receipts from members contributing less than $100 each to our treasury have almost doubled, while our receipts from contributors of $100 or more each have more than doubled. I hope that it will not be inferred from this that we are rolling in money. Quite the contrary. Our activities have increased so rapidly that we shall close the year with a negligible balance in the treasury and with a well thought program of work for 1912 that will call for an expenditure of about $30,000 as compared with the $20,000 that we have secured and expended in 1911. We need more than at any time in our history the active and generous support of all those who believe in reasonable labor laws rigidly enforced.

At this meeting, as at most of our previous meetings and conferences, the subject of workmen's compensation and insurance legislation occupies a foremost place. I do not wish to anticipate the distinguished speakers who will deal with different phases of this broad subject, but it seems appropriate that I should introduce the discussion by saying something about the relation between federal and state legislation in this field. Of state legislation we have had a goodly grist in the last two years. Thirteen states have passed more or less complete compensation or insurance laws, and of these only two, the laws of New York and Montana, have thus far been set aside by the courts as unconstitutional. Those who consider it a great advantage of our federal system that it offers a wide field for experimental legislation must view the laws that have been passed with satisfaction. They present nearly every possible method of dealing with the compensation problem, from compulsory compensation without insurance through all the gradations to straight state insurance. The unanimity of opinion that has developed from the study that we have thus far given to this problem was well illustrated by the experience of the Massachusetts commission. In answer to the question whether their report had been unanimous, one of the members of that commission said to me with fine irony: "Oh yes, we were unanimous! There were five of us on the commission. One was in Europe and could not submit a report, three of us turned in separate reports, and the other dissented from all our views but was unable to get his own ideas worked out into a plan in time to submit them to the legislature!"

Valuable as these diverse legislative experiments must prove to

future generations, they involve serious hardship on contemporaneous enterprise. It is said that in consequence of the New Jersey act the rates for employers' liability insurance in some trades are in Camden, New Jersey, just ten times the rates employers in those trades must pay across the river in Philadelphia. Such a situation is only tolerable on the assumption that it is a passing phase in the general movement toward the adoption of the new system by the whole country.

Impressed by the difficulty of securing uniform state compensation laws, some students of the subject have looked for relief to the federal government. Mr. Dawson, who has promised to take part in the discussion this evening, has urged upon the federal commission the adoption of a federal accident insurance law which shall apply the best features of the German compulsory insurance system to our American industries generally.

No one who has studied the operation of the German system can fail to be impressed by its advantages. The ideal which inspired the German statesmen of the eighties and which inspires LloydGeorge and his associates in England today, is a splendid one. It is to do away with that large proportion of poverty that is directly traceable to industrial accidents, illness, unemployment, old age, and premature death by protecting those liable to it through a comprehensive system of social insurance. This ideal of substituting order and regulation through obligatory insurance for the chaos growing out of our unbridled individualism must appeal to all of us with a forward look. In our enthusiasm for it as a goal toward which to work, we must not, however, underrate the difficulties to be overcome or the dangers to be avoided before we can achieve it.

The severe arraignment which Dr. Ferdinand Friedensburg, a former president of the senate of the German Imperial Insurance Office, has recently brought against the whole German system of workingmen's insurance emphasizes some of those difficulties and dangers. While his strictures no doubt betray, as Dr. Zacher has declared, "an unwarranted tendency to condemn a great national social insurance system on account of a few shortcomings in some of its details," they yet are the conclusions of a well-informed German observer for whose "sense of justice and fairness" Dr. Zacher himself expresses "the highest regard." The conclusion to be drawn from them is not that the German system is unsound, but

rather that in the working out of that system serious mistakes have been made, mistakes in administration rather than in legislation, and that such mistakes will inevitably be made unless every development of the policy is preceded by laborious thought and study. The Germans will no doubt correct their mistakes. Unless we are to make worse ones, however, we must be content to make haste slowly in this for us still new field of legislation.

