Social Security In America

Part I

UNEMPLOYMENT COMPENSATION

Chapter II

A SUMMARY OF FOREIGN EXPERIENCE WITH UNEMPLOYMENT INSURANCE

NINETEEN European countries, Canada, and Queensland, Australia, now have nation-wide unemployment insurance legislation adopted on either a compulsory or a voluntary basis. Since the compulsory systems of unemployment insurance in Great Britain and Germany are of particular interest because of their wide coverage and highly industrialized conditions, their provisions will be discussed in the present chapter. The voluntary systems of Belgium and Switzerland are also considered in some detail because of the interesting parallel between the local political autonomy of these countries and the Federal-State relations of the United States.

GREAT BRITAIN{1}

In its National Insurance Act passed by Parliament in 1911, Great Britain was the first country in the world to establish national compulsory unemployment insurance. The provisions of the insurance act were frankly experimental in nature. Political demands subsequently resulted in many amendments and, as a result of the recommendations of three commissions appointed to study the system, the act has been frequently and extensively revised in the years since the initiation of the plan. The latest modifications of the system were embodied in an act of June 28, 1934, later incorporated in a consolidated unemployment insurance act which was passed on February 26, 1935. The various revisions and amendments have had reference to coverage; amounts and rates of contribution;

{1} The principal sources of information on the provisions in Great Britain are as follows Industrial Relations Counselors, Inc., An Historical Basis for Unemployment Insurance (The University of Minnesota Press, Minneapolis, 1934) ; "Unemployment-Benefit Plans in the United States and Unemployment Insurance in Foreign Countries", Bulletin of the U, S. Bureau of Labor Statistics No. 544, (U. S. Government Printing Office, Washington, D. C., 1931) ; "Operation of Unemployment Insurance Systems in the United States and Foreign Countries", Monthly Labor Review, June, July, August, and September 1934 ; Hill, A. C. C., Jr., and Lubin, Isador, The British Attack on Unemployment (The Brookings Institution, Washington, D. C., 1934) ; Final Report of the Royal Commission on Unemployment Insurance (H. M. Stationery Office, London, 1932), Cmd. 4185.

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amounts, rates, and duration of benefits; qualifications for benefits; length of waiting period; correction of anomalies and abuses; and coordination with other measures for the assistance of the unemployed during the critical post-war and depression periods. The provisions of the law cover England, Northern Ireland, Scotland, and Wales. The territory now comprising the Irish Free State, before its establishment in 1922, was also covered by the British act, but now has its own system of insurance.

Administration.-The British system of unemployment insurance was first administered by the board of trade through a series of employment exchanges established by the Labour Exchanges Act of 1909. Later, with the formation of a Ministry of Labour in 1917, the functions of both labor exchanges and unemployment insurance were transferred to the new government department. At present the Ministry of Labour is assisted by an unemployment insurance statutory committee, which has supervision over the financial aspects of the unemployment insurance scheme and acts in an advisory capacity on questions relating to the operation of the act. The statutory committee consists of a chairman and from four to six members appointed for periods of 5 years. At least one member must be a woman. The foremost duty of this committee is to assure the solvency of the scheme. It examines the finances at the end of each calendar year and proposes amendments to the act to restore and maintain a balance between contributions and expenditures.

The Ministry of Labour maintained, on January 1, 1933, 420 local employment offices or exchanges and 747 smaller branches throughout the area of its jurisdiction. For administrative purposes the local offices are grouped in seven territorial divisions, each with a divisional office intermediate between the other local offices of the district and a central record office for the whole system in the Ministry of Labour at Kew. The central office at Kew is under a chief insurance officer and each of the local offices is directed by a local insurance officer. All these officers are appointees of the Minister of Labour, and other personnel appointments are under the civil service. In branch offices the personnel are frequently on a part-time basis and are not civil-service appointees.

The local and branch employment offices are the administrative unity of the system with responsibility for the registration of the unemployed and examination of their work qualifications; the maintenance of lists of industrial and other labor requirements and vacancies; job placements; investigation of eligibility for benefits; and payment of benefits.

The local employment office gives each insured worker an employment book which serves the threefold purpose of identification,

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record of contributions, and employment history. The book is valid for 1 year and when it has expired is sent to the central office in Kew where it is filed for permanent record. While the book is current, it is kept by the employer as long as the worker is employed, and each week the employer affixes and date-cancels stamps to the value of the requisite contribution. When a worker loses his job he receives his insurance book from his employer and immediately takes it to his employment office where he leaves it until he is reemployed. The local office checks his contribution record, registers him as available for work, attempts to place him in suitable employment, inquires as to whether there are any disqualifying conditions, establishes the waiting period necessary to qualify him for unemployment benefits, requires him to report, usually once a day, to sign an unemployment register, and, when statutory conditions are fulfilled, pays the covenanted benefits.

