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TWj voluntary or friendly societies were also included in the system. Their members were exempted from the compulsory insurance, provided the society was sound enough to guarantee the minimum benefits under the Act. The whole contribution in these funds was found by the members without assistance from State or employer. All these funds, obligatory and voluntary, were liable for the minimum benefits as follows :— Free medical attendance, medicines, and surgical fittings. In disability, after the third day an allowance equal to one-half the average daily wage. Or The insured may elect to take free nursing in a hospital, and have one-half of his sick-allowance paid to his dependents. The provision that no claim can "be made for the first three days' sickness is apparently designed to discourage triflers. The sick-allowance due by these funds is payable for thirteen weeks, but, excepting in the Communal Funds, there is power to extend the period, as well as to grant treatment in sanatoria and other extra benefits, including a funeral allowance equal to twenty times the average daily wage.., If, however, the sickness is the result of a trade or industrial accident, the cost from the fifth to the thirteenth week is borne by the individual employer, and should the worker be not insured under a Sickness Fund, then the whole cost of the first thirteen weeks' sickness is paid by the employer. The total money value of the legal benefits is not to exceed three-fourths of the average daily wage upon which the contributions are based, and if a worker is a member of a friendly society as well as compulsorily insured, the total benefits to be received must not exceed the standard wage. For the purpose of assessing the contributions and benefits, the light of practical experience is closely followed, and, of course, in a largo compulsory system of this sort age is disregarded, just as it is in our New Zealand workers' compensation system. The workers are classified into age groups, from which a standard or average is computed. The contribution to be paid by the worker insured in the local or trade obligatory funds is not permitted by the law to exceed 3 per cent, of the average wage. As before mentioned, the rate for the Communal or Municipal Funds must not exceed 2 per cent, of the wage —a rate, however, which may be exceeded on appeal to the Imperial Insurance authorities. The scale computed by actuaries on the above basis at the outset of the scheme was fixed for ten years, with a provision that after the expiry of the ten years it was to be reviewed every five years in the light of experience. These fixed periods were known as the " contributory periods." The funds must create a reserve equal to the average expenditure of the previous three years, and in some funds for five years. The actual payment of the contributions to the Sickness Funds is made by the employer, who is responsible for the insurance of his workmen and also for the collection of the contributions and the furnishing of the necessary data to the funds. The employer has power to deduct from wages the two-thirds of the premium-charge due from the worker, so as to reimburse himself to that extent. The employer is bound to insure the worker within three days of the commencement of work unless the employment is for less than a week's duration, or unless the worker is a member of a friendly society. A person during unemployment is not only relieved of the duty of contributing, but is also debarred from the benefits, and it can be readily seen that no other course could be adopted in order to protect the funds and meet the danger of abuse of the system by malingerers or impostors. The insurance against unemployment is a separate branch of reform. All of the funds bear the cost of management except the Communal Funds, the administration charges of which are payable by the municipality. The management rate of the Sickness Funds is estimated at about 5 per cent, of the total income. This sickness assurance has turned out to be very popular in Germany —much more so than the accident or pensions part of the system. There are probably two causes of this : — (1.) The democratic form of management; and (2.) The immediate and substantial benefits from improved medical attendance. The management of the funds was by Act vested in boards or committees to be composed of twothirds representatives of workers and one-third of employers. The latter, however, appear to have taken no great interest in the management, and it is stated that the control has passed over to the workers. Probably the employers reasoned that, as the worker had to find two-thirds of the cost, he could be trusted to administer the funds on careful business lines; and the result appears to have justified the confidence. It is said by observers who are conversant with both systems that, apart from the compulsory element, these sickness assurance funds are very much akin to our friendly societies in constitution and management. Indeed, the intention of the whole legislation was to decentralise the management and vest it in the people affected, eliminating as far as practicable direct State control. The medical benefits under this assurance are highly prized, and have been developed in all possible directions. The statutory right given to the funds to amalgamate for the purpose of acquiring by legal agreements the best medical skill, places the medical attendance question on a satisfactory footing. As an instance of the value of this benefit it is stated that in one Berlin Industrial Sickness Fund alone the members have the choice of one hundred skilled and qualified doctors. An interesting return is furnished showing the proportion of the funds expended on the various benefits during the first ten years. Out of eveiy £100 spent — £47 went for sick-allowances. £37 ~ doctors, medicines, and appliances. £11 ~ hospitals and homes. „ other expenditure, including funerals, &c. £100