HD 57-2 */ he n * dbor Legislation Re view fu ndame ntal SEPTEMBER, 1921 v urvey 1.920-21 with tiard Recommendations t * i s 1 a t i v t e s Pennsylvania Commission Report on Health Insurance in England PUBLISHED QUARTERLY BY THE AMERICAN ASSOCIATION FOR LABOR LEGISLATION !; EteiT 23d STREET, Nl'.W ' :. S f)JBCO?r~C3-Ab6 MATJ'BB FEBEtr.U5Y 20, 1911, AT THB J>OT O7J-TC V , ?1 D AcrorsT 24, 1912. ACCEPTANCE ?OP MAIUINO AT VO-B IN SKOTION 1103, .ACT cv.0fcjfa?tn 3, ?91", ATTTHO- -/.ro AMERICAN LABOR LEGISLATION REVIEW Vol. XI, No. 3 The American Labor Legislation Review JOHN B. ANDREWS, Editor FREDERICK W. MACKENZIE, Associate Editor Vol. XI SEPTEMBER, 1921 No. 3 CONTENTS Legislative Notes 183 Unemployment Survey 1920-21 with Standard Recommen- dations 191 Introductory Summary 191 Extent of Unemployment 194 Distress Not as Acute in Winter of 1920-21 as in 1914-15 196 "Living Off Their Fat" 197 Organization for Temporary Relief 200 "Work Tests" and Relief Jobs 203 Food, Clothing, Shelter, Money and Loans 205 Public Employment Bureaus 205 Public Works 207 Part Time Employment in Industry 210 Wage Reductions 211 Regularization of Industry 212 Unemployment Insurance 213 Unemployment Handled Slightly Better in 1920-21 214 Policies Good and Bad 215 Standard Recommendations for the Relief and Prevention of Unemployment 218 State Legislation to Plan Public Works Against Unemployment 220 The Need of Legal Standards of Protection for Labor JOHN A. RYAN .... 221 Face the Labor Issue THOMAS L. CHADBOUKNE 227 Report of Investigation into the Operation of the British Health Insurance Act . 233 The AMERICAN LABOR LEGISLATION REVIEW is published quarterly by the American Association for Labor Legislation, 131 East 23rd St., New York, N. Y. For contents of preceding issues see Publications list at back of volume. The price is $1 a single copy, or $3 a year in advance. Annual subscription includes individual membership in the Association. "Comes None Too Soon" From an Editorial in the Nev> York "Globe", August 29, 1921 DRESIDENT HARDING'S unemployment conference, announced * by Secretary Hoover, comes none too soon. It is amazing that the greatest industrial nation should have muddled through months of economic distress without apparently once having taken thought of remedies. For a full year the period of depression has been developing. During that time unemployment has increased in severity. Between five and six million people who were wage-earners two years ago are estimated now to be jobless. A condition such as that is fraught with peril for every class of citizens. * * * "The leaders of industry whom Secretary Hoover announces will be called to Washington should be able to contribute wisdom. Industries are suffering in varying degrees from the depression, and within a single industry individual businesses are not affected alike. Very exceptional manufacturers have passed through this crisis without difficulty. Others, a minority when the country is taken as a whole, have put plans into operation for the relief of the needs of their unemployed workers. What the most intelligent employers have done upon their own initiative ought to be made available for the entire country. "But responsibility for counteracting the tendency toward unemploy- ment is a public as well as a private obligation. Every modern industrial country is in advance of the United States in this matter. If unemployment were the sole test of our civilization America would in- evitably be rated a backward nation. Public works ought to have been begun when private demand decreased. A series of employment ex- changes ought to have been in existence. Congress, with amazing blind- ness, ordered most of the federal employment offices shut when hard times loomed upon the horizon. That act was as wise as it would be to close up the hospitals at a time of epidemic. * * * It is possible now to do something to alleviate the distress which has been so general. Two years ago, or even a year ago, had such a conference been prac- tical, the opportunity would frankly have been greater. The past, how- ever, cannot be retrieved." INTRODUCTORY NOTE T T NEMPLOYMENT is the immediate issue. How to combat distress ^J resulting from the long-continued idleness of millions of workers and how to check the continued increase of the army of unemployed are questions that temporarily overshadow all other measures for the protection of labor. With the announcement on August 28 by Secretary Hoover that the President will call a National Conference on Unemployment soon, the United States makes its first move toward organizing against existing un- employment on an adequate scale, following similar official activity recently under way in Canada. Significantly, in naming the objects of the Confer- ence, the announcement gives recognition to industry's responsibility by stressing the need of recommendation for "measures that can properly be taken in co-ordinating speeding up of employment by industries and public bodies during the next winter.'* This official action is encouraging. For one thing it marks the end of a "do nothing" attitude that has been distressingly persistent during the past twelve-month. Congress has done nothing. The states have done little more. Many cities have taken hold but have still failed to organize on a basis at all commensurate with the need. Industry, though averting a vast amount of additional complete unemployment by going on a part time basis, is nevertheless confronted by millions of idle men. "Where IS the unemployment?" is a question that has been heard frequently. When on November 8 of last year the Association for Labor Legislation in a public statement declared that **a period of widespread unemployment has arrived" and appealed for "immediate, concerted efforts" to combat its consequences, certain attempts were made to discount this estimate of the seriousness of the situation. Throughout the Winter of 1920-21 and until quite recently there appeared to be, in official and in many business quarters, a skeptical or indifferent attitude which stood in the way of properly organized effort to combat unemployment now belatedly recognized as an urgent need. During the present Summer this Association made under the imme- diate direction of Frederick W. MacKenzie a brief survey of unemploy- ment in 1920-21. It covered the same 1 15 cities that were drawn upon in our comprehensive survey of unemployment in 1914-15. The results of this second inquiry are summarized in this number of the REVIEW; as of aid not only in understanding what has happened thus far in the existing depression but, more important, what effort has been made among industrial communities to fight off the evil results of enforced idleness. It is to be especially noted that the "Standard Recommendations for the Relief and Prevention of Unemployment" (see pages 218-19 of this REVIEW) formulated by this Association, with the cooperation of 300 local organi- zations, after the survey of 1915 and re-issued in pamphlet form at the beginning of the existing depression, have been found in use wherever head- way is being made against acute distress, many cities specifically reaffirming the effectiveness of the recommendations out of their recent experience. It is now too late, as the survey shows, to exercise foresight the cardinal principle of a constructive program in warding off unemployment. The unemployed are here. The "roof cannot be mended in fair weather" against the rain that is falling. Now, once more, it is imperative to adopt large measures of relief. Cities must bear the brunt of the relief burden and the sum of their best collective experience is that the adoption of the "Standard Recommendations" is the most certain and effective means of organizing themselves to overcome the worst results of involuntary unem- ployment. The states can help by arranging their road building and other public improvements so as to fit in with the most pressing needs of the un- employed. Meanwhile, the forthcoming President's Conference will make a great and lasting contribution to the solution of the unemployment problem if it stirs industry throughout the nation to a realization of its responsibility for adopting practical plans for preventing unemployment. Acute distress in the Winter of 1920-21 was averted, as the unem- ployment survey shows, largely because of the unprecedented extent to which the unemployed wage-earners have been able to take care of them- selves out of savings acquired during the war years. Such self-assistance cannot be counted upon next Winter. The workers' savings are rapidly nearing exhaustion. Industry and the public must now consciously take up the responsibility of providing subsistence for these unemployed where they have been forced to lay it down. JOHN B. ANDREWS, Secretary, American Association for Labor Legislation. Legislative Notes FOLLOWING a favorable report by the judiciary committee, the United States Senate on June 10, by a vote of 75 to 4, passed the Johnson-Mills bill, as prepared by the Association for Labor Legislation, to restore the protection of state workmen's compensation laws to injured long- shoremen and other harbor workers. O COMMENTING on the failure of the Wisconsin legislature to pass a strongly supported bill for unemployment compensation, after it had received a favorable committee report in the Senate, the conservative Wisconsin State Journal says: "Defeat of the Huber unemployment measure is a bit of history that may be reviewed with regret at a later date. * * * We are probably nearing a time in which society will discountenance a system under which men willing and able to work must suffer with their families because of unemployment. We are an industrial nation." O PROPOSALS for a uniform international system of unemployment records have been approved by the governing body of the International Labor Office, as recommended by a subsidiary commission. The com- mission recommended that the following definition of involuntary unem- ployment should be submitted to the governments of Member states: "Unemployment may be defined as the condition of a worker who is both able and willing to work but is unable to find employment suitable to his qualifications and reasonable expectations." It was also agreed that the governments should be approached with regard to the drafting of standard and uniform tables for the presentation periodically of statistics of employment, compiled by trade unions and employment agencies and of statistics of unemployment insurance. O NEW HAMPSHIRE has enacted a law for maternity protection, follow- ing the bill for state action prepared by the Association for Labor Legislation. O BY a vote of 63 to 7, the United States Senate on July 22 passed the Sheppard-Towner bill for maternity protection. The measure, which had already passed in the Senate last December, is now pending before a committee of the House, but was not reported out before the recess. The principal change made by the Senate was a provision that prevents officials from entering any home to carry out the purposes of the law. 184 American Labor Legislation Review ON June 11 the Supreme Court of Utah sustained the constitutionality of the rehabilitation provision of the compensation law by which, in fatal cases where there are no dependents, $750 is placed in a special fund for the compensation of employees who by a combination of suc- cessive injuries have become permanently and totally disabled, but would otherwise receive compensation only for the latest injury. O A SIMILAR provision in the New York law, by which $900 is placed in a special fund for vocational retraining whenever a killed workman leaves no dependents, was recently upheld by the highest court in the state. O IN New Jersey, however, the provision of the workmen's compensa- tion law requiring $400 to be placed in a special fund, when there are no dependents of the killed worker, has been held unconstitutional by the court of errors and appeals. In New Jersey, it is to be noted, the money thus turned into the state treasury was used merely for general administrative purposes of the labor department. O LEGISLATION has been enacted by Belgium putting into effect the eight-hour day and the forty-eight hour week, in accordance with the Draft Convention adopted by the first international labor conference of the League of Nations, held at Washington in 1919. In ratifying the act the King urged greater production on the part of workers and new methods on the part of employers to sustain exports, since the country can only support one-third of its population, the remaining two-thirds depending on industry and commerce. O "THE act creating the Court of Industrial Relations is a reasonable and valid exercise of the police power of the state over the business of producing coal," says a unanimous decision of the Supreme Court of Kansas, June 11. The law was held valid on each of the eight issues raised in the contempt case against the president of the Kansas miners' union. O FOLLOWING a decision of the United States Supreme Court, last December, holding that Ohio employers carrying their own risks under the workmen's compensation act could not continue to reinsure against the results of industrial accidents through liability insurance companies, the state industrial commission has issued an order which compels 600 big employers to cancel their reinsurance contracts. They may insure at cost directly in the exclusive state insurance fund. Two hundred employers who are able to carry their own risks, but do not reinsure with commercial companies, are not affected by the order. O CONDITIONS of unemployment expected on the completion of the sugar harvest could be met in part by giving idle men a chance to work on Legislative Notes 185 central highways, construction of which is planned in four provinces, said Dr. Alfredo Zayas in an address shortly before entering upon his duties as president of Cuba. O DRAFT of a bill for workmen's health insurance in Spain, according to a recent despatch, is being prepared by the minister of labor. O AFTER the governor of Ohio had signed the law of 1921 extending the workmen's compensation act to include fifteen specified occupational diseases, to go into effect August 15, it was discovered that no appro- priation was provided to put the law into effect. Before the legislature adjourned, however, an attempt was made to secure $125,000 for this purpose, but this amount was cut to $25,000 by the legislature. O THE criminal syndicalism act of Montana has been declared uncon- stitutional by a district court. O FOLLOWING an appeal by the commissioner of public welfare, the mayor of New York City appointed a special committee on unemploy- ment, including the commissioner and representatives of labor and the American Legion, to suggest plans for combating distress among the jobless which is becoming increasingly serious. Figures given out by the superintendent of the municipal lodging house show that applicants for relief at the institution have increased ten-fold in a year. O INTERNATIONAL labor agreements have been entered into between Belgium and Holland whereby workers of both countries will have reciprocity of treatment in regard to compensation for industrial accidents and the advan- tages of social insurance. An agreement has also been made with Bel- gium by France, guaranteeing to workers of both countries who work in French or Belgian mines the workers' pensions in force in each of these countries. O MANY of the larger industries of Oregon have already applied for the 5 per cent reduction in insurance rates under the workmen's com- pensation act, effective July 1, as provided by the 1921 legislature for compliance by employers with state requirements of safety education and accident prevention. O IN reaffirming his support of the Sheppard-Towner bill for maternity protection, pending in Congress, the Rev. John A. Ryan on June 19 declared that an article in the Woman Patriot had misrepresented his position "in most unwarranted and shameful fashion." Adding that his own view is in harmony with that formally expressed by the National Catholic Welfare Council, he said: "My favorable attitude toward the bill has been somewhat strengthened through my observation of certain sinister influences and their methods that are arrayed in active opposition." 186 American Labor Legislation Review THE workmen's compensation act of 1921 in Arizona, creating the state industrial commission, has been held unconstitutional by the state Supreme Court. The invalidity of the act, it was held, lies chiefly in the section requiring the employee engaged in a hazardous occupation to elect in advance of the injury whether he shall avail himself of the act. One justice expressed regret that the language of the constitution, as it had already been interpreted by the court, made impossible such legislation as had been found desirable by other states. O DESPITE the decision of Federal Judge James E. Boyd of North Caro- lina that the federal child labor law is unconstitutional the second decision by this court against child labor legislation it is reasonable to expect that the United States Supreme Court will consistently uphold the right of the national government to utilize broadly the federal taxing power. In so doing it would merely be sanctioning the same method for protecting children against premature or excessive labor that has already been upheld for protecting bankers against undue inflation of the currency, dairy farmers against attractively colored oleomargerine, and workers in the match industry against phosphorus poisoning. LITTLE children at work in a cotton mill, adjoining golf links in a section of the South where child labor is especially notorious, inspired this qua- train by Sarah Cleghorn which must chafe the consciences of those states that still permit the industrial exploitation of childhood: The golf links lie so near the mill That almost every day The laboring children can Iwk out And see the men at play. "!T is expected that employers under state laws for unemployment insurance," said Professor John R. Commons at the recent National Conference of Social Work, "will organize their employment and labor management departments as effectively as they have their safety depart- ments under the stimulus of workmen's compensation laws. It is also expected that the liability incurred when a man is laid off on account of lack of work will prevent employers from over-expanding with rush orders and induce them to spread out their work more evenly through the year. This is based on the actual experience of several large manu- facturing establishments in different parts of the country which have done much during the past ten or fifteen years towards stabilizing employment." Legislation for unemployment insurance as advanced in the United States, Professor Commons points out, avoids philanthropy or paternalism, and is based on the idea that unemployment can be largely prevented by good business management if organized on the same basis as the safety and accident prevention work. Legislative Notes 187 COMPULSORY health insurance legislation for all workers, without regard to their earnings, has recently been enacted in Poland. The law also includes maternity benefits. O ELIMINATION of commercial insurance companies from the workmen's compensation field, through the adoption of an exclusive state fund for accident insurance modeled on the successful Ohio law, was given a leading place on the immediate legislative program of the New York State Federation of Labor at its recent annual convention. RECENT legislation on employment exchanges and unemployment in- surance in the Republic of Austria satisfies the requirements of the Washington Draft Conventions on unemployment, according to an article in the official International Labour Review for May-June, 1921. It should also be noted that reciprocal agreements on unemployment benefits have been concluded between Austria and Czecho-Slovakia and Germany providing for the like treatment of their respective citizens, and a similar agreement is about to be concluded with Switzerland. AMBULANCE-CHASING lawyers are campaigning to bring about the defeat of the Missouri workmen's compensation law of 1921. Opponents of the act have filed sufficient petitions to invoke the referendum in the 1922 election. Meanwhile the operation of the law is suspended. IN calling for the prompt passage of the Jones-Fitzgerald bill drafted by the Association for Labor Legislation and now pending in Congress to provide workmen's compensation for private employees in the District of Columbia, a resolution adopted at the recent convention of the Ameri- can Federation of Labor strongly demands the adoption of the exclusive state fund plan of insurance. "The American Federation of Labor," says the resolution, "reaffirms its conviction based on years of practical experience that exclusive fund insurance and the elimination of private profit in workmen's accident compensation is advantageous to wage workers, and urges the early enactment of the Jones-Fitzgerald District of Columbia workmen's compensation bill without change from the exclusive fund plan. * * * Private employees in the District of Columbia are wholly without the protection of a workmen's accident compensation law or even an employers' liability statute," the resolution declares. "The American Federation of Labor has repeatedly appealed for the elimination of private profit in the operation of workmen's com- pensation laws, and at its Montreal convention endorsed the Ohio work- men's compensation insurance plan. Our representatives have accord- ingly given their support to the Jones-Fitzgerald bill modeled on the Ohio system." 188 American Labor Legislation Review As an aid in relieving unemployment, a resolution adopted at the recent convention of the American Federation of Labor instructs all state federations of labor and central labor bodies to urge state, county and city governments "to immediately make provision to carry on such public works as they now may have under consideration." "EXPERIENCE has clearly demonstrated that the industrial accident fund can take care of itself; that it is absolutely self-supporting," declares the fifth annual report of the Wyoming Workmen's Compensation Department prepared under the direction of the state treasurer. Begin- ning six years ago with an appropriation of $30,000 from the state as a nucleus, the state fund established to provide accident insurance at actual cost is now in a position to go "on its own," according to the report. The department recommends that the original $30,000 together with all other sums since advanced by the state, amounting to $228,817, be returned to the state's general fund. The favorable showing of the Wyoming state fund and the compensation department's recommenda- tion follows similar action in Pennsylvania where the state accident insurance fund recently paid back to the commonwealth in full its original investment of $500,000. O A PROCLAMATION issued by the executive council of the American Federa- tion of Labor, August 25, declaring that unemployment is "approaching a dangerous crisis," calls upon the federal and the state governments to assist in fighting unemployment by "immediately concerning themselves with putting into operation processes of production for public improve- ments of buildings, roads, etc., and to use the credit of the country for the encouragement of productive processes." O IN Racine, Wis., and Hartford, Conn., measures were undertaken during the summer to relieve unemployment that have received wide publicity. Racine bankers took up a city bond issue of $150,000 to be used in pro- viding city improvement jobs to the unemployed. In Hartford the city appropriated $10,000 a month for extra city work for which selected unemployed workers are hired for five-hour daily shifts at 40 cents an hour. O THE resignation of Miss Julia Lathrop as chief of the federal Chil- dren's Bureau was accepted August 19 by the Secretary of Labor in a letter in which he expressed regret at her retirement and appreciation of her "conscientious and devoted service." To Miss Lathrop, the Secretary wrote, "is due the great credit of building up the Children's Bureau," and he adds "what a wonderful work you have accomplished. * * * It does not seem that any one can really fill the place that you are leaving." Legislative Notes 189 PRESIDENT HARDING has appointed Miss Grace Abbott of Grand Island, Neb., to succeed Miss Lathrop as chief of the Children's Bureau. O CANADA is organizing on a national scale, in advance of the coming winter, to combat unemployment. The request of Minister of Labor G. D. Robertson that provincial officials call conferences of all interested in relieving unemployment is being well received throughout the Dominion, according to a recent dispatch. Ontario and Alberta have already called conferences and Manitoba is arranging for a meeting at Winnipeg. At a conference in Vancouver, August 10, fifty representative employers met with officials of the cities in the province to work out a program whereby industry would assist in providing jobs for the unemployed. It is expected that a national conference will be held, after the provincial gatherings have completed their work, to consider plans for aiding the jobless on a big scale. <> "WHAT the able veteran, out of a job and destitute, needs is work," declares an editorial in the Chicago Tribune, August 4. "We do not know how many of the 4,000,000 soldiers are walking the streets without money to get their meals or to support their families, but there are thousands of them, probably hundreds of thousands. * * * The veterans are entitled either to work by which they may support themselves, or to protection and insurance against unemployment. Protection is not charity. It is a social handling of a national question. * * * Every soldier who served honorably in the late war who can't get work today should receive OUT OF WORK COMPENSATION from the government." O SECRETARY HOOVER, in a letter to the governors, July 28, urged state action to forestall unemployment distress during the coming winter, by letting contracts for road building in the autumn, wherever practicable, instead of waiting until next spring. O GROWING interest in unemployment insurance among employers in the United States is reflected in a recent issue of the New York Times' Annalist. Referring to the wide extension of the unemployment insurance act of Great Britain, effective November 8, the article says: "Its extension is proof that it has demonstrated its practicability and value." And it points out that the trend toward unemployment insurance is likely to run along the same lines as the movement for compulsory accident insurance, now an accepted feature of industry, but which, for years before its adoption, was violently opposed by employers. O G. V. M. TURNER, member of the staff of the New South Wales Board of Trade, has written a brief survey (71 pages) of unemployment insur- ance, published by the government. 190 American Labor Legislation Review THIRTY states have enacted legislation accepting the provisions of the federal act for the vocational rehabilitation of industrial cripples. They include Alabama, Arizona, California, Georgia, Idaho, Illinois, Indiana, Iowa, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Caro- lina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, West Virginia, Wisconsin and Wyoming. O IN THREE special articles in the Journal of the American Medical Associa- tion (Chicago) of May 7, 14 and 21, Dr. Alfred Cox, medical secretary, British Medical Association, makes a valuable, authoritative contribu- tion to the literature of Health Insurance in England. O A RECENT social survey of Prague, reported comprehensively in the Survey for June 11, 1921, makes the following findings with respect to protective laws for labor: "In labor legislation for the protection of women and minors and for the protection of all workers, the new republic of Czecho- slovakia takes a high rank among the nations. Social insurance pro- viding for sickness, maternity, accident, unemployment, old age and invalidity; regulation of hours, child welfare, safety, sanitation and health and minimum wage had been subject to new legislation." O A COMPREHENSIVE system of public labor exchanges has recenly been created by royal order in Spain. State subsidies are provided to encourage the establishment of employment bureaus and exchanges by town councils and other provincial and local institutions. In order to secure the financial aid from the royal government, local labor exchanges must fulfil several conditions including management of the exchange by a board composed equally of representatives of employers and workers advised by experts on social questions. O A BILL to ratify the Draft Convention adopted at the Washington meeting of the International Labor Conference of the League of Nations, pro- viding for a national system of public employment agencies and unem- ployment insurance, has been prepared by the government and advanced well on the way to adoption in Czecho- Slovakia. Similar steps have already been taken as noted in these pages for December, 1920, looking to the ratification of other Draft Conventions agreed upon at the Wash- ington conference. In addition, the government of Czecho-Slovakia has proposed to the national assembly that measures be taken to adhere to the Berne Convention of 1906 prohibiting the use of poisonous phos- phorus in the match-making industry, as well as to protect the workers against anthrax and lead poisoning. Unemployment Survey 1920-21 with Standard Recommendations Introductory Summary T TNEMPLOYMENT in the Winter of 1920-21, although twice ^ as great in extent according to highest official estimates as during the previous depression of 1914-15, was accompanied by far less acute distress. The outstanding reason given for this was the unprecedented degree to which unemployed workers tided themselves and their families over the first few months of idleness. By using up their savings and selling their Liberty Bonds, and to a less extent dispos- ing of automobiles, victrolas, pianos and other valuables acquired during the war and post-war boom even in many instances sacri- ficing paid- for or partly-paid- for homes the unemployed on the whole carried themselves over last Winter's emergency for periods ranging from three to nine months. Charitable and relief organizations, therefore, were to that extent freed from a burden that must otherwise have quickly over- whelmed their resources although reporting that, as it was, they had to expand their activities greatly ; in some cases toward Spring their expenditures for material aid and temporary loans amounting to three or four times as much as in previous years without fully meeting the need for relief, while in many places it was found necessary to assist with charitable aid through city appropriations. Employers succeeded in preventing a large amount of complete unemployment by going on a part time basis. Business associations reporting from 41 cities were almost unanimous in stating that the short day and the short week were used as a rule by manufacturers in their effort to avert as much joblessness as possible. Shift- ing and rotating employees, though to a less extent, were also used. Thefe was some "making to stock," especially in basic industries, despite the uncertainty of price trends in raw materials and of the buyers' strike, and there were also a few attempts to utilize labor in making plant repairs or improvements. The reports warrant the estimate that if emergency plans for making available work go as far as possible had not been thus generally adopted by manufacturers there would have been twice as many without employment. 