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e inn ndB- mt- At 1901 investments of Institutes under these headings amounted to close on £14,000,000. Thecost of management is met out of the contributed funds, and is estimated at about 5 per cent, of the income. The contributions and allowances aie collected and paid through the Post Office, and a great saving in the cost of administration is effected by this method. It is canied out by means of a card system much on the lines of the penny savings-bank cards, with spaces foi a year's contributions and when filled up a receipt is given, and a fresh card issued. Special stamps' are issued by the Insurance Institutes to the Post Office, where they are sold, at the various denominations, to the employers who in most cases stamp the cards, and deduct the workers' half of the contributions from wages In fact the Post Office is largely availed of in the whole system, including the Accident and Compensation Branch. r The Invalidity and Old-age Insurance is stated to have been the least popular of any branch of the German system. In addition to the fact that the allowances and pensions were regarded as inadequate, there was the difficulty which appears to be common to all superannuation systems— that is, the inability of the worker to see the necessity of contributing when young towards a benefit which he reckons he may possibly never require or live to enjoy. The same difficulty is experienced in our friendly society system ; and the objections of the German worker, who, moreover, is asked to pay less than a third of the cost, merely affirm the truism that human nature is much the same the world over, and at the same time put a strong argument at the disposal of those who contend that o!d-age-pension systems based on compulsory contributions are impracticable. So great, indeed, was the dissatisfaction that the old Act was repealed, and from 1900 a new Act became law, increasing the benefits and extending the privileges. This concludes the description of the system, and it may be of interest to offer some general remarks gleaned from different writers on the subject. Remaeks. In the first place, the system has been credited by its supporters with having brought about several indirect improvements in national and municipal government. Free medical attendance is now so generally available that persons of the poorer class, hitherto without these benefits are frequently visited by doctors, which led to the exposure of defects in dwellings and of irregularities common to such places, with the result that the attention of the municipal authorities was more promptly and directly focussed on these spots. In the words of one German eulogist the system " introduced a fresh breeze into municipal government." From the national point of view it is stated that the Government as an entity now commands much greater respect as a dispenser of good things compared with the position it previously occupied in the minds of the mass of the people as an extractor of taxes ; and, m the opinion of some, this has done a great deal to strengthen the patriotism of the German people. An American observer gives it as his view that the sickness and accident assurances are of enormous value to the national economy, and are producing results out of all proportion to the cost. They have, in his opinion, been one of the main factors in Germany's industrial progress. It was claimed by one German writer that the system has also had the further effect of lowering the cost of poor-relief, and that it has been the means of inculcating thrifty habits in the people. It would be surprising to find that the poor-relief expenditure has not been reduced in actual amount with such a highly subsidised system as this in operation, but the evidence is not conclusive as to a reduction in the fundamental rates of poor-law cost. Indeed, a German authority is understood to have recently stated that the poor-law expenditure had gone up ; but he added that it would have gone up much higher but for this system. This is not a very satisfactory explanation, particularly as applied to a country like Germany, where the aged proportion of the population might be expected to be fairly stationary. As a proof of thrift, it ispointed out that, whereas in 1870 there was only one person in eighteen of the population with a savings-bank account in Germany, there was in 1894 one in five Other causes, however, may bring this about; and, as a matter of fact, in New Zealand during the same period the number rose from one in thirty to one in five of the population. It is not unreasonable to assume that where compulsory thrift showed the workers substantial benefits, there might be created a desire to exercise further saving voluntarily. In any case,lthe system does not appearlto have been detrimental to thrift. The English criticism on the inauguration of the system was mainly aimed at the principle of State subsidy and the compulsion element. A great deal of the objection then raised is now without much point, seeing that we have since adopted State pensions. The compulsory feature of the system, with its attendant concomitants of tutelage and the right of interference by officials, is quite repugnant to our ideas of government, and, indeed, it is reported that regulations under some of the German Acts had to be modified, so strong were the objections. The Germans, however, argue on the compulsory question that, no matter how free they may be*politically they cannot be economically independent, because of the intricate and complicated'system'of modern industry. a 3 The law on its establishment entailed considerable sacrifices on the part of the employer, who had not only to contribute under all three Acts, but was also held responsible for the insuring of his employees, and, further, had to keep payments and particulars up to date, and furnish the necessary data to the authorities. But, against this, it is stated that capital has greatly profited by the scheme having produced better workers and better workmanship. The Director of the Insurance Department reports that some of the largest employers have extended the principles of the legislation to provide further benefits, such as allowances to widows and orphans.

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