compulsory-insurance law, the private accident companies have done a thriving business in assuming the legal obligations of the employers. In France the mutual insurance associations or syndicates, and even the government itself, through a central fund, are competitors of the private companies, and yet the latter hold their own and contribute very substantially to the promotion of the purposes of the law. Nor are we entirely without experience in the United States, for the workmen's collective policies contain suggestions of a method which may be greatly extended if legal pressure or even encouragement were to make it to the interest of large bodies of employers and wage-earners to unite in securing protection. Already under the collective policies the expenses of solicitation have been reduced to a minimum, since the entire body of employees is included at a stroke under a contract which also lowers the cost of payments of 12 Mr. H. G. B. Alexander, president of the Continental Casualty Company of Chicago, stated at a meeting of the International Association of Accident Underwriters, that the accident and health insurance companies had collected $25,700,000 in the United States in 1906, this being a gain of $2,783,000 over the preceding year. Health insurance showed an increase of 28.8 per cent. and accident insurance of 9.57 per cent. premiums by the simple process of deducting them from the wages. Uncertainty in regard to the indemnity would be reduced by legal definition of obligation and by simpler judicial organization for the adjustment of disputed claims. If the employers could be released from liability under existing laws they could then have at their disposal a large fund which they are now compelled to expend on casualty companies and lawyers to protect themselves against suits for negligence; and the insurance companies would then become insurers of the working-men rather than their sworn antagonists. CHAPTER VII FIRMS AND CORPORATIONS In this article railroad relief departments are excluded from consideration as they are treated in the next chapter. The relation between the two movements is very intimate. Before the railroads undertook their relief departments experiments had been made on a small scale by private firms, and when the railroads had developed their plans with manifest advantage the employers of smaller numbers of men in turn enlarged their schemes and multiplied their number. Meantime the size of manufacturing plants has rapidly increased, until now many of them rival railroad corporations in the magnitude of their enterprises and the number of employees. Some of the corporations also resemble the railroads in their prospects of permanence without regard to the persons who own their stocks and temporarily control their policies. This condition of affairs is favorable to the introduction of plans of old-age pensions, and especially of sickness and accident insurance. During the years 1905-8 there has been a marked increase in the amount of attention given to the development of such schemes. This has been due to various causes; and, first of all, to the examples of success in the railroad relief departments. Another cause has contributed powerfully to this tendency and will continue to operate with increasing momentum until compulsory insurance makes it unnecessary. That cause is the tightening of the employers' liability laws and the strictness and even rigor with which they are interpreted by many courts and applied in individual instances. It has been said by certain judges in high places that with a little more stringency the courts will practically make the |