Certain groups outside the official insurance scheme are established locally to carry on phases of administration. Local employment committees organized in 1917 in various districts, and composed of workers' and employers' representatives, and other interested individuals, cover the whole country. These committees advise the Minister of Labour on problems in connection with the administration of the insurance system and of the employment offices and assist the exchanges in maintaining contacts with employers, trade-unions, and local industry. Between 1921 and 1926 these committees also acted on behalf of the Minister of Labour in determining eligibility under the special conditions attached to the receipt of benefits for which the worker was not qualified on the basis of his record of previous contributions. Local courts of referees, consisting of a chairman appointed by the Minister of Labour and a workers' and an employers' representative, hear cases of dispute regarding ordinary benefits. If this local court decides against the claimant, an appeal may be made to the umpire who is appointed by the Crown with jurisdiction over the whole country.

Administration of unemployment insurance and placement for juveniles is the function of two separate bodies, (1) the juvenile advisory committees of the employment offices and (2) special juvenile bureaus which perform all the functions of employment exchanges.

When the national insurance act was made effective a number of trade-unions and other workers' associations were operating unemployment benefit schemes of their own. Under the original and subsequent acts these organizations were permitted to continue their insurance functions and to distribute the benefits to which their members were eligible under the national unemployment insurance system, provided that the unions or associations fulfilled certain re-

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quirements. These requirements have been changed at frequent intervals but in the main consist of four general rules: (1) The union must have the machinery to keep constantly informed concerning wages and working conditions on jobs held by its members; (2) it must use an effective method for securing notices of vacancies from employers and for placing its unemployed members, including a register in each district under the charge of a qualified officer; (3) it must have a system, satisfactory to the Minister of Labour, for recording the unemployment of its members, by requiring members to register at an employment exchange or at the local union office and by providing a full-time official of the union for registration work; (4) it must pay benefits from its own funds in addition to state benefits. Since 1930 the minimum supplementary union benefits required have been at least 75s. for 25 weeks of unemployment to be paid over a period of not less than 10 weeks.

The rigid requirements imposed upon trade-union unemployment insurance plans, the involved technique of their administration of benefits, and the drain of the depression upon trade-union funds have tended to reduce the number of unions availing themselves of the permissive provisions of the law. Over 100 unions took advantage of the opportunity to act as agents for the insurance system in 1911, when the law became effective, and by 1915-16 nearly half of all state benefits were paid out through unions. Between 1920 and 1930, however, this percentage had dropped to less than 8 percent. In practice the unions which take advantage of the opportunity to distribute state unemployment benefits contain only one-third of the total union membership of the country. {2}

Coverage.-As first established, the British unemployment insurance system provided coverage for only 2,500,000 workers in a few selected manual trades (mechanical engineering, building, iron founding, shipbuilding, construction of vehicles, saw milling, and machine work) having a high and similar incidence of unemployment. In 1916 workers engaged on or in connection with munitions work in any trade, as well as workers in the metal, chemical, leather, rubber, and brick trades--a total of about 1,250,000 peoplewere added to the system. The following year, 1917, it was recommended that the insurance scheme be extended to all workers, and on November 8, 1920, the scheme became practically universal. All manual workers and all non-manual workers earning less than at the rate of £250 a year were brought within the system, except agricultural workers, domestic servants, permanent employees on the railroads, certain employees of local authorities and of the

{2} Hill, A. C. C.. Jr., and Lubin, Isador, op. cit., pp. 294-299.

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poor-law and asylum authorities, and certain employees in public utility companies. Under amending legislation, the minimum age was set at the school-leaving age and the maximum at 64.

In July 1935, 14,003,000 persons 16 to 64 years of age, inclusive, were covered by unemployment insurance in Great Britain and Northern Ireland. On November 25, 1935, 1,788,182 insured persons were registered as unemployed in Great Britain. Of the insured unemployed in Great Britain 851,694, or slightly less than one-half, were claiming insurance benefits. The number of claims for unemployment allowances was 732,338 on November 25. Of these claims 34,572 were disallowed.

The unemployment insurance statutory committee, in accordance with the provisions of the act of 1934, has studied the problem of agricultural coverage.{4} A report issued by this statutory committee in January 1935 recommended the establishment of unemployment insurance for agricultural workers with lower rates of contribution and benefit than those which obtain for the general unemployment insurance system. The committee recommended further that unpaid family labor, special seasonal workers (unless the worker so employed is already covered by insurance), and private gardeners should be excluded from coverage. In the opinion of the committee special provisions exempting employees but not employers from contributions will be necessary for piece-work contracts and for Irish migratory labor.

The main reasons for the recommendation of a separate account for agricultural workers are the following: (1) The general level of money wages is lower than in other industries; (2) unemployment in agriculture, though substantial, is less than in the insured industries taken as a whole; (3) agriculture should not be made liable to the debt incurred by the unemployment insurance fund during the past 14 years.

On April 9, 1936, the unemployment insurance act for agricultural workers was enacted into law (26 Geo. 5. and 1 Edw. 8. Ch. 13). Contributions first became payable beginning May 4, 1936, and benefits will be paid beginning November 5, 1936. It is estimated that 750,000 agricultural workers will be covered by the act.

Contributions.-Three sources of contribution finance the unemployment insurance system; the National Government, the employer, and the employee are required to pay equal amounts to the insurance fund. The contributions are flat rates based on sex and age differen-

{3} The Ministry of Labour Gazette, vol. XLIII, no. 12, December 1935, p. 481.