192 American Labor Legislation Review Public works were found to be effective for relief, serving as a sponge to absorb jobless workers. Out of 81 cities sending in- formation, 24 had by June 1 provided bond issues and appropria- tions totalling nearly $10,000,000 expressly for the purpose of starting or pushing forward useful public works as an aid to the unemployed a significant showing in view of the many cities reporting a disposition to delay even their regularly-planned public works pending cheaper transportation and construction costs. No city, however, had provided work enough to take care of all who applied at least half in most cases being turned away. Direct hiring was the rule on city emergency work, as was also working the same hours and applying the same standards of efficiency as is required for regular city employment. Cities generally had failed to make any efforts to reserve neces- sary improvements for bad seasons or bad years. Neither have they made any progress, the reports show, toward maintaining sinking funds to be used in starting emergency work when needed. Public employment bureaus were helpful in relieving unemploy- ment, most reports commending their services. Employers' asso- ciations in 19 out of 28 cities reporting expressed themselves as favorable to the public employment service, only 5 registering oppo- sition. Some employers' bodies criticized the private fee-charging agencies for, as one expressed it, "collecting exorbitant fees on myth- ical jobs." The action of Congress a year ago in radically curtailing the appropriation for the United States Employment Service was criticized in many reports which declared that necessary offices had to be closed and that placement activities had thus been seriously crippled. In all cities reporting, where federal, state and city bureaus were in existence, they were found to be in close coopera- tion not only with each other but also with other agencies private and public dealing with the unemployed. Community organization had by June 1 to a marked extent taken the form of emergency committees representing both public and private agencies. In no less than 18 cities special unemployment committees appointed by mayors, or similar public-private bodies, were created. Activities of these groups ranged from specific cam- paigns for stimulating emergency public works and finding tempo- rary jobs in private employment to the more general work of co- ordinating the efforts of all existing relief agencies. In 14 cities where organized work of emergency relief was confined to com- mittees of private bodies or citizens, it was found that in most cases Unemployment Survey, 1920-21 193 the committees were formed to bring about closer cooperation be- tween existing relief agencies. Nearly all cities that had any experience with the demoralizing results of " pauperization " sent in warnings to " avoid bread lines, soup kitchens, money gifts or other indiscriminate giving of charit- able relief." Nine cities especially condemned the giving of undue publicity to relief plans or funds. Several states in 1921, through legislation, expanded their sys- tems of state employment bureaus, with generous additional appro- priations. One or two authorized bond issues by cities for the relief of the unemployed. Some made provision for road construc- tion. Unemployment insurance bills were introduced with strong, representative backing in two states, and in Wisconsin the bill was advanced to a favorable committee report in the Senate. Two states on opposite sides of the continent furnished a striking con- trast: New York reorganized its labor department, on the ground of " economy," in such a way that a serious blow was struck at the state employment bureaus, and on the same plea of " retrenchment " refused to advance a resolution to create a legislative committee to coordinate all plans for public works, under way or contemplated, throughout the state as a matter of first aid to the jobless ; California, on the other hand, enacted a comprehensive law providing for per- manent, advance planning of public works by state departments so that useful jobs may be made available at once whenever an unem- ployment emergency sets in. Federal action, aside from Secretary Hoover's appeal to the states to help by letting contracts for road building in the Autumn, wherever practicable, instead of waiting until next Spring, was even less in evidence. Our government suffered in this respect in com- parison with Canada, where the government, already provided with a well-organized national-state employment service, announced that it will push forward public works scheduled for next Summer so that they will be available during the coming Winter to combat unemployment. Canadian government officials, too, called a con- ference at Vancouver, August 10, of 50 representative employers and government and municipal officials to work out a definite pro- gram whereby industry would assist in providing jobs for the unemployed. Looking immediately ahead, reports from many sections in the United States warned that cities must prepare for severe unem- ployment during the coming Winter. Relief agencies not only 194 American Labor Legislation Review pointed out that the unemployed have exhausted their own savings and valuables and cannot continue to help themselves as they did last Winter, but they also found that unemployment has been increas- ing faster than community activities have been planned to combat it. While an encouraging number of cities, the reports show, have taken measures to relieve the unemployed, still the great majority face the coming Winter with no program at all or merely the feeble be- ginnings of constructive relief. The opinion is widely held that unless the industrial cities promptly " dig in " unemployment in many sections will become unmanageable with the advent of cold weather. Definite conclusions as to the proper measures for combatting unemployment were forthcoming out of the experiences of 66 cities. Of these, 23 laid stress upon expansion of public works as the most successful measure within their experience; 16 emphasized tempo- rary jobs and the giving of material relief, where necessary, only when earned; 15 regarded proper community organization, includ- ing " mayors' " committees as a prime necessity ; 14 were especially aided by the efforts of employers to provide part time employment by means of the short day, short week and the " making to stock " ; and 8 secured notably good results through public employment bureaus. On the whole reports indicate that many of the lessons of 1914-15 had been taken to heart. Many cities, out of the most recent experi- ence, specifically reaffirmed the effectiveness of the " STANDARD RECOMMENDATIONS FOR THE RELIEF AND PREVENTION OF UNEM- PLOYMENT "* issued by the American Association for Labor Legisla- tion after a similar survey of unemployment in 1915, declaring that where adapted to local conditions they have proved most successful. Extent of Unemployment Unemployment in 1920-21 has been far greater in extent than in 1914-15. Six years ago the total number of workers forced into involuntary idleness was estimated at 2,000,000, with at least as many more on only part time employment. In the present industrial depression there were, by June 1, 1921, according to the highest official estimates, 4,000,000 employees idle and at least as many more on part time. 1 See pages 218 and 219, infra.; also American Labor Legislation Review, Vol. V, No. 3, September, 1915, which contains a comprehensive, illustrated report of the " Unemployment Survey, 1914-15." Unemployment Survey, 1920-21 195 About October, 1920, unemployment began to set in on an unmistakably large scale. On December 9 the United States De- partment of Labor announced that what is left of the Federal Em- ployment Service would undertake to gather statistics of unemploy- ment for the entire country, in co-operation with other federal and state agencies, the figures to be published at regular intervals. In accordance with this new plan the first number of the Industrial Employment Survey Bulletin was published by the United States Employment Service in January, 1921 ; the second number appeared in March, and later the Bulletin appeared monthly. On January 25, 1921, according to the official government figures based on data from 182 principal industrial cities in 35 states and the District of Columbia, there were 3,500,000 fewer workers em- ployed in the mechanical industries covered than in January, 1920 a reduction of 36.9 per cent. The official figures fall short of dis- closing the actual extent of unemployment in that they do not take into account the great railroad and mining groups and the smaller firms throughout the country employing less than 501 workers. In eight basic industrial groups the degree of unemployment in Jan- uary, 1921, as compared with January, 1920, according to the official estimate, was as follows : Metal and products, machinery, electrical goods, foundry products, 30.5 per cent fewer employed; building trades, 52.4 per cent fewer employed; packing and food products 19 per cent fewer employed ; textiles and products, clothing, hosiery and underwear, 35.5 per cent fewer employed ; leather, its products, boots and shoes, 34.9 per cent fewer employed ; automobiles and ac- cessories, 69.2 per cent fewer employed; lumber, house furniture, boxes and wood products, 32.3 per cent fewer employed ; clay, glass, cement and stone products, 19.3 per cent fewer employed, which meant that in these great industries alone there were on the average as high as 35.5 per cent fewer persons at work than a year previous. The American Federation of Labor, on February 28 announced that a canvass under way by organized labor covering 917 cities indi- cated that approximately 4,000,000 were out of work. On May Day the Associated Press reported that estimates from government, labor, and industrial officials showed more than 2,000,- 000 men unemployed in 19 states a large proportion of those unable to obtain work being in the industrial sections of the Eastern and Central States while reports from the remaining 29 states indi- cated that the total for the country was between 3,000,000 and 5,000,- 000 idle workers. On June 1 the " survey " published by the Guaranty Trust Company, relying upon "the most reliable esti- 196 American Labor Legislation Review mates," placed the number of unemployed at between 3,000,000 and 4,000,000. On July 22, the Wall Street Journal printed a Washing- ton despatch quoting " unofficial estimates by the U. S. Employ- ment Service of the Department of Labor" under the heading: " NEARLY 5,000,000 INDUSTRIAL WORKERS UNEMPLOYED JULY 1," and in August, the Secretary of Labor submitted to the United States Senate the official estimate that 5,750,000 were unemployed. Here was an unemployment crisis of appalling magnitude. Fol- lowing past experience with these ever-recurring depressions particularly the crisis of six years ago the way has been opened this time alarmingly wide for the quick appearance of acute distress and destitution on a scale never before known. Yet as winter dragged out its course and gave way to spring, the reports from all sections, with but few exceptions, failed to record drastic resort to emergency relief measures or suffering among the families of un- employed at all commensurate with the extent of involuntary idle- ness. How was this to be explained? With a view to finding out what measures were being taken to combat unemployment, the American Association for Labor Leg- islation during the Summer of 1921 undertook a brief survey cover- ing 115 principal industrial centers of the United States. Ques- tionnaires were sent to the same cities and the same sources of infor- mation public employment bureaus, chambers of commerce, labor unions, municipal departments of public work and permanent relief organizations that had co-operated in the comprehensive unem- ployment survey made by this Association in 1915, leading to the formulation of the " STANDARD RECOMMENDATIONS FOR THE RELIEF AND PREVENTION OF UNEMPLOYMENT " which have since been much discussed, especially during the past Winter, when, in leaflet form, they were in great demand and were distributed throughout the country by the thousands. To facilitate comparisons, the detailed part of the 1920-21 inquiry was confined to the corresponding six months' period covered by the 1914-15 survey, that is, from Decem- ber 1 to June 1. It was desired particularly to learn whether the lessons of six years ago had been taken to heart. Had the industrial communities really made progress toward dealing constructively with unemployment? Distress Not As Acute in Winter of 1920-21 As in 1914-15 Distress among unemployed workers is reflected in the calls upon charitable and relief societies for temporary aid. Yet, during the Unemployment Survey, 1920-21 197 Winter of 1920-21, with 4,000,000 out of work as compared with the 2,000,000 of 1914-15, only half of the cities reporting were forced to meet greater demands for relief than six years ago. Out of 65 cities, 9 had " far greater " demands for assistance than in 1914-15, 18 had "greater" demands and 6 found the pres- sure about the same. Five cities had no comparative data, while 27 reported that the distress in 1920-21 was less than in 1914-15. In Rochester the Social Welfare League met a greater number of applications and heavier demands upon its finances because of " the high cost of living, shortage of houses, exorbitant rents, unwill- ingness of landlords to trust even old tenants for any reasonable time and inability of relatives to help over such a long period." Yonkers, on the other hand, had less need for charitable relief be- cause " families had amassed savings from higher wages ; came later to ask for relief ; relatives of families in need better able to assist, due to higher wages." Philadelphia reported " our belief is that the reason for few applications for aid has been due primarily to savings." In Pittsburgh the charities reported (in July, 1921) that the demands for relief were less in 1920-21 due to " savings " and " credit," but added significantly that " these are becoming ex- hausted and increasing numbers are coming to us." " Living Off Their Fat " An editorial article in The Railroad Trainman for August, 1921 discussing the plight of the 5,000,000 unemployed, says : During the war it was common practice to refer to the spendthrift tend- encies of the workmen who spent their money like drunken sailors. Silk raiment, high grade autos and jewelry were supposed in the main to absorb the extra wages of all workmen and their families. That this was not gen- erally true is proven by the ability of the unemployed, for the most part, to take care of themselves. They may be doing it through the sale of their extravagant purchases during the good years, and their Liberty Bonds, which they can sell at a decided reduction of their face value. But, whatever the reason, the fact holds that the unemployed saved money in some form and have been pretty generally able to keep from asking for public assistance. This very fact is covered by the extent of the suffering that must now be experienced because of the loss of the regular wage. The public has not been asked to help to any great degree, although it is fair to assume that the limit of self -maintenance has about been reached in very many cases. When it comes to the last ditch there will be hundreds of thousands of men and women who will prefer to starve and suffer rather than to appeal for public assistance The self-respecting and independent, therefore, will not be counted among the out of work and down and out until they are forced by starvation to make known their wants to the public. 198 American Labor Legislation Review That is precisely what happened. The workers themselves, by " living off their fat," had up to June 1 been largely instrumental in averting general and desperate want. As early as November, 1920, the Metropolitan Life Insurance Company, in its Statistical Bulletin, said that " despite popular mis- conception that wage-earners spent their higher incomes in wasteful ways, the real evidence is that much of the increased income was expended wisely in securing a more wholesome home environment. Department store records show that wage-earners bought heavily such useful goods as furniture, bedding, carpets and other lines of household equipment. * * * Savings banks reported record breaking deposits from this group of the population." The New York Journal for January 28 reported that, " It is interesting to note that an increase of $104,500,000 or 27 per cent in savings was reported by Chicago banks in 1920, the heaviest increase developing after November 15, at which time unemployment began to be recognized. These figures are said to be the result of the public decision to economize and refrain from buying as employment had become an issue. Decline in the cost of living and money saved out of prohibition are also said to be important factors." By March a Maryland bank official was reported as saying that " he never knew a time when so many depositors have been compelled to draw on their savings accounts for living purposes. * * * Owing to their inability to find work and being driven to the extremity, they have been gradually drawing sums out of the banks each week to meet their necessary expenses." On May 11 the Post Office Depart- ment announced that the total deposits in the United States postal savings system on May 1 were approximately $10,000,000 less than on April 1. "At the large industrial centers, where there is con- siderable unemployment or wages have been reduced," said the department report, " instead of the usual increase in deposits there have been withdrawals to meet the living expenses of depositors." Even more positive evidence came from permanent relief organi- zations in 61 cities. With but few exceptions, all who replied to questions as to savings stated emphatically that a vast amount of distress had been forestalled because of the extent to which unem- ployed workers tided themselves over the immediate emergency. Liberty Bonds were likewise sacrificed by the unemployed. To a less extent jobless wage-earners sold or pawned other property and surrendered partly paid for homes. Striking testimony came from the charitable and relief societies of interest not only by way of Unemployment Survey, 1920-21 199 disclosing what happened in the Winter of 1920-21 but also to sug- gest how completely unemployment is stripping the workers clean of what material gains they made in war time and the post-war boom. From Sacramento came the report: "Most of them lived on their savings and bonds, selling their automobiles a great many bought them when they received a raise in wages in 1918-19. * * * A great many Liberty Bonds were sold from November until March at a great discount. It was too bad." In Waterbury, Conn., " our industries began laying off help last October, but owing to the fact that our people had been receiving high wages and many had savings and Liberty Bonds the problem did not come to us in the form of requests for relief until about the middle of December when men with large families began to apply." Similar reports came from such widely separated cities as Chi- cago, Phoenix, Springfield, Mass.^ Worcester (" savings banks are reporting unprecedented withdrawals"), Grand Rapids, New York City, Yonkers (" in many instances families lived upon savings for three, sometimes four months, supplemented by earnings from odd days' work"), Dayton, Newport, Providence, Spokane, San Fran- cisco, Milwaukee (" most * * * lived upon savings from three to seven months"). The two following reports are fairly repre- sentative : Lowell : " During the war wages had been very high and every employable member of most families was at work. There was a period of saving. These savings were drawn on. Many bank ac- counts were closed out entirely. * * * A large brokerage firm reports that all workers having Liberty Bonds sold ; them when they needed the money. When certain shops laid off help the bonds were on the market." Rock ford : " All of the local banks report that the unemployed have been drawing on their savings. In many cases they have with- drawn all that they had accumulated during the past year or two. J The common practice has been to take out at the rate of from $25 to $30 a week rather than large amounts at one time. * * * Receipts in the various savings departments of the city have been reduced almost to a minimum. * * * In three cases we have known of purchasers of homes who have had to turn over the contract because of inability. * * * Selling Liberty Bonds has been quite com- 200 American Labor Legislation Review Cities reporting the sale or mortgaging of household furniture, the pawning of articles, or the loss of partly paid for homes, included Indianapolis, Boston, New Bedford, Grand Rapids, Newark (" about 70 per cent of unemployed drew upon savings ; about 3 per cent sold or pawned property"), Utica, Rochester, Cleveland, Allentown, Erie, Knoxville, Memphis. Toledo reported that, " many stretched their credit at grocers, with landlords, etc., to the limit; few homes sold, many mortgaged; installment furniture returned. Only about 10 per cent of unemployed men in Toledo asked for public aid." Organization for Temporary Relief Community efforts to assist the unemployed through the Winter of 1920-21, to a marked extent took the form of " mayors' " committees, representing both public and private agen- cies, or similar bodies in which citizens were brought into close working relations with each other and with federal, state, county or city officials. Sixty-four cities reported on this matter. In 18 special unem- ployment committees of a public-private character, usually appointed by the mayors, were created ; in 14 cities committees of private or- ganizations or of citizens generally were formed; in 6 there were special unemployment committees of chambers of commerce or manufacturers' associations; in 5 there were city or state-wide " conferences." In one city Toledo an emergency labor commis- sioner was appointed by the mayor in January and " has been in constant touch since with the work done by the welfare department of the city government and the Social Service Federation." In San Francisco a special unemployment committee, appointed by the mayor, " took a careful survey of the situation and decided that it would be unwise to create a special fund or to give publicity to the unemployment situation under existing conditions. Instead of doing so, the regular agencies were asked to assist the situation even if it necessitated incurring a deficit. The work was divided between the Associated Charities, which assumed necessary relief for unemployed family men, and the Salvation Army, which undertook the care of single civilians, and the Red Cross, who cared for all soldiers, either family men or single." In New Britain, the city's /abor bureau, established in April, found jobs nearly all " street work, pick or shovel " for some 1,600 men, out of a total of 5,000 unemployed, by July 1. " Our instructions from the mayor are to Unemployment Survey, 1920-21 201 place the most needy first, most deserving next, etc., but to allow no one to go to bed hungry. When work cannot be given applicants are taken to the charities department and food, etc., is supplied." Johns- town reports that while no special committee was appointed last Winter, the state employment bureau has a committee on " Prepar- ing for Hard Times Before They Come." In view of the importance of creating permanent unemploy- ment committees to make timely plans for preventing and reliev- ing unemployment, the following extracts from a report from Utah are quoted here as an example of how not to proceed: At a conference called by the governor to consider the situation * * * at which each county in the state was represented, resolutions were adopted calling upon cities, towns and counties to do all public work possible. On being questioned the governor stated that the state had no money to spend, as also did the county commissioners of Salt Lake County; as a matter of fact all the county officials present stated they had no public money to expend on road work or improvements. * * * Finally the conference adjourned in a squabble after adopting a resolution calling upon each county to appoint an unemployment committee. Not a con- structive suggestion was made. The mayor of this city (Salt Lake) estimated that at that time there were 6,000 unemployed in this city and about 8,500 in the county. Later a conference was called by the mayor and chairman of the county commission of this county. A permanent unemployment committee was formed of which the writer is a member. Nothing has come of it so far but talk. The committee adjourned to meet at the call of the chairman; weeks have passed and no meeting has been called. Nothing but talk is the result while the unemployed starve. The mayor said that he had heard of mal- nutrition but never in his life had he seen it except in the two months previous to the conference when parents came to appeal to him with their children with drawn faces and sunken eyes. In the 14 cities where organized work of emergency relief was confined to committees of private bodies or citizens, it was found that in most cases the committees were formed to bring about closer cooperation between existing relief agencies. In St. Paul there was cooperation between representative groups to induce employers to operate on part time. In Lincoln a " coal committee " was created by the Commercial Club and other civic organizations to assist families of the unemployed. In Schenectady a citizens' relief com- mittee provided entertainments, using the proceeds to relieve persons who would not apply to the Department of Charities, yet needed assistance. In Philadelphia, a committee of social agencies on un- employment " resulted in excellent team work " and secured a special appropriation of $10,000 for unemployment relief administered by the city department of public welfare. In Spokane, the chamber 202 American Labor Legislation Review of commerce and the central labor council were jointly represented on a special unemployment committee, making every effort to secure employment for those out of work. About $2,000 was raised by the central labor council as a special fund for the unemployed, dis- bursed by the Social Service Bureau. In Manchester, N. H., a community council consisting of thirty industrial, philanthropic and social organizations was formed. Expenses, salaries and office costs were paid by the Red Cross, the council acting as a clearing- house for all philanthropic organizations in the city. Its function was to refer all applicants for assistance either to an established society or one of the emergency relief funds and to secure work for as many as possible. One of the most ambitious attempts made in the United States to organize a community to deal with unemployment was the creation in February, 1921, of the " Coordinating Committee on Employment Activities of New York City," working in close cooperation with the United States Employment Service, the Women's Bureau of the State Industrial Commission and the Vocational Division of the State Department of Education. In its first bulletin the committee said: One of the by-products of the war was an increased interest in the problems of employment. The seriousness and the loss to the community because of unemployment, inadequate training and placement have become more and more generally recognized. More careful attention is given to training, guidance selections, placement, and reduction of waste due to employment. In response to the growing interest in these directions, new organizations have come into being and the work of existing organizations has been greatly expanded. As a result, there has, of course, been overlapping and overlooking and a general lack of understanding in the plans and purposes of the various organizations. Above all, there is a general lack of fruitful co-operation between the training and the placement agencies with the employers' and employees' group. The desirability of co-ordinating the activities of these various groups, the im- portance of better training, more discriminating placement, better organization of the employment market and production processes as means of reducing employment is peculiarly apparent at the present time. It is also apparent that no single agency can bring about significant improvements in these matters. This must come through the co-ordination of the different groups involved, co-operating to formulate and help realize a community employment policy." Chambers of commerce or other employers' associations in sev- eral cities appointed special unemployment committees as in Hart- ford, Wilmington, Brooklyn and Fall River, where the Red Cross emergency loan committee of representative business men under the direction of the chamber of commerce provided food, shoes, etc., through loans. Unemployment Survey, 1920-21 203 Efforts by labor organizations to assist the unemployed through special committees of their own appear to be negligible, although in Los Angeles, a special committee of the central labor council " worked on city officials to stimulate public work with fair results." And from the Trades and Labor Assembly of St. Paul came an inter- esting report that the labor movement started on a plan to employ its own people, resulting in the organization of the " People's Construction Company," owned and controlled by organized labor, which competes with building contractors. By July 15 it had a pay- roll of $4,000 weekly. "Work Tests" and Relief Jobs Out of 71 cities from which information was secured, 41 per- manent relief organizations reported that they had no regular means such as a wood yard or laundry for furnishing either employ- ment, a work test or employment with training. In Phoenix, the Associated Charities had a wood yard for men and laundry and cleaning for women. Oakland had a municipal lodging house and wood yard which employed from 100 to 150 unemployed single men daily in cutting wood in one of the undeveloped sections of the city. They received in return shelter and food at the lodging house. " Every alternate day was spent in looking for employment, so that one day's work paid for two days' lodging." Other cities reporting wood yards in use included Brooklyn, Wilkes Barre, New Haven, Davenport, Baltimore, Paterson and Boston. Sacramento "had none for the last two years * * * abandoned during the war * * * we may next year." In the great majority of cases such temporary relief work was carried on without the aid of city or other public agencies, but through the close co-operation of various permanent relief organ- izations. In Cincinnati there was a " small-job " committee composed of some of the heads of