cerely trust, notwithstanding that this may seem to you going over familiar ground, that it may be carefully read, because a great deal of that which follows is based upon it; but I am not going to weary you by taking up all of that which precedes the main argument.

I do want to impress upon you that the following is the situation: There are here three parties to consider. There is the employer, who, in this matter, except in the case of the railroad companies, which can not so readily shift the burden at the present time, really needs least to be considered, because if you impose a general tax throughout the United States upon employers of a class according to the hazard, obviously in most occupations and employments it will simply be transferred to the price paid by the consumer. The employer, therefore, is usually only interested in it as a means of keeping down the cost of the product and so increasing his trade, and not because it would necessarily affect his profits in the least. Then there are the employees and their families. They are tremendously interested. And what an enormous army of them there is, composing virtually the substratum of the entire Nation, almost making up the entire Nation really in point of numbers, and in many respects all that makes up our Nation. But that is not all. You have another question to consider, and that is the interests of the people of the United States who are neither wage earners nor the employers of wage earners in industries which supply products or services for sale.

What situation have we to-day? We have the situation very accurately shown by an investigation made by S. C. Kingsley on behalf of the United Charities of Chicago, covering 50 fatal accidents. He found that $8,749 had been received, an amount of about $175 apiece, by those families. He found that in one case the magnificent amount of $3,000 had been received, the highest amount in those 50 accident cases the largest amount given to support an entire American family. The next largest was $1,150; the next largest was $800. There were 15 cases in which nothing had been received, 2 cases in which only the funeral expenses had been paid, and 12 others in which nothing had been received but where there were suits still pending. They had a careful estimate made, on the lowest possible living basis, as to what was required to support those families, and they found that, in addition to what the widow and the children could earn, an average of $301.60 a year was required for their support, which must be supplied by public or private charity. Now, this ceases to be a question even of mere justice between employer and employee, and becomes a question as wide as the Nation. We will pay this tax, gentlemen, in some form. We have always paid it in some form. We are now paying it. We have never permitted these people to starve on our streets. We have never permitted these children to go entirely without their schooling. But what have we done? We have, in order that they might receive the benefits which we tax ourselves to give them, destroyed their self-respect and made paupers of them. We have introduced their children in their early infancy to the humiliation of pauperism. We are responsible, on account of the method by which we pay the tax, for the condition into which we have sunk a considerable portion of the great American people, the prosperity of which, 50 years ago, was the marvel of the world.

Senator CHAMBERLAIN. It is to avoid this very condition that these different brotherhoods and charitable organizations amongst the workmen have been formed, is it not?

Mr. DAWSON. Yes; a good many of them, and they have done good work; but after all a very small percentage on the whole are thus taken care of, and mostly very inadequately.

The CHAIRMAN. In these brotherhoods the burden falls upon the employees.

Mr. DAWSON. Precisely; where it should not fall.

I want, just as briefly as I possibly can, now, to pass over what other countries have done.

Germany adopted the system which I have roughly outlined to you of collecting enough to pay the current requirements in the year 1884 as relates to sickness insurance and extended it to accident insurance in 1886; and again, at a later date, which I can not recall for the moment, to invalidity insurance and old-age insurance, and it now has before its Parliament, with everey probability of its passing in some form, a proposition extending it to cover death from all causes. That has been the history of the German legislation.

The first country to follow Germany was Austria. The German system was criticized, I am ashamed to say, by members of my profession, the actuarial, as unsound; the reasons for its being declared unsound were absolutely false, and to-day the members of my profession who are regarded as the leaders of it are not of that opinion at all. I trust that the members of my other profession, the legal, will never be able to recall any instance in which their members have taken a similar position. We, of course, of the legal profession, always have our minds open to new things. But the actuarial profession, having had up to that time its exclusive training in the service of private companies engaged in furnishing insurance to men who could buy insurance to-day and drop it to-morrow, were utterly unable, at the time that this was brought forward in 1886, to grapple with the greater problems of a system of compulsory taxation for these purposes. Consequently, almost unanimously-the exception could scarcely be heard-they condemned it as unsound.