{4} Report of the Unemployment Insurance Statutory Committee, in accordance with. sec. 20 of the Unemployment Insurance Act, 1934, on the question of the insurance against unemployment of persons engaged in employment in agriculture (Cmd. 4786), January 1935.

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tials rather than on wages. The following weekly amounts are paid by employers under the most recent act:

The employees pay the same amount as weekly contributions, employees 65 years of age or over being exempt, and the exchequer makes an equal payment to the insurance fund on behalf of each insured person.

The employer is made responsible for the employee's share of the contribution. He purchases stamps from the post offices and each weekly pay day affixes an unemployment insurance stamp to the employee's insurance book which has appropriate spaces for each calendar week from July 1 to June 30. The stamps are date-canceled by the employer when they are affixed. One-half the face value of each stamp is thereupon deducted from the weekly pay of each employee under 65 years of age for whom the contribution has been made.

This method of collecting income at source has many advantages, since the number of employers is small in comparison with the number of insured individuals. The money obtained by the post office from the sale of unemployment insurance stamps is turned over to the insurance fund.

The rates established for contributions and the resources available for payment of benefits have varied during the 24 years that the system has operated. In the main, contributions have increased, not only in amounts but also in proportion to wages. In 1931, when the rates now in effect were established, the total weekly contribution of worker, employer, and state for a man over 21 represented 4.6 percent of average weekly earnings.

Under the agricultural system contributions are to be paid in equal shares by employer, employee, and exchequer, each to pay weekly 4 1/2d. for males 21 years of age and over and 4d. for females of the same age. The contributions for this age group are one-half of those under the general system. Younger age groups pay lower contributions. Rebates are to be given to employers and employees for agricultural labor hired on a yearly or half-yearly basis.

The 1911 Unemployment Insurance Act was based on actuarial calculations on the assumption that, on the average, 8.6 percent of the, workers in the industries covered would be unemployed during a trade cycle of 10 to 15 years. During the first 9 years of the system, unemployment was less than the estimated average and reserves

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were accumulated. In 1920, when 11,000,000 additional workers were covered by the Unemployment Insurance Act, the actuarial basis was lowered to 5.32 percent as an average rate of unemployment to represent more accurately the larger groups insured. Actually, since 1921, the average annual percentage of unemployment has only once fallen below the 10-percent average occurring in 1924 and has ranged from 10 to over 20 percent in the intervening years. Benefits were increased under the 1920 law to allow for higher costs of living, and contributions, though also increased, were not raised in proportion to benefits. Furthermore no provision was made for the accumulation of reserves for the newly admitted groups covered. Within a month the fund faced a depression, and by the middle of 1921 the surplus accumulated in the first 9 years had been exhausted. It was also found that the statutory benefit, available to those with a specified minimum of previous employment and payable in proportion to the amount of insured employment, was insufficient for the needs of many insured workers. For such workers benefits were extended to those who lacked the requisite contributions or who had exhausted their statutory benefit, provided that they fulfilled certain other special conditions. These additional benefits were known by various names at different times, "uncovenanted", "extended", and "transitional" benefits and "transitional payments." The history of the fund from 1921 to 1931 was characterized by increasing deficits except for the year ending July 1924. Finally, the cost of "transitional" benefits was thrown upon the exchequer, and beginning with the act of February 6, 1930, the insurance system was relieved of the responsibility for providing payments to insured persons who had exhausted their rights to statutory benefits or lacked sufficient contributions to qualify for these benefits. Under the 1934 act the borrowing power of the fund was repealed, although temporary advances were permitted, and the existing debt is to be repaid with interest to the exchequer, at the rate of £5,000,000 a year during a period of 37 years.{5}

Benefits.-The benefits paid to unemployed workers covered by unemployment insurance are, like contributions, flat rates based on sex and age differentials rather than on wages. Workers who qualify for statutory benefits must meet requirements related to definitions of unemployment, duration of contribution period, total amount of contributions, and duration of unemployment. The amounts and duration of benefits, the waiting period, and the statutory quali-

{5} Hill and Lubin, op. cit., chap, XIII, "The Story of the Unemployment Fund"; U. S. Department of Labor, "Unemployment-Benefit Plans in the United States and Unemployment Insurance in Foreign Countries," Bulletin of the U. S. Bureau of Labor Statistics No. 544 (U. S. Government Printing Office, Washington, D. C., 1931), p. 288.

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fications for the receipt of benefits are described in the paragraphs which follow.

Amount of Benefits.- As pointed out in the discussion of contributions, the amount of benefits to which a qualified unemployed worker has been entitled has fluctuated in accordance with the provisions of various legislative amendments to the insurance acts.

Under the 1911 act benefit rates were low, being based upon trade-union out-of-work benefit practice. They were designed merely to bridge short gaps between jobs and to offer minimum subsistence rather than to afford compensation which would approximate ordinary wages except for low-paid unskilled laborers. In a period of high costs of living the benefits were increased, but were subsequently decreased partly as an economy measure and partly to permit extended benefits for unemployment of long duration. The most recent revision of the benefit schedule was the act of June 28, 1934, incorporated into the consolidated act of 1935. The new rates are 20 and 25 percent higher for men and for women, respectively, than were the provisions of the original act of 1911. The weekly rates for ordinary benefits are now as follows:

When an insured contributor, male or female, has a dependent child or dependent children, the weekly rate of benefits is increased by 2 shillings with respect to each child. A dependent child for the purpose of this act is defined as younger brother or sister, half brother or half sister, stepbrother or stepsister, stepchild, or offspring under 14 years of age. The age limit for a dependent child is raised to 16 years (a) if the child is receiving full-time school instruction, ( b ) if he is unable to find work after leaving school, or (c) if he is physically or mentally unable to receive school instruction.

