Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-24

Precisely as with the American war
insurance fol veterans. the British uns
employment insurance schemes have
overstepped every bound originally set
for them until now it is necessary for
the Parliament at least to attempt meas
uTeS which are declared to be fatty con-
ffScatory in order to maintain the ever
increasing expense of public relief. Re-
lief measures now constitute the largest
item in the British government budget.
The British experience has fallen into
unhappineSS because of the occurrence
IN terrifying iapld succession Of those
unforeseen contingencies which, 1t would
almost appear. are about the only con-
tingencies which may be counted on.
Funds Easily Exhausted.
The first unemployment insurance
scheme on a large scale was launched
in 1920. II provided that the benefits
be paid from fund built up from small,
regular contributions from the workers
on the one side and from employers on
the other. The Government was to have
appropriated small sums in emergencies
to NIL shortages in the privately raised
funds.
In its first year the scheme fell down
and the insurance fund became actu-
arlally insolvent. In 1921 an acute trade
depression descended upon Great Brit
ain. Factcriss closed and unemploy-
ment became general, the beginning Of
a decade-long period CT distress among
the workers
The very fact that the numbers OF
unemployed were large struck a double
blow at the scheme Out OF work, the
workers were unable to build UP the
planned reservoir of relief money and
that very circumstance made it neces-
q wv f7tsf hon To Az
cient reservoir for relief
The scheme, in this emergency, was
altered to provide for what was termed
uncOvenanted benefits. This permitted
unemployed persons to draw, in adj
vance of their contributions, sums such
as they would have drawn under the
original plan. In other words, they
were borrowing against future payments
into the fund. The treasury, of course,
had to put up the money. 1t is a long
time since there has been any unem-
ployment fund and the whole load has
fallen on the excheQuer Existing legis-
lation, under which the benefits are
paid, is effective until October 81 next
and royal commission now is studying
the entire set-up with a view of finding
way out
The fiction of the unemployment fund
is maintained as a bookkeeping matter.
The government merely Lends" to the
gfund. Parliament has passed successive
acts setting a limit to loans, but every
little while this limit must be raised.
The fund now owes the exchequer $685.
100000. The present law sets limit Of
$3.50 100000 which the government may
advance. Demands on the fund are in
creaSing at the rate Of $5,000,0 900 week.
Obviously some drastic step must be
taken before the Autumn, when the en-
abling legislation lapses.
While the law authorizing these
treasury advances to the fund lapses,
the basic law setting up the scheme
does not. This means that the unen-
ployment fund will continue to owe the
treasury the total of its borrowings and
that some day this must be repaid.
Clearly, then, the workers who on the
return of prosperity viii again be draw
ing wages must Ply their contributions
into the fund witt the certainty that,
as fast as they are paid In, instead Of
creating new reservoir, they must, for
long term of years, go 70 the reim-
bursting of treasury loans. Short of ex-
traordinary prosperity and a big lift
in the wage scale, there is little chance
Of the present generation Of British
workers repaying their debt. Their chill
6ren will have to take up the burden.