different organizations and a number of volun- teer workers who gave full and some part time. The committee was directly under the supervision of the special unemployment com- mittee appointed by the mayor. It was the duty of this committee to find the small- job, which they asked the housewife and business man to create, for the express purpose of taking care of this situation. For instance, such work as whitewashing cellars, painting, papering (which was out-of -season), raking leaves, cleaning yards in fact, asking the public to actually create work, in the small-job way. The 204 American Labor Legislation Review physicians were asked to tell their patients, the attorneys were asked to speak to their clients, the pastors and priests were asked to notify their congrega- tions, etc., each one to call the "Small-Jobs Committee," who was located with the state-city labor exchange, and easily accessible by phone or personal call. As a whole, 7,000 transients were cared for during this period. From the Associated Charities of Waterbury, Conn., came the following interesting report: From the middle of December, 1920, to April 1st, 1921, our Association worked out a scheme with the Street and Park Departments by which the city furnished the work, tools, foremen, and teams and our Association paid the men at the rate of 35 cents an hour out of funds collected by the Asso- ciation from private individuals. Owing to the open winter it was possible for the men to do street grading and other outside work practically every day during the winter months. The reason our Association paid the men was because the city had no funds available at that time for this purpose, its departments being on the budget system. During this time our Association spent approximately fifteen thousand dollars. By April 1st the situation became more serious with increasing numbers of men applying for help. We then called a meeting of citizens, manufacturers and city officials to consider the problem of additional funds and facilities for more work. This conference resulted in a bond issue of about $700,000 by the city for water extensions, street improvements, and park work. As soon as the bond money was available about the first week in April, the identical scheme that prevailed during the first three months was continued with the exception that the men were paid out of the city treasury and at the City Hall instead of at the office of the Associated Charities. This, of course, enabled us to take on considerably more men. We have been employing on an average of three to four hundred men a week in this way and by alternating them with one week on and one week off we have been able to take care of approximately six hundred men on our active work list. This, of course, has changed as the men found work in other industries and new men applied. In Toledo " the Social Service Federation has wherever possible put into effect the work test, especially with the floating element, and in a great many cases in dealing with recipients of relief who are residents of Toledo and have families. * * * For a consider- able time while the relief was being given it was not possible to apply the work test to the heads of families. * * * While the work test was applied to all men whose families were receiving the relief the demand for relief dropped down to 50 per cent." Meriden, Conn., " gained temporary jobs through publicity in the newspapers." In New Haven, the chamber of commerce sent printed cards to employers and social agencies asking them to find work or employ ex-service men, and the charities organization " found employment for quite a number of individuals at casual labor, but manufacturers are unwilling to lay up a supply of manu- factured articles and add to their inventory." In Akron contacts Unemployment Survey, 1920-21 205 were established with employers which resulted in their taking on married men first, limiting hiring to local men and some part- time work. Erie depended principally on direct appeal for the benefit of individual families going by preference to former employers. " We have been quite successful in securing work on the individual appeal basis. Our state employment bureau has systematically given preference to men whose family conditions were certified to them." In Knoxville a meeting of city officials and large employers adopted a plan that citizens loan sums of from $500 to $3,000 to the city, receiving in return certificates of indebtedness. These individual loans reached the total of $8,000, which was used in paying the " charity squad " for street work at 20 cents an hour. " This was successful." Food, Clothing, Shelter, Money and Loans No comprehensive data were obtainable as to the amounts spent during the Winter of 1920-21 for material relief to idle workers and their families. Yet, from all reports received it was apparent that in at least half of the large industrial centers the expenditures for this purpose were exceedingly heavy despite the amazing extent to which the unemployed had been able to tide themselves financially over the first months of unemployment. Food and shelter and other necessaries were as a rule given only in return for work, except in cases of desperate need or to prevent suffering among children. In some cities, as in New Bedford and Akron, loans of money were made to the unemployed, while in others, as in Fall River, food, insurance, shoes, etc., were provided by order as loans. In San Francisco unemployed family men provided with work that needed to be done at the Relief Home were paid by the Asso- ciated Charities largely in food and at the rate of 50 cents an hour. " Each man was allowed to work so that he could provide adequate food for his family and really excellent quality. Groceries and vegetables were bought at wholesale prices and distributed directly to the men at the Relief Home, where they were also furnished by the management with an excellent dinner." Public Employment Bureaus The unfortunate results of the blow struck by Congress last year at the United States Employment Service, in cutting its appropria- tion down to skeleton proportions were apparent throughout the 206 American Labor Legislation Review country. Almost without exception local agencies state, city and private turned to the federal offices (what was left of them) for cooperation. And almost without exception the testimony was that such cooperation, where it did exist, was " effective." In New Jersey, for example, the state director of employment reports, " the curtailment of the federal funds appropriated for pub- lic employment work has acted to reduce the number of public offices in New Jersey from 15 to 7." In order to overcome this handicap, however, " local committees have been formed in Newark, Jersey City, Camden and other cities of representatives of the state, municipal governments, chambers of commerce and relief organiza- tions, and they have directed appeals to the citizens to create what odd jobs and repair work were possible, centering such calls in the public employment bureau." Among the states, New York's position was particularly unenvi- able. The political reorganization of the state labor department by the governor and the state legislature in 1921 resulted in the face of increasing unemployment in the closing down of a number of state employment offices. This reactionary move aroused widespread protest and, according to reports from a number of the principal industrial cities of the state, served to cripple community efforts to combat unemployment as far as it could be mitigated by labor placements. Thus, the Merchants Association of New York State, on July 5, 1921, protested that unemployment conditions are too serious to warrant the discontinuance of the public employment bureaus. After a special inquiry, a committee of the Association had found that " it is very important that the state should maintain as many of these employment bureaus as possible." Out of 55 cities reporting 3 took some action between December 1, 1920, and June 1, 1921, relating to employment bureaus. Savan- nah and New Britain established city labor bureaus and Portland, Ore., enacted an ordinance prohibiting private employment agencies from publicly advertising for foreigners to fill jobs at their dis- posal. There was some state action. North Carolina established a state free employment service ; Arizona passed a law creating an indus- trial commission regulating employment offices and administering the accident compensation law (which has since been held unconsti- tutional) ; Kansas in March appropriated $20,000 yearly for its six state employment offices ; Nebraska appropriated $8,768 to be used in cooperation with the federal employment service; North Dakota Unemployment Survey, 1920-21 207 appropriated $10,000 for the state free employment service covering two years and providing for cooperation with the federal service. Ohio appropriated $15,000 extra for the Cleveland state-city em- ployment office to offset the withdrawal of financial support by the Welfare Federation. Significantly, the reports from chambers of commerce and other business organizations were overwhelmingly favorable toward pub- lic employment bureaus. Out of 28 cities reporting on this ques- tion, the employers' associations in 19 expressed themselves as strongly favorable to the public employment service, 4 were non- committal and only 5 expressed opposition. At the same time sev- eral employers' representatives criticized the private fee-chargjmg agencies for, as one expressed it, " collecting exorbitant fees on mythical jobs." Paterson, N. J., employers raised the objection " there is much repeating f>f employees and * * * general dis- satisfaction among employers that there is no control over these floaters who are continually going from job to job." Cincinnati manufacturers felt that either the executives of public employment bureaus in charge were "not able to handle the position or that necessary funds were lacking." In striking contrast with these views, however, were those of the merchants and manufacturers in Phoenix, Pueblo ("apparently a success"), Hartford ("very ex- cellent work is being done by the state employment office * * * particularly in the placing of unskilled labor"); Boston ("help- ful"); Worcester ("effective work"); Buffalo ("very satisfac- tory ") ; Schenectady (" state employment bureau which goes out of commission this week due to lack of funds from the state depart- ment of labor has done good work here") ; Fort Worth ("cannot say too much in behalf of municipal employment agency and believe it accomplished great things in relieving unemployment ") ; Seattle ("city-federal employment bureau was of great assistance"). Public Works When the wheels of private industry stop and millions of workers are suddenly cut off from their earnings, it is not charitable relief but useful work that is demanded both to conserve the best interests of the community and to maintain the self-respect of the workers who are jobless through no fault of their own. Hence aside from the relatively few and futile " made " jobs that may be resorted to work for the workless can best be provided by pushing forward pub- 208 American Labor Legislation Review lie works and starting new public improvements immediately. This was done effectively in many cities during the Winter of 1920-21. Out of 81 cities from which reports on public works were re- ceived, 24 cities made provisions for about $10,000,000 of bond issues and appropriations. Cities that voted bond issues to provide public work or relief for the unemployed included Phoenix, with $465,000 for public improve- ments " will bring work to almost all unemployed within 90 days ; unemployment not felt until February;" Bridgeport ("state legis- lature recently authorized city to issue $300,000 short-time notes for relief, but it is unknown whether this will be spent in work or in , outdoor relief ") ; New Britain, grading and sewer construction started and moved forward; bond issue authorized by 1921 legisla- ture ; New Haven, $250,000 extra bonds for improvement of parks, roads, bridges, new fire houses ; Waterbury, $700,000 for water ex- tensions, street improvements and park work; Lynn, $75,000 for road building; Flint, Mich., $500,000 for sewer work which was both started, and moved forward; Minneapolis, over $1,000,000 bonds for street work " expect money from eastern buyers in June to start work ;" Dayton, about $100,000 bonds taken by sinking fund, for moving forward sewer work; Toledo, $286,000 for permanent park improvements ; Fort Worth, " county issued $4,000,000 bonds for good roads, available at time unemployment became serious; city provided $1,900,000 for sewer and water extensions, work hastened to meet unemployment ; also large amount of street paving speeded up." In Jackson, Miss., significantly, where a bond issue for 1921 improvement program was voted down at the April, 1921, election, " people are now demanding a special election, which will be held August 1 to reconsider the bond proposition so public work can be started to give work to the unemployed." Cities that made other provisions, mainly by appropriations, for moving forward or starting public works as emergency aid to the unemployed included Oakland, Bridgeport, Hartford, Augusta, Ga., Moline, Shreveport, Baltimore, Lowell, Grand Rapids, Elizabeth, N. J., Newark, Paterson, Schenectady and Seattle. In hiring the unemployed on street improvements and other pub- lic works most cities appear to have maintained the same standards of wages, hours and efficiency as are required for the city's regular work. Out of 34 cities sending detailed data on public works started or moved forward expressly to aid the unemployed, 17 cities, or half, had adopted definite standards of labor for the emergency employ- Unemployment Survey, 1920-21 209 ment. All of these cities required the same efficiency as is usual for city work with the exception of Seattle, where 50 per cent to 60 per cent was regarded as satisfactory, and Hartford which was content with 75 per cent. Direct hiring was the rule ; 1 1 cities hiring the men directly, one city letting out the work under contract, while 5 cities provided the work under both direct hiring and contract. In 11 cities wages paid were at the regular rate, ranging from $1.75 for a five-hour day in Hartford to $4.75 for an eight-hour day in Seattle. The hourly rate, which was most common, ranged from 30 cents in Baltimore (less than the regular rate) ; 42^ cents in Dayton (less than regular rate) ; 40 cents in Flint (regular rate) ; 52 to 57 cents in Newark (regular rate) to 60 cents an hour (reg- ular rate) in Lynn. In all cases the daily hours of work required were the regular hours ranging from five hours in Hartford, eight hours in 11 cities, up to ten hours in Flint and Waterbury. Rotation of workers was employed in eight cities, varying from the plan of working one week and then being laid off to changing gangs every three days. In selecting the men for the emergency city jobs, married men with families or with dependents, who were local residents were in almost all cases given preference; in some cases ex-soldiers being also put in the preferred class, and in two cities, Moline and Dayton, it was further required that those put first on the list for employment be " American citizens." No city reporting had work enough to take care of all who applied. Thus, in Seattle there was work for only 727 out of 1,560 applying; in Milwaukee, jobs for 300 out of 2,000 applying; Paterson, 150 jobs for 220 applicants; Flint, 200 jobs for 500 applicants; Moline, 500 jobs for 1,000 applicants; Waterbury, 3,000 jobs for 4,000 applicants; Hartford, 350 jobs for 1,000 applicants and in Dayton only 2,000 jobs available while there were 1,000 men applying for the work every day. It is to be noted that the city work here reported began in many cases in the early Spring, although in a few cities, as in Dayton, Flint and Seattle, the work was started as early as February. Reports were practically unanimous that all groups in the com- munity were ready to lay aside partisan prejudices and unite on plans for extending public works to tide over the industrial depression. Cities in all parts of the country failed to make efforts to reserve necessary improvements for bad seasons or bad years. Out of 13 representative cities making reports on this point, 11 said nothing at 210 American Labor Legislation Review all had been done to this end. Only two cities had a positive word Kansas City, Kan., where the city " regularly tried to let contracts in dull seasons " and Milwaukee (which, by the way, has a contingency fund), where such emergencies are taken care of as they present themselves. Neither have cities generally undertaken to maintain a sinking fund to be used in starting emergency work when needed. Dayton was the only city out of 17 that had such a fund; 14 reported none at all and in only 2 were there any helpful financial provisions of this nature made as a regular matter Milwaukee, which maintains a contingency fund, and Kansas City, Kan., where there is a 5 per cent levy to take care of the engineer's department so that when there is much public improvement an emergency or general fund is accumulated to draw upon. Charter limitations as a rule limited city expenditures for emer- gency public works to aid the unemployed. Out of 13 cities furnish- ing definite data all were restricted by the city charter with the exception of Seattle. In no cases were there any steps taken to have the limitations removed. Part Time Employment in Industry Employers generally made use of the short day, the short week, shifting or rotating employees, " making to stock " and pushing plant repairs or improvements, in an effort to avert as much unem- ployment as possible. Manufacturers and business establishments applied such of these measures as would fit in with their own plant conditions in an individual way, much as unemployed wage-earners bore the burden of the early months of idleness almost wholly as individuals and families and not as organizations. Business associations in 41 cities that included information on this point in their reports were in almost unanimous agreement that the short day and the short week were the most widely used devices. In all but 4 of these cities " many " or " practically all " industries went on the short day or the short week, or both. Shifting or rotating employees was not so common: in Phoenix it was done " in the big mines " ; in Pueblo it was " the most common plan to meet unemployment and is successful " ; in Hartford and Wilmington it was tried by one large plant on a " one week on, one week off basis " ; in New Haven " practically all " did it " success- fully"; in Gary the steel company did it (together with the short week), thus "at present making it possible for 2,500 men to work Unemployment Survey, 1920-21 211 who would otherwise be entirely out of employment " ; in Indianapo- lis it was common with the automobile, packing and furniture indus- tries; in Evansville, Ind., with a large steam shovel company (Bucyrus) ; in Syracuse with the steel industry; in Cincinnati with steel plants, railroads and rolling mills ; in Seattle with longshore work ; while in Lynn " union rules apportion work so all get a share " ; in Minneapolis " it was attempted by nearly all." There was some " making to stock " despite the uncertainties of the trend of prices of raw materials on the one hand and the " buyers' strike " on the other. This was true notably in Phoenix (sash and door), Evansville, Fort Wayne (water driven motor pumps), Minneapolis (" making up of stock has been carried to the limit of the financial ability of the firms involved and their view- point as to price fluctuations "), Cincinnati (rolling mills, steel plants and glucose plants), Toledo ("this has been done consistently throughout the different industries ; in fact some of the manufactur- ers have gone almost too far for their own safety in doing this "). And in Niagara Falls (" practically all because most are basic indus- tries " but " storage limit about reached "). Using the depression as an opportunity to make plant repairs or improvements with labor that would otherwise be let out, it appeared, was not extensive. In some places like Cleveland and Cincinnati it was done, extensively, as well as in the mines of Arizona ; but on the whole this was a negligible factor. New Haven's plant im- provements had been made " during the war." In Rochester there was little of it " because of strikes and building costs." Little information was forthcoming from chambers of commerce and other business bodies as to the basis upon which the workers to be kept as long as possible were selected. " Efficiency " is the test most frequently cited. In Phoenix the aim of employers was to keep men who are " real mechanics, also tax payers and property own- ers " ; in Denver, the " more efficient workers " ; in Rochester, " the most efficient and economically dependent " ; while in Syracuse the following were considered (1) efficiency, (2) resident or non-resi- dent, (3) number of dependents, (4) length of service, (5) ability to do other work. Wage Reductions Wages in all sections, almost without exception, were reduced. Reductions varied greatly. For example, the decreases ranged from 10 per cent to 15 per cent in factories generally in several cities 212 American Labor Legislation Review reporting to 20 per cent in big steel industries, 22^ per cent in im- portant textile industries and even 25 per cent in factories in many sections. The building trades as a rule appeared to be most resist- ant to wage cuts, though in Phoenix the builders' exchange reported a reduction on March 1 with another expected " soon," both totalling 25 per cent. Reflections of the " open shop " war appeared in many reports. One important California chamber of commerce remarked: Quite a few of our employers take the position, that as these organizations (labor unions) were very insistent in urging the claims of their members for increased wages during the labor shortage, they should now assume the burden of protecting them through the present depression. On the other hand, Open Shop concerns have shown an earnest desire to cooperate with the men who have stood by them, thus setting up another strong argument in favor of the American Plan or Open Shop. " Employers, generally, are very bitter about the whole matter," reported a settlement in the East. " They feel that the demands of labor have been so arrogant during the period of the scarcity of labor that it is not incumbent on them to feel any sympathy or to take measures to alleviate conditions. There are, of course, many shining exceptions." A charitable organization in the South wrote that it was " afraid that the business men have welcomed the unemployment situation as a means of bringing down wages." From the Middle West a settlement association reported that " many working people feel that unemployment is largely due to an organized effort on the part of employers to bring down wages and break the union " a suspicion that was reflected in a resolution adopted by the American Federation of Labor at its Denver con- vention in June, which declared that " it is apparent that a portion of this industrial depression is artificial and was manufactured by profiteering for the purpose of lowering living and working stand- ards, weakening the organized labor movement and breaking the morale and spirit of the workers." Regularization of Industry Constructive plans for permanent regularization of industries were reported. In Chicago, the Joint Board of Employers and Workers in the " ready-made " part of the clothing industry, to meet the situation of a heavy demand for workers in one branch of the industry and slack time in the other, worked out a plan which permits the transfer of cutters formerly employed by the tailor-to- Unemployment Survey, 1920-21 213 the-trade houses (who would therefore be unemployed or working only part time) to ready-made houses where there is a need for their services. Later, it was explained, when the tailor-to-the-trade season begins and the ready-made industry slackens a new readjust- ment can be made " thus the union has been able to work out, so far as the cutters are concerned, a scientific distribution of the workers to meet the needs of the industry, make the best use of the man power in the market, eliminate waste and provide for more continuous employment for our members. " The most notable recent effort to lessen unemployment by regu- larizing industry was reported from Cleveland. In summing up " the new methods that are being worked out in the garment industry gradually to eliminate or at least lessen unemployment,' 5 the manager of the Cleveland Garment Manufacturers Association wrote: As you may be aware, we have in this industry a co-operative arrangement between the employers, the employees, and an impartial board of referees. Wages are now set by the board of referees following an annual hearing. In April of this year the referees granted a wage decrease approximately of 13 per cent but they at the same time caused an unemployment fund to be set aside equal to 7^ per cent of the direct labor payroll in each plant. In the 26 weeks following June 1st of this year each worker is being guaranteed at least 20 weeks of employment. Failing to secure this, he is permitted to draw upon the unemployment fund to the extent of 2/3 of his minimum wage. This, of course, places the burden for unemployment directly upon the manu- facturer and while his losses are limited to 7% per cent, yet he can save any or all of this amount by providing 20 weeks of work to each of his employees. Unemployment funds were found in successful operation in sev- eral manufacturing establishments notably the Dennison Manu- facturing Company at Framingham, Mass., 1 and the Deering Milli- ken Company bleacheries at Wappingers Falls, N. Y., 1 and else- where. But such constructive permanent provisions for safe- guarding industries against the demoralization of unemployment crises were found to be so few and scattering that, taking the country as a whole, they may still be said to be a negligible factor in reliev- ing or preventing unemployment. Unemployment Insurance Progress was made toward the adoption of unemployment insur- ance legislation. In many states there was increased interest in agitation for an unemployment insurance law in 1921, particularly 1 Described in detail in the American Labor Legislation Review, Vol. XI, No. 1, March, 1921, pp. 41-47 and pp. 53-59. 214 American Labor Legislation Review by labor organizations, civic and social service organizations and progressive-minded employers, but no legislation came out of the reactionary sessions of 1921. In Pennsylvania an unemployment insurance bill was introduced in the legislature with strong repre- sentative backing. And in Wisconsin, where a similar bill was introduced and aroused state-wide interest, a favorable report was secured from the Senate committee having the bill in charge. It was, however, defeated in the closing days of the session, when its own sponsors refused to accept it with some impracticable amend- ments that had been voted into it by the Senate. Unemployment Handled Slightly Better in 1920-21 Conditions of unemployment in the Winter of 1920-21 presented several important aspects that made comparison with 1914-15 diffi- cult. While, on the whole, it appeared that communities profited by the experiences of six years ago and made somewhat better pro- visions for combating the evils of unemployment, still this must be somewhat discounted because of the remarkable extent to which the unemployed wage-earners themselves, through their savings and other resources, lightened the responsibilities that would otherwise have taxed to the limit the best of organized community efforts. What credit there is for improved " handling " of the situation in 1920-21 must go for the most part not to industry, not to relief societies, not to city fathers, not to citizens committees, but most largely to those least to blame the victims of involuntary unemploy- ment. They were able temporarily to exist on their own savings. Yet, community planning and activity for emergency relief as worked out during this period and in some cities being put to severe test, as where unemployment hit first and where the unemployed first exhausted their own resources showed a little improvement over six years ago. Out of 17 cities able to make comparisons, 9 reported that there was definitely " better " handling of unemployment between Decem- ber 1, 1920, and June 1, 1921, than in 1914-15. Various reasons were given : " cooperative methods now in use " ; " city employ- ment bureau now organized " ; " state employment bureaus created " ; " more comprehensive plans for emergency public work " ; " previ- sion and effective community organization." In unfavorable contrast with the spirit of most industrial centers has been that of two of the greatest cities of the United States Unemployment Survey, 1920-21 215 Boston and Chicago. Throughout the Winter of 1920-21 both these major industrial centers lay back in neglect and indifference, as the reports agree, and on June 1 there was no immediate prospect of either stirring into action. Policies Good and Bad With a single voice the cities bearing testimony as to the results of their various efforts to relieve unemployment, declared that " the only cure for unemployment is employment." Relief even faintly suggestive of charity was found to be a bad policy except as a last unavoidable resort. Sixty-six cities contributed their conclusions as to the proper methods for relief and prevention. Of these 23 laid stress upon expansion of public works as the most successful measure within their experience of meeting the unemployment emergency; 16 em- phasized temporary jobs and the giving of material relief, where necessary, only when earned; 15 regarded proper community or- ganization as a prime necessity ; 14 were aided by regularization of industry short day, short week, making to stock, repairs and im- provements, etc., and 8 got especially good results through public employment bureaus. A few scattering cities like Hartford and Indianapolis found that sending idle men to farms had been helpful. Most cities made use of all, or nearly all, of these measures in com- bination in making most effective headway against distress due to unemployment. Many cities, reporting definitely that they had drawn upon the " STANDARD RECOMMENDATIONS FOR THE RELIEF AND PREVENTION OF UNEMPLOYMENT " issued by the American Association for Labor Legislation, in dealing with unemployment, listed these activities on the successful side of the community ledger. Avoid bread-lines, soup-kitchens, money gifts or other indis- criminate giving of charitable relief! That is the warning coming from nearly all cities that had any experience with the de- moralizing results of " pauperization." Especially vigorous con- demnation of these methods came from 24 cities, including such im- portant industrial centers as Pittsburgh, Toledo, Pawtucket, Tacoma, Milwaukee, Denver, New Haven, Rockford, New Orleans, New Bedford, Springfield, Worcester, Mass., Manchester, N. H., New York City, Syracuse, Dayton, Fall River and Savannah. Undue publicity of relief plans or funds