Benefits are likewise increased by 9s. in respect of not more than one adult dependent. Female adult dependents are defined as (1) a wife who resides with the insured contributor or is wholly or mainly supported by him; (2) a widowed mother, widowed stepmother, mother who has never been married, or mother whose husband is permanently disabled and unable to work, or person who has the care of the insured contributor's dependent children, where these persons reside with the insured contributor and are wholly or mainly supported by him; (3) a person employed at the

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rate of not less than 9s, a week who assists in the care of the insured contributor's dependent children provided such person was engaged in these duties before the insured contributor became unemployed.

Adult male dependents are defined as follows: (1) a husband who is prevented by physical or mental infirmity from supporting himself and is wholly or mainly maintained by his wife; (2) a physically or mentally incapacitated father or stepfather who resides with the insured contributor and is wholly or mainly supported by him.

Benefits for agricultural workers are somewhat lower than those for industrial workers. The amount of benefits for agricultural workers is 14s. a week for a man aged 21 to 65 and 12s. 6d. for a woman between these ages. Allowances for dependents are 7s. a week for a dependent adult and 3s. a week for each dependent child. The maximum benefit is 30s. a week.

Duration of Benefits.-After statutory requirements have been fulfilled and the required waiting period has elapsed, an insured contributor is entitled to receive weekly cash benefits, the amount of which is determined by his age and sex. Under the Unemployment Act of 1934, these benefits are payable for 26 weeks (156 days) in the 12 months following the date of application. Special provisions relating additional benefits to contributions enable persons with good employment records in insured occupations to obtain benefits for the full 52 weeks in a 12-month period. Thus, if the contributor has been insured for 5 years previous to the date of application for benefits, he is allowed 3 additional days of benefits for each 5 weekly contributions made in his behalf during the 5-year period. From these additional days allowed is subtracted 1 day for every 5 days of benefits which he may have received during the 5 years. When a claimant has exhausted his right to benefits, ten contributions on his behalf are necessary before he may obtain benefits for another period of unemployment.

Since the insurance system has been. in operation, the standard duration of benefits, like rates of contribution and of benefits, has been frequently revised. Ever since 1921 it has been felt necessary to make some special provision for persons who lost their jobs before they had the statutory number of contributions to their credit and for those who had exhausted their rights to benefits. Systems of "uncovenanted", "extended", and "transitional" benefits were established in the hope that during a temporary emergency the insurance fund would be able to pay benefits in advance of contributions. At one time uncovenanted and extended benefits were granted at the discretion of the Minister of Labour; at other times, they were granted as a right to all unemployed persons covered by insurance. As a

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result of the National Economy Act of 1931 transitional payments were restricted to claimants who could prove their need.

The act of June 28, 1934, abolished transitional payments and made a complete separation of the insurance system and unemployment relief through the establishment of an unemployment assistance fund. However, the continuation of transitional payments through the labor exchanges was provided for until January 7, 1935, the date set by the Ministry of Labour for the transfer of these cases to the newly established unemployment assistance system. The cost of unemployment assistance is met almost entirely by the national treasury; though a small portion will be financed by local tax funds. The employment exchanges will continue to act as the paying agents.

Under the system for agricultural workers, contributions are collected for 6 months before payment of benefits, and each individual must have paid 20 contributions within 2 years before qualifying for benefits. In order to begin a benefit year, the contributor must have not less than 10 unexhausted contributions. The benefit period in a benefit year is defined as 2 weeks of benefits for the first 10 unexhausted contributions and 1 further week of benefits for each 2 unexhausted contributions beyond 10, subject to a maximum of 50 weeks of benefits in any benefit year.

Statutory Conditions for the Receipt of Benefits.-Four statutory conditions must be fulfilled before an insured contributor may become entitled to unemployment benefits: (1) Not less than 30 contributions must have been made to his credit during the 2 years previous to the date of claim for benefits; (2) his application for benefits must be made in the prescribed manner and he must have been continuously unemployed since the date of application; (3) he must satisfy the authorities that he is capable of and, available for work; (4) he must, if a juvenile under 18 years of age, either attend or show good cause for not attending authorized courses of instruction designed to facilitate his chances for reemployment.

Waiting Period.-Six days must elapse between the date of application for unemployment insurance benefits and the date when the applicant first becomes eligible for benefit. Any 3 days of unemployment in 6 consecutive working days are considered as continuous 3-day periods of unemployment. Two such periods of unemployment satisfy the waiting-period requirement, provided they are not separated by more than 10 weeks.