Now, in consequence of their condemnation, the first country to follow Germany, which was Austria, following it in 1887, adopted a system similar to the German in most respects, but departing from it in the following: First, that it created great district associations to collect and disburse this tax; second, that it imposed a small portion of the tax upon the employees, even in the case of purely industrial accidents-only one tenth; and third, that it undertook to collect enough to establish these capitalized value reserves which I have mentioned; that is, not only enough to pay the claims falling due during the year, but to meet the claims that grew out of that year's accidents that would fall due for 50 years afterwards.

The CHAIRMAN. May I interrupt you there?

Mr. DAWSON. Certainly; yes.

The CHAIRMAN. Do you think it is wise in this scheme to impose a tax upon the workman as well as upon the employer? In other words, would it tend to make him more careful?

Mr. DAWSON. In my judgment, if you only provide for the payment of compensation to the workman when injured because of an accident while at work, i. e.. arising out of his employment, you ought

not to assess any portion of the tax upon the workman, because, to start with, that is not the way to get it into the price of the product, except by his forcing wages up, which is an unpleasant way; second, because if you did so, the portion of it which you would impose on the workman would be so small (and that has been the experience in other countries) as not to have any marked effect in that direction. I am of the opinion that the great public purpose we have been discussing calls for the civilized method of dealing with this, which is to protect the workmen of the United States against the effects of sickness and nonoccupational accidents as well, through these associations, in which case they should be required to pay a tax, and I may say that in such case they will not only pay the tax, but they will pay it willingly and enthusiastically, with an amount of acclaim which it is not possible for the gentlemen within the sound of my voice to credit at this time.

The workmen of the United States are standing day after day as to themselves and their families, under the shadow of disaster. The conception of this matter as dealing only with industrial accidents is already a mistaken one, and we, as the most civilized country in the world, absolutely in the van in the most important respects, ought not to tail in behind the rest, but should go clear to the front.

The CHAIRMAN. I think you are quite right in saying workingmen would quite willingly contribute to this.

Mr. DAWSON. They will not, in my judgment, contribute willingly to any considerable amount to a fund out of which injuries and deaths due to industrial accident are compensated.

The CHAIRMAN. My observation has been that poorer people are more willing, and they always have been, to help one another.

Mr. DAWSON. But they will not willingly contribute to any considerable extent to a tax which is raised purely for the purpose of covering industrial accidents. That has not been the experience anywhere in the world, and I am sure will not be here. But if it is made a comprehensive civilized plan for keeping workingmen and families out of the poorhouse when disaster comes upon them, they will not only contribute, but they will contribute with an amount of satisfaction and enthusiasm which will be absolutely astounding to some people in this country who think workmen would regard it as tyrannical.

Austria's system then differs in being district instead of according to trades; in having a small contribution from workingmen to the purely accident benefit, whereas the German, while it has a large contribution to sickness and old age, does not assess them at all in regard to occupational accidents, and also in attempting to maintain a capitalized reserve. They copied Germany in the important particular that they gave the employers who contributed representation in the management; they also gave the employees a small representation and that made a still greater representation of the employer class.

They have not maintained these capitalized reserves. The thing which ruins voluntary associations-such as mutual life associations in the United States-namely, that the members will not maintain the capitalized reserve, and which has often ruined mutual fire insurance companies, namely, that you can not induce its mutual members to pay what they ought to pay-operated almost instantly in

Austria, and of the seven district associations into which Austria and Bohemia are divided, but one has a sufficient capitalized reserve, and, if I recall correctly, the most important of them have only about onehalf.

They have abandoned now in Austria all attempt and pretense that they will ever do it, and the only modification of the German plan that to-day really exists in Austria is that they have some funds already collected, and so only need to collect currently sufficient to meet the claims, taking into account the interest on the money that they already have.

That is not all. In Hungary-which many of us in this country suppose to be a part of Austria, but which is a separate nation-they refused to follow Austria, and within the last three years have followed Germany identically, except that they did not make a classification of associations according to trades.