was condemned as harmful in reports from 9 cities, including San Francisco, New Bedford, Syra- 216 American Labor Legislation Review cuse, Cleveland, Spokane, Flint, Michigan, Newport and St. Louis. From 11 cities came scattering recommendations of measures to be particularly avoided, such as giving work to women instead of to men with families, the creation of new organizations until existing machinery has proved inadequate, " politics " or antagonism between groups, permits to beg or peddle on the streets, obviously created or " made " work, and " hysteria." Labor organizations contended that over-production, overtime or longer working hours tended to aggravate unemployment. On the positive side, interesting campaigns were carried on in several cities. That undertaken in Erie, Pa., is suggestive. There the Associated Charities, besides drawing upon the " RECOMMEN- DATIONS/'' carried on emergency activities that were especially de- signed to focus public attention upon constructive measures of re- lief. On January 29, 1921, the following general appeal in mimeo- graphed form was circulated throughout the city : UNEMPLOYMENT WHAT CAN WE Do ABOUT IT? Where there is no Fire Department every citizen must be ready to do his part in case of fire, and since no adequate preparation has been made for meeting unemployment, we all must render such emergency service as we can. Employers should make every effort to continue in operation. They should retain just as many of their employees on the pay rolls as they possibly can, giving part time employment in preference to laying men off. Employees who live in the city and those who have families dependent upon them should be given first consideration. In some cases men of family might be taken on and men without dependents dropped to make room for them. Employees, until the emergency is past, should lend support to part time work, or even to longer hours or reduced wages, where only this will enable the employer to continue operation. Work of any and every kind should be sought as preferable to charity. Those who are in need should be cared for by their unions or by fellow workmen if possible. City and county departments should see that all public work which it is possible to do now is started at once and that it is done by those who have no other means to tide them over. Landlords should be lenient with tenants who are out of work if they have always been prompt in payment heretofore and are known to be honest. Levies should not be made unless there is reason to believe that the tenant will not pay up. Tradesmen should discourage unnecessary expenditures by those out of work, but for the purchase of necessities they should extend extra credit as far as their capital will permit to those whom they know they can trust. Prices should be reduced wherever possible, to keep goods moving and stimu- late production. Relatives should recognize the claims of kinship, and as far as their Unemployment Survey, 1920-21 217 resources permit should see that those related to them are not forced to ask aid from strangers. Friends and neighbors should take thought for those who are un- employed and do the various turns that friendliness and neighborliness will suggest. Loans might be offered by those who have savings. Liberty bonds might be purchased at par from those who are obliged to sell. Grocery accounts or rent bills might be guaranteed by those who own property for others who have no property to make their credit good. Churches should make an effort to care for the steady workers among their members by loan funds or by direct gifts from their charity funds. Money for this purpose should be raised quietly and should be disbursed without the names of the beneficiaries becoming known except to those con- cerned in the actual disbursement. Everybody must undertake to see that employment is offered from every possible source. Odd jobs, clean-ups, repairs, preparations for building, and many other things can be done now. Even if it costs a little more, the difference represents the most efficient form of charity and embodies real patriotism. Any jobs found may be reported to the State Employment Bureau, where they will be assigned to those who need them most., Welfare agencies, whatever their special lines of work, must recog- nize that unemployment can soon defeat all their efforts, and should give serious attention to warding off this threatened danger. They are in touch with those whose resources are most limited and to whom unemployment is most likely to mean actual privation. Their workers should take up each indi- vidual case on its merits and, after analyzing it, be in a position to suggest workable plans for bridging the period of unemployment. The Associated Charities will care for families who have no one else to depend upon, and for those who are difficult to care for because of shift- lessness, unreliability, etc. But no relief agency can act as a substitute for employers in offering work, nor guarantee payment of the rent and grocery bills of all the unemployed. To do this would swamp any agency before it was fairly started. Even to investigate and report on more than a small percentage of those out of work would be impossible with the present staff. However, the Associated Charities can and will do its part, and if everyone else will do the same, the period of unemployment can be passed without unnecessary hardship to anyone." (Here was inserted extracts from the "STANDARD RECOMMENDATIONS FOR THE RELIEF AND PREVENTION OF UNEM- PLOYMENT" issued by the American Association for Labor Legislation.) If preparation had been made in advance, we could now have public works ready to begin operation on a scale sufficient to insure every able-bodied man a job. The probability of general unemployment being thus removed, business in most lines might have felt little slackening. Unemployment insur- ance, which could have been carried easily during the years of steady work, would have prevented suffering now, and would also have kept up the buying power of the public, thus hastening the return of employment. STANDARD RECOMMENDATIONS FOR THE RELIEF AND PREVENTION OF UNEMPLOYMENT REPORTS received in the course of an investigation by the American Association for Labor Legislation from more than 300 organizations and individuals in 115 different com- munities, point to the following recommendations on measures to be taken and to be avoided in the relief and prevention of unemployment : 1. ORGANIZATION Organize the community as long as possible before unemploy- ment becomes acute, including any necessary reorganization or coordination of existing agencies. The appointment of an unem- ployment committee by the governor or by the mayor if improper political influences is guarded against insures semi-official stand- ing and greater prestige. Include in the membership all classes concerned, such as employers, workingmen, public officials, social workers, civic leaders and representatives of churches, lodges and women's clubs. To carry out preventive measures, permanent organization, not temporary activity during a crisis, is essential. 2. EDUCATION Upon the basis of careful information gathered from employ- ment offices, relief agencies, and all other available sources, bring the facts of the unemployment situation home to every citizen. Emphasize civic and industrial responsibility. Avoid " the ostrich policy of refusing to face trie facts on the one hand and hysterical exaggeration of facts on the other." 3. EMERGENCY RELIEF Avoid duplicating the work of existing organizations. Do not advertise the existence of large relief funds or other pro- visions for relief without work, or give indiscriminate relief to able-bodied men. Except as a last resort, discourage the start- ing of bread lines, bundle days, soup kitchens and similar measures. As far as possible supply aid by means of employment, at standard rates, but on part time, to encourage early retuin to regular occupation. Open workshops and secure odd jobs from householders. Do not provide work for housewives who are not ordinarily wage-earners, instead of for their jobless husbands. For the homeless, provide a municipal lodging house, with a work test, or a cooperative lodging house under intelligent super- vision and leadership. Abolish the " passing on " system, but do not make provision for non-residents at the expense of resident unemployed family men. 4. SEPARATION OF UNEMPLOYABLE AND UNEMPLOYED Differentiate the treatment of the unemployable from that of the unemployed. Develop appropriate specialized treatment based on the continuous work of trained social investigators for the inmates of the municipal lodging house. Provide adequate facilities for the care and treatment of the sick, the mentally defective and the aged. Develop penal farm colonies for shirks and vagrants, training colonies and classes for the inefficient, and special workshops for handicapped and sub-standard workers. 5. INDUSTRIAL TRAINING Provide industrial training classes with scholarships for unemployed workers. . 6. EMPLOYMENT EXCHANGES If one is not already in existence, open an employment ex- change to centralize the community's labor market, using private contributions if necessary in the initial stages. Beware of poor location and insufficient appropriations, of political appointees and general inactivity. Do not start temporary philanthropic exchanges in times of depression if there is a public bureau which can be made efficient. Stimulate the cooperation of citizens to improve the existing public exchange and to coordinate the work of non-commercial private bureaus. Secure adequate legislation establishing permanent state or municipal bureaus, extending joint city-state-federal control in their administration, and regu- lating private agencies. Work for federal legislation and appropriations to develop a national system of employment exchanges. 7 PUBLIC WORK Start or push forward special public work, using private contributions in time of urgent need if public funds cannot be obtained. This should not be " made " or unnecessary work, but needed public improvements in as great variety as possible, so as to furnish employment to other sorts of persons besides un- skilled laborers. Give preference to resident heads of families if there is not work enough for all applicants. Employ for the usual hours and wages, but rotate employment by periods of not less than three days. Supervise the work carefully and insist upon reasonable standards of efficiency. To avoid the difficulties of emergency action make systematic plans for the regular concentration of public work in dull years and seasons by special provisions in the tax levy or by other appropriate method. Urge the repeal of laws restricting cities to contract work. Secure the aid of state and national officials in stimu- lating local action. Steady employment of the regular force, retaining employees on part time in preference to reducing their numbers. ^ 8. REGULARIZATION In times of depression, urge the use of regular employees in making repairs and improving the plant, and the policy of part time employment rather than reduction in numbers. Do not rely upon general appeals to " Do it now," " Hire a man," and the like, addressed to the public at large without definite sug- gestions as to method. Rouse employers to the importance of the problem and the advantages of regularization. Stimulate careful planning for this purpose by experts as part of the regular routine of business management. Encourage the forma- tion of employment managers' associations. 9. UNEMPLOYMENT INSURANCE Work for the establishment by legislation of a system of un- employment insurance, supported by contributions from em- ployers, as the most just and economical method for the proper maintenance of the necessary labor reserves and as supplying the financial pressure needed to secure the widespread regulariza- tion of industry. State Legislation to Plan Public Works Against Unemployment CALIFORNIA has just taken an important step toward the long-time, advance planning of public works to combat unemployment. The 1921 legislature enacted a law providing for " the extension of the public works of the state * * * during periods of extraordinary unemployment caused by temporary industrial depression and regulating employment therein." The new " preparedness " plans in California require that the board of control " ascertain and secure from the various departments, bureaus, boards and commissions of the state ten- tative plans for such extension of the public works of the state as shall be best adapted to supply increased opportunities for advantageous public labor during periods of temporary unemploy- ment. The bureau of labor statistics, in co-operation with the immigration and housing commission and the industrial wel- fare commission, is required " to keep constantly advised of in- dustrial conditions throughout the state as affecting the employ- ment of labor; and whenever it shall be represented to the said bureau by the governor of the state, or the said bureau shall otherwise have reasons to believe, that a period of extraordinary unemployment caused by industrial depression exists in the state, it shall be the duty of the said bureau to immediately hold an inquiry into the facts * * * and report to the governor * * * whether, in fact, such condition does exist." In case it is thus found that extraordinary unemployment does exist, the board of control is " authorized to make such disposition and distribution of the available emergency fund among the said several departments, bureaus, boards and com- missions of the state for such extension of the public works of the state under the charge or direction thereof, including the purchase of materials and supplies necessary therefor, as shall, in the judgment and discretion of the said board of control, be best adapted to advance the public interest by providing the maxi- mum of public employment, in relief of the existing conditions of extraordinary unemployment consistent with the most useful, permanent and economic extension of the works." Here is a notable effort, in a year of general legislative reaction, to make permanently effective a cardinal principle of unemployment prevention prevision. What California has done, as a state, may well serve as a stimulus not only to other states but also to municipalities and to private industry. The Need of Legal Standards of Protec- tion for Labor BY REV. JOHN A. RYAN, D. D. Professor of Industrial Ethics, Catholic University of America; Director Social Action Department, National Catholic Welfare Council; Author of "A Living Wage" " Distributive Justice," etc. ANY conception of protective standards for labor is funda- mentally the conception of the dignity of personality. It is the notion that the individual, the human person, is of intrinsic worth. The teaching of Christianity made the individual something sacred and indestructible. This idea is older than Christianity, but it has been greatly developed by Christianity. It is the idea that Kant had when he said that the human person is an end in himself, not a means to anything else. Therefore, industry exists for man, not man for industry. And industry exists for every man, for all persons who are in any way connected with it, or in any way de- pendent upon it. The American Association for Labor Legislation holding to this idea of the human being as possessing intrinsic worth, with a soul to be developed and a body to be safeguarded, proceeds on the political principle that some state intervention in industrial affairs is desirable. Indeed, the principle of state intervention itself no longer stands in need of defense ; for the laissez-faire theory is universally discarded. Nevertheless, every important proposal of legislative action in this field meets some opposition on the ground that it is not justified by general principles, or that it is " socialistic." This is particularly true of the present time when the forces of reaction appear to be in control both of legislation and of public opinion. The greatest obstacle, just now, to a realization of protective standards for labor and I mean reasonable legal standards is industrial autocracy. The principles and program of labor legislation which this Association has fostered are not extreme. They do not call for more than a certain reasonable minimum of opportunity. The Principle of Legal Standards It is the function of the state to provide for the common good. Now the common good means not only society as a whole, but every 222 American Labor Legislation Review important class of the population. Some political thinkers seem to believe that in order to justify legislation for a class it is necessary to show a more or less direct benefit that will finally accrue to the general public. While it is true that in the long run society as a whole will suffer through the evils inflicted upon any considerable class, no such connection is necessary to justify legislation on behalf of a particular class or section of the community. The correct prin- ciple of state intervention has nowhere been better formulated than in the statement of Pope Leo XIII : " Whenever the general in- terest or any particular class suffers or is threatened with mischief which can in no other way be met or prevented, the public authority must step in to deal with it." The state exists for the sake of individuals; individuals do not exist for the sake of the state. Therefore, it is the duty of the state so far as possible, to promote the welfare of all individuals by what- ever means are necessary and appropriate. One of the most effective methods of furthering the welfare of particular classes of individuals is through legislation affecting economic conditions. This is class legislation, but no other kind of legislation is suitable in a society where men are divided into classes and have different class interests. Practically all general laws affect the different economic classes dif- ferently. Very few laws can be equally beneficial to all classes. Hence the necessity of deliberate, honest and fair class legislation. The alternative to industrial legislation is trade union action. If labor organizations could obtain for the working people all the protection and benefits that they need, industrial legislation would be unnecessary and undesirable. It is better that men sho'uld do things for themselves than that the state should do things for them. But we know from abundant experience that the labor unions of the United States are not able to effect the reforms in industrial conditions which are urgently demanded. We must have recourse to the state. Industrial Autocracy Over against the philosophy of human standards, we have the philosophy of industrialism. This is the theory that neither labor unions nor legislation is necessary. The masters of industry insist that they alone know what is good both for their own interests and for the interests of their employees. At best, this theory means a benevolent feudalism an industrial autocracy which is impossible in this democratic age. I have lately been reading, in those three remarkable volumes by J. L. and Barbara Hammond, a description of the industrial revolu- Need of Legal Standards 223 tion in England during the period between 1760 and 1832. I have been interested not so much in their intensive descriptions of the awful conditions in the factories and the factory towns, the poverty and suffering of the workers and the apparent inhumanity of the more powerful classes, as in their interpretation of the philosophy of that age the mental attitude of the dominant classes. The rich masters of the industrial society of that day, as ex- plained by the Hammonds, were able to take an attitude of in- tellectual calmness toward all this human suffering because of two or three industrial theories which they had borrowed, and somewhat perverted in the borrowing, from the economists : First, that there was an unseen hand which directed every man in pursuing his own selfish purposes to promote the common good. That is a very common and comforting doctrine. No matter how selfish a man is, what he does for himself is also useful for the com- munity. Second, that there were natural laws which fixed wages at about the level of subsistence ; so, there was no use in trying to ignore nature's laws by expecting or hoping that men could have more than a wage barely sufficient for subsistence. Third, that in any case there was a certain fixed amount of money available for paying wages in any one year the wage fund. There- fore, if one class of workers happened to get proportionately more than they got the year before, it meant that some other class must be satisfied with less. Such was the philosophy which dominated the industrial classes of that time, and made them so apparently calloused and indifferent to the sufferings of humanity. Have we advanced very far beyond that philosophy? One may well wonder, especially as one reads the current metropolitan press. In these papers there is continual insistence upon the necessity of giving industry an opportunity to become again what it was before the war exactly what it was five or six years ago! There is in- sistence upon the necessity of reducing taxes ; especially by entirely wiping out the excess profits taxes and by lowering the rates of super-taxes on the higher incomes, in order that business men will have sufficient money to invest in different forms of capital and to provide employment. This is, it seems to me, only a slightly modified form of the wage fund theory ; for it contends that if capital is not making large profits, there will not be sufficient money for adequate wages. The old theory that wages should be about at the level of sub- sistence has been abandoned to some extent in the philosophy of in- 224 American Labor Legislation Reiriew dustry, but not entirely. It still prevails with regard to unskilled labor. At least it is held in some powerful quarters of the industrial system. A recent editorial in the Wall Street Journal is particularly enlightening on this point : When the real readjustment comes the unskilled worker finishes where he belongs at the bottom of the list. He will be able to live on $2 a day when he is lucky enough to get that amount regularly. * * * The cost of living will adjust itself. The Labor Bureau will give up publishing nonsense about $2,600 a year minimum for a fancied " family of five." The unskilled worker will thank goodness that he has no family of five or, indeed, anybody but himself to support ; nor will any employer pay him on the basis of such father- hood as the bankrupt and discredited Interchurch World Movement absurdly proposed in its gratuitous inquiry into the steel strike. That is the Wall Street Journal! For calm brutality it exceeds anything that I have ever before seen in the literature of American capitalism. It is industrial autocracy that is mainly to blame for the per- sistence of this philosophy of industrialism which subordinates the man to the machine, the man to the system, because this philosophy does subordinate not merely the wage-earner but the employer and everybody else as well to the fetish of production. The system must keep on functioning in terms of output regardless of what it does to human beings. Industrial autocracy must be held mainly responsible because the attitude toward the human side of industry, as expressed in the con- temptible editorial in the Wall Street Journal, is on the whole de- termined by a few powerful industrial groups. We have had a recent convincing illustration of that side of in- dustrial autocracy in the hearings of the Lockwood committee in New York. Let us examine briefly what was brought out at this investigation into the building situation, particularly in the light of the so-called open shop movement. At the very outset of this cam- paign, it seemed to me, and some of my associates in the Social Action Department of the National Catholic Welfare Council, to be a movement for the destruction of the labor unions. All the evidence since then has confirmed us in that belief. The testimony before the Lockwood committee proves it to be abundantly true in the power- ful steel industry. These industrial autocrats profess to be in favor of an open shop, to give to the man who does not belong to the union, opportunity to work when and where he pleases. They refuse to deal with the union in any sense. More than that, in the steel in- dustry there is an association one of whose functions is to see that only non-union foremen are employed; that the non-union foremen as far as possible do not employ any union men. In other words, their open shop means a closed shop against the union. Need of Legal Standards 225 The different steel concerns contend also for freedom of associa- tion for themselves to combine for fixing wages and for presenting a solid front against unionism. They deny, as one of their repre- sentatives on the stand denied, the right of the workers to combine to fix wages or to adopt a common policy toward non-union workers. When Mr. Untermyer, counsel to the committee, asked " But you assert for your association of employers something that you deny the workers ?" this man replied, " Yes, that is what it amounts to." These masters of steel denounce the boycott as being something un-American and unjust when employed by labor. They, them- selves, unite to boycott the building contractors of New York and Philadelphia who will not subscribe to their program against the unions. One of them even admitted that if it were thought neces- sary to attain their ends, they would extend that boycott to all the builders in the United States. One of the great steel corporations has from the beginning pro- fessed high devotion to the doctrine of publicity ; and yet the secre- tary of an association of steel producing concerns testified that he had been instructed to omit from the minutes of a certain meeting, at which a reprehensible policy was agreed upon, the fact that this particular steel corporation had participated. A conclusive indication of the autocracy in industry is the sincer- ity of the masters. And that is the worst feature. -They believe that autocracy is best not only for themselves but for the workers, just as the powerful industrial classes of a century ago justified them- selves on the ground that they were making better provision for the workers than the latter could make for themselves. The great over- lords in the steel industry, as in many others, appear to believe this sincerely. One of them, Mr. Gary, said that he believed it was better for the workmen not to belong to a union; that he would do what was right for them, and could do what was right for them more successfully than they could, themselves. Even if an industrial autocracy of this sort were benevolent, it would still be intolerable. But we know that it is not a good thing for labor. Witness the Interchurch World Movement Committee's report concerning conditions in the steel industry. Bear in mind its findings as to the extent of the twelve-hour day and the seven-day week, and even as to wages. It is true that wages were increased in the steel industry since 1914 more- than the increase in the cost of living; but an important qualification of that apparent liberality is the fact that wages must have been terribly low for the unskilled workers prior to 1914 ! 226 American Labor Legislation Review The theory that these industrial autocrats, if they are only let alone, are going to do for the workers what is best for them does not harmonize with the facts. Even if it did, we in America do not want to live under that kind of an industrial regime any more than we want to live under a political autocracy. Need For Labor Legislation History and experience tell us what would happen to the workers if success should attend the present campaign to cripple or destroy the trade unions. The sum of the situation is that the unions must fight as hard as they know how against the attempt to destroy them, and all friends of protective standards for labor must redouble their efforts to improve conditions of employment through proper legislation. We need labor legislation the establishment of legal standards because we cannot trust industrial autocracy to abolish existing industrial abuses. We cannot leave it all to the trade unionists. For myself, I have much sympathy with the viewpoint that where private initiative can accomplish anything better than or as well as government can accomplish it, we should prefer private initiative; so, if the workers' organizations could bring about and maintain pro- tective standards there would be no need of the legislative method. Indeed, the former would be preferable because it is always better for human beings to do things for themselves than to have things done for them by others. That, after all, is democracy. But we know that the trade unions cannot accomplish all that is needed on a widespread, uniform basis and within a reasonable time. The generation of unskilled workers now living who have not sufficient wages, who have not sufficient security of employment, who have not sufficient safeguards against sickness, accident and old age, are of quite as much importance as the next generation, whose condition may possibly by that time be improved through the trade unions. There are many, doubtless, who are somewhat discouraged at this particular time because Congress and the legislatures of many states are reactionary. Nevertheless, we can draw encouragement from the probability that the lessons of history will continue to hold good ; that reaction will go to such an extreme and will be so crude and unwise in wielding its power, that we shall before long have a reaction against reaction. The pendulum will swing back, and the average man who wants to be fair will again find the way clear for the further advancement of scientific legislation that must be adopted if we are to uphold the standards of human dignity and human decency among the laboring people. Face the Labor Issue ! ' BY THOMAS L. CHADBOURNE 1AM more concerned to analyze this nation's indifference to the three great fears that darken the lives of the poor the fear of ill health, of unemployment, and of want in old age than T am in the fact that the American Association for Labor Legislation was responsible for the federal bill protecting workmen in match fac- tories from a loathsome occupational disease. I am more interested to find out why obstacles were thrown in the way of legislation to protect the compressed-air workers in underground work than I am in the fact that we finally obtained this legislation. The reasons for the indescribable slowness and unspeakable difficulties experienced in securing legislation to prevent lead poisoning are of more moment to me * * * than is the fact that we were instrumental in securing such legislation. The reason why this nation was thirty-six years behind Germany and twenty years behind Great Britain in adopting compulsory acci- dent insurance for employees is, in my judgment, worthy of a great deal more consideration than the fact that we drafted and aided the passage of a model bill for workmen's compensation for the half million civilian employees of the federal government. It is a splendid thing to feel that we have secured one day of rest for factory employees in the most important industrial states in the union and laid a splendid foundation for the extension of this prin- ciple, but even this does not impress me so much as the fact that we are still without insurance for wage-earners against illness, while Germany has had such insurance for thirty-seven years and Great Britain has had it for eight years. It is gratifying that this Association has had more to do with creating state industrial commissions than any other organization in the United States, and that these commissions are composed of the men who see the procession of the widows and cripples of industry and who inspect the work-places for the purpose of preventing acci- 1 From presidential address delivered at the fourteenth annual meeting of the American Association for Labor Legislation, New York City, December 29, 1920. 