Disqualification From Benefits.-Grounds for disqualification from benefits are failure or refusal to apply for a suitable job called to the attention of the unemployed contributor by the employment exchange or failure or refusal to carry out written instructions given him by an employment exchange officer with a view to assisting

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him in finding suitable employment; misconduct; voluntarily leaving work without just cause; unemployment resulting from a trade dispute. The maximum period of disqualification is 6 weeks except that for trade disputes the applicant for benefits is disqualified for the duration of the dispute. Inmates of a prison or workhouse, persons residing outside the United Kingdom, and those who are in receipt of sickness-insurance benefits, invalidity benefits, or pensions for blindness are not eligible for unemployment benefits.

GERMANY {6}

Although a pioneer in other forms of nation-wide, compulsory social insurance, Germany did not enact unemployment insurance legislation until July1927, when an insurance system was developed as a substitute for and an adjunct to national emergency relief for the unemployed.

Post-war unemployment had far exceeded the financial resources of local public authorities. In November 1918 a national relief system was established and financed from communal, state, and Federal funds to assist all persons able and willing to work but in need because of unemployment resulting from the war. The system was an emergency measure intended for only 1 year of operation, but it remained in force, with minor revisions, until 1923, when a permanent system was set up.

The first step in the transformation of emergency relief into unemployment insurance was taken on October 15, 1923, when employers and employees were required to contribute toward the cost of relief. Their contributions, based on wages, were to provide four-fifths of the total unemployment relief expenditures and the remaining one-fifth was to be derived from communal appropriations, with supplementary aid from state and Federal Governments if these sources of income proved inadequate. At first communal authorities administered the relief fund, but control was gradually shifted to employment exchanges which had been consolidated

Sources : "Gesetz fiber Arbeitevermittlung and Arbeitslosenversicherung vom 16. Juli 1927," Reichagesetzblatt, Teil I, Jahrgang 1927 (Verlag des Gesetzsammlungsamts, Berlin, 1927), p. 187; Gasetz fiber Arbeitsvermittluns und Arbeitalosenversicherung, In der Fassung des Gesetzes vom 12. Oktober 1929 (Reichsgesetzblatt I, S. 162) and der Verordnungen des Reichsprhsidenten vom 26. Juli and 1. Dezember 1930 (Reichsgesetzblatt I, S. 318 and S. 520) nebst der Verordnung des Reichsarbeitsministers fiber die Krisenfursorge fuir Arbeitslose vom 11. Oktober 1930 (Reichsgesetzblatt I, Nr. 42) ; Retchsarbeitsblatt, Amtsblatt des Reichsarbeitsministeriums, Teil I, Amtlicher Teil, Jahrgang 1928 Jahrgang 1935 (incl.); Industrial Relations Counselors, Inc., An Historical Basis for Unemployment Insurance (The University of Minnesota Press, Minneapolis, 1934) ; "Operation of Unemployment Insurance Systems in the United States and in Foreign Countries, 1931 to 1934," Monthly Labor Review, vol. 39, no. 2, August 1934, pp. 273-307 ; Weigert, Oscar, Administration of Placement and Unemployment Insurance in Germany (Industrial Relations Counselors, Inc., New York, 1934) ; studies of the staff of the Committee on Economic Security.

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into a national system in July 1922. In 1926 a severe crisis prompted an extension of the system beyond the time of previous regulations, with funds supplied by the Federal Government and communes in proportions of three-fourths and one-fourth, respectively.

The entire relief system was superseded by the Employment Exchange and Unemployment Insurance Act of July 16, 1927, to take effect on October 1. In framing this act German authorities foresaw that the payment of ordinary benefits would not afford the workers covered adequate protection during severe depressions. At the very outset, therefore, the system was a combination of insurance and relief, with provision for extended out-of-work benefits to insured persons whose unemployment was of longer duration than the period of covenanted benefits. Applicants for emergency benefits were required to pass a needs test, but this test was to be less strict than that applied for local public assistance.

Ordinary benefits were to be financed by contributions of employers and workers. The Federal and local governments were responsible for furnishing the funds for emergency benefits, given to workers who were not yet, or were no longer, qualified for ordinary benefits. The Federal Government was to pay four-fifths of such benefits, the local governments paying the remaining one-fifth. If the worker remained unemployed after having drawn the maximum amount of ordinary and emergency benefits allowed him under the law, he was then taken care of by the local poor-relief authorities. Thus there were three distinct steps in the help given an unemployed worker: First, he received insurance benefits. These were given to him as a matter of right, since he (or his employer) had paid for them by contributions to the insurance fund. Second, during severe depressions the Federal Government, in cooperation with the local governments, promised to continue making payments for a limited period of time to a worker after he passed a means test administered by the employment exchanges. Third, the local poor-relief authorities took care of all persons who were ineligible for both insurance and emergency benefits.

Industrial and employment conditions were rather favorable at the beginning of unemployment insurance operations, but in 1928 and 1929 Germany suffered a severe depression and a crisis in government finance. To relieve some of the strain upon the insurance system which resulted from widespread unemployment, the Federal Government made large loans to the insurance fund. A commission was appointed during the summer of 1929 to recommend reforms in the system. As a result, various measures to limit coverage, to prolong the waiting period, to prevent abuses, and to tighten restrictions were enacted. A month later (December 1929) the contribution rate was increased for a 4-month period in the hope of

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removing the budget deficit. In the spring of 1930 the Reichstag was dissolved because of its rejection of a bill to increase contributions by an additional 1 percent and to decrease benefits. The measure became effective, however, by presidential decree. In October 1930 the contribution rate was again increased to a total of 6.5 percent of wages, shared equally by employer and employee.

