Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-02
BY CYRIL ARTHUR PLAYER.

BY CYRIL ARTHUR PLAYER.
BY Gable to The Star.
LONDON, June 2.-Compulsory in
eurance, established in 1911, was a con-
tract among three parties-employed
employer and taxpayer the state). The
taxpayer, who pays national taxes, is to
be distinguished from the ratepayer,
rates The ratepayer sustains poor law
relief, which Is locally controlled.
Each of three parties to the contract
paid In a contribution which has tuc-
tuated in amount and in proportion. but
Is now and for long has been almost
the same for all three; there is a slight
advantage, if any, to the employed; In
the beginning, before the war. the state
paid less than the others. The contrl-
button then from the state was almost
3 cents and from each of the others 5
cents.
The participation Of the state was
justified on the practical ground that II
1t wished to claim the right to admins
ter the fund 1t must have financial
interest in it, and on the social ground
that there existed a definite relation
ship between the welfare of the whole
public and the welfare of any and all
Of its economic units.
Solvent in Those Years
The system was solvent in those years.
The actuarial estimate Of 8.6 unemploy-
ment over cycle of years for the trades
involved, on which the rate Of contribu-
ton was based, never was approached.
The fund began to create reserve, and
It became evident that unemployment
insurance would be extended to further
Observation-Disclosures to all classiflcationS
of workers.
The war, after it settled down, proved
pitiless and cratic employer To
some it paid pittance and on Others 1t
bestowed fortunes, but for all it provided
work. Unemployment became negli-
gible In the first glow of enthusiasm,
and even when there had been time for
second thoughts, almost every man Of
fering himself to the armed services was
promised his old job back. And when,
in 1916, 1t became necessary to make
munitions manufacture an attractive
employment, a new insurance act was
passed applying compulsory insurance
to persons engaged in number of mu-
nitions industries and other occupations
likely to suffer from depression at the
return of peace.
BY July, 1918, almost 100000 per-
sons were insured and two years later
the total was 4,197000 Yet, because
unemployment was negligible, the I'M
employment fund In November, 1919,
had a balance in its favor Of $94,-
100000.
Even when, In 1919, the benefit rates
were raised, while the contribution
schedule remained unaltered. the fund
went ahead, so at the end Of 1870 1t
had a balance OF more than $780,
100000.
There was, however, another side of
the. picture already beginning to come
into view. For one thing, when de-
mobilization had thrown armies Of men
on the labor market and other mar
kets also and very few Of these men
found their old jobs open after all
Parliament voted an out-of-work dona-
ton which cost, from November, 1918
to November. 1919, more than $108,-
100000 in payments to unemployed
civilian workers. 1t voted a further
s16o,00o,o00 to unemployed ex-service
men over q somewhat longer period.
Many Preferred Donation.
The donation was larger than the
unemployment benefit, so many civilian
workers who were entitled to the bene-
fit preferred the donation. The dona-
ton for civilians ended in November,
1919, however. and even then the I'M
employment fund continued to add to
its reserve.
One other shadow Of the future was
noticed by the cautious. When, in
1916, the plan was extended to take
in munitions and similar workers, no
new actuarial scrutiny of the enlarged
situation was made, and the fiat rate
for all contributors was continued.
The original rates were intended to
"cover the risk" in specially selected
trades, and while the 1918 extension
proved harmless, the original principle
involved became the more easy to
prejudice later when greater hazards
entered into the program.
But up to 1920 unemployment in
surance was splendidly successful, and
the unemployment fund was increas-
ingly solvent. In 1920 trouble began.
With mounting deterioration Of the
economic condition of the country, the
fundamentals of the plan were not ex-
actly abandoned, but suspended under
euphemistic phrases, until as many as
100000 of the unemployed were COM
pletely outside the contract qualif1ca-
tons bat were receiving benefits on the
theory that these benefits were in
anticipation Of contributions to the
fund yet to be made-at some more
prosperous time.
Unemployed members were kept on
benefit SO they might not be tempted
to undercut the union rate. The union
was directly interested in reducing I'M
employment to a minimum.
State insurance at the beginning, and
until war time brought complications,
wisely sought TO develop the same sys-
tenn. but desired to reach unskilled and
unorganiZed workmen. 1t was meant to
provide only "tiding benefit to
those whose eligibility could be readily
determined and under rules designed to
interest both employer and employed in
reducing unemployment and avoiding
unnecessary claims.
The dole has saved Great Britain from
revolution, but its abuses have aroused
bitterness, not only among the crushed
taxpayers, but among workers them
selves, while the financial chaos has
become a nightmare to all those who
bear any responsibility for the financial
integrity of the nation.
Contributors Proud Of Plan.
Yet there IS sturdy feeling that the
basic scheme of unemployment insur-
ance has not had fair break, that 1t
has been swamped by crisis or by a
series of crises outside all ordinary cal
culations.
The contributing worker contributor
to the fund.- is proud of the plan and
will tell you, quite accurately, that
counting from 1912, when compulsory
insurance went into effect. the contri-
buttons together of employed and en-
pioyer passed the billion-do!lar mark N
Midsummer. 1925. That is true. BY