228 American Labor Legislation Review dents, but my pride in these accomplishments is tempered somewhat by my wonder why we are so bitterly opposed in our efforts to secure pension and insurance systems for the aged poor while Germany has had these provisions for thirty-one years and Great Britain for twelve years. * * * There can be but one of two explanations for our failure to profit by the experiment successfully tried by these two nations. One is, that social insurance was not needed here as there. This we must reject. The difference in the workmen's pay between our country and these two countries has been practically met by the difference in the standard of living. The same fears of ill health and unemployment and want in old age that the governments of Germany and England have been attempting to relieve are in the hearts of our own workmen. The other possible explanation is un- doubtedly the true one : While we, for years, have been inviting the immigration of the foreign individual, we have erected a wall as high and as impassable as was our tariff wall against the immigration of liberal social ideas. There is no doubt that contact with things they do not under- stand is distinctly disagreeable to many minds. A dog not only prefers a customary smell ; he hates a good one. A perfume pricks his nose and tends to undermine all those moral principles without which dog society cannot exist. No more remarkable illustration of this could be cited than our attitude toward Russia. Notwithstand- ing the fact that a social experiment is being tried by that nation on the greatest scale known in the history of the world, we are not even curious to ascertain the details of that experiment, or, perhaps I should say, any details except the horrors which always accompany a revolution; but those portions of that philosophy of communism undergoing an acid test by 170 millions of people, the experiences in which might be of great and lasting usefulness to the human race, their importation is not encouraged, their discussion is not smiled upon, and our nation and the Allies have done all in their power to convince the Russian people that if the communistic experiment fails it fails not by virtue of its inherent weakness, but because of its external enemies. You will remember that in 1906 there was an earthquake fol- lowed by a fire in San Francisco. The catastrophe had been im- pending for a long time. The night after it happened, and for some nights thereafter, the banker and his coachman, the merchant prince Face the Labor Issue! 229 and Chinese opium joint keeper, the lady and the harlot, the ditch digger and his wife, gathered in one tent and slept under one blanket, and the world acclaimed it as an evidence of the brotherhood of man, as an evidence of the leveling qualities contained in a catastrophe, as an acceptance of the doctrine of the Nazarene. The earth stopped shaking ; all neighboring communities sent aid in supplies and com- forts of every nature ; the fire was put out. The process of readjust- ment began, and soon the banker and his coachman, the merchant prince and Chinese opium joint keeper, the lady and the harlot, the ditch digger and his wife resumed their normal positions in the social structure, and San Francisco the even tenor of its way. In 1917 an earthquake occurred in Russia. It, too, had been impending for centuries. Analysts of the social structure of that great country were more certain of the threatening cataclysm than were analysts of the geological structure of San Francisco. The quake came in the form of Kerensky's revolution ; the fire followed it in the form of the bolshevist accession to power. Again the banker and his coachman, the lady and the harlot, the merchant and China- man were jumbled together, but this was not acclaimed as an evidence of the brotherhood of man ; its leveling qualities were not apostro- phized by our press, and the flames of resentment which made the fire in Russia were fed by France, England, Japan, and the United States by throwing troops into Russia, by instituting a blockade of supplies against the people of Russia, and by encouraging with advice, arms, and goods the Kolchaks, the Denikins, and the Wrangels, who were of the very bone and blood and sinew of those responsible for making the social structure of Russia an abhorrence and a stink in the nostrils of free men for generations past. And thus have we made it impossible for the process of readjustment to begin, and the social jumble there still continues. The nations of Europe treated the French Revolution in much the same way, and that experiment is now approved by mankind as the greatest one single aid to the liberty of humanity the world has ever known. You may think, and perhaps with reason, that Russia is far afield from labor legislation, but it stands out as the most striking illustra- tion of this country's attitude with respect to the undesirability of all ideas which are not the ideas Americans are accustomed to. In appealing for labor legislation, this Association is obliged to recognize that our national and state legislatures are practically 230 American Labor Legislation Review without direct labor representation, and that this condition, when compared with the English, French, and German legislative bodies, is most marked, and in my opinion most menacing. The labor leaders in this country have not only refrained from organizing a labor party, but until the last election have consistently refrained from attempting to make labor politically expressive. * * * Labor's inactivity in politics, its failure to vote as labor, has been reflected in the political platforms of both our great parties. * * * This has tended to produce a peculiar situation in our political life. I am not suggesting that this failure is all due to labor's aloofness from politics and the impunity with which the two great parties have been able to ignore labor as a political entity, but it must have had a great deal to do with it, and nobody can deny that the existing state of affairs presents a very strange spectacle. Industry in this country has developed since the Civil War with great rapidity. Because of this, a large percentage of our popula- tion has been vitally interested in the relations between employer and employee, but all of these questions have been either settled or left unsettled, and in so far as they were left unsettled we have had direct action, that is, the strike and the lockout instead of political action. I believe everyone will admit that the most important prob- lems in the lives of the greatest number of people in this country are the problems of the relation between capital and labor, employers and employees, and yet there has never * * * been an issue made between the two great political parties upon any of these questions. As has already been stated, we do not find labor directly repre- sented in the state and national legislatures. Neither is it directly or indirectly represented in the councils of either the Republican or the Democratic parties as they are now constituted. These councils are dominated by the employing group which has been willing, or perhaps I should say desirous, to have the difficulties between em- ployers and labor left to other than political means for settlement. The abstention of the laboring masses from political action to attain their objects probably arises from their belief in the effective- ness of direct action, a belief welcomed by the employer, as it leaves him in control of the governmental machinery to withstand direct action when labor makes its challenge along that line. But unless this growing industrial unrest, which certainly did not spring out of nothing and which has surely and steadily been increasing, performs the miracle of vanishing into nothing, a continuance of these atti- Face the Labor Issue! 231 tudes by employer and employee is merely going to serve to widen the chasm between them. Now, anybody who is waiting for this social unrest and industrial ferment to pass without attaining some of its objects is like the man Horace describes who lay upon the river bank waiting for the water to pass, in order that he might have a dry place to cross, not realizing the unlimited source of the river's headwaters. The workman must be roused to the fact that direct action is never successful unless the cause in which it is urged has first been the subject of favorable political reaction, or to put it perhaps more simply, only when the cause is the recipient of favorable public opinion. For instance, English workmen were able to dictate to the British government, by the threat of a general strike, a flat prohi- bition against supplying the enemies of the present Russian govern- ment with supplies to be devoted to its destruction. That was be- cause the public opinion of Great Britain was in favor of letting Russia attend to her own domestic problems. * * * The workman must be educated to the collateral cruelty and wastefulness of strikes. I would like to have each one of them read a little one-act French play where the curtain rises on a workman's family affectionately taking leave of the father, who is departing to take up his night's work at one of the railway stations. His love of wife and children and his reluctance to leave are movingly por- trayed. An hour after he has torn himself away the youngest child is writhing in pain. A physician is called who diagnoses the case as one for instant operation. The surgeon comes in and decides that the child cannot even be moved to a hospital. A table is moved over under the electric lights. The operation is performed, and before the severed arteries can be tied and the open wound cared for, the lights go out a frantic mother and a panic-stricken surgeon. Candles are brought whose inadequate lights do not permit the sur- geon to stop the flow of blood, and then while the child is bleeding to death, the voice of the father in the hallway calling to his wife, " Marie ! Marie ! We have declared a general strike and there is not a light burning in Paris ! " The employer must learn that the workmen's impatience with the present social structure is mostly the philosophy of distress. If anybody stands on your pet corn long enough, you don't hesitate at murder if you cannot get him off in any other way. The employer must be made to realize that he cannot get his philosophy of distress too quickly into the political arena and take it out of the realm of 232 American Labor Legislation Review warfare between the constabulary, the militia, the strikebreaker, and the picket. The employer must learn that history is full of revolu- tions produced by causes similar to those now operating in these United States. I realize that while it is considered right to urge the danger arising from radicalism as an argument for governmental severity, it is considered wrong and improper * * * to urge the danger of radicalism as an argument for conciliation or political education. I know of no way by which this education can be administered to employer and employee unless one of our great political parties will make its house ample and hospitable for all citizens who want the problems of to-day solved progressively and peacefully, by knowl- edge and by reason, and by political means, but who are bound and determined that those problems shall be solved, that is, by becoming a real liberal party ; and then this party so constituted must go out to meet the present condition of affairs by securing an understanding of what the great bodies of the working people want and devise means by which their just demands shall be fairly met and their excessive demands squarely rejected. The party that goes out to meet this situation, instead of empha- sizing the old formula that all men are born equal, must let the laboring man know that it recognizes natural inequalities imposed upon many of the people from theis birth so grave as to make it essential that if they are to be treated with fairness they must be treated with something akin to tenderness. The party that goes out to meet this situation must stand ready to bring home to the em- ployer the artificial inequalities now existing which are so grave and serious as to be a scandal to civilization. The party that goes out to meet this situation must be prepared to learn that the fruits of the world are distributed in such a way as to be a travesty on human justice. The leaders of the party that goes out to meet this situation must remember that they are politicians and statesmen and not anti- quaries, because the people of this country are no more going to be content with reaction or with the return of the philosophy of twenty- five years ago than they are going to return to drowning witches, burning heretics, or selling slaves from the auction block. If one of our great parties will make its house thus ample and will honestly and earnestly seek to force industrial questions into the political arena for settlement, labor will cease trying to indemnify itself illegally for the denial of legal privileges. ( EDITOR'S NOTE: The following official report is incorporated in this number ) < of our REVIEW as a contribution of unusual value in the consideration of > | American proposals for workmen's health insurance. ) REPORT of Investigation into the Operation of the British Health Insurance Act By William T. Ramsey Chairman of the Health Insurance Commission of Pennsylvania in company with Ordway Tead Expert Investigator FOR THE PENNSYLVANIA HEALTH INSURANCE COMMISSION OF 1920 Preface IN submitting this report, the undersigned desire to call attention to two facts: (1) the field inquiry consumed only one month, July, 1920; (2) the method of inquiry was therefore necessarily confined to reading all available documents and to the interviewing of over fifty representative persons in London, Manchester and elsewhere, including government officials, employers, union officials, friendly society officers, commercial insurance company officials, insured workers and doctors. The Chairman of your Commission was accompanied to England by Mr. Ordway Tead, a professional consultant in labor problems, who was retained to do the specialized work involved in such an investigation, and to formulate the findings. Since at practically every interview both of us were present, not only did we have the advantage which comes when two people are seeking the facts instead of one, but the observations and conclusions here set forth are those of both the Chairman and the investigator. It was the easier for this agreement to be reached because the outstanding facts about the English situation soon become apparent to any honest and unbiased observer. The study in England was prefaced by as full a reading knowl- edge as possible of the details of the health insurance legislation, although this had resulted in no settled conviction as to the working of the act. The inquiry was conducted with thoroughly open minds, without preconceptions, with a sincere desire to get the whole truth. Moreover, special pains were taken before leaving this country tc communicate with prominent individuals known to be deeply interested in health insurance either because of their advocacy or their opposition. Letters of introduction were obtained equally from both groups and the special effort throughout our visit was to search out and interview those in England who were opposed to the act. It may be said in passing that the active opponents to it are very few, and many, if not most, of the persons whom it was suggested that we see by those on this side of the water known to be most critical of health insurance, turned out to be in general favorable to health insurance and only critical of the present act in some of its details. In short, no step was omitted that would assure our hearing all the adverse things that could possibly be said by well-informed English subjects about the working of the act. The result may be unsatisfactory to those who desire unqualified statements of approval or disapproval. For the conclusions reached in this inquiry are not unqualified. They indicate a degree of suc- cess and a degree of what is less failure than confusion of purpose, which has necessarily resulted in gradual but important changes in the insurance act and in the other public health legislation as well. This kind of a qualified conclusion will be seen to be inevitable by all who realize that social institutions develop experimentally. The value of this investigation for America is thus the greater because England's experiments need not be repeated in every par- ticular. They can and should be used as the basis for wiser meas- ures designed specifically to meet American conditions and needs. September 15, 1920. WILLIAM T. RAMSEY, Chairman of the Commission. ORDWAY TEAD, Expert Investigator. L Introduction 1. Summarized Conclusions THE investigation into the operation of Health Insurance in Great Britain which was undertaken at the request of your Commission, was designed to find the degree of success attending the operation of the present act, to discover the attitude of the various affected groups toward it, and to consider as far as possible the extent to which it might be applicable to American conditions. It may be said at once that in the main and considering the handicaps and obstructions suffered during five years of war the act is in reasonably successful operation and is beginning to produce some of the benefits that were initially urged in its behalf. In the second place the affected groups in the community are now working the act with a remarkable degree of co-opera- tion and with an all but universal recognition of the value of the legislation. Few in the community would seriously advocate or even contemplate its repeal or withdrawal. The tendency and common desire is in quite the opposite directions to make the act in fact as well as in name a national act which will really assure good health throughout the country. In the third place, as this report will presently develop, it is highly probable that much may be learned from the failures and the shortcomings of the present operation ; and any rigid copying of the British act would certainly be quite unwarranted when the peculiar conditions under which it has developed are understood. Points at which the British experience can most certainly provide a useful warning are the following: 1. The cash benefits should not be paid through approved so- cieties but through local bodies publicly constituted. 2. The cash benefit should be at least 50 per cent of wages. 3. The medical benefits should not be limited to the insured workers, but should extend to their families. 4. Hospital care, consultant services and specialized diagnostic facilities in the form of clinics and laboratories should not be left out of the plan, but should be incorporated as part of the medical benefit. This report will amplify and explain the above statements. It will be exceedingly difficult to offer anything like statistical proof 238 of them because to a considerable extent that does not exist. At every turn and in respect to every problem we were repeatedly told " You know, during the war it was impossible to do that, etc.," or, " The experience of the war years would really vitiate any figures we might offer." Hence, while we have sought figures wherever possible, we have even more sought the considered opinions of rep- resentative and typical spokesmen of the government's administra- tive staff, employers, trade unions, approved societies, panel and general doctors and insured workers. 2. Purpose of the Act It is first necessary to consider what the act was intended to do. It was advanced by Mr. Lloyd George in 1911 to some extent for political reasons, and also to meet the conditions revealed in the reports of 1909 Poor Law Commission. It was originally intended to carry insurance against sickness and death to workers and their dependents through state organized funds. But because of the strength of the commercial life insurance companies and of the " friendly societies " (working-class mutual benefit societies) the death feature was omitted and these organizations were allowed to become the agents for administering the cash benefits. And because of the work and expense involved the dependents were excluded (except in the case of the maternity benefit for the wife of the insured man). The act was designed to be a preventive of ill health and a means of alleviating the destitution which it brought. If " pre- vention " is taken to mean discovering from the records of sickness its incidence in particular trades and local areas, with special study and treatment to reduce that incidence where it is excessive, little has been done. But if prevention means also making it easy for all working people between 16 and 70 to consult a doctor as soon as they begin to feel ill or whenever they are too ill to go to work and therefore want to be certificated for cash benefits by their doctors who must consequently ex- amine them, then the amount of preventive work has been tremendous. Hundreds of thousands of persons, it is universally agreed, seek medical advice now who would not have afforded it before; and they seek it promptly. They seek it, as the' doctors told us, at a stage when the length and seriousness of the illness can usually be reduced. The fact that there are roughly twice as many visits paid by doctors now as there were 239 before the act was in force may be taken to prove not that there is twice as much illness or unnecessary visitation, but that people see the doctors as soon as they feel indisposed, and that many people now secure medical attention who never got it prior to the act. As a doctor put it to us, "If three men come to me two of whom have little or nothing the matter with them, and the third is in the early stages of some serious disease, all three visitations are justified." As to the other purpose of the act, the relieving by cash bene- fits of destitution due to sickness of the wage-earner the situation has been so profoundly changed by the war that accurate statements are difficult. The cash benefit, even as increased by recent legisla- tion, is so small as compared with wages that in cases of prolonged sickness the need of some larger degree of outside assistance is still necessary. The act does not provide a large enough cash benefit to remove the possibility of destitution resulting from the wage- earner's sickness. Due to a combination of causes, however, the amount of actual destitution is less in England (July, 1920) than before in recent years. It is, for example, generally admitted that wages have in most cases risen to a degree that has made provision out of wages for more food and for illness more likely than in pre- war days. Especially have the unskilled workers improved their status in this respect. II. Brief Description of the Act THE original act of 1911 was amended at various points in 1913, 1918 and 1920. Since the report of the previous Health Insurance Commission of Pennsylvania 1 contains an admirable out- line and summary of the provisions of the basic legislation, it is only necessary to mention below the essential features of the present law and regulations. Many minor provisions have intentionally been omitted in the interest of clarifying the main points. 1. Contributions Men pay 10 pence (20 cents) a week, of which the employer pays 5 pence and the worker 5 pence. To the amounts thus col- lected the state adds an amount equal to 2/9 (two-ninths) of the total. 1 Report of the Health Insurance Commission of Pennsylvania, January, 1919. 240 Women pay 9 pence (18 cents) a week of which employer pays 5 pence and the worker 4 pence. To the amount thus collected the state adds an amount equal to % (one-fourth) of it. These contributions are payable in respect to practically all manual workers, and all non-manual workers whose income falls below 250 per year ($1,250). Other citizens may join as u voluntary contributors," but since no medical benefits are available for them they pay a reduced con- tribution. The contributions are made through the employer who buys special stamps at the post office. These he is required to affix weekly to the card of each employee as in evidence of payment. If the employer has more than 100 employees he may stamp the worker's card half yearly with one lump sum, high-value stamp representing the total amount of the combined contributions. These cards are at each six months' interval given to the individual work- ers who send them to their respective " approved societies " (pres- ently defined) which in turn use them as evidence of payment to get the proper funds credited to them by the Government. The approved societies then distribute fresh cards to the employers with whom their members are at work. 2. Cash Benefits The man who is certificated by the doctor as " incapable of work" because of some specific illness is entitled to 15 shillings ($3.75) a week after a three-day waiting period, which payment may continue for twenty-six weeks. And for continued disability thereafter he gets 7 shillings 6 pence ($1.88) a week so long as he is incapable of work. The benefit for a woman worker is 12 shillings ($3.00) with the same disability benefit as the man's. To be eligible for these benefits the worker must have paid con- tributions for 26 weeks ; and he is deemed to be in arrears in his contributions if they are not made for at least 48 weeks in the insurance year. When in arrears the worker is notified and has three months' grace in which to become fully eligible by the payment of a fixed sum depending) upon the length of the arrears period; and if that is not paid he is eligible for benefits at a lowered rate. A married woman worker is entitled to 40 shillings ($10) at confinement. The wife of an insured man is entitled in her own right to the same amount when confined ; and if both husband and wife are working, two maternity benefits are paid. 241 The cash benefits are usually paid through the local officer of an approved society upon presentation to the society of the medical certificate from the worker's doctor and also in many cases after a visit from the society's sick visitor. 3. Medical Benefits Every insured person is entitled to medical attendance through- out his illness provided it is service that can be rendered by a general practitioner of ordinary skill and capacity. This service does not, however, include the services of a doctor at times of confinement of an insured woman or of the wife of an insured. The sanitarium benefit heretofore providing hospital care for tuberculous insured persons, is to be withdrawn after 1920 for reasons which will be presently considered. Medical benefit also includes the free provision of the familiar drugs and medicines and of a stated number of medical and surgical appliances such as bandages, etc. There is no statutory provision for hospital treatment, nurses, dental treatment, medical attendance upon the dependents of the insured, specialists' advice or medical care at confinement. 4. Administration of Cash Benefits There are the following general types of carrying funds which the insured person may join : An approved commercial insurance company. An approved friendly society. An approved trade union. An approved establishment fund. In addition, there is a class called deposit contributors, who belong to no society, but hold their own cards and buy stamps for themselves at the post office. Their contributions are only avail- able in benefits to the amount of their own and their employers' payments ; there is no sharing of the risk with the members of any group. The worker has the option of choosing his approved society ; and he may not transfer except at stated intervals and on payment of two shillings. The approved societies are not profit-making bodies and they do not pool their funds. Each fund is supposed to carry its own burden of sickness and the idea has been that if any society accu- mulated a surplus, that value would be available for larger benefits 242 to the members of that society. A valuation was to be made every live years to determine the condition of the funds ; but owing tc the war the first valuation is only now being brought to completion. The results of it will not be published until early in 1921 ; but they will probably show a considerable variation in surpluses. 2 5. Administration of Medical Benefits The local doctors who desire to practice under the act that is, do the medical work for the insured are contracted with by a local insurance committee, which is the representative administra- tive and supervisory body of each local area in respect to the medical side of the act. Doctors are now paid at the rate of 11 shillings per year per person on their " panel." However, in Man- chester and Salford, although the total sum of money available to be used in payment of the local doctors is allotted at this rate, the individual doctor is paid on a visitation basis on a scale locally agreed upon. Complaints of inadequate or unsatisfactory medical service are supposed to be brought to this insurance committee; and if there is a real case against a doctor there is an investigation and final decision by a body of inquiry composed of three doctors and a barrister. Up until now if there has been doubt about the certification by a doctor of an insured person, the approved society has usually employed its own medical referee to give an opinion. Under the latest amendment thirty state referees have now been appointed to look into doubtful cases. In order to assure a reasonable division of work and proper service to each individual, the size of the panels is now to be limited to a maximum of 3,000 persons, with authority in the local insurance committee to restrict the number further where they so desire. In the London area, for example, the panel of any indi- vidual doctor may now be only 2,000. In Manchester, on the other hand, it may be 3,000. As a matter of fact the great majority of panels are less than 2,000 in number. 2 Interim Report by the Government Actuary upon the Valuation of the Assets and Liabilities of Approved Societies as of December, 1918. 243 6. Financial Arrangements The explicitly recognized expenses under the act are the follow- ing: 1. The cash benefits. 2. Payment to doctors at the rate of 11 shillings per person per year. 3. Administration expenses of approved societies at rate of 4 shillings 5 pence per person per year. 4. Administrative expenses of insurance committees. 5. Payment for drugs on basis of an agreed schedule of prices. 