Meanwhile the number of persons who had exhausted their rights to emergency as well as statutory benefits and who had claimed local poor relief had reduced many of the local governments to the verge of bankruptcy. The year 1931 brought an even more serious financial crisis, in withdrawal of foreign credit, large reparations payments, and reduced export trade. Uncertainty concerning the political stability and financial solvency of the country created a panic.

A commission appointed in January 1931 was called to recommend measures of economy. They unreservedly supported the continuance of the insurance principle for the relief of unemployment and rejected the application of a needs test to recipients of ordinary benefits; but, in order to balance the budget, they advocated a longer waiting period, reduction of benefit rates, stricter application of eligibility requirements, and greater Federal powers. They also recommended the continuance of emergency benefits as an intermediate stage between insurance and poor relief. The recommendations of the commission were incorporated in a presidential order and, to meet the cost of extended benefits, an emergency tax was levied on wages, salaries, and other income for a 2-year period. The various economy measures introduced in 1931 resulted in a surplus in the Federal insurance fund for the fiscal year ending March 31, 1933. But the financial burden of emergency benefits continued to increase beyond the financial capacity of local and National Governments. In 1932 the Federal Government was therefore empowered to revise benefit rates and to apply any surplus in the ordinary benefit account to other expenditures for unemployment relief. These measures destroyed many of the insurance features of the original act. An attempt was made to adjust benefits in accordance with the cost of living in communities of various size. Ordinary benefits were paid for only 36 days without proof of need, and a rigorous needs test was applied to claimants after they had received benefits for 6 weeks. The means test was similar to the test for recipients of poor relief. The tax on all wages and salaries was continued to help pay for emergency benefits.

Since the National-Socialist revolution other restrictions with respect to financing the system have been introduced. Emergency benefits are now entirely paid for by contributions from employers and employees. The new Government in Germany has addressed its major efforts to the prevention of unemployment through regulation

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of employment, bonuses to the employers for hiring persons over 40 years of age, and work programs.

Administration.-The Federal Institute for Employment Exchanges and Unemployment Insurance (Reichsanstalt fur Arbeitsvermittlung and Arbeitslosenversicherung), an autonomous organization supervised by the Ministry of Labor, is the central administrative authority for the unemployment insurance system, as well as for employment exchanges. Before 1933 the powers of the president of the institute were circumscribed in accordance with democratic principles of administration. The president carried out the decisions of the board in charge of administering the law (Verwaltungsrat), on which employers, employees, and the public were represented. In 1933, in keeping with the introduction of the "leadership principle" in other branches of the Government, the president took over the functions of the governing board and became solely responsible for the decisions made by him. The same fundamental change was made in the state and district employment exchange and unemployment insurance offices (Landesarbeitsamter and Arbeitsamter). The committees on which the interested parties were represented transferred their powers to the heads of the state and district offices, who were responsible only to the president of the Federal institute.

Thirteen district employment exchanges supervise the activities of the local offices, of which there are more than 360, direct the transfer of workers from one district to another, act as the depository of the moneys collected as contributions in their district, and, by making loans or granting subsidies from the funds of the Federal institution, promote relief work calculated to reduce unemployment.

Local health-insurance offices (10,000 in number) receive the employer-employee contributions for unemployment insurance at the same time that health-insurance contributions are collected. The sickness-insurance societies then transmit the insurance contributions to the district employment exchanges which, in turn, send part of the surplus to the central office and keep the remainder for disbursement to local employment exchanges of their jurisdictions in accordance with the local requirements for benefit payments.

The intermediary collection and transfer of contributions by the health-insurance funds is supervised by the Federal institution. The health-insurance societies retain as a collection fee a small percentage of the unemployment contributions which they collect. From the unemployment insurance contributions are also paid the costs of placement, vocational guidance, and administration of the local, district, and central offices of the Federal institution.

When unemployed, a worker registers at once at the placement department of his local employment exchange, where he receives a

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control or report card. The qualifying period, waiting period, and duration of benefit all date from the time of this registration.

If the worker cannot be placed immediately in new employment, his case is at once transferred to the insurance department where he files his application for benefits. This application is accompanied by evidence that he has been in insured employment, together with statements of the duration of his last employment, his earnings during the preceding 6 months, and the reasons for terminating employment. He must also state the number of his dependents and the amount of money he has received as a discharge bonus or other benefits. His claim to benefits is investigated and his eligibility requirements are frequently checked during the course of his unemployment. Since the 1932 amendment went into effect, the applicant also has to furnish information on his resources. While the possession of incomes does not bar him from benefits for the first 6 weeks, continuance of payments is made contingent upon his need after that time. The local relief offices begin investigating the financial status of the unemployed and of his relatives shortly after the application is filed in order to determine whether benefits should be paid beyond the first 6 weeks. During the prescribed waiting period and while he is in receipt of benefits, the unemployed worker must report three times a week at the placement office to register his availability for work. Benefits are paid at the employment exchanges once a week in accordance with the wage class of the insured worker.

