on one hand and on the other gives himself up, either from ignorance or from superstition, to all sorts of fake remedies and quack doctors.

We have come to look upon insurance as a moral duty, which a man with very material resources behind him owes to his dependents to prevent their being thrown upon a lower scale of living when his immediate income stops. If they are subject to a moral obligation in order to prevent a break in the hopes and aspirations of their children, what is the condition of those to whom the sudden cutting off of support means not only the blotting out of hopes and aspirations, but perhaps of subsistence itself?

To the workingman then, sickness insurance is not the luxury that it is to the man of higher income, which allows him to go about his work with a more comfortable feeling of mind that he has not got to pinch himself in any material comforts when some of the major hazards come upon him. To the workingman without capital behind him, it means immediately tackling life from a lower plane with less physical strength and with less food, and hence, with less courage and with infinitely less chance of success. The possibility of creating the necessary reserves seems to inevitably and of necessity depend upon the compulsion that will automatically place this reserve behind him. It is well enough to assume that the workingman ought to do it voluntarily. It is unquestionably proven that he will not do it voluntarily. Can he even be expected to do it voluntarily when it is acknowledged that the existing voluntary agencies are either wasteful in administration or unsound in principle? The only relief in sight which will practically work is to compel the deduction at its source of a percentage of wages sufficient to cover the average risk and to so safeguard the essential principles of insurance and the investment of these funds as to guarantee the relief in the hour of need.

The objection is raised that no automatic system can take the place of individual thrift; that the paternalistic or socialistic attempt to compel a man to do what he ought to do for himself is foredoomed to failure and makes for dependency and shiftlessSpace does not permit of quarreling with the theory of this contention. We can only face the facts which are apparent

ness.

to all that the average workingman who is earning less than $1,000 a year does not save and has no reserves behind him. We are all vitally interested in this fact and would like to mitigate it and explain it away if it were possible to do so. If you accept it as a fact, will you veto the application of a principle which you know to be sound in your own life, if this application can only be effectively and broadly secured by compulsion? Will you veto it if you realize that for small incomes especially the insurance principle has a far sounder economic basis than the pure savings idea? He who saves in order to meet a future disability must have a long time in which to do it and exercise great self-sacrifice in saving and skill in investing. He is finally the greater speculator in futures. To lay by, say $100, a year out of $1,000 he must have the ideal combination of four factors:-time, self-sacrifice, investing skill, and a justifiable spirit of adventure. And, if he dies at the end of one year, he leaves but $100, but if he insures he leaves his heirs $1,500. The saver is an isolated adventurer. He cares only for himself. The insurer is in strong contrast and rests himself upon the principle of combination and cooperation with all those who are exposed to the same average degree of risk. If this principle is sound for larger incomes, it is beyond dispute for those who are living close to the line of subsistence

We must first, however, insist that in the enforcing of this principle under compulsion, we can only avoid unreasonable individual injustice if it is limited to groups who are subject to a similar degree of risk. As long as the hazards which are averaged are fairly within the common experience of all of the members of a group, there is no injustice in compelling contributions to a common fund. It is only when it is proven that "A," in contributing to relieving "B's" disabilities, is contributing to a far higher average of risk than he is himself subject to, that injustice occurs.

If we are willing to agree to the idea of compulsion, when limited to groups of a like average of risk, can we bring this compulsion into harmony with our social and legal philosophies?

If it is a part of our political, as well as our moral creed, that it is the duty of every individual to support himself; and if it is the duty of the state to protect itself as far as possible from

dependency, why cannot the state compel the individual to actually perform what is recognized to be his universal obligation? We certainly are not willing to give up lightly the immense benefits and liberties that individualism has brought us. We believe in individualism and are going to continue to fight for it. Is it then a contradiction that we are willing to make some sacrifices to accomplish a higher degree of individual support on this earth, here and now? Shall we actually enforce the fundamental duty of self-support in the only practical way it can be accomplished, i.e., by the compulsory contribution to a common fund of all those who are subject to a like degree of economic risk, or shall we continue to attempt the impossible-the salvation of the derelicts of our individualism through the deadening influences of charity and poor relief?

Social workers and socialists exclaim with impatience against the restraints of constitutional limitations in working out social reform. It is confidently believed, however, that we can find methods of working out this reform under constitutional methods and that in so working it out with strict regard to both individual rights and responsibilities, and under strict observance of sound and tried insurance principles, we will immensely increase its power for social upbuilding.

We would first lay it down as a fundamental and universal obligation of every man and woman of legal age, to provide during their working days for their own self-support during disability and temporary support for their dependents at their death. This is laid down not merely as a moral theory for general guidance, but as a fact of economic necessity, which the state is justified in enforcing. It is foreign to the method of development of the theory to insist that the state must do this to protect itself from dependency, but, if this theory gives the lawyer an added comfort, we need not object to it, unless it necessitates looking upon the exercise of this duty as an exercise of the police power, and the relief as poor relief and charity.

The method of enforcement should logically be through the imposition of an income insurance tax, pro-rated exactly upon the incomes of all classes of individuals within the state who were engaged in any form of labor for profit, i.e., upon all those who had any incomes, without respect to the character of

their employment, but with certain obvious and reasonable exceptions, as the theory of the law permitted.

It is fundamental to the purpose in mind that both premiums and benefits be rigidly fixed in relation to income. So also must all individuals be classified according to those who are subject to a like degree of hazard. Only by observing these elementary principles of sound insurance can we guarantee that the compulsion does not bring about the taking of property inequitably from one class of individuals for the support of another class. Also, if we neglect these principles, we shall lose sight of the individual's rights and responsibilities upon which our foundations rest, and will forfeit one of the most valuable influences of such an undertaking-the safeguarding and protection of the health of groups so that the cost may be reduced or the benefits increased. So far the proposal has allowed for the greatest freedom of the individual in placing his insurance and has emphasized the necessity of the fulfilment of the individual's duties. The removal from any individual or class of an obligation, which clearly rests upon them, for the social betterment of another individual or class must inevitably fail of its purpose.

In the case of insurance, there can be no question but that a relation of dependency of the people upon the state will develop if the individual benefits derived are not purchased by proportionate individual sacrifices. If this is true as regards the receipt of benefits, it is more than true as regards the remedial and curative effects, which should be the most valuable factor to the state of such an insurance plan. Unless individual sacrifices will make for a reduction of the burden of the cost, there will be no incentives upon either individuals or groups to apply the preventive and protective measures which the modern conception of medicine has made available. The greatest benefit of the workmen's compensation law socially has not been in the benefits or compensation paid. It has been in the more direct incentive to prevent accidents, which has been a great economic saving, particularly among self-insurers. So in sickness, if the relation between the cost and its avoidance can be kept simple and direct, the incentives toward the scientific prevention of disease will be powerfully multiplied. We do not appreciate the amount of the cost at present. The first step is to visualize

the cost by definitely locating it; the second is to establish more definitely the responsibility for its existence; the third is to apportion justly both the cost and profit for its reduction.

BRITISH NATIONAL HEALTH INSURANCE ACT OF MAY 20, 19201

The British national health insurance act of May 20, 1920, which came into force on July 5, 1920, made a number of important changes in the health insurance system described in the Monthly Labor Review for January, 1920, p. 45-59. These changes are so numerous that a brief restatement of the system is the simplest way of presenting them.

Industries and Occupations Included

The system includes in the compulsory insurance two groups of persons: First, all persons, men and women, 16 years of age and over, under any contract of employment for which remuneration (in cash or in kind) is paid and whose employment is manual in character; second, a similar group of persons whose employment is non-manual in character, if their total income is less than £250 ($1,216.63, par) annually. Persons 70 years of age or over are not required to insure and insured persons on attaining 70 may not receive pecuniary benefits, as the national old-age pension system benefits begin at that age.

The persons exempt from insurance are those who have rights to sickness and other benefits (the equivalent of those provided by the national system) from certain specified sources, such as those insured in approved establishment funds, teachers' funds, railway benefit funds, etc. Another group which may be granted exemption on application to the authorities consists of persons who can show that they are in receipt of a pension or income of the annual value of £26 ($126.53 par) or more and not dependent on their personal exertions for their livelihood, or that they are ordinarily and mainly dependent on some other person for their support or that they are dependent for their livelihood on earnings derived from an occupation which is not employment as already defined.

1 From article by Henry J. Harris. Monthly Labor Review. 11: 405-15. September, 1920.