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For administrative purposes the insured employees are grouped in five wage classes, determined by total annual earnings, and their contributions are made weekly in accordance with the following graded scale:

In 1912 the total receipts from all sources was 399,938,100 marks ($95,265,255), of which amount 34.2 per cent was contributed by employers, 34.2 per cent by employees, 13.8 per cent by the Imperial Government, and 17.8 per cent was in the nature of interest on accumulated reserves and miscellaneous receipts.

The benefits comprise: (1) Old-age pensions; (2) Invalidity pensions; (3) Sickness pensions; (4) Widows' and orphans' pensions, and (5) Medical care.

The old-age pension is payable from the seventieth birthday to a person who has made at least 1,200 weekly contributions, but payment of contributions may be omitted without loss of rights during sickness, accidental disability, or military service. The required term of insurance is so long (over 23 years) that no person could have obtained a pension before 1914. To meet this objection the required term was reduced by forty weeks for each year of age over 40 at the time the act became operative. Thus a man who was already 70 years of age in 1891 could claim an immediate pension.

An old-age pension is made up of two parts: (1) The Imperial subsidy of 50 marks ($11.91), which is the same for all pensions, and (2) The insurance annuity, which is 60 marks ($14.29) for the first wage class and increases by steps of 30 marks ($7.15) for each succeeding class. The entire pension thus ranges from 110 marks ($26.20) per year in the lowest to 230 marks ($54.79) in the highest class. If a pensioner has been a member of different wage classes at different times, the insurance annuity is prorated. Whatever the amount, pensions are paid monthly, in advance.

The total number of old-age pensions in effect on January 1, 1914, was 87,261. The number of old-age pensions has decreased from year to year due to the increased number of invalidity pensions held by persons 70 years of age or over. By way of explanation it should be stated in this connection that when an insured person who is receiving an invalidity pension reaches the age of 70, he has the option of choosing an invalidity or an old-age pension, and the former is usually chosen because, ordinarily, it is of a larger amount.

The average amount of all old-age pensions granted in 1914 was 167.99 marks ($40.02), or about $3.33 per month. The average has slowly risen, having been 124 marks ($29.54) in 1891, 145.54 marks ($34.67) in 1900, and 166.15 marks ($39.58) in 1908. The increase is attributable to two causes: (1) Wages have been rising and the proportion of persons in the lower wage classes has consequently decreased, and (2) pensions granted during the "transitional period" (1891 to 1914) were necessarily kept low because of the small number of contributions which had been paid in by the pensioners. Each year up to 1914 the number of contributions increased and consequently the sums granted as pensions were automatically increased.

The pension age (70 years) is so high that very few live to enjoy the old-age benefit, consequently compulsory old-age insurance would naturally be unpopular were not this objection met by the granting of an invalidity pension in case of permanent disability before the pension age. Because of the interdependence of old-age and invalidity insurance, the latter should be also discussed in this connection.

Invalidity is defined as inability, through accident or disease, to earn one-third of the normal wages earned in the same occupation and locality. Accidental injury sustained in the course of employment is excluded, since incapacity from that cause is otherwise provided for. An invalidity pension can be drawn only after 200 weeks' insurance and after the payment of at least 100 weekly contributions.

An invalidity pension consists of:

(a) The Imperial subsidy of 50 marks ($11.91);

(b) A basic insurance annuity of 60 marks ($14.29) for the first class, increasing by 10 marks ($2.38) for each succeeding class; and

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(c) A supplementary amount equal to the number of weekly contributions which the pensioner has paid, multiplied by 3 pf. ($.007) for the first class, 6 pf. ($.014) for the second, 8 pf. (8.019) for the third, 10 pf. (8.024) for the fourth, and 12 pf. ($.029) for the fifth class. Under this arrangement an invalidity pension will be greater or less than an old-age pension, according to the length of the insurance period prior to invalidity. Since 1906, however, invalidity pensions have averaged higher than old-age pensions.

The Code of 1911 provides a further allowance of 10 per cent of the invalidity pension for each child under 16, but such allowance is limited to 50 per cent in all. Of 130,609 invalidity pensions granted in 1914, 27,112 carried such allowances.

The smallest invalidity pension is 116 marks ($27.63) yearly. The average of such pensions in 1914 was 200.81 marks ($47.83), as compared with an average of 167.99 marks ($40.02) for old-age pensions. The average is increasing for the same reasons which operate in the case of old-age pensions.