The appeals procedure was worked out on democratic principles in the original law. There were attached to the local employment offices committees which decided disputed points. Representatives of employers and employees had a voice in the decision. The appeals commissions attached to the district and state offices were organized in a similar manner, and so was the commission of last resort, which formed a part of the Federal insurance office (Reichsversicherungsamt).{7} Under the National-Socialist Government, these committees and commissions went out of existence, and the decisions are now made by the heads of the local district and Federal offices in accordance with the "leadership principle."

Coverage: The German compulsory system of unemployment insurance covers all manual workers between the school-leaving age and 65 and all salaried persons receiving no more than 8,400 marks a year, except that agricultural workers and domestic servants are excluded from the system.

The population of the country in June 1933 was 65,336,000, of whom 32,300,000 were gainful workers. The total number of those

{7} This office also administers all forms of social insurance except unemployment insurance.

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insured against unemployment was 13,472,000 in November 1935. During that month the Federal institution reported 1,984,452 as unemployed. Of these, 386,684 were receiving ordinary benefits, 666,466 were in receipt of emergency benefits, and 340,017 were receiving relief from local welfare authorities. The remaining 591,285 unemployed persons were receiving no form of unemployment benefits or assistance from public authorities.{8}

Contributions.-The insurance system is designed to operate solely with employer and employee contributions. A total payment of 6.5 percent of the first 300 marks per month in wages and salaries is shared equally by employer and employee. The insurance system has from time to time availed itself of its power to borrow from the Federal Government, but contributions and benefits are now adjusted to permit the funds to carry the entire load of ordinary and emergency benefits.

The insurance fund is completely pooled for all industries and all districts except that the Carl Zeiss Optical Works has been permitted to maintain its own system of unemployment insurance with participation in the administrative expenses of the national system. From time to time it has been recommended that contribution rates should be varied for districts and industries in accordance with their unemployment hazards, but it has been felt that departure from the uniform basis would tend to restrict the mobility of labor, as well as to handicap industries with high risks.

Benefits.-Ordinary benefits, like contributions, are graduated by the income class of the insured contributor and, in addition, are varied in accordance with the size of the community. The benefits paid are a higher percentage of the basic wage in the lower income groups than in the higher. Additional "family allowances" in respect of each dependent of the insured person are also paid. These benefits are subject to deduction for a portion of the income derived from temporary employment.

The emergency benefits and family allowances are the same as ordinary benefits but are payable only to those who pass a rigid means test and are reduced in proportion to any income which the worker may possess.

Amount of Benefits.-The following tabulation gives the range of maximum weekly benefits payable to various wage classes in three different types of communities

{8} Statistische Beilage zum Reichsarbeitablatt, 1936, Nr. 1, pp. 5-6.

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Duration of Benefits.-Ordinary benefits are paid to a qualified person for a period of 20 weeks, except that after 6 weeks they are contingent upon a needs test. Emergency benefits, after exhaustion of the right to ordinary benefits, are payable up to a period of 38 weeks or, in exceptional cases for persons over 40 years old, for a period of 51 weeks.

Statutory Conditions for the Receipt of Benefits.-In order to qualify for the first benefit an insured person must have been employed and have paid his contributions for a period of 52 weeks in the 2 years preceding his benefit claim. For subsequent periods of unemployment he must have been employed and have paid contributions for 26 weeks in the 12 months preceding the filing of the new claim. Further statutory conditions for benefits are reporting for registration at the employment exchange, ability and willingness to accept work, performance of work or training, and in the case of persons under 21 years of age, married women, and workers who have received six weekly benefits, evidence of need. Additional eligibility requirements are imposed upon part-time workers.

Waiting Period.-After the claim for ordinary benefits has been filed, a waiting period must elapse before the first benefit is payable. The duration of this period is set at 14 days for persons with no dependents, at 7 days for persons with one to three dependents, and at 3 days for persons with four or more dependents. These waiting periods are reduced for persons who were employed only part time prior to their total unemployment and for those who found work after a period of unemployment but lost it before the end of 13 weeks.

Disqualiftation From Benefits.-If unemployment is the result of leaving work without just cause or of dismissal for just cause, the right to benefits is withheld for 6 weeks; if the benefit claimant refuses to submit to vocational training or retraining, he is disqualified for a period of 4 weeks; if unemployment is a direct result of a strike or a lockout, benefits are withheld for the duration of the labor dispute.

BELGIUM {9}

A voluntary system of unemployment insurance, except for a period of financial collapse during the World War, has been functioning in Belgium for nearly 35 years. This system had its origin

{9} Data on the Belgian insurance system have been taken from: Industrial Relations Counselors, Inc., An Historical Basis for Unemployment Insurance, op. cit.; Kiehel, Conatance A., Unemployment Insurance in Belgium (Industrial Relations Counselors, Inc., New York, 1932) ; "Operation of Unemployment Insurance Systems in the United States and in Foreign Countries, 1931 to 1934", Monthly Labor Review, vol. 39, no. 2, August 1934, pp. 273-307 ; Friedman, Gladys R., "Recent Developments in Unemployment Insurance in Belgium", Personnel, vol. 11, no. 2, November 1934, p. 51.

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in the Liege (1897) and Ghent (1901) plans of communal subsidy to purely voluntary unemployment insurance established by tradeunions for their own members. As a subsequent development to the communal subsidy, the provincial and eventually the National Government contributed toward the benefits paid to the unemployed members of trade-union funds which met certain requirements with regard to methods of accounting. Communal funds under local political control with a minimum of Federal regulation were set up to distribute these Government subsidies and to extend insurance to nonunion members.

The population density of Belgium, the high degree of industrialization, the strong local autonomy of the communes, and the politically conscious character of trade-unionism have all conduced to the preservation of voluntary features in the insurance plan even with the participation of the National Government in the finances of the system. Recent developments have, however, tended to strengthen central as opposed to local control. Eventually, with Government participation and subsidy the need arose for uniformity of procedure and benefits throughout the country, but not until the evils of local political control had forced basic reorganization of the system were these results even approximated.

Just before the outbreak of the World War, 101 communes, or 4 percent of the total in the country, were affiliated with 39 communal funds. Approximately 130,000 workers were insured by trade-union and similar plans, representing an insurance coverage of about 10 percent of the working population. During this pre-war period industrial conditions were favorable and unemployment rarely exceeded 4 percent. The low rates of benefit paid for short periods were well within the financial limits of the systems. Almost 60 percent of the total amount of benefits paid was financed from member contributions, communal subsidies represented a little more than 25 percent, and national and provincial subsidies were responsible for about 15 percent.

Unemployment assumed staggering proportions with the outbreak of the war. Many trade-unions and communal governments were bankrupt and all attempts to pay benefits were abandoned.. The National Government felt compelled to offer some form of relief to the unemployed, and in 1915 organized and financed the national relief committee to provide for all unemployed wage earners without regard to their participation in insurance plans. This responsibility, though assumed only as an emergency measure, brought to light many inadequacies of the trade-union insurance plans as measures designed to meet the hazards of unemployment. A Royal Decree of December 1920, while reviving the bankrupt insurance societies, amplified and unified to some extent the provisions for contributions

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and benefits. At the same time a national emergency fund, similar in organization to the national relief committee, was established to distribute a Federal subsidy to societies that met Government requirements.

In general the trade-union insurance societies were permitted to conduct their affairs as they chose, provided they kept their unemployment insurance accounts separate from other finances. Unemployed members were required on the first day of unemployment to register for work at the employment exchanges which had been coordinated with emergency relief distribution. But, in the absence of detailed Federal regulations, societies varied greatly in their insurance provisions. The national emergency fund supplemented the grants of insurance societies by paying basic grants and family allowances to needy unemployed persons who had exhausted their rights to insurance benefits from the societies of which they were members, as well as to workers who belonged to societies that had exhausted their resources. The national emergency fund was supported (a) by a grant from the National Government; (b) by reimbursement, from societies which were not financially exhausted, of 15 percent of its payments to members in receipt of benefits; and (c) by reimbursement, from the communes, of 10 percent of its payments to beneficiaries residing in those communes. The communal funds distributed the basic grants and family allowances. These communal funds were controlled by communal governments.

In the decade from 1920 to 1930 the unemployment insurance system was changed only slightly. Benefit provisions, requirements, and records of the various societies and communal funds tended toward greater uniformity, and membership in societies was restricted to persons under 65 years of age. By 1929, 70 communal funds had been established; and although only about half of the Belgian communes were affiliated with these funds, the communes so affiliated contained four-fifths of the entire population of the country. In 1929 Federal expenditures for unemployment insurance and relief represented more than 40 percent of the total expenditures for benefits.

With the beginning of the depression in 1930 unemployment rapidly mounted until, by December, it reached 26 percent of the total insured population. A law was passed requiring all communes of the country to affiliate with a communal fund and to reimburse the national emergency fund for 10 percent of its grants to their residents. This law introduced the first element of nation-wide compulsion in the hitherto entirely voluntary insurance system. Communal and provincial governments, however, soon were in financial straits, and the National Government through loans and advances to local govern-

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ments was carrying practically the entire load of unemployment insurance benefits and relief. In 1934 nearly all the insurance societies also became bankrupt, and the national emergency fund assumed their obligations.

Thoroughgoing reform of the insurance system was necessary. Even though the entire system was practically supported by Federal money, communal funds under local political control had the sole authority for benefit payments. Supervision of the unemployed was practically abandoned; no coordination existed between insurance and placement; and the protection afforded an insured person depended more upon the accident of his residence and the liberality of his commune than upon the severity of his employment risk. No attempt was made to safeguard funds by adherence to eligibility requirements, since the money was all furnished by the national treasury. Societies, for political reasons, preferred to retain the good will of the unemployed rather than to abide by administrative regulations, since they knew that their obligations would be assumed by the national emergency fund if their funds became insolvent.

As a result of this chaotic situation basic reorganization of the insurance and relief systems was undertaken. The National Government issued two decrees on May 31, 1933, amending and extending unemployment insurance, providing for rigorous control of the unemployed, defining membership, contributions, and benefit requirements on a uniform basis. The authority of the Central Government was greatly increased and local governments, though required to contribute a larger proportion of expenditures, were deprived of their long-cherished autonomy in the distribution of benefