If the accident results in death a funeral benefit is paid in all cases, whether the deceased has left dependents entitled to survivors' benefits or not. The amount paid is one fifteenth of the annual earnings, but not less than $11.90. This benefit must be paid within one week after occurrence of death, even if burial is impossible, as in case of drowning or burning. A liberal pension is provided for surviving dependents. The widow receives 20 per cent. of the average annual earnings of her husband, for life. If she remarries she is given three times the annual amount, or 60 per cent., in a lump sum, but then her benefits cease. If a woman supporting a dependent husband is killed, he receives 20 per cent. of her wages as long as he is unable to support himself. Each child receives 20 per cent. of the wages of the killed parent until the age of fifteen, but the total benefits may not exceed 60 per cent. of the average annual earnings. If there are more than two dependent children in addition to the widow, the benefits are divided equally so as to total 60 per cent.

The cost of insurance is defrayed by assessments on employers based on the amount of wages paid to employees and the nature of the risk. The board of directors of the insurance association classifies the risks, and adopts a schedule of charges which must be approved by the imperial insurance office. Premiums collected are based upon the cost of the previous year. It is evident that under such a system the cost will increase every year until a maximum is reached. Each year more widows are added to those already drawing pensions, and each year more are added to the list of permanently disabled. Until approximately as many widows and disabled die as are added each year, the cost of insurance will increase. The argument is often made that under such a system the new concerns do not receive justice. They are assessed the same amounts as the older ones, and consequently are obliged to pay for losses of the past, and for accidents to which they did not contribute. The fallacy of this argument is easily seen when we look at the underlying theory. The burden of insurance must be borne by the industry, and not by its individual members. When a new company becomes a member of a trade association, that industry has already caused a certain number of accidents and must bear the

losses. The individual employer finds remuneration in advanced prices, by which the cost of insurance has been shifted upon the consumer. The premium should be regarded more in the nature of a tax upon industry. A new company knows in advance what that tax is, and is able to make provision for it when it is organized.

The most important branch of the administrative machinery of the German compulsory insurance law is the mutual trade associations. Employers in related trades organize their own associations, fix their own rates, and enforce their own safety requirements, and to the special facilities which this method affords is mainly due the conspicuous success of the German system in promoting accident prevention. Each Berufsgenossenschaft or trade association has its own constitution, but is closely regulated by the state and the imperial insurance office. The last named authority, whose expenses the government assists in defraying, is supreme over the whole field of industrial insurance, and has its office at Berlin. It is composed of a president, and permanent and temporary members. The president and permanent members are appointed for life by the emperor upon nomination by the federal council. Of the thirty-two temporary members, eight are chosen by the federal council, at least six of whom are from its own membership, twelve are selected by employers, and twelve by the insured. Subordinate to the imperial insurance office is a system of local and superior insurance offices, each composed of public officials with associates elected by and from employers and employees respectively. Judicial and administrative matters passed upon by the local office may, subject to certain restrictions, be appealed to the superior office, and from that to the imperial office, whose decision is usually final.

According to the report of the imperial statistical bureau issued in 1914, over 28,000,000 workmen were insured against accidents in 1912, and $42,500,000 was paid in indemnity. The system is cheaply administered and cases are settled quickly, giving relief when it is most needed.

b. Methods in Other Countries. The German insurance system has been described in detail because it was the first to be introduced, is one of the most efficient, and was the

experiment upon which, in various degrees, other countries based their acts.

Great Britain passed a compensation law in 1897 which was frequently amended and amplified in scope until the present law was enacted in 1906. All employments, and all injuries arising out of and in the course of employment, are covered. In case of death three years' wages are paid in a lump sum to the dependents. Disability benefits are limited to 50 per cent. of wages, but continue for life if the disability is permanent. The employer bears the entire cost of compensation, and may either carry his own risk under proper safeguards or insure in a private or mutual company.

The principle of industrial accident insurance, or workmen's compensation as it is usually called, is now so generally accepted that over forty foreign countries, including practically all of any industrial importance, have laws of this character, covering together some 50,000,000 wage-earners.' Benefits range from 50 per cent. to 80 per cent. of wages, and in most of the important countries medical and surgical aid is rendered. To secure the payment of benefits, employers are usually required to insure their risk, often in institutions prescribed and controlled by the state.

c. Inclusion of Occupational Diseases. Though workmen's compensation laws originally concerned themselves only with mechanical injuries, such as cuts, broken bones, or loss of members, it soon became obvious that elementary justice required the extension of similar relief to the victims of specific industrial diseases contracted in the course of employment. The first country to take this forward step was Great Britain,

1 For complete summary of this and other European laws see United States Bureau of Labor Statistics, Bulletin No. 126, 1914, pp. 131-179. 2 Among the more important foreign countries with workmen's compensation systems are: Austria, Belgium, Denmark, France, Germany, Great Britain, Hungary, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Queensland, Russia, South Australia, Spain, Sweden, Switzerland, and Western Australia.

This latter percentage occurs only in the Swiss law of 1911, Sec. 74, and is payable only during the period of illness immediately following an accident, after which the compensation for permanent total disability is reduced to 70 per cent. of wages. Under both the Swiss and the German laws, however, indemnity may be increased to 100 per cent. of wages in exceptional cases requiring special care.

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which in the act of 1906 included for compensation a schedule of six of the commonest occupational maladies. While South Australia and Ontario have followed this example, the mother-country has three times expanded its original schedule until in 1915 no fewer than twenty-five diseases were there compensable. These include poisoning by lead, mercury, phosphorus, or arsenic, compressed-air illness, anthrax, a number of miners' ailments, glass workers' cataract, and telegraphers' and writers' cramp. In other countries, also, the beginnings of similar consideration for victims of occupational maladies are to be noted. Because of the peculiarly infectious nature of the disease and its close connection with the occupations in which it occurs, both France and Germany now class anthrax, for compensation purposes, as an accident. In France, also, by the financial law of 1911, employers of miners suffering from ankylostomiasis, or "miners' hookworm," are required to bear the expense of treatment and to pay compensation. Foundations for a broad system of occupational disease indemnity have, moreover, been laid in Germany and Switzerland. In the former country the federal council has been given permission, and in the latter it has been ordered, to draw up a list of trade diseases which shall be compensated for at the same rate as trade accidents. Up to the beginning of 1916, however, neither country had drawn up its list.

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(3) Compensation Legislation in the United States

Sigtes many

As in other forms of social insurance, to be considered later, the United States is far behind European countries in providing for the injured workman. The first legislation providing for stated benefits without suit or proof of negligence was enacted in Maryland in 1902, in the form of a cooperative insurance law. The law was narrow in scope, covering only a small specific list of industries, and was declared unconstitu21914.

1 1911.

'German workmen's insurance code, 1911, Article 547.

'Swiss federal law relating to sickness and accident insurance, 1911, Article 68.

'United States Bureau of Labor Statistics, Bulletin No. 126, p. 30.

tional in 1904. In 1908 Congress enacted a law granting to certain employees of the United States the right to compensation for injuries sustained in the course of employment. In 1910 an act was passed in Montana providing for the maintenance of a state cooperative insurance fund for miners and laborers in and about mines. This also was declared unconstitutional.2

The first law of general application was passed by New York in 1910. It was made elective for most occupations, but compulsory for an enumerated list of hazardous employments. This statute was declared unconstitutional in 1911 in the case of Ives v. South Buffalo Railway Company, but an amendment to the constitution made possible the enactment of a compulsory law in 1914. Other states followed New York's lead, and during the five years 1911-1915 compensation laws were enacted in thirty-one states and two territories of the union. Moreover, the 1908 law covering federal employees was extended to several additional classes of workmen, including those on the Alaskan railways, and in 1907 the United States Philippine Commission established limited compensation for public employees in those islands.

One of the main obstacles to the enactment of effective compensation laws has been the question of constitutionality. It is maintained that to require a person to pay damages for an accident for which he was not to blame is taking property without due process of law, that both employer and employee are deprived of the right of trial by jury, and that the employer is charged with liability without fault.

Before the end of the year 1915 the constitutionality of compensation laws had been tested by the highest courts of

1 Franklin v. United Railways and Electric Co. of Baltimore (1904). Summarized in United States Bureau of Labor, Bulletin No. 57, 1905, pp. 689, 690. 2 Cunningham v. Northwestern Improvement Co., 44 Mont. 180, 119 Pac. 554 (1911).

Ives v. South Buffalo R. Co., 201 N. Y. 271, 94 N. E. 431 (1911). Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.