The number of invalidity pensions in force at the close of 1914 was 998,339, as compared with only 87,261 old-age pensions. The number has risen steadily from 31 in 1891 to 405,335 in 1900, and 868,086 in 1908. As already explained, this increase has been accompanied by a decrease in the number of old-age pensions.

The aggregate payments on account of invalidity pensions in 1912 was 158,715,621 marks ($37,806,061) as compared with an aggregate of 14,061,878 marks ($3,349,539) for old-age pensions. The relative importance of invalidity pensions has increased and that of old-age pensions has correspondingly decreased year by year. The aggregate expenditures for these two benefits stood as 1 to 2 in 1894, as 2 to 1 in 1900, as 8 to 1 in 1908 and as 11 to 1 in 1912. In fact, the greater part of the invalidity pensions are in reality old-age pensions. Out of 103,200 invalidity and old-age pensions granted during 1912 to persons of 50 years of age or over, only 28,702, or 27.8 per cent were to persons of 70 years of age or over while 50,677, or 49.1 per cent were to persons under 65. These figures indicate that incapacity from old age more often begins before 65 than after 70 years of age.

Ordinary cases of sickness are cared for at the expense of the sickness insurance funds. But if disability continues beyond the twenty-sixth week, a temporary invalidity or "sickness" pension (Krankenrente) is granted. Sickness pensions are identical in amount with invalidity pensions, and the definition of disability is the same- inability to earn one-third of normal wages. The number of such pensions in force January 1, 1914, was 16,555; the entire cost during 1912 was 3,201,735 marks ($762,653) and the average pension was 192.3 marks ($45.81). Under the law of 1891 the only death benefit was the return of contributions to the dependents of an insured person who died before receiving a pension. This left, not only orphans, but aged and invalid widows without provision. This defect in the system was remedied, to some extent, by the widows' and orphans' pensions established by the Code of 1911. A pension is payable only to an invalid widow, but "widow's money," equal to one year's pension, is paid in any case upon the death of the husband. The widow's pension consists of the Imperial subsidy of 50 marks ($11.91) and of three-tenths of the insurance annuity to which her husband would have been entitled at the time of death. Aged women are, therefore, not as well provided for as aged men, in that the pension is only about one-half as much as that granted in case of actual invalidity. There is no "old-age" pension, as such, for women.

The widow's pension provisions became operative in July, 1912. In 1914 pensions were granted to 9,834 widows, the average amount having been 78.85 marks ($18.78) per annum, and 30,223 orphans' pensions were granted, the average amount having been 78.12 marks ($18.61). Whenever it is believed that a case of invalidity can be benefited, or impending invalidity prevented, a course of treatment may be given, the expenditure being charged to the invalidity and old-age fund. Preventive treatment, in fact, has become one of the most beneficent activities of this branch of social insurance. Sixty-five or more sanatoria are maintained, at which about 70,000 persons are treated annually. The great cause of premature invalidity is tuberculosis, and nearly 60 per cent of all the cases treated are tubercular. The efficacy of the treatment is indicated by the fact that more than 80 per cent of the patients are discharged with "disability removed."

The expenditure for invalidity pensions increased from 7,250,000 marks ($1,726,950) in 1912 to over 9,000,000 marks ($2,143,800) in 1914, while the cost of sickness pensions rose from 24,000 marks ($5,717) in 1912 to about 360,000 marks ($85,752) in 1914. The decrease in expenditures on account of old-age pensions was, on the other hand, 400,000 marks ($95,280). Invalidity and old-age insurance is administered by forty-one territorial and special "institutes" under the general supervision of the Imperial Insurance office. The total cost of administration in 1914 was 24,156,658 marks ($5,754,116). The cost per 1,000 marks ($238.20) of total expenses in 1914 was 81 marks ($19.29) as against 83 marks ($19.77) for the years 1912 and 1913. The Central Office, a branch of the Imperial Insurance Institute, is administered by highly trained experts. The published reports are, therefore, the most comprehensive of their kind anywhere issued.

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The most striking feature of old-age relief in Germany is its correlation with a comprehensive scheme of workingmen's insurance. Accidental injury in the course of employment, sickness, child-birth, permanent invalidity, premature death and old age, all are provided for by compulsory insurance. Especially significant, in the present connection, is the interdependence of old age with invalidity and survivors' insurance. When it is understood that 60 per cent of the insured persons die before attaining the seventieth year, and that of all old-age and invalidity pensioners, 88 per cent are under 70 years of age and 54 per cent are under 60 upon first receipt of pensions, it is clear that the old-age pensions alone would afford a very unsatisfactory degree of protection, nevertheless they do constitute relatively large returns upon the investment made in the form of premiums paid by those insured.

Whatever may be the beneficial effects of social insurance in the case of individual pensioners, it cannot be denied that this system has resulted in improved standards of health and work of the general wage-earning population, and to it has been due in some large measure the remarkable industrial development of Germany in recent years.

Sources. Annual Report of the U. S. Commissioner of Labor, 1909, Vol. I, pp. 1354-1444; German Workingmen's Insurance Code, Bulletin No. 96 of the U. S. Bureau of Labor; Amtliche Nachrichten des Reichsversicherungsamts (Report of the Imperial Insurance Office) 1913; Statistisches Jahrbuch für das deutsche Reich (Statistical Year Book of the German Empire) 1912 and 1914; Monatsblätter für Arbeiterversicherung, 1912, cited in Reichsarbeitsblatt, Bd. XI, no. 2, Feb. 1913 and Reichsarbeitsblatt, Bd. XIV, no. 3, Mar. 1916.

France. The compulsory old-age insurance law of 1910 prescribes insurance for practically all working people "of whatever nationality" who earn less than 3,000 francs ($579) per annum (including those State employees who do not come under the regulations of civil and military pensions).

The receipt of a pension is conditioned upon the regular payment of premiums for 30 years, except that the number of payments is reduced to 28 for all men who have performed at least two years military service; and for women the birth of each child is reckoned as one year's insurance, which may be deducted from the prescribed 30 payments. There are three groups of premiums depending upon age or sex, and corresponding to three wage groups for insurable wage-earners as follows: men, 9 francs ($1.74) per year; women, 6 francs ($1.16) per year; minors under 18 years of age, 4.5 francs ($0.87) per year. Responsibility for payments of premiums rests with the employer who must duplicate his employees' contributions, which are receipted for by means of stamps affixed to cards.

The original State subsidy of 60 francs ($11.58) was increased to 100 francs ($19.30) by an amendment in 1912. This annual grant is paid in those cases where the 30 prescribed subscriptions have been made, and is increased one-tenth for every insured person of either sex who shall have brought up at least three children to the age of 16. If premiums are paid less than 30 but more than 15 years, the State subsidy is calculated on a basis of 3.33 francs ($0.64) for each year of complete payments. If less than 15 annual payments were made, the State allows no pension subsidy whatsoever.

The pensionable age is 65, but pensions may be drawn at 55 years of age, subject to a proportionate reduction both in amount of pension and of State grant. In case of death, if of contributions were paid in and no pension had been received, children of the deceased may receive 50 francs ($9.65) a month for from 4 to 6 months; in case there are no children, the widow may receive this amount for 3 months; in case of divorce, when the exclusive fault of the husband was the ground for divorce, the wife may receive this sum.

All persons who, in 1910, were already 35 years of age must insure. If between 35 and 40 years old, the State grant of 60 francs ($11.58) is not diminished; if 46 years old, it is raised to 62 francs ($11.97). The grant increases 2 francs ($0.39) thereafter for every additional year of age at which insurance begins. In accordance with provisions of the Act of 1905 persons over 65 years of age receive such a pension, exceeding 100 francs ($19.30) but less than 240 francs ($46.32), as their needs may require. The Old Age Pension Act of 1907 includes invalidity, and the maximum invalidity pension is 360 francs ($69.48) per year.

In addition to compulsory insurance, a system of optional insurance has been extended to private persons receiving small income, employers engaged in small enterprises, peasant proprietors, independent workingmen, and to wage-earners whose annual income is more than 3,000 francs ($579) but less than 5,000 francs ($965). The voluntary annual contribution rate is from 9 ($1.74) to 18 ($3.47) francs.

The estimated number of persons to be insured under this Act is from 10 to 12 millions. The number of persons insured in 1913 was 7,854,132 and the income from the sale of stamps was 45,525,540 francs ($8,786,429).

