John Graham Brooks describes the conditions surrounding the worker and his guilds as follows:

"A state of serfdom practically existed in Bavaria until 1808. Freedom to choose one's handicraft, even, was not allowed in other parts of Germany until 1810. Until the revolution of 1848 countless petty restrictions. hemmed in the life of the laborer as well as of industry in general. The most advanced part of Germany, Prussia, only brought in liberty for the laborer to move freely from town to town (Freizügigkeit) in 1842. Though the laws of Stein and Hardenburg had done so much to destroy the old guilds, they yet dragged lumbrously along until the Prussian trade regulations of 1845, which mark so important a change in this history as to demand closer consideration. The law of 1842, allowing laborers to pass freely from one place to another, introduced changes as great as the Stein legislation of 1811, which broke down so many of the old guild privileges. From a condition under which the choice of a trade was for the laborer and not by him, to conditions under which he could freely elect his craft, the difference was profound. In many parts of Germany the old trade monopolies existed in such form as to make the free development of trade impossible. Not only was competition shut out in the more considerable trades of tinning and milling, but especially in the minor provinces, such monopolies extended to the smaller trades of the barber and chimney-sweep. That these special privileges of the guilds would all have been swept away if the Stein legislation had been allowed to do its work is evident. The new freedom was feared, however, and the trade regulations of 1845 are a protest against the destruction of vested rights. That portion of the trade laws which more especially concerns us recognizes two kinds of 4-BOYD W C

sick associations-the apprentice society and the guild (Innung).

In section 144 the apprentices and assistants are permitted to retain their mutual benefit societies, but it is reserved to change and adapt them to new and existing circumstances. New societies may also be formed under conditions fixed by government. An apprentice is not allowed to be excluded from such a society because he does not work with a member of a guild (section 169). To the guilds is also given the right to form sick, burial and relief societies, as well as savings banks, though they are not compelled to form such society for every branch of industry. It will be seen that these laws of 1845, in reacting against those forces which threatened to destroy the guilds, yet endeavored to preserve as much liberty, self-government, and self-discipline as was possible in an effort to save the guilds and continue their work. The workmen also were frightened by the loss of a powerful influence which the guild had secured to them. Before 1845 they expressed fears such as would be felt by trade unionists of today if their rights. of organizing were threatened. The conservative character of the law is, however, seen in such provisions as that which compels those who form a guild to prove their capacity before some authorized body of examiners, as the academy of arts or the committee appointed for such purpose. Consent to enter a guild might be refused by the communal authorities to criminals, to bankrupts, to those residing where a similar guild already exists, etc. All persons in mechanical trades who belong to no guild could by local statute be formed into an 'inferior guild.' The community is here supreme over the decisions of the individual. Although the elite workmen were freed from compulsion to join such societies, the less able workmen were so far under con

straint that they must give satisfactory reason before. the authorities why they failed to form or join some benefit society."15

§ 31. Miners' societies (Knappschaftskassen).—The fundamental principles of workmen's insurance as illustrated by the miners societies are thus pointed out by Mr. Brooks:

"An illustration may now be given from among the miner's societies (Knappschaftskassen) which will illustrate in more detail the actual working of the insurance principle. In this bit of history is to be seen almost every feature, good and bad, which the imperial scheme now presents. These societies provided for sickness, accident, burial, and also granted pensions to orphans, widows, and invalids, thus covering even more than the state laws now cover. In its later development the mining society was administered by a committee composed half of employers, half of laborers. The contributions were also divided between both. The employer was made responsible for the entire sum, being allowed later to deduct the laborers' share from the wages when paid. Thus it is seen why this special form of association was chosen by the government as a type upon which to build the imperial structure."16

§ 32. Ethical basis of system.-Reviewing the long and serious strife which attended the development of the principles of compulsory workmen's insurance during the period of 1790 to 1854 it is important to recognize the incontestable fact of history, that these laws were the outgrowth of the ethical elements of sympathy, pity, and good will, playing so important a part as to mould

15 Fourth Special Report, 1893, p. 31.

16 Fourth Special Report, p. 37.

first the customs and then the laws of their primitive insurance societies. Here Mr. Brooks further observes:

"Nothing is more obvious than the fact that mere business did not alone dictate those first regulations that made the strong and the fortunate willingly help to bear the burden of the weak. The opponents of state insurance make no issue as to this fact; they only insist that the state cannot, from its very nature, carry out and enforce such principles as those upon which universal insurance rests. The believers in such state insurance

carry over the ethical idea, that already existed in the small free group, into the state asserting that the state, with compulsory powers, is alone competent to secure the blessing of such insurance to the whole masses of the people. Thus there is a distinct issue of fact rather than of theory. From the thirteenth century to the time of Frederick the Great, nothing like compulsory insurance, even in small mines, can be said to have existed. Until the Prussian law of 1854 there was no general state compulsion for miners."17

17 Fourth Special Report, p. 39.

CHAPTER V.

THE ECONOMIC BASIS OF COMPULSORY INDUSTRIAL INSURANCE AND COMPENSATION LAWS FOR INJURED WORKMEN.

econo

§ 33. Statement of problem from the mic standpoint. It is proposed in this chapter to present the economic basis for the substitution of a new remedy, namely, compulsory industrial insurance for workingmen, or workmen's compensation acts, in lieu of the common and statutory liability law remedies, as a means for compensating workmen who are injured in course of their employment.