For this reason and not because my imagination is not also quickened by Mr. Dawson's ideal, I cannot refrain from expressing satisfaction that the federal commission has finally decided to confine itself to the more modest task of recommending a simple compensation law for the employes of interstate railroads. The tentative bill that has been prepared by the commission has many admirable features. More than half of it is addressed to the task of substituting a simple plan of arbitration for the settlement of questions that may arise under the law, for ordinary court procedure. This seems to have been well thought out and, since the act will apply only to interstate railroads which deal directly with their employes in accident cases without the intermediary of the employers' liability insurance companies, should operate to the satisfaction of both parties. This is the more probable because the compensation system provided is to be exclusive and because the scale of compensation proposed is so moderate that the railroads may well be expected to adopt a conciliatory, not to say liberal policy in the settlement of claims.

The one feature of the new system that seems to be seriously objectionable is the limitation of the compensation to be paid to the non-resident widow or dependent child of an employe who is killed by an industrial accident to one year's wages, and the exclusion of other non-resident dependents of a deceased workman from any compensation whatever. Such a policy is opposed to the general trend of foreign compensation laws, is unjust and ungenerous, and has the practical disadvantage of putting a premium on the employment of aliens whose families reside abroad to the exclusion of American workmen. No doubt the equal treatment of non-resident dependents of deceased employes presents administrative difficulties, but foreign experience proves that these may be overcome. This Association has already declared itself opposed to this species of discrimination in connection with state legislation and should protest against its inclusion in the proposed federal law.

Much more significant and important than any of the details of this proposed federal act is that it is recommended as a compulsory law. If Congress can be brought to pass a law which shall present squarely to the federal courts the question whether the compensation principle can be introduced into our system without violating the due process requirement, an important step will have been taken toward removing the constitutional difficulty that has thus far been a serious stumbling block.

Taken all in all, the tentative bill drafted by the federal commission is an important contribution. It is only one of numerous evidences of the intelligence and ability which the members of this commission have brought to their task. As their hearings, published with commendable despatch and widely circulated, have helped to educate public opinion on this whole subject more than could the hearings of any state commission, so the serious discussion of this bill in Congress must lead to further enlightenment. There seems good reason to hope that from it will emerge a federal compensation law that may serve as a useful model for state legislation and give an impetus to the movement toward uniformity, which has thus far been sadly lacking except in academic discussions of the problem.

Among the compensation systems that have been adopted by different states, none has dealt with the problem more comprehensively or fearlessly than that of the state of Washington. We have the privilege of having with us this evening the Honorable John H. Wallace, a member of the Washington State Industrial Insurance Commission, who will tell us about the Washington system.

COMPULSORY STATE INSURANCE FROM THE

WORKMAN'S VIEWPOINT

JOHN H. WALLACE

Member, Industrial Insurance Commission of Washington.

It has been said that so long as the workman receives compensation for work accidents, he is not concerned with the source of the money, that he cares not whether the employer goes bankrupt paying the bill, whether insurance corporations assume the indebtedness, or whether it is paid out of a common fund contributed by all the industries. The attitude of the workman in the state of Washington, in the formation and final passage by the legislature of our compensation act, must tend to disprove this statement. The members of the American Association for Labor Legislation are familiar with the text of the act passed in my state. Other members of the Washington commission have explained to some of you the salient points. As members of a national organization concerned with procuring for the American states the best system of compensation possible to replace the slow, unjust and obsolete common law procedure, you will be interested in the unique system of Washington, in formation and in process of administration, as viewed by the working people who are the beneficiaries.

I. WORKINGMEN UNDER THE COMMON LAW

It is unnecessary for me to point out to this body the universal experience of working people under the so-called common law system. Able investigators have conclusively demonstrated that not to exceed 15 per cent of the men injured in work accidents could obtain compensation under the old system, leaving the heaviest burden in modern life to fall on the weakest members of society in 85 per cent of such cases. Not only this, but the funds paid out by employers to protect themselves against excessive verdicts, if not all verdicts, have been largely wasted-from the workman's viewpoint. Not less than one million dollars a year in each great industrial state was paid out by employers. Not more than 20 or 25 per cent