On June 30, 1910, the total number of persons pensioned under this Act was 569,456, and on September 30, 1912, this total had increased to 640,532. It is estimated that about onethird of the total number of French working men were actually insured 18 months after this

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law became effective. The Act secures substantial incomes for many who could not be induced voluntarily to provide for their old age through private institutions, and it accomplishes this without inviting thriftlessness in the decade before receipt of a pension. Putting the pensionable age at 65 instead of at 70 brings a much heavier charge upon the French Treasury.

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The amounts paid as old-age pensions are slightly higher than those paid in Germany, but under the German system certain additional benefits accrue to the insured.

Sources. Journal Officiel, April 6, 1910, cited by R. F. Foerster in Article entitled "The French Old Age Insurance Law of 1910," in Quarterly Journal of Economics, v. 24, no. 4, Aug. 1910; I. M. Rubinow, Social Insurance, 1913; France Ministry of Labor, Old Age Pensions, Librairie Berger-Levrault, 1915.

Sweden. The Swedish old-age insurance law of 1913 is more comprehensive than that of either Germany or France. The French and German systems are practically confined to persons gainfully employed, while the Swedish law applies to the whole adult population, including married women.

Every Swedish man or woman from the sixteenth to the sixty-sixth year, inclusive, pays an annual tax, or premium, of crowns ($0.80). For incomes over 500 crowns ($134) a surtax is imposed, ranging up to 10 crowns ($2.68) for incomes over 1,200 crowns ($322) per annum. Additional voluntary payments may be made, not to exceed 30 crowns ($8.04) per year in all. Members (and their wives) of the military, naval, and civil service, who are otherwise provided for, and permanently disabled persons, are exempt.

If a pensioner receives poor relief, then his pension must be paid in part or in whole to the public charity organization in order to reimburse it to the amount of the relief given to such pensioner. If institutional care is given, the institution or hospital may claim the pension to reimburse itself to the amount charged for such care of a pensioner. If a pensioner is a convict, or imprisoned for more than one month, his pension is withheld during that time; his dependents may, however, claim it for their support. Habitual drunkenness and voluntary idleness are disqualifications. Moreover, a pension reverts to the general insurance fund if it is not claimed within one year after it becomes due.

An old-age pension is payable, without respect to incapacity, from the sixty-seventh year. An invalidity pension is payable at any age in case of permanent disability. The annual amount of the pension is 30 per cent for men, and 24 per cent for women, of the whole amount that has been paid in by the beneficiary. In addition, the government grants a subsidy of 150 crowns ($40.20) per annum for men and 140 crowns ($37.52) for women whose whole annual income does not exceed 50 crowns ($13.40). This subsidy is reduced by one-half of the pensioner's income over 50 crowns ($13.40), and ceases altogether when the income reaches 300 crowns ($80.40) for a man or 280 crowns ($75.04) for a woman.

It will be seen that for the lower wage classes the government subsidy will be the chief component of the pension. For a generation to come, the government subsidy will be nearly the sole constituent of all pensions. At least thirty years must elapse before the insurance annuity will amount to any considerable sum.

In 1914 the number of pensions granted was 33,138 and the total amount paid was 1,875,457 crowns ($502,622), or 56.6 crowns ($15.17) per capita. Records further show that pensions were granted to 10,565 men, totaling 623,120 crowns ($166,996), or 58.98 crowns ($15.81) per capita; and to 22,573 women to the amount of 1,252,336 crowns ($335,626), or 55.48 crowns ($14.87) per capita. The total number of persons insured under the Act in 1914 was 3,225,700. They contributed a total of 14,571,000 crowns ($3,905,028). The number of voluntary cases insured in 1914 was 628.

Sources.

Svensk Farfattningssamling, nr. 120, Lag om allmän pension forsakring (Universal Old Age Pension Law) June 30, 1913; Reichsarbeitsblatt, 1913 and 1916.

Austro-Hungary. The Austro-Hungary compulsory old-age insurance law of 1906, in force since January 1, 1909, is restricted to salaried employees, and does not, therefore, make general provision for the aged.

In the Austrian mining industry operated by the State, a compulsory old-age pension fund was established as early as 1854, and the State, as employer, pays one-half of the contributions.

Sources. I. M. Rubinow, Social Insurance, New York, 1913; Statistisches Jahrbuch für das deutsche Reich, 1914.

Russia. In Russia no general provision is made for invalidity and old-age insurance, but in 1881 an Act was passed which provided for compulsory old-age insurance of employees in the government mines. Old-age insurance systems, established as early as 1858 by private railroads, were made compulsory in 1888 for such railroads, and in 1894 for State railroads.

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In 1914 the government paid 117,994 roubles ($60,694) for pensions, which is an increase of 1,824 roubles ($939) over the amount for the preceding year.

Sources. - Monatsblätter für Arbeiterversicherung, 1913, cited in Reichsarbeitsblatt, Bd. XI, no. 8, August, 1913; I. M. Rubinow, Social Insurance, 1913; The Times' Book of Russia, 1916.

Italy. The Italian National Institution for the Insurance of Workers against Invalidity and Old Age dates from 1898 and is modeled rather closely upon the French National Retirement Fund. In 1899, a law was passed providing that employees in the tobacco industry should be insured in this Institution. In 1904, a bill for uniform insurance was introduced and became law, and in 1905, this law was extended to employees of government engraving and printing offices, and in the same year to employees of the government salt works. In 1908 the compulsory pension system was extended to include government railway employees; in 1910 to include persons engaged in the shipping industry, and in 1913 to include sailors.

The pensionable age is 60 years for men, and 55 years for women. The monthly contribution from the wage of an employee is 2 lire ($0.39) for men, 1 lira ($0.193) for women. The smallest pension granted is 480 lire ($92.64) for men, 300 lire ($57.90) for women. The total annual subsidy of the State and the Institution given in every case is 34 lire ($6.56) for men, 22 lire ($4.25) for women.

Sources. Report U. S. Commissioner of Labor, Washington, 1909, v. II; I. M. Rubinow, Social Insurance, 1913; Statistisches Jahrbuch für das deutsche Reich, 1914.

Roumania. In 1912, compulsory old-age and invalidity insurance was established by law, but there is no evidence at hand to the effect that the system has yet become operative. The act appears to be modelled upon both the German and the French acts. Under this act, invalidity is defined as inability to earn one-third of normal wages, and in this respect the act follows the German precedent. The pensionable age is 65 years. The French method of uniform weekly contributions for all classes of insured persons was adopted. The weekly rate is 45 bani ($0.87) for the first 10 years from the date the act becomes effective, and employer, employee, and the State contribute equally. The employer is responsible for the worker's share, which he may deduct from the wages. The normal old-age pension granted is 150 lei ($28.95), and in order to receive it, contributions must have been paid altogether for at least 1,200 weeks. The invalidity pension is increased by 10 bani ($0.193) for every weekly contribution exceeding 200 contributions. It is paid to any insured person after he has been ill for 16 consecutive weeks. The number of persons insurable in 1913 has been estimated at 150,000.

Sources. -I. M. Rubinow, Social Insurance, 1913; Statistisches Jahrbuch für das deutsche Reich, 1914; Law of 1912, cited in Bulletin, International Labour Office, 1913, v. VIII, No. 2.

Netherlands. An act passed in 1913 provided that old-age and invalidity insurance should be compulsory for all "workers" (with certain exceptions) earning less than 1,200 florins ($482) per year. Those insured under the act are entitled to a pension on attaining the age of 70, or earlier, if incapacitated, incapacity being defined as inability to earn one-third of normal wage. Surviving children of insured persons also receive annuities until they reach the age of 13 years. In order to be eligible, a pensioner must be needy and deserving, and must not have received public charity. Persons convicted of crimes, drunkards, and those who lead a dissolute life are disqualified. Continuous residence of at least 20 years and continuous citizenship of at least 5 years are necessary qualifications.

Insured persons are grouped in five wage classes, determined by total annual earnings as follows:

First class,

Second class,

Third class,
Fourth class,
Fifth class,

less than 240 florins ($96.48)

240 to 400 florins ($160.80)

400 to 600 florins ($241.20) 600 to 900 florins ($361.80) 900 florins and over

Military conscripts serving with the colors are assigned to the second class and their contributions are paid by the State. The weekly contributions for the respective classes are 20 cent. ($0.08); 24 cent. ($0.096); 32 cent. ($0.129); 40 cent. ($0.161); and 48 cent. ($0.193). Contributions are payable generally by the employers who may deduct from the wages of each employee a portion of the contribution paid in his behalf, the proportion varying according to the wage class of the employee. Contributions are paid by means of stamps affixed to cards, or in cash to the Local Labor Council.