6. Administrative expenses of Ministry of Health including indoor and outdoor staff. 7. Reserve Fund. 8. The contingencies fund. 9. Women's Equalization Fund. 10. Central Fund. (The last four funds are explained later.) To meet these expenses there are available the three-fold con- tributions, and sundry parliamentary grants which have been called for as special problems have arisen. 7. National Administration The central administration which includes allocation and handling of accounts, inspection of operation of the act by em- ployers, insurance committees and approved societies, issuance of regulations, stamps, cards, etc., is vested in a department of the Ministry of Health. The actual arrangements with local doctors and the actual pay- ment of cash benefits is, however, left to the several local agencies above described. III. Other Public Health Legislation NO adequate picture of the working of the act is possible without mention of the public health measures which are simultaneously provided. In 1919 the Ministry of Health was organized " for the pur- pose of promoting the health of the people " of Great Britain. Under it are now grouped for purposes of co-ordination the following administrative duties: 1- Those of Local Government Boards pertaining to Public Health. 2. The administration of the National Health Insurance. 244 3. Supervision of work of Board of Education for expectant and nursing mothers and of children up to five. 4. Supervision of work of same body in respect to medical inspection and treatment of school children. 5. Supervision of midwives. Under other recent enactments, provision is already made by most local authorities with the aid of special grants from Parlia- ment for treatment of tuberculosis, venereal diseases, medical and dental work for school children, maternity and infant welfare centers. The situation is well summarized in the following paragraph: " (1) Before birth the expectant mother may be dealt with by the local Health Authority (i.e., the Town or County Council, or District Committee), under the Notification of Births (Extension) Act (Child Welfare). " (2) At birth there may be in attendance either a midwife provided by the Local Authority or a panel, or private medical practitioner. " (3) From birth till five years of age is reached, the child again comes under the Child Welfare Scheme of the Local Authority. "(4) Between five and fourteen years, the child comes under the medical inspection scheme of the Education Authority, but if treatment is required that may be obtained from the family doctor or through a voluntary or charitable agency, or through clinics provided by the Education Authority. "(5) From fourteen to sixteen years there is no public provision of any kind for medical treatment, but the young person, if seeking employment in a factory, will be examined by a certifying Surgeon appointed by the Home Office. " (6) From sixteen years of age till the end of life, the man or woman, if employed, comes under the Insurance Acts, and receives Medical Benefit through the Insurance Committee." 3 The doctors engaged on full or part time under one or another of these provisions probably total several thousand, and are thus in fact the members of an embryonic national medical service. In addition to the above provisions it should be explained that the Local Poor Law Guardians also have their own medical and hospital provisions for destitute persons of any age. But it is now proposed and contemplated that all of this work shall be taken over and done under the local authorities, which will mean the final abolition of the Poor Law administration in so far as it constitutes a distinct branch of the medical service. It is significant to point out in connection with all of this legislation that the tendency is definitely toward separating from the insurance act all special medical treatment and toward 3 A Public Medical Service, by McKail & Jones, 1919. 245 providing on a universal public health basis those medical services which are not readily available through a general practitioner. This is the meaning of the removal of tuberculosis and venereal disease treatment from under the act; and of the institution of maternity centers and care for all mothers under an act of 1918. And it is not unlikely that in the next few months the Government will bring in a bill on the hospital question which will at least provide state payment for insured persons in hospitals and possibly for all regardless of whether they are or are not in- sured. In short, the insurance act has been one of the potent in- fluences in rallying public attention and support to a consistent and complete program of public health administration. And the Ministry of Health will undoubtedly in the next few years extend the scope and improve the quality of the medical services available for all the people. To this extent the insurance act has unques- tionably been an aid in the direction of fundamental preventive medicine. Having given this brief sketch of the framework of health in- surance legislation and administration, it is necessary next to con- sider its actual operation. IV. The Act in Operation 1. Contributions AT present there is little if any objection to be found to the compulsory collection of contributions, except from those who believe that the contributory principle is less sound or less economical than the non-contributory believe, namely, that cash subventions as well as medical service should be provided directly out of taxes. It appears to be widely understood that in whatever way im- mediate expenses are met, it is ultimately industry itself from which the cost is met. Whether the contributions are direct by assessment or indirect from taxation, the income out of which payment comes results from the productivity of industry and agriculture. And it is not generally felt to be a matter of primary moment to argue 246 whether the contributions at least for the medical service should be secured in one way or another. 4 On the other hand, it is true that the present contributory method of collecting the funds out of which the cash benefits and the medical benefits are paid, lightens the burden of direct taxation and is not felt to be an onerous burden by any indi- vidual employer or worker. From the point of view of adjusting the Government's public health budget to its available income resources, this consideration becomes, of course, of almost de- termining importance. It should be clear, however, that if we in the United States elect to proceed by the contributory plan or by public grants, there is some substantial expense involved. Good health can be bought only and as soon as we are willing to pay the price. As to the administration for collecting the benefits, the work and confusion are now reduced to a minimum. Yet it is useful to consider further (1) the method of collection and (2) the cost of collection. If the contributory idea is to prevail, there must of course be some definite evidence of payment which is readily available for the employer, the insured, the approved society and the govern- ment. The stamped card was only adopted after the most pro- longed consideration ; it is admitted to be a clumsy method, but no satisfactory substitute has yet been found which will apply to all cases. It is still conceivable, nevertheless, that a simpler method might be used for all but the most irregular and shifting types of work where, because the worker is constantly moving about, it is hard for him to have at all times evidence of his standing as to payment. The method of lump-sum stamping at the end of each six months obviates much clerical work. The machinery of collection may thus be said to be running as smoothly as could be expected in a huge system comprehending 15,000,000 people and ranging from scrubwomen who come in by the day to highly skilled artisans and clerks whose income is regular. *A valid criticism may be made, however, against the restriction of the benefits to a limited number. Sir Arthur Newsholme, Medical Officer of the Local Government Board, says, for example, in a recent volume (Public Health and Insurance, Johns Hopkins Press, 1920) : " On the point of equity it must be admitted that any system of so-called insurance which, like that of the English act, excludes a large proportion of the population who, while paying in taxes in aid of the insured, require but do not receive their benefits, is contrary to the principle that any expenditure of Government funds should ensure to the whole commmunity in need of the provision in question." 247 Nevertheless, thoughtful administrators of the act, including such persons as approved society secretaries, government inspectors, the best doctors, etc., call the whole stamp machinery into question at least so far as the contributions are made to affect eligibility for medical attention. They point to the difficulties created by loss of cards by workers, agents or approved societies, by failure to stamp cards, failure to pay arrears. They point to the large amount of time and money required to hunt down (1) the loss or error in one card, (2) to be sure that employers are regularly stamping the cards, (3) to be sure that workers are technically eligible for benefits to which they are entitled or which they mani- festly should have. In the Government's own inspecting staff an enormous amount of time is certainly spent straightening out irregu- larities in regard to contributions. The cost of contributions and collection is negligible as far as the individual employer is concerned. The administrative expense of bookkeeping entries and stamping is surprisingly small ; and the employer's share of the contributions is usually not over one per cent of the payroll. For example, in one store with over 7,000 employees not more than the equivalent of the full time of two clerks is devoted to the health insurance details. In one factory with about 800 workers about half the time of one clerk was used. In general this cost would come to not over one-tenth of one per cent of the payroll. The testimony of employers was therefore unanimous that the expense of the act to them was not a factor of any importance. From the public point of view, however, the total expense of securing the contributions is undoubtedly great when all items in the account are considered inspection, printing, postage, handling of stamps and cards by employers, approved societies and govern- ment officers. And that irregularities regarding contributions and stamping should ever deprive the insured of medical treatment is surely a denial of the whole idea of assuring good health among the workers. It frequently happens, moreover, that the worker whose contributions are not in good order, will be the very one who needs most not only the medical but the cash benefit as well. In short, the conditions determining the eligibility for cash benefits may also disqualify the worker from benefits on the medical side. This inter-relation seems to have little to com- mend it from the public health point of view. There should, it would seem, be no question from the public health point of view 248 of eligibility for medical benefit. Any person needing medical attention should be able to have it. 2. Cash Benefits The cash benefits, even as now increased, is in most cases such a small fraction of the possible wages that it is decidedly inadequate to protect the income and living standard of the insured during illness. It is generally conceded that the benefit should be less than wages, but a cash benefit which i? 50^o of wages is the very least that should be considered if a real subsidy is intended. Yet with a wage level for men workers today of between three and a half and five pounds a week (from $17.50 to $25.00), the weekly cash benefit of $3.75 is less than 25 per cent of wages. The small size of the present cash benefit not only auto- matically brings malingering to a minimum, but, as several doctors said, the sick worker often returns to work before he sho'uld. Even unskilled workers are in many cases able to earn as much in one or two days' work per week as they could get from the whole week's benefit. The problem from the point of view of malingering only becomes difficult in cases of irregular work, where the worker may not have regular weekly employment and thus may normally get wages which do not exceed the usual benefit. The promptness with which cash benefits are paid appears to vary greatly with the efficiency of the approved society. The best organized societies unquestionably pay claims promptly upon their receipt. Delay may be due to many causes, principal among which are the question in the mind of the society as to the validity of the medical certification, and (in the case of commercial companies) transfer of agents with whom the insured thus gets out of touch and therefore does not know where to submit his claim. The cash maternity benefit is undoubtedly the most popular and the most valued. The money is now paid directly to the woman beneficiary and the testimony is general that in ninety-five cases out of a hundred, the money is used to help in defraying the expenses of confinement. It assures that the mother takes care to have a qualified midwife in attendance at the confinement. And the latter is sure to be on hand since she knows that the money for her fees is available. Moreover, the midwife is^now required in case of any complication to call in a doctor whose attendance fees are paid by the local authorities under the maternity provisions legis- lation of 1918. Indeed, now that there is in most local areas some 249 follow-up work with expectant mothers (as a Public Health Pro- vision), the likelihood is even greater that the maternity benefit will be wisely expended. The maternity benefit is not, however, adequate to cover all the charges incident to confinement. The nurse's or doctor's fees usually take all or nearly all of the benefit, which leaves the other expense to be otherwise met. There is therefore a demand, espec- ially in labor circles, for the payment of a larger amount which will be more in the nature of a maternity endowment paid to all mothers. There is also on the part of organized labor a definite sentiment favoring the addition of a funeral benefit for the deceased worker. The demand for this will undoubtedly be strengthened by the recent governmental inquiry into the operation of commercial insurance companies, which found that in one large company over 40 per cent of the insurance policies lapsed with consequent advantage to the companies and no return whatsoever to the insured ; and found also that " though practically every person in the wage-earning class is insured at some point of his life, at} least 30 per cent of the deaths among that class are uninsured at death." 5 Indeed the departmental committee of inquiry intimated that " it might be practicable to propose a funeral benefit to be administered under the National Health Insurance System." 3. Medical Benefits As already suggested, the existence of free medical service for all insured persons means that many now go to doctors who did not do so before and go at the earliest signs of illness. Everyone agrees that this is an incalculable benefit, the good results of which in a better level of health cannot fail to materialize. It should be pointed out, however, that the medical service which is available is neither thorough nor exhaustive; nor is it expected to be under the terms of the act. If a doctor finds that a case requires an operation, or he is uncertain of the proper diagnosis, he must now have recourse to hospital and consult- ants whose services are not required to be available to him or to the insured under the act. It has happened fortunately up until now that the voluntary hospitals (supported by private subscription and by the free work of their medical staffs) have stood ready to supplement the work of the general practitioner 6 Industrial Insurance Companies and Collecting Societies, Cd. 614, 1920. 250 to the extent of their facilities. In this way, hospital service has been usually available, although it has never been guaranteed, never been completely adequate in the urban districts, always been dependent on private charity and subject in no way to any control by the patients or by the public health authorities. It is one of the anomalies of the act that its success on the medical side depends upon access to hospital and consulting facilities which have as yet no organic relation to the rest of the scheme. Now that the hospitals are on the verge of insolvency, the Gov- ernment is being obliged to consider relating them to the insurance provisions more formally. Much attention was given in our investigation to the quality of medical service given. While accurate general statements are difficult to make, it is probably fair to say that the workers of England are on the whole now getting more and better medical service than they ever did before the act. It has to be remem- bered, however, (1) that under the act every registered general practitioner has always been eligible to become an insurance doctor, simply by making application; (2) during the war a great many of the best practitioners were in army or navy service ; (3) the act only requires such treatment as " can consistently with the best interests of the patient, be properly undertaken by a prac- titioner of ordinary professional competence and skill." (Medical Regulations.) These three facts alone go far to account for much of the criticism which has been leveled at the quality of medical work given under the act. Moreover, the doctors were at first hostile to or suspicious of the act. Today this is not true. Out of between 20,000 and 23,000 doctors (how many of these are only consultants and not supposed to do insurance work is difficult to find out) who are in active practice, over 14,000 are on the panels. Criticism of the medical service has fastened on the danger of " lightning diagnosis ;" on the distinction made in attention given to panel as against non-panel patients; on the difficulty of lodging complaint against a doctor ; and on the fact that the best doctors do not become insurance practitioners. There is undoubtedly con- siderable basis for some of these criticisms or they would not be repeated so often. But the testimony is on the other hand con- vincing that medical service is better now, barring the handicaps of war just noted, than it ever could have been before for thousands of persons. Now that the number of patients per insurance doctor is to be limited and the doctors are finding their panel practice in 251 most cases so remunerative, the reasons for inferior service will be reduced. The doctors are and will be increasingly anxious to keep the good will of the insured and of the insurance committee as well. The Scotch Health Insurance Commission which until July, 1919, administered the act for Scotland says in its latest report that " very little reliable evidence has emerged of neglect of duty on the part of insurance practitioners or of any real ground for loose general charges of inefficiency. Dissatisfaction with a limited service and agitation for an extended and complete medical arid institutional service must not be founded on as a condemnation of the present insurance scheme but rather as an indication that it has resulted in increased appreciation of the- importance of a great development of medical services in the interests of the national welfare." (Boldface ours.) Invidious distinction between panel and non-panel patients is undoubtedly still made; but it is generally considered to be decreasing. The feeling of inadequacy in the attention received appears to be a social as much as a medical matter. In those cases where the insured person does not use his panel doctor, but goes to another physician and pays a private fee, the person is usually in the ranks of the clerical workers who still feel a certain class superiority to manual workers and therefore to panel doctors who treat manual workers. The real reason for inadequacy of treatment is affirmed by the best doctors in England to be due rather to inadequate medical education and insufficient opportunity for special diagnostic assist- ance from which insured and non-insured suffer alike. Opportun- ities for study after the doctor leaves medical school are meager; his opportunities for consultation with other practitioners and specialists are not well organized; access to laboratories is not as- sured. An offset to this as well as to other shortcomings of general practitioners' service, is increasingly being resorted to in the form of partnerships of insurance doctors. These partnerships are of from two to six men, each of whom has his assigned hours at the offices and also naturally has some diseases on which he is more of a specialist than his colleagues. Under this arrangement the insured are certain of a doctor being at hand all the time, yet each individual doctor has free time for study and recreation. The terms under which these partnerships work are governed by regulations of the Ministry of Health, so that the danger of any abuse of the 252 plan is slight. Indeed, such arrangements appear to be officially encouraged. Similar results are to a certain extent obtainable where an insurance doctor hires an assistant to help him. The medical services under the act are, it should be emphasized, specifically planned on the theory that only general practitioners' services can at this stage be given. Tuberculosis care, for example, except for domiciliary treatment, is now removed from the act and entrusted to the local authorities. The insurance doctor is not sup- posed to have to treat venereal cases, which also go to a local clinic. Nor is the insurance doctor expected to take maternity cases unless he so elects. But he is supposed to be able to diagnose and treat the usual complaints and to act as a clearing house for sending Special cases\ to the necessary agency. It is in his home contacts and constant knowledge of the family that his value lies. The policy thus exemplified seems to argue for more adequate statutory pro- visions to correlate general and specialist advice. The question of determining eligibility for medical benefit reveals the anomaly of trying to adhere strictly to the insurance principle in the provision of medical treatment while at the same time trying to make the physicians' services as fully available to all as possible. Loss of one's medical card, failure to pay a sufficient number of weeks' contribution or failure to " sign on " to a doctor's list, may temporarily make it difficult if not im- possible for one to be eligible for medical attention. Testimony is general, however, that a person needing treatment is likely to get it regardless of his legal status under the act. And this seems natural. The only real evidence which it should be neces- sary to give as to eligibility for treatment is increasingly seen to be the need of treatment. This principle does not apply as yet, however, in the case of attention needed by the dependents of the insured. They must pay for their service; and, as would be expected, the workers of a family go to the doctor on the slightest provocation, while the non- insured persons will wait until illness becomes serious and therefore doubly difficult to cure. Yet even here the tendency is for the insurance doctor in his home visits to consider the troubles of other members of the family in which situation the fee, while important, is not the primary consideration. And without a great deal of bother the visiting insurance doctor can often direct a non-insured sick person to the service of local doctors available under special provisions for the tubercular, for maternity cases, school children's cases, etc. 253 Decision as to the eligibility of the insured for benefits in doubt- ful cases is now in an unsatisfactory state, since the standards of different approved societies vary so greatly and their method of local follow-up are so different. As it is, if the approved society doubts the validity of a claim it usually sends its own doctor or referee to see the patient, advising the local doctor of the step and asking for his help. This intervention is usually welcomed and the necessity for a second diagnosis is so far recognized by all that thirty referees are now included as salaried doctors under the act. Indeed, it is not inconceivable that the time may come when there will be one doctor to give medical advice and a wholly different one to authorize the certification for cash benefits. It is felt by many that there is much to commend such a separation of two quite different functions. It is in fact difficult to tell in many cases whether incapacity for work really exists. The border line cases are many, especially where there is a tendency to diagnose illness as " general debility " and " anemia." In such cases it will be seen that there are two points of view at work and they perhaps form a wholesome cor- rective to each other. There is the point of view of the approved society anxious to suspend payments as soon as that can be justi- fied; and there is the point of view of the insurance doctor who usually sees the need, especially with " run down " persons, of a prolonged rest without worry and under wholesome conditions. It is admittedly hard to reconcile these points of view where the sur- rounding conditions, economic and otherwise, are constantly work- ing to negative the efforts of the doctor. Truly preventive work in many cases requires more than cash or medical benefits. It requires more food and better-cooked food, more fresh air, more quiet, no worry, etc. Failing these, cash benefits and bottles of medicine or tonic may be poured out unceasingly without apprecia- ble results. It should be noted, in short, that under any act it will be difficult in certain cases to define when the person is sick; and it will be necessary while giving medical service without stint to use care in paying cash benefits for these border-line instances of incapacity or valetudinarianism. This is, of course, an aspect of the problems of malingering. There is undoubtedly some of this kind of unconscious malinger- ing which has to be guarded against; and the use of referees under the act is essential to keep this at a minimum. It is also necessary to this end to have the administration of cash benefits 254 in the hands of a local agency which can really be in intimate touch with the beneficiaries. At present there is the further safeguard of weekly certification for cash benefits by the doctors (except in chronic cases where the approved society agrees to accept a bi-weekly or monthly certifica- tion). Apart from these comparatively exceptional border-line cases, the amount of deliberate malingering is agreed by all to be negligible. Indeed, as a problem of practical administration, it has hardly to be reckoned with. 4. Extension of Medical Benefits The Government health insurance budget of 1914 contained estimates for the services under the act of referees, consultants and nurses. It is therefore fair to say that, although the war prevented the addition of any of these services, they were con- templated as parts of an adequate plan. It is probable that within the next year the Government will again introduce plans to aid in the provision of hospital beds, consultants' services and perhaps nurses' services. Already one of the approved societies with a membership of over 300,000 gives dental treatment free to the insured. There is considerable demand in labor circles for the extension of medical benefits to the families of the insured. It is recognized that this would entail a larger contribution, but it would be pro- portionately less than the amount necessary to protect the men alone. This demand reaches its logical culmination in the stand of the Labor Party for a national medical service under which medical attendance would be available much as education now is for anyone who wanted it. The distinction should be noted, however, between a " state medical service " and a " national medical service." Under the former all doctors would be full time salaried servants of the state. The advocates of such a plan are naturally few. Under the latter the state would rather aim to build up and provide such medical service as was needed to assure the public health; leaving to private, individual and voluntary attention the doctors and patients who did not choose to receive the benefits of the public service, just as now public education is available for all unless the individual chooses to substitute a competent private school. 255 The Association of Approved Societies, including some of the largest friendly society and trade union approved societies to which belong some six million insured, has also recently come out for nationalizing the medical service in the sense used above as the most satisfactory way of getting medical attention for all with as little red tape as possible. The doctors as represented by the British Medical Association are opposed to the idea of a national medical service, although they recognize and approve the tendency of the state to provide certain consulting and specialist services in the hospitals on a salary basis as well as for the local authorities to make the medical provi- sions which they do. 6 It is, indeed, a fact which no one in England ignores that wholly apart from the insurance, there are today several thousand whole or part time doctors in the salaried employ of one or another gov- ernmental body; and the number is constantly increasing. If the insurance doctors are included in this number it would total close to 18,000 doctors. 7 When applications were sought for the thirty referees posts to be rilled this summer there were over 1,300 ap- plicants; which certainly indicates no great reluctance on the part of doctors to accept a salaried position with the government. 6 The following quotation from an article on " The Future of the Medical Profession" in the British Medical Journal for October 19, 1918, indicates quite typically a prevailing view among many thinking doctors as to the types of medical service which they would like to see available : "What, then, should be the profession's constructive policy? In formu- lating this it were well shortly to consider the basis, or bases, on which the profession renders service to the community at present, and these services can be classified under four heads, according as they are rendered, under con- ditions of: 1. Salaried service, whole time or part time for example, public health appointments, tuberculosis appointments, school medical appointments, etc. (military medical services are not under consideration). These are conditions of " State Medical Service." 2. Part time contract service for example, national health insurance work. 3. Voluntary service for example, work done at charitable hospitals. 4. Individual service for example, private practice. This can be divided into two heads, according as it deals with (a) general work, (b) consultant and specialist work." 7 " The majority of the medical profession in Great Britain is engaged in either whole-time or part-time service for the state or for local authorities. Of the 24,000 medical practitioners in England and Wales, some 5,000 are engaged as poor-law doctors, some 4,000 or 5,000 in the public health service, possibly 500 in the lunacy service, some 1,300 in the school medical service, and smaller numbers in various other forms of medical service for the state. This is exclusive of the general practitioners who undertake contract work under the National Insurance Act, and who cannot fall far short of three- fourths of the total membership of the profession. It should be noted that many doctors held several appointments." Public Health and Insurance, by Sir Arthur Newsholme, page 83. 256 There is also an association of about 500 doctors actively in favor of a national medical service. These facts are dwelt upon at length because this particular problem is significant for America as illustrating how a situation was not fully faced at the outset. Whether Great Britain was to have an insurance plan for dealing with health or a public health program supplemented by cash benefits, does not appear to have been candidly considered by the initiators of the legisla- tion. As a result, the experiments have conclusively shown the need for making whatever medical provisions are offered uni- versally available without regard to the industrial status of the citizen, his income limit, or his standing in a scheme of cash subventions. In solving this problem serious consideration has to be given to the attitude of the medical profession itself. Its co-operation is manifestly essential to any plan the community decides to undertake. But that co-operation can so easily extend over into dictation that the experience of England is a useful warning. The outstanding features of any plan to be adopted should be offered to the medical profession for an opinion and for sug- gestion as to ways and means. But it will be a serious mistake to allow those who are accustomed to think that they " have a vested interest in ill health," to dictate how much or how little medical service the community shall provide for itself on a public and universal basis. On that matter of fundamental policy which is really the first problem to be faced in working out a plan for health insurance or other public health provisions, the doctors' advice should not be final, as they are likely to have a too ex parte view. It is true of the doctor's relation to the state, as of the relation of other professional experts, that when basic policies are being determined " the expert should be on tap but not on top." Contrary to the usual impression in America, however, the doctors are not today opposed to the British act. Quite the opposite is the fact. They realize and state freely that " the doctors are better off under the act than they were before. They have an assured regular income and no bother with collections." As one doctor in a peculiarly influential position said : " The doctors could not be pried loose from the act with a crowbar." Such remarks should not be taken to mean that doctors feel that they have a sinecure under the act. But it has brought a degree of economic independence in the profession, which is unprece- 257 dented, and has served as a spur to better workmanship and to the enlistment in the profession of more young men and women than the medical schools have ever before had. The fact that the doctors have a small organization which is actually a trade union, and another large and powerful body which is to all intents and purposes a professional union, and that both of these organizations represent the doctors in collective bargaining with the government, should not lead to the conclusion that there is an absence of co-operation in these official relations. This fact does, however, point strikingly to the importance of having groups of officials both in the actual governmental administra- tion and in the local areas strong enough to carry on the inevita- ble bargaining process in a way calculated to assure that the rights of the tax payer (that is, everyone) and of the patient are protected. In saying that the doctors are today favorable to the act we do not, however, ignore the opposition which exists especially to cer- tain details of the present administration. The greater part of the practitioner's contact with the Government comes through his rela- tions with the local insurance committee (upon which the doctors have of course at least three representatives). And it is inevitably true that varying standards and regulations should be set by these committees. This may give rise to legitimate annoyance as may also the regulations which may be imposed from the office of the central administration in the Ministry of Health. But it would be wrong to think that such regulations are imposed without oppor- tunity for conference. There is a National Advisory Committee upon which the doctors are represented which considers just such matters as these . Moreover, when all is said, two facts have to be remembered: Some degree of oversight of the work of the individual doctor is surely in the public interest; it is only important to be sure that it is an oversight exercised reasonably and tactfully. And, secondly, the English doctor does not have to become an in- surance doctor unless he so elects. And even when he does, his private practice is still open to him to any extent which his strength enables him to carry it. His panel practice, however, need be as large and no larger than he desires, since he does not have to take an insured person upon his list unless he wishes to. Over 14,000 doctors did not willingly " subjugate themselves to the state " or to the insurance patients, nor would they if the relationship was irk- some, continue so to do for eight years. The fact is that once the 258 arrangement was entered into the doctors did not on the whole find it onerous, unduly inquisitorial or destructive of their freedom. As pointed out in the footnote on page 255, they recognize the need for a variety of types of medical service, all of which should be avail- able both to the public and to the individual doctor who is choosing a congenial type of professional activity. Medical opposition to the health insurance idea in our own country fastens to some extent on the idea that the " contract " with the Government involves an ignominious, subordinate and undignified relationship of the doctor to the rest of the community. Nothing is further from the truth if the British experience can be taken as proof. It is, of course, true that when this contractual relation- ship is established many points have to be made explicit which as between the doctor and the private patient have been largely implicit. But to this no conscientious physician can have of in England does have objection. For example, the contract requires that the physi- cian's services shall be available under the following terms : "A practitioner is required to attend and treat at the places, on the days and at the hours to be arranged to the satisfaction of the Committee, any patient who attends there for that purpose, but he may with the consent of the Committee, which shall not be unreasonably withheld, alter the places, days, or hours of his attendance, or any 'of them, and shall in that event take such steps as the Committee considers necessary to bring the alteration to the notice of his patients." 8 In this as in its other provisions it is fair to say that the contract is only laying down for all practitioners a standard of professional obligation which all good doctors already adhere to. Indeed, to that extent and in this respect the act has unquestionably leveled up the standard of medical service which is given in Eng- land; and to this there can certainly be no honest objection. In short, the contract is a necessary device for defining the extent to which the Government and the insured patient may call upon the doctor in return for a prescribed sum. That this should lower the dignity of the doctor's status is no more thought of today in Eng- land than it would be thought of in any way compromising to pro- fessional integrity to take the oaths of allegiance, etc., necessary to becoming an army doctor. 5. Administration of Cash Benefits The cash benefit is administered through the approved societies, except in the case of the 300,000 " post office contributors," who 8 Manchester Insurance Committee Terms of Service for Insurance Prac- titioners, January 31, 1920. 259 may collect through the local post offices benefits to the amount of their contributions. A brief explanation of the machinery will serve to show the part played by these societies. They are the official carriers. A worker must join one of them (or become a deposit contributor at the post office). He then receives from his society a stamp card, which he gives to his employer to stamp as evidence of payment by him of contributions for himself and his employees. These stamp cards, one for each six months, are returned to the worker at the end of the half yearly period ; who in turn sends his card to his approved spciety, which credits him with the payment and presents the cards to the Government as evidence of the collection. When the worker wants cash benefits he gets his medical certifi- cate of illness from his doctor, and sends it along to the approved society, usually by presenting it locally to an agent, who forwards the claims. Since the approved societies are organized in different ways some in local lodges, some in central organizations with merely local agents the promptness with which claims are settled, the standard of eligibility for benefit, and the thoroughness with which a local visitor investigates each case, in addition to forwarding the doctor's certificates to the central office, vary greatly. Moreover, since each worker may join any approved society he wishes, it is not unusual to find in one shop workers who belong to from twenty-five to fifty different approved societies. It is the mul- tiplicity of societies which makes it necessary and convenient to use the stamped cards as evidence of payment. And when it comes to payment of benefits, this multiplicity may make it necessary for the agents and sick visitors of a great number of approved societies to be visiting in the course of one day in the same street or even in the same house. The frightful waste to which this overlapping leads is at once apparent. So important a feature of the act are these approved societies, however, that further discussion of them is postponed to a separate section. As already intimated, the diversity of standards set up by the approved societies means that some societies are making every effort to curtail payments while others are giving benefits almost without question. The element of control which is counted on by the central governmental authority to keep the payment of benefits within rea- sonable limits is provided by considering each society's finances 260 autonomously. The act provides that the surplus of any society (as determined by the government valuation taken every five years) shall be available for increased benefits for the members of that society. These increased benefits may be in the form of either cash or medical benefits. Whether or not this provision has acted as an effectual check upon liberality of payments, is doubtful. For the government, although careful in its inspection, has on the other hand made special and additional financial provisions for societies which become insolvent. Another provision relating to the control of approved societies' administrative expenses says that if they go above 5 shillings per person per year there shall be an assessment upon the members of that fund or their benefits may be correspondingly reduced. There has been some criticism on the score of delay in payment of cash benefits. There is undoubtedly some ground for this com- plaint, although here again much of the criticism can be explained in terms of the disorganized clerical staffs of the approved societies during the war (e. g., one large society lost 100 men clerks the day war was declared). Or, in the second place, delay in settlement is frequently to be explained because of some irregularity in the pre- sentation of the claim for which the approved society is not respon- sible. Here again the machinery of the stamp cards causes con- fusion, as for example, when the worker unwittingly gives his card to the agent of a society to which he does not belong and the card is put aside by the agent or lost in the offices of his company. In general, however, the largest carriers, especially the friendly and big 1 trade union societies, pride themselves upon the efficiency of their office organization and the promptness with which claims are paid. It was the usual thing in a number of the societies visited, to have all the claims received in a morning's mail handled and dispatched the same day. Testimony is gen- eral, however, that the commercial companies which are acting as approved societies are the least satisfactory carriers from the point of view of prompt payment due perhaps less to intention than to the fact that the health insurance is only incidental to their profit-making business. It may be said, in short, that most of the administrative difficulties surrounding the present method of paying cash benefits are not inherent parts of a soundly-organized insurance plan, but they are inherent parts of a method of paying through approved societies 261 such as England felt compelled to resort to because of the strength of the commercial insurance companies and friendly societies. 6. Administration of Medical Benefits Because it seemed expedient to work the cash payments through approved societies and because they had available no adequate administrative machinery for the provision of medical treatment, it was necessary for England to set up separate machinery for the administration of medical benefits. The country was therefore divided into about 150 local areas, in each of which an insurance committee was created, the membership of which is representative of the different interested groups. This insurance committee makes the contracts with the local doctors who are to serve in that area. It also decides how many insured persons may be on the list of any one insurance doctor, although a maximum of 3,000 persons has now been set by the Government. This committee, moreover, handles the transfers of insured persons from the list of one doctor to another ; receives and deals with complaints against the insurance doctors; makes the payments to the doctors; and makes arrange- ment with local druggists for the provision of drugs. The means at the disposal of these committees for dealing with inferior or inadequate medical service are by no means completely satisfactory, but are being constantly improved. The limitations of the size of the panels is universally felt to be desirable, as is also the use of official referees, who will now necessarily work in close conjunction with insurance committees. Actual formal complaints against insurance doctors by insured persons are remarkably rare, due perhaps rather to the cumbersome- ness of the machinery and the difficulty of proving a case, than to the absence of criticism. And it frequently works out in practice that the insured persons complain to the approved society with which they feel on better terms than to the insurance committee; and the approved society then handles the complaint if it is serious. If the insurance committee finds that there are grounds for the complaints which it receives, it may discipline the doctor in any one of several ways, the most drastic of which is to cancel his contract. In such a case, however, the doctor has the right to appeal to a disinterested local body composed of three medical men and a bar- rister as chairman. To safeguard the interests of the insured person who would assure himself of satisfactory medical service, the following methods are provided: He has free choice of doctors; the 262 chance periodically to change his doctor ; and the right to com- plain to an authority, the local insurance committee. In practice, the first provision free choice of doctors means today as much, if not more, actual freedom in selection than obtained before the act was passed. For in the great majority of cases those doctors who were already practicing in industrial or agricultural centers became insurance doctors. And in some dis- tricts the assurance of a fixed income from insurance practice has meant that additional doctors have been attracted there to practice. The clamor for " free choice of doctors " was not one, however, which was or is raised by the patients, although it goes without saying that the most successful medical work depends upon a condi- tion of personal confidence between doctor and patient. But there is very much less interest on the part of the insured persons in exercis- ing a free choice than was anticipated. The great problem has, indeed, been to get workers to indicate a preference for some doctor, in order that they may be assigned to a place on that doctor's list. It is a further consideration that the free choice may take place on a capricious basis. Mention was frequently made of cases where a popular doctor on a convenient corner had larger panels than he could handle properly, while better doctors, who were less genial or lived on a side street, had less to do than they could take care of. Once the insured person is on a given doctor's list and finds the medical service unsatisfactory (even though there may not be suffi- cient ground for official complaint), he may apply for transfer to the list of another doctor. Such transfer may take place at th'j end of any six months' period; or, if the original insurance doctor also signs the application, the insured may transfer at once. Manifestly, however, the latter condition is difficult to fulfill ; and the former is resorted to in surprisingly few cases. 7. Payment of Doctors The basis for the payment of doctors is 11 shillings ($2.75) per insured person per year to which in the rural areas are added mileage fees for distances of over two miles to the patients' homes. A doctor with a thousand persons on his list would thus have an assured income of about $2,750. (This would mean over $3,000 if considered from the point of view of the comparative purchasing power of money in England and in America) to which would be added his fees for private prac- tice. It is admitted by doctors and affirmed by all observers that the doctors are thus better off under the act than they ever 263 were before. They do not have to worry about collecting fees from panel patients; they get their insurance income at regular intervals of three months ; they are virtually guaranteed an income dependent upon the size of the panel. Now that the practice of doctors working in partnership with several colleagues is being extended, the time on duty is being divided up in a way to make the amount of work necessary to earn a comfortable living exceed- ingly reasonable, leaving time for study and recreation. Some trouble still arises about the number and identity of insured persons on a doctor's list but difficulties on that score are being reduced. The doctor is paid on the basis of a list made up' in advance, and if there are transfers or movement of persons an adjustment is effected at the end of the period. Here again it seems true that doctors are on the whole less particular than they used to be about being sure that the patients whom they treat are on their own panel. If the visitor to a doctor's office needs attention he is likely to get it; or he is sent where he can get it. The present so-called capitation basis of payment has the effect of making it an object for the doctor to keep his insured patients well and of getting them well as quickly as possible. Of course, there is also possible the view that since the fee is assured the service will not be so good. Undoubtedly, instances to illustrate both tendencies could be cited. But on the whole it is agreed that the capitation basis is the most satisfactory. In Manchester and Sal ford, the doctors originally objected to the capitation plan and a basis of payment for services rendered was adopted. A similar plan started in four other localities has been dropped. The plan provides a scale of fees for different types of visit and a full record by the insurance doctor of services ren- dered by him. The records pass through the hands of a committee of doctors to see that there has not been excessive visitation and the payments are then made. The total fund from which payment comes, however, is determined on the capitation basis ; that is, it is as many times 11 shillings as there are insured persons in the entire district; so that no doctor gets more in the long run than he would in any other district unless he happens to be working in an area where the rate of sickness is constantly excessive. Since the total resources are thus limited, it has thus far under the visita- tion basis been necessary at every settlement to discount the doc- tors' claims for remuneration. The result naturally is that the good doctors who find their bills discounted because their colleagues have 264 been doing too much visiting and are thus making large claims, inquire into the type of medical service being rendered. Whether the reason for this discounting of claims is that the scale of fees for the several services is high or that the doctors do too much visiting, it is impossible to say. The doctors themselves, however, and others in the Manchester district, believe in the system and say that it works to satisfaction. It has the good result, they con- tend, of paying for work done and thus encouraging good work where it is needed. Not the size of the panel, but the rate of sick- ness should in this view determine the payment. The capitation basis, however, is clearly the simpler of the two; requiring less check and oversight, and giving the benefit of a guaranteed amount of income and of freedom to give all the medical attention necessary without thought of seeming to " over- visit." And in the last analysis the kind of medical attendance given is determined more by the education and morale of the pro- fession than by the method of compensation. The English experience in administering medical benefits thus confirms the case for (1) local administration of the medical service; (2) for a uniform basis for contracts with the local doctors in all districts; (3) for a uniform basis for certification as to physical condition justifying cash benefits ; (4) for medical referees; (5) for co-operative use of local diagnostic clinics. 8. Drugs A prescribed number of drugs and medical appliances are avail- able free on prescription from the insurance doctor. These pre- scriptions when filled are forwarded to the insurance committees who make the payments to the local chemists whom they have ap- pointed to fill the insurance prescriptions, on the basis of charges which have been agreed to between the Government and the national pharmaceutical organization. In the event that a doctor is found to be giving too many pre- scriptions or those calling for too expensive drugs for which equally good but cheaper substitutes are available, he may be brought before a committee of doctors to explain his conduct. In practice, however, the administration of the drug provisions of the act gives rise to little difficulty and is considered to be run- ning smoothly. Criticism under this head as with the other fea- tures of the act fastens rather upon the small number of items and appliances made freely available to the insured as their statutory right. 265 9. Approved Societies The use of the approved societies as carriers of the cash benefits has been an expedient but in many ways unfortunate procedure. Certainly no other country seeing the extra expense, duplication and over-lapping caused by the present system should think of resorting to this method of handling the cash benefits. There are now over 900 approved societies and there were at one time over 2,000, many of which have been consolidated with other funds. Each society, of course, has its own central office, its own local agents and. sick visitors. Accounts must be kept for it separately in the Government offices and there must be individual supervision of their activities. Some societies select their risks; others admit every applicant. There is comparatively little segregation of risks by occupation and no segregation by residence. The statistics which would show the incidence of sickness by occupation and locality are thus especially difficult to get. In short, the whole approved society machinery is a fine example of what to avoid. Indeed, there are not lacking signs that the English themselves would be glad to be rid of them and to administer the insurance through one national fund. The valuation of approved societies which is now nearing completion will undoubtedly reveal wide dif- ferences in the amount of surplus which will be available for in- creased benefits in the several societies. If it comes about that some of the strongest commercial companies and friendly societies are in a position to offer larger benefits than many of the other societies, there will undoubtedly be considerable objection from the trade unions. And it is openly hinted even in official quarters that in the event of such a wide discrepancy being revealed, the agitation for one national fund as the carrier would be very active. Certainly the warning was again and again repeated to us : " If you go in for health insurance, don't have anything to do with approved societies." 10. Hospitals As already stated, no hospital treatment is given under the act. The doctor who wants his patient to have institutional care must get him into a voluntary hospital. Of late years this has been in- creasingly difficult because of a shortage of beds and now also because the hospitals are financially embarrassed. Costs have more 266 than doubled, former contributors are now taxed so heavily that they do not give ; contributors from among the " new rich " have not yet materialized. As one advocate of privately supported hos- pitals naively remarked to us : " We expect that in another ten or twelve years the new rich will get the habit of giving and then the hospitals will be all right." But meanwhile frantic efforts are being made to keep the hospital doors open at all ; and those who are planning the public health pro- gram of the country, see that a wholly new way of meeting the problem is essential. It is possible that the Government will in the near future abolish the poor law hospitals and make their beds available for use by the local authorities. It is also possible that the Government will subsidize the hospitals on the basis of the num- ber of beds used by insured patients. If some such arrangements as this are made, it will be then necessary to take steps to pay the hospital doctors who now give their services ; as it is clear and right that if the hospitals are to be paid for their work for the insured, the consultants should be paid also. This is an admittedly transitional time in respect to hospital pro- visions, and those who are anxious to see adequate provision made as soon as possible with no suggestion of charity about it, are advo- cating that the hospitals be operated as public institutions. This will undoubtedly come in time, although the Minister of Health has officially stated that this is not the present Government program. Nevertheless the trend is already toward wholly publicly supported institutions for tuberculosis and maternity ; and a good number of municipalities have their own general hospitals. At the end of August of this year (1920), the Minister of Health introduced a bill which is likely to become a law, which aims to make a beginning at public support and control of the hospitals. The proposed legislation gives power to county authorities to supply and maintain hospitals, to contribute to hospitals, to undertake the maintenance of any poor law hospitals in their areas, to provide ambulance service. It also gives these authorities power to raise the necessary funds. The element of national control begins to enter, for contributions out of county funds to voluntary agencies are only allowed " on such terms and conditions as may be approved by the Minister." This legislation is obviously a temporary and temporizing manner of dealing with the shortage of hospitals, since it puts the whole financial burden on the counties while making possible a beginning of national oversight. Still further legislation from the national 267 point of view is thus needed, and is probably contemplated in con- nection with a bill to transform the poor law institutions into general municipal agencies. 11. Tuberculosis At present provision is made under the act for the sanatorium treatment of insured persons having tuberculosis. This arrange- ment will be discontinued after the year 1920, not because it is no longer needed, but because it is felt that the local authorities can handle this disease better and more adequately. For then the whole population will be considered at once from the point of view of institutional care of tuberculosis, rather than be treated in two groups the insured and the non-insured. Domiciliary treatment for this disease remains, however, the duty of the insurance doctor. Admittedly the present provisions are too few ; almost every in- surance committe has a waiting list for sanatorium treatment. To pass on to the local authorities the work of maintaining all the sana- torium beds necessary for tuberculosis will, therefore, not solve the problem. As was said above with relation to general hospitals, it will be necessary in the immediate future for the Ministry of Health in conjunction with the local authorities, to adopt a policy which will really promise to cope with this enormous problem. Interesting experiments are being made in the organizing of self- supporting farm colonies for tuberculosis patients who have had sanatorium treatment but who will be much safer and healthier if they do not immediately return to the cities. One of these colonies just out of Cambridge in Cambridgeshire may be mentioned as deserving additional study at the hands of those in this country who are carrying on the community's attack on this scourge. 12. Nursing No nursing services are provided under the act although as already pointed out they were contemplated in 1914; and will in all probability sooner or later be added. The nursing situation, like that of the hospitals, is admittedly unsatisfactory and in a transi- tional state. Nursing services are now provided by " local authorities in con- nection with Tuberculosis and Infant Welfare, by Parish Councils for the supervision of children under the Children Act, by Educa- tion Authorities in following up the recommendations as to treat- ment made by School Medical Officers, and by various voluntary agencies. With such a plethora of authorities it is to be expected 268 that it will frequently occur that two or more nurses will at one and the same time be visiting the same family." 9 It will thus be seen that some districts are adequately staffed while others are not ; and that there is needed a proper coordination of national and local policies which will make universally available in a public way the services needed. 13. Prevention and Research The claim that health insurance means a new awareness of the value of preventive medicine has on the whole been substantiated in the experience of Great Britain, although the developments have perhaps been in unforeseen directions. It may be fairly said that the Ministry of Health which was created in 1919 grew not only out of a knowledge of the need for co-ordination of medical efforts, but also out of the fact that a unified national health program and administration was shown to be necessary to national vitality by the health insurance and by the army draft. It is also true that since the insurance act was passed, measures have been adopted for providing separately for venereal disease, for tuberculosis, for maternity and child welfare. How much of a causal relation exists between the needs revealed by the insurance act and the inception of these services, it is impossible to say. But it is certain that, now health insurance is a fact, there is a new impetus and eagerness to attack the hospital, nursing, dental and sanatorium problems on a public and fundamental basis. It is also true that the demand for a constructive policy worked out under a national medical service is greater than it would have been today had there been no insurance act. And the doctors have certainly come a long way toward their new attitude regarding preventive medicine, toward clinical co- operation and toward regarding themselves as custodians of the health of the community as well as the curers of its ills. This change of outlook, this invaluable educational process, can be ascribed almost wholly to the experience they have gained in work- ing the insurance act. It is, moreover, now widely realized that the tuberculosis as well as other sickness cannot be greatly reduced until the housing prob- lem of the country is seriously faced on a large scale. It was to have been expected, however, that the records of sickness would reveal local problems and occupational exposures which needed special attention. Medical records were required of f A Public Medical Service, by David McKail and William Jones. 269 the insurance doctors until the war when they were abandoned, and only at the present time is attention being given to devising a record card that will be of value. For it is admitted by all that the pre-war records were practically valueless as disclosing the in- cidence and nature of the country's sickness. In short, after eight years of the insurance act, there is not a definite body of knowledge as to which localities, trades or age groups experience which particular kinds of illness. But here again, extraordinary as this omission seems, it must be remembered that through five war years the doctors who remained in civil life hardly had time to see all the patients who needed attendance to say nothing of trying! to keep individual records. On the side of research the results, although only indirectly attributable to the health insurance, have been most valuable. A Medical Research Committee was organized at an early date after the act was passed ; and during the war that committee became the official research body of the Government under which worked the Health, of Munitions Workers' Committee and others. Its find- ings, reported in full in special monographs and in its very inter- esting annual reports, have been of great medical value; and the chief problem, as was pointed out) by the secretary of the Committee, is to get the information obtained by research quickly into the hands of all the general practitioners of the land. So important has become the work of this Committee that it has now become the Medical Research Council, removed from under the jurisdiction of the Ministry of Health (for reasons which seem to the outsider hardly sufficient), and placed directly under the Privy Council. On the whole, considering the intervening problems, the work of fostering preventive measures and research has gone well*; although it is a matter of great regret that the original form of medical record keeping was not well enough designed to be of per- manent use, and that the body of existent records is so meager. Not the least significant of the preventive influences which have been set in motion are two reports, one by Sir George Newman, Chief Medical Officer of the Ministry of Health, on " An Outline of the Practice of Preventive Medicine;" 10 the other the Interim Report of the Consultative Council on Medical and Allied Services on the " Future Provisions of Medical and Allied Services." 11 ~"Cmd., 363. "Cmd., 693. This, and the report referred to in footnote 10, may be ordered by the code numbers given at a nominal cost from H. M. Stationery Office, Imperial House, Kingsway, London, W. C. 2. 270 These reports have had a wide reading and are in harmony on their major recommendation, although the latter carries its con- structive proposals into greater detail. They emphasize the strategic place in a national public health program of : 1. The general practitioner as the first and major point of contact with the people; 2. The primary (or local) health center as the unit of local medical work especially 'on its diagnostic and specialist side although the members of the clinic would be largely local general practitioners; 3. The secondary (or district) health center with salaried specialists and consultants having necessary hospitals and laboratories; 4. A number of supplementary services and special hospitals; 5. A better integration of medical education with the day-by-day work of the general practitioner. Their conclusions as to general principles and as to methods of carrying them into practical effect seem to your investigators to be sound and to warrant the further study of your Commission. Two copies of each accompany this report. 14. Insurance Finances The sources of income for the insurance expenses are the following : 1. Contributions of employers and employed. 2. Contributions of the State under the act. 3. Supplementary Grants of Parliament for Women's Equalization Fond ; and for the Central Fund. 4. Parliamentary Grants as follows: a. Medical Grants in Aid (under Act of 1913). b. Special Grants in Ministry of Health Budget for Central Administration. c. Special Grants for Expenses of Insurance Committee. The sources of expenses under the insurance act are as follows : 1. Cash Benefits. 2. Doctors' Fees. 3. Administration Expenses of a. Approved Societies. b. Insurance Committees. c. Central Administration. 4. Drug Fund 5. The Reserve Fund 6. The Contingencies Fund. 7. Women's Equalization Fund. 8. Central Fund. 271 In explanation of the above two paragraphs it will be useful to describe those funds not already explained. The Reserve Fund is set up to enable the insurance fund to pay for the sickness of the older members. The statutory contrib- utions are based on the sickness rate of 16 years of age and until there has been one complete generation contributing under the act it is necessary to create a reserve to meet the increased incidence of sickness of the older members admitted at the start. The fund is based on a complete payment by 1950. The Contingencies Fund is created for every approved society to meet any extraordinary demands that might arise. The Women's Equalization Fund is to pay for the high incidence of sickness of married women workers, which the societies have found it necessary to provide for. The Central Fund is to provide for those cases where an ap- proved society shows a heavy and extraordinary deficit. The moneys available from each contribution are divided as follows for men : Pence Sickness Benefit 3 .02 (per cap. per week) Disablement Benefit 1.11 Maternity Benefit 68 Medical Benefit 1 .92 Expenses of Administration 94 Total 7.677 2/3 pence. To Benefit Fund (including administration) 7-2/3 To Contingencies Fund and Central Fund 2/3 To Redemption of Reserve Fund Value 1-2/3 10d. total of employer and employees' contribution. But the expenses under the act, in addition to requiring 2/9 of the expense of benefits to be borne by the state, necessitate other appropriations. The increased doctors' fee now makes necessary a special Ex- chequer grant. The amount of this grant in 1919 was 3,000,000; but the 1920 figure will be considerably higher. The Women's Equalization Fund comes from an Exchequer grant of 280,000. The expenses of administration in the Ministry of Health come (as far as can be roughly estimated from the 1920-21 budgets) to something over 400,000. 272 The statement given below will indicate in an approximate way only the aggregate sums involved in the insurance plan for the year 1920. APPROXIMATE BALANCE SHEET OF RECEIPTS AND EXPENDITURES FOR THE OPERA- TION OF THE ACT (1920)" Receipts Contributions of Em- ployers and Employees State Grant including Supplementary Grants on Women's Equaliza- tion Supplementary Grant for Medical Services (1919 basis) Interest on Cash Re- serves 29,800,000 6,900,000 3,100,000 2,000,000 41,800,000 Expenses Benefits (cash and medi- cal) Supplementary Medical (1919 basis) Central Administration.. Contingencies Fund Reserve Values Reserve Surplus 28,700,000 3,100,000 400,000 1,800,000 1,500,000 6,000,000 41,500,000 A rough check of this balance sheet is obtained by making a com- parative study of the Estimates of 1920. These show that the expense of the act to the Government and payable out of the exchequer is between eleven and twelve million pounds for the year. Such an amount added to the receipts of the act from the contributors roughly balances the total expense of the act. Another sidelight on the cost of the act was supplied by the figures of Dr. Addison, the Minister of Health, in reply to a ques- tion in Parliament on July 19, 1920. He said that since the incep- tion of the act the total cost was in round numbers 190 million pounds. Of this amount 99 million pounds had gone in benefits; expenses and administration had taken 25 millions; and there was a balance in reserve of 60 millions. About 12 per cent, he said, of the receipts from contributions went to the approved societies for their expenses of adminis- tration. As far as it is safe to draw any conclusions from the above figures, they indicate that to provide medical service for about 15 million people and cash benefits to the amount of something over 15 million pounds, the yearly Government expenditures is about 12 million pounds and the cash contributions of employer "This statement aims to give only the most general approximation of receipts and expenses. It includes a figure for the supplementary medical grant which is probably much too low owing to the fact that the 1920 medical oayment is at the new rate of $2.75 per insured. 273 and the workers are something over 29 million pounds. And it has so far cost one pound for administration for every four pounds expended on benefits. It would seem to be fair to draw the conclusion that for the benefit of 15 million peoples' health, about 205 million dollars (in terms of American currency) per year is being spent; or between $13 and $14 per insured person per year. If these figures are at all accurate, the total outlay appears large for the benefits received. In a careful study of "A Public Medical Service" (Allen & Unwin), 1919, made by a Glasgow doctor and the Clerk of the Glasgow Insurance Committee, the case is set forth with a con- vincing show of accurate statistics for a truly public medical service (cash benefits excepted), which would cost between 12 and 13 shillings per person per year or a little over $3. The additional cost necessary to pay cash insurance claims would certainly not amount to over $5 (probably $4 would be much more nearly a correct figure on the basis of the amount of the English benefits) ; making a total cost of less than $10 per capita for medical and institutional treatment available for the entire population with the addition of cash benefits of the amount specified in the British act. These figures are introduced as being in no sense exact or con- clusive. But they are believed to indicate that the present methods of an insurance scheme with duplicating approved societies, elaborate doctors' panels, government inspecting agencies and small- scale private druggists, create a variety of channels for small wastes and leakages, which in the aggregate amount to an unwarrantedly high expense for the value received. Moreover, it is obvious that the method of financing the measure has now departed (if indeed it ever was so financed) from an insurance basis. Special funds are created and new costs are added with no regard to the amounts originally made available. This is not said in objection to the present method of financing by supplementary grants. But it is a further point in the evidence that the tendency is increasingly away from an insurance and toward a public health basis of finance, so that the funds are made available on a basis of public need rather than solely on a basis of joint contribution and a pooled risk. 274 V. Conclusions THE general conclusions reached by your investigators were somewhat summarily stated at the outset. But it may not be out of place to consider finally some of the more specific results of the British experience from which America might especially profit. A. The application of the insurance method to the provisions of medical, hospital and nursing facilities is a clumsy and indirect way of making sure that the public health is being fostered and conserved. The tendency is a wise one which brings a separation between the medical services which should be universally available and the cash benefits which might remain on an insurance basis. On the other hand, it is undoubtedly true that the immediate expense to the public treasury can be kept considerably reduced by securing payment for the medical services out of the fund created by the joint contributions. And it is further true, not only in England but wherever health insurance has been instituted, that the working of the insurance has supplied the great education to all groups in the community but especially to the doctors, as to the necessity for a more extensive public health program. Hence, as a practical matter, the incorporation of the medical benefits into the insurance act is probably a wise step coupled with which should be the extension of these benefits under the act to all dependents. B. The public health provisions of the community should as soon as possible include the following: Medical attendance for all sick members of the community who desire it (including general practitioner and consultant services) ; Institutional treatment including hospitals, sanataria and con- valescent homes ; Medicine and medical appliances ; Dental treatment, nursing ; and All medical services incident to maternity. These provisions should be available on a basis of joint state and local support with the actual administration of the work as the responsibility of the local health authorities, who would be so organized or reorganized as to be able to include the above services under their care. Plans for the relation of local to district medical facilities have been admirably worked out in one or two English counties and their method of organization suggests a model for careful consideration. 275 As illustrative of the method there in use, the plan given below lf is valuable: 1. The authority for carrying out the scheme will be a Board consisting of representatives of the County Council and of the General Hospitals. 2. The General Hospital areas shall be those shown on the sketch plan, subject to such modifications as experience shall show to be necessary. 3. In each Hospital area an Advisory Committee shall be formed of members of the Hospital Staff and Medical Officers in charge of the out-stations, whose duties will embrace a. Ensuring that all treatment given at the out-stations is effective, and b. Advising the Board of Representatives on all medical matters, including all difficulties arising in connection therewith. 4. The situation of the out-stations shall be as shown on the plan and where practicable shall be established in connection with the Cottage Hospitals. They will be opened in the order decided by the amount of work likely to be done at each and will be arranged to meet the circumstances of each particular area, being larger and more completely equipped in the denser localities than in the more scattered areas. 5. The out-stations will be provided and equipped by the County Council. 6. The uses of the out-stations are primarily for examination and out-patient treatment in connection with a. Venereal Diseases, b. Tuberculosis, c. Ex-service Men, d. School Children, e. Maternity and Child Welfare, for which provision has been made at the public expense. They will also be available for other conditions for which provision may be made in the future, and may be used by the Medical Officers for insured persons and general hospital cases, by arrangements with the County Council. 7. The Staff will be a. Medical (1) A regular staff consisting of local practitioners appointed as medical officers by the Board of Repre- sentatives. (2) A consultant staff consisting of (a) Visiting Staff of the General Hospital. (b) The Tuberculosis and Venereal Disease Officer of the County Council. b. Nursing (1) District Nurse "Report of County Medical Officer on Health to Gloucestershire County Council, June 4, 1919. 276 (2) Masseur and Masseuse ) (3) V. D. Orderly and Nurse ( peripatetic 8. The Out-stations will be 'opened a. Weekly at a convenient hour, on a fixed day, for atten- dance by the medical officer, or oftener if necessary for the work of the County Council. b. Periodically, for attention by members of the Visiting Staff, and by the Tuberculosis and Venereal Disease Officer, by arrangement. c. As often as may be necessary for intermediate treat- ment by the Nursing Staff. d. At such other times for the convenience of the Medical Officer in seeing his own patients and hospital cases, by arrangement with the County Council. 9. A register shall be kept of all attendance in a book provided for the purpose, and a case file kept for each case containing such simple notes as may be necessary for the medical history of the patient. It should be pointed out that such proposals as these do not involve the idea of a universally state-employed medical service. Your investigators believe that the idea of such a service is repug- nant to the great majority of physicians and patients, and that the best results, at least for some time to come, are obtainable in other ways. For example, the general practitioner who is to be available to give public medical service to any comer, would (as now) go upon the Government's list and have assigned to his care those families who elected to have him as their physician. He would then be paid on a capitation basis. If any individual feels that he would get better service by going to a doctor who is not on the public list, or by paying a public practitioner in his other capacity as a private doctor for the service he gets, he is at liberty to elect either of these alternatives. And the doctor meanwhile has whatever spur is provided both by the opportunity of getting on in the public service or of making good in private practice. In short, there would be necessary the employment on full or part time (as at present with the insurance doctors) by the public health authorities of a constantly increasing number of general practitioners and specialists, thus accelerating an exist- ent tendency. But there would still be the widest possible lati- tude for those persons who chose to secure their own medical and institutional care, and for those doctors who preferred on whole or part time, to carry on private practice. Moreover, the existence side by side of a considerable amount of both public and private practice would undoubtedly react whole- somely on each, keeping initiative, energy, professional ambition and a spirit of public service alive and growing. 277 In short, the medical benefits under an act should be as liberal as possible, including the maximum of institutional pro- visions as well as general practictioners' care, and all treatment should be carefully co-ordinated to bring into effective use for the insured and his dependents all local and all state facilities. C. Having made medical provision available for all insured and their dependents, it would still be necessary to make provision on a compulsory insurance basis for payment of cash benefits to workers when they are unable to work and secure wages. All employed persons should be required to insure in a state fund out of which cash benefits would be paid during incapacity due to illness'. D. Cash benefits should be at least 50 per cent of wages. E. The administration of cash benefits should be decentralized on the disbursement side on a geographical basis, but centralized on the collection side, so that the Fund would be pooled and the risk distributed over an entire state. Benefits should be paid through a local agency, which would be in the control of representatives of the affected groups. F. The cash maternity benefit should not be administered on an insurance basis, but should be universally available and should be of an amount to cover fully the expenses of confinement. There is much to be said for a policy which makes of this benefit a maternity endowment of an even more substantial amount. Medical service should be freely available for all maternity cases. It is recognized that these conclusions may seem to your Com- mission to extend into a larger field than that of the immediate inquiry. They are, however, the conclusions to which your investi- gators were led in an honest and wholly unprejudiced effort to discover the good and the bad in the English act, from the point of view of its furtherance of the public health and from the point of view of its availability for American uses. It may, of course, be necessary for each separate community to make the same social experiments and learn by the same mistakes. It is to be hoped, however, that this is not true ; that it is possible for one community to build upon the experience of another. And the experience proves, as your investigators read the evidence, that the acute necessity for greatly developing the public medical facilities of the state should be recognized, and set apart from and in addition to any insurance provisions. The two are not mutually exclusive. They are supplementary. But 278 the proper and wise development of the public health services will and should modify the kind of insurance plan which is adopted. Your investigators recognize fully the painful fact that those forces which have for various reasons been in opposition to the introduction of health insurance into America, have taken the line that " prevention " rather than insurance is the method to pursue. Where this position was simply taken to delay matters and " preventive " was simply a plausible cant phrase with which to oppose any governmental action, the opposition has of course been sinister to a degree. But this fact should, nevertheless, not be allowed to lead to a slighting of the immediate value and need of aggressively preventive work. Hence, if we are to meet that opposition most effectively we might well take up the slogan: Medical and institutional service freely available for all employed persons and for their families, with cash benefits for physically incapacitated workers out of a fund created by joint contributions, and with the strengthening and co-ordinating of the federal, state and local public health activities on behalf of children, mothers, the subnormal and abnormal, the aged and N those suffering from all infectious diseases. It is not a question of prevention or insurance. It is when all elements in the problem are faced at once a question of assuring simultaneously adequate medical service, prevention and cash sub- vention. And there is no good reason why these three aspects of a public program should not be developed together. Certainly to allow the advocacy of one to be used as a basis for opposition to another is unscientific and short-sighted. This report will certainly be construed wrongly if it is taken to be unfavorable to health insurance in general or to the British act in particular. It aims rather to give a discriminating statement of the extent to which insurance has been able to carry out the original promises and purposes of its proponents. The British Health Insurance Act has been a distinctly for- ward step in social legislation. It is, however, to be hoped that your Commission will see its way clear to favoring a program at once more thorough-going, far-reaching, economical and scientific, which will, however, include an application of the insurance idea in its legitimate sphere. 279 Appendix Persons Interviewed in Course of Inquiry into British Health Insurance Mr. W. A. APPLETON, secretary, General Federation of Trades Unions; Mr. JOHN BAKER, secretary, Iron & Steel Trades Confederation; Mr. BARLOW, assistant secretary, Workers' Union; Dr. ETHEL BENTHAM, panel doctor, London, Member Labour Party Committee on Public Health; Mr. GEORGE P. BLIZARD, insurance expert (former secretary, Labour Party Committee on Public Health) ; Miss MARGARET G. BONDFIELD, secretary. National Federation of Women Workers; Mr. G. A. STUART-BUNNING, secretary, National Federation of Sub-Post Masters; Mr. G. W. CANTOR, insurance executive of Union of Post Office Workers; Mr. A. S. COLE, Peek, Frean & Co., Ltd., London; Dr. ALFRED Cox, secretary, British Medical Association; Mr. WM. CRAMP, assistant secretary, National Union of Railwaymen; Mr. G. W. P. EPPS, Government Actuary's Office; Dr. LETITIA D. FAIRFIELD, medical officer of London County Council; Sir WALTER M. FLETCHER, secretary, Medical Research Council; Mr. THOMAS FOSTER, building trades employer, Bromley, Lancashire; Mr. I. G. GIBBON, administrative official in Ministry of Health; Mr. E. HACKFORTH, administrative official in Ministry of Health; Mr. R. W. HARRIS, administrative official in Ministry of Health; Mr. FRANK HODGES, secretary, Miners' Federation of Great Britain; Mr. D. J. JENKINS, insurance executive, Iron & Steel Work- ers, Approved Society; secretary, Association of Approved Societies; Miss ELEANOR T. KELLY, employment manager, Debenham & Co.; Dr. WM. KERR, medical officer of London County Council; Mr. F. KERSHAW, insurance executive, National Federation of Women Workers; Mr. JAMES P. LEWIS, executive officer, Hearts of Oak Benefit Society; Mr. E. J. LIDBETTER, Bethnal Green Poor Law Union; Mr. THOMAS LILLY, clerk, Manchester Insurance Committee; Mr. MCFARLANE, divisional inspector, National Health Insurance, Manchester District; Sir CHARLES MACARA, cotton manufacturer, Manchester; Mr. A. B. MACLACHLAN, administrative official in Ministry of Health; Mr. J. S. MIDDLETON, assistant secretary, British Labour Party; Mr. MILLER, insurance executive, Workers' Union; Miss MURBY, inspecting staff, National Health Insurance; Sir THOMAS NEILL, president, National Amalgamated Approved Society; Dr. CHARLES A. PARKER, consulting physician; Dr. MARIAN PHILLIPS, women's organizer of Labour Party; Mr. CHARLES G. RENOLD, firm of Hans Renold & Co., Manchester; Dr. HARRY ROBERTS, panel doctor, London; Dr. MEREDITH ROBERTS, administrative official in Ministry of Health; Mr. D. A. RUSHTON, editor, National Insurance Gazette; Mr. SAMUEL SANDERSON, secretary, Insurance Section, Amalgamated Association Card, Blowing and Ring Room Operatives; Mr. SHARP, Harrods' Department Store, London; Mr. ROBERT SMITH, insurance executive, Cooperative Whole- sale Society Approved Society; Mr. H. O. STUTCHBURY, administrative official in Ministry of Health; Mr. FRED THOMAS, Amalgamated Weavers' Association; Mr. JOHN TURNER, secretary, National Amalgamated Union of Shop Assistants; Miss WARD, inspecting staff, National Health Insurance Dept.; Mr. WARREN, insurance executive, National Amalga- mated Union of Shop Assistants; Sir ALFRED W. WATSON, government actuary; Mr. & Mrs. SIDNEY WEBB, economists, members 1909 Poor Law Commission; Dr. A. WELPLEY, secretary, Medico-Political Union; Dr. J. S. WHITAKER, administrative official in Ministry of Health; Mr. H. L. WOOLCOMBE, secretary, London Charity Organization Society. 280 PUBLICATIONS American Association for Labor Legislation No. 1: Proceedings of the First Annual Meeting, 1907. No. 2: Proceedings of the Second Annual Meeting, 1908.* No. 3: Report of the General Administrative Council, 1909.* No. 4: (Legislative Review No. 1) Review of Labor Legislation of 1909. No. 5: (Legislative Review No. 2) Industrial Education, 1909. No. 6: (Legislative Review No. 3) Administration of Labor Laws, 1909.* No. 7: (Legislative Review No. 4) Woman's Work, 1909.* No. 8: (Legislative Review No. 5) Child Labor, 1910. No. 9: Proceedings of the Third Annual Meeting, 1909. No. 10: Proceedings of the First National Conference on Industrial Dis- eases, 1910.* No. 11: (Legislative Review No. 6) Review of Labor Legislation of 1910. No. 12: '(American Labor Legislation Review, Vol. I, No. 1.) Proceedings of the Fourth Annual Meeting, 1910. No. 13: (American Labor Legislation Review, Vol. I, No. 2.) Comfort) Health and Safety in Factories. No. 14: (American Labor Legislation Review, Vol. I, No. 3.) Review of Labor Legislation of 1911. No. 15: (American Labor Legislation Review, Vol. I, No. 4.) Prevention and Reporting of Industrial Injuries. No. 16: (American Labor Legislation Review, Vol. II, No. 1.) Proceed- ings of the Fifth Annual Meeting, 1911.* No. 17: (American Labor Legislation Review, Vol. II, No. 2.) Proceedings of the Second National Conference on Industrial Diseases, 1912. No. 18: (American Labor Legislation Review, Vol. II, No. 3.) Review of Labor Legislation of 1912. No. 19: (American Labor Legislation Review, Vol. II, No. 4 ) Immediate Legislative Program. No. 20: (American Labor Legislation Review, Vol. Ill, No. 1.) Proceed ings of the Sixth Annual Meeting, 1912.* No. 21: (American Labor Legislation Review, Vol. Ill, No. 2.) Proceed- ings of the First American Conference on Social Insurance, 1913. No. 22: (American Labor Legislation Review, Vol. Ill, No. 3.) Review of Labor Legislation of 1913. No. 23: (American Labor Legislation Review, Vol. Ill, No. 4.) Adminis- tration of Labor Laws. No. 24: (American Labor Legislation Review, Vol. IV, No. 1.) Proceedings of the Seventh Annual Meeting, 1913. No. 25: (American Labor Legislation Review, Vol. IV, No. 2.) Proceed- ings of the First National Conference on Unemployment, 1914. No. 26: (American Labor Legislation Review, Vol. IV, No. 3.) Review of Labor Legislation of 1914. No. 27: (American Labor Legislation Review, Vol. IV, No. 4.) Associa- tion Activities. No. 28: (American Labor Legislation Review, Vol. V, No. 1.) Proceedings of the Eighth Annual Meeting, 1914. No. 29: (American Labor Legislation Review, Vol. V, No. 2.) Proceedings of the Second National Conference on Unemployment, 1914. *Publication out of print. THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN Trtl6 BOOK ON THE DATE DUE. THE PENALTY WILL" INCREASE TO SO CENTS ON THE FOURTh ' DAY* AND T,q $1.OO ON THE SEVENTH DAY O V ER D U E. ' x * OCT 25 OCT 26 1932 FEB 15 1943 FEB 1 IFeb'SOMB U / 51748! UNIVERSITY OF CALIFORNIA LIBRARY "TT is inconceivable tha? \merica, with T * its surplus in food anJ clothing, with housing though crowded And ft It? roi abundance of fuel, could allow among those of our own r desu 3 *ork, It is should be forehanded tn such measures as will prevent any such suffering." uft'er-. who .. w e w i it OF COMMERCE HERBERT HOOVER