The experience in Austria has been that prevention has not been good on the whole. Not bad, but not good on the whole. The best prevention they have had is from the cooperation in the sicknessinsurance associations there, which take care of the first few weeks' accidents. There the employees and employers have been cooperating and the State has had little to say about it. One reason why the result has not been good is that the employers do not see the immediate connection of what happens with what they pay, and that they do not criticize one another as they do in trade associations. The next country to act was Norway. Now, I may say that up to this time everybody called it State insurance pure and simple; and many criticized the German plan as being unscientific, and the argument was brought forward, which is sure to be brought forward in answer to what I have said to you, that this increasing burden on German industries, by postponing payment for the accident which happened this year, would be a crushing weight. As a result of this, when Norway took action-up to that time nobody talked about mere workmen's compensation; it was not much thought of as yetNorway went further; it established a pure State insurance department. It could not very well have associations such as they have in Germany. Norway has a smaller population than several of our States. But it created a State insurance department with orders to accumulate the full capitalized reserve. This is nearer to being selfmaintaining than in any other country in the world, so far. It was short at one time and had to get a small amount from Parliament to make the reserves good out of the general taxes, but it has maintained the reserves well, and it is now strengthening them, because it found that some of its actuarial investigations as to the amount to be carried were incorrect.

About this time the general idea which has appealed to your minds and which has been presented to you with such thoroughness before I had an opportunity to speak to you to-day, the general idea that this was workmen's compensation had gained headway. In Rome they talked of Roman liberty and Italian liberty, and in France they talked of Gallican liberty and the impossibility of getting the independent Frenchman to stand compulsory insurance; and in Denmark they talked about Danish liberty and the impossibility of getting the free and independent Danish citizen to stand compulsion; and, of

course, in Great Britain, which we sometimes think of as being overrun with monarchical institutions, they talked about British liberty and the unwillingness of the free Briton to stand compulsion; and there they evolved out of it the compensation idea as distinguished from the insurance idea, which former they thought was sound. And a few years after Norway's action, Denmark, France, Italy, Great Britain, and Belgium adopted laws all of which were of the pure workmen's compensation type, without any requirement that the employer should insure.

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In Denmark and in Great Britain they made the death benefit a lump sum, an asininity that they have not yet gotten over in either country, but there are fair signs that they will eventually overcome it. For there, as we know it is in our own country, as soon as the widow gets the lump sum into her hands in a few weeks or months be taken away from her and her family, leaving them dependent upon private or public charity as before. In all of these countries they made the benefit to the injured man, unless his injury was below a certain percentage in some countries, take the form of a benefit continuing during the duration of his injuries. And yet we in the United States are worse than the worst of the countries of the world in that matter, because we have not had the courage, so far, even to do that, but after a few years cut off the people who are disabled, to be thrown upon public or private charity.

Now, for a while that wave ran over the world. Apparently they were going to have compensation acts. The countries I have mentioned have since been followed by some parts of Canada, by Australia, by New Zealand, by Spain and Portugal, and also by Finland, although with some modifications, and by Russia, Finland being under separate law. For a while it raged that way and that is the form in which our legislatures have had it continually before them. Rapidly I want to tell you what has taken place in that matter. Italy has recovered its senses. To-day it has compulsory insurance and has erected a state institution in which the employers must insure unless insured in private companies or mutual associations. France even had a little sense about it when it started. It taxed every employer a small percentage on his pay roll to create a state fund to insure the payment of compensation in case the employer or the insurance company failed. It also established a state institution to compete with private companies, which state institution has to carry a capitalized reserve.

In Denmark they had the good wit to realize that, even if they were going to preserve this valuable independence, they must attend to the settling of these claims themselves or the private companies would settle them in a way that was not altogether to the benefit of the claimant or the people of Denmark; and they set up a government institution for settling claims, and every solitary claim that a private company pays in Denmark is adjusted by the state department and the company has nothing to do with it but to pay.

In Great Britain they gave them absolute liberty. They do not require them to insure. I remember the enthusiasm with which I examined the British act; I was a thorough convert to that view at that time, so thorough that I drew a bill along the same lines, which was the first bill for workmen's compensation introduced in the