Evening star., 1932-01-30
INSURANCE PLAN
HELD UNWORKABLE
Unemployment Risks Too
Great, Expert Tells East
ern Bankers.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, January 3O.-Unem-
ployment as a whole does not fulfill as
a risk all fundamental requirements to
make it inSurable, in the opinion of
actuarial authorities, James D. Craig,
aCtuary. Metropolitan Life Insurance
Co.. told the Eastern Regional Savings
Conference meeting here at the Hotel
Roosevelt, under the auspices Of the
savings division, American Bankers
Association. He spoke on the subject:
rs Unemployment Insurance Feasible
and Practicable and Can 1t Be Made
Secure From an Actuarial Basis Under
Political Government" While indi-
eating that there are certain types of
upimplOvment to which insurance may
possibly be adapted, Mr.. Craig declared
that "anV economic depression, such as
exists at present, requires stronger
measures than InSuranCe-lt creates
condition which requires the active
enthusiastic cooperation of the entire
Nation" Mr.. Craig said, in part:
That type of unemployment which
comes to Industrious, efficient WOrKmen
for a relatively short period might pos
Sihly be compensated upon insurance
principles Amount of benefit as well
as duration should be carefully de-
termned and a premium commensurate
with this risk calculated. Each industry
and class of risk must be considered
independently and relation to the whole
borne in mind Administration must be
put in conscientious and competent
hands. It must not be allowed to be-
come a political foot ball and cannot
be expected to accomplish anything be-
yond the particular purpose for which
it was established. Unemployment
lasting longer than provided for under
such plans must be dealt with in other
ways than through insurance.
Sees Many Difficulties.
Much is heard today about unem-
ployment insurance for the workers OF
this country. 1t seems to be a popular
belief among the more ardent pro-
moments that by some Aladdin'S lamp
a program of unemployment insurance
can be made to function in fortnight,
that somehow by actuarial and political
wizsrdrv a reserve fund Of great
magnitude could be made to spring up,
that the right of the 100000 unem-
ploved to benefit would be clearly and
fairly determined and within few
short weeks we would begin to see the
Nation overcoming the i'll effects of the
depression in so far as the more un-
fortunate were concerned.
If we knew such a plan we would
be the first 10 argue for it. Any sound
arrangement which would make it pos
sible for the people to obtain such
security would claim our undivided
support But unfortunately we know
Of no such plan.
L would not want you to feel that
SC
practicable and we as a Nation should
wait for the perfect plan to descend
from some mythical Mount Sinai. Quite
the contrary. Security against economic
hazards is the cornerstone of any last
ing program of industrial relations. Now
is the time for American employers and
employees to COllabOrate more closely
than ever Unemployment is lnduStry'S
problem. Every means should be adopted
to encourage employers and employees
TO cO-ODerate in each individual factory,
trade and industrial community. Only
through experimentation using in
dividual factories as laboratories are we
going eventually to discover any plan
or plans under which the Nation as
whole will reap a genuine economic and
social profit.
There is growing evidence that en-
constructive action Plans cannot be
established over night and put into
operation until sufficient capital or ac-
cumulated reserve has been developed.
On such a very limited basis unem-
ployment benefits might be kept on a
sound basis.
Some Vital Questions.
whether they could be maintained
on that basis against political pressure
is a question. Whether such reserve
plans as the employers favor could be
set up. administered and kept solvent,
under governmental supervision in 49
States is very much in doubt. Under
an arbitrary form Of government 1t
might be done. but countries with
democratic form Of government have
found it very difficult to resist the
pressure for increasing benefits under
their various plans. Experience abroad
has been limited. The larger countries
with the more extended experience have
been unable to keep the issue out OF
politics, or to prevent the government
from becoming very deeply involved.
Mr. Craig indicated the sound
actuarial fundamentals of insurance,
which he declared cannot be applied
TO the larger aspect of general unem-
ployment, in the following questions:
Does an msurable interest exist?
To what extent are the characteristics
Of human nature involved? What is
the relation between income and
benefit? What action is to be taken
after the period Of benefit has expired?
What is the nature of administration?
What will the cost be and who will pay
~ Insurance is a science subject to
certain fundamental principles and as
Twr no one has found a method Of pre-
Venting the operation of these prln-
ciples. no matter how desirable the pur-
pose of the insurance may be.
Experience has repeatedly shown that
the technical questions stated above
cannot be successfully waived aside