employers so carry on their business that practically no workman could get compensation out of them, even though he had a perfect case, as there would be no available assets.

A very sad effect of the act is, as is well known, to make it very risky to give a day or two of charitable employment to some casual poor man, for fear of his having some slight accident and making a very exaggerated claim.

But in large industries there is a much brighter side. The employer can take better care of himself, and if the injured workman puts himself in the hands of a strong trade union, he usually gets a fair settlement without litigation; and employers have very seldom had to complain of unions supporting unreasonable or excessive demands. Where employers are wealthy, and trade unions are powerful, these questions, like many others, work smoothly, except in rare cases.

The chief problems of the act are: 1. The case of small employers who cannot or will not pay. 2. Obscure accidents, possibly complicated by previous bad health or injury.

mailing. companies.

3. Black

4. Excessive awards. 5. The position of insurance

These last are complained of as being harsh in settlement, and unfavourable to small employers, while, on the other hand, the insurance companies complain that they are looked on as fair game for everybody.

Employers who cannot or will not pay are necessarily small men, and the insurance companies do not lay themselves out for the smaller class of business. Unless compelled by law, probably many of these small employers never would insure, even if the process were easier than it is, while in this as in any other class, compulsion is very unpopular. A small employer may insure his one or two regular men, but will often muddle on anyhow rather than employ an extra hand. His own interests may suffer, but he does not see it, and the man who might have got a job goes to swell the ranks of the unemployed.

As regards both large and small employers, much harm has been done by excessive awards. If an employer believes that in case of permanent injury the most he will have to pay will be £400, he will arrange his estimates accordingly, but if a softhearted judge awards some man £800 instead, all employers will put up their estimates, and thus will now and then lose orders, whereby their men lose employment.

Insurance companies necessarily fight their claims much more than an employer would do, and this makes them unpopular with the average workman, who dislikes fighting and litigation.

A remedy recommended by some of the labour leaders is government insurance. How the government would like this it is hard to say, but they could work it far more cheaply than insurance companies, and might fairly make a small profit, while a strong, uniform, impartial hand would be an enormous boon to both employers and workmen. The logical consequence would be compulsory insurance, but, in adopting this course, consideration would have to be given to the question of how far it discouraged casual employment.

STATE AND COMPULSORY INSURANCE

AFFIRMATIVE DISCUSSION

STATE INSURANCE FUNDS1

The only way compensation benefits can be extended to all the excluded classes is by means of exclusive public or so-called "state" insurance or by state-aided or monopolistic mutual associations. We have no place in America for monopoly unless it be a public monopoly. In justice to the workers therefore it becomes necessary to advocate public or “state” insurance to the exclusion of all other kinds of insurance. A "competitive" state fund which stands on the same footing as private competing casualty insurance companies seems at first glance to be the very quintessence of fairness and squareness. In reality it is never possible to put a state fund on an equal footing with private casualty companies. The private companies will take only the cream of the business and leave to the state fund the task of carrying all the more costly risks that are hardest to acquire and are most subject to great catastrophes which wipe out reserves. Just why should the community bind itself to refrain from giving the best guaranteed insurance to its workers at the lowest possible cost? It is well known that the overwhelmingly greater part of the high cost of competitive insurance is due to the expenses of acquisition, renewal, and collection of premiums. The investment of reserve funds and the computation of actuarial liabilities also constitute very heavy charges. The costs of acquisition, renewal, collection of premiums and investment of funds are almost eliminated under an exclusive state fund in which every employer would be obliged to insure his employees. The premiums should be assessed and collected in the same way as taxes. In fact, there is no more reason for the interference of private companies in the insurance of compensation risks than in the assessing and collecting of taxes. All the enormous advantages

1 From article, Lacks in Workmen's Compensation, by Royal Meeker, United States Commissioner of Labor Statistics. American Labor Legislation Review. 9: 35-46. March, 1919.

in economy and universality are lost or diminished if private competing methods are permitted to enter. A competitive state fund may be very little less expensive than a private profit-seeking stock casualty company.

It is frequently argued that the insurance companies should be maintained because of their great contributions to human welfare in times past, and because of the enormous store of experience and wisdom which they have acquired and the vast vested interest which they have built up by their industry and integrity. I always go out of my way to call attention to the very great services performed by the insurance companies in the past. It is urged that an insurance company is different from a brewery or distillery in that it cannot, when there is no further need for it, be converted to any useful purpose, such as the manufacture of artificial ice, denatured alcohol or ginger pop. There is much force in this argument, but nothing like as much as in the case of the toll wagon roads of Pennsylvania which brought suit to enjoin the building and operation of the then newly conceived railroads on the ground that the monopoly charters of the toll-roads were violated by the charters granted to the railroad companies. The courts of Pennsylvania decided rightly against the toll-roads, holding that the progress of the community could not be held up by the monopolistic claims of an obsolete system of transportation. The same principle holds true in the realm of insurance. Community insurance is much cheaper and it reaches all, therefore it must and will supersede private profit-seeking competitive insurance. If exclusive state insurance cannot be obtained in any state, we should be ready to accept temporarily a competing state fund as one means of regulating and controlling private casualty companies.

STATE ACCIDENT INSURANCE IN AMERICA A DEMONSTRATED SUCCESS1

During 1919 I was engaged in official investigations of the state insurance funds for workmen's compensation in the three states of Ohio, Pennsylvania and New York. In Ohio the fund is exclusive, while in Pennsylvania and New York commercial

1 By Miles M. Dawson, Consulting Actuary. New York City. American Labor Legislation Review. 10: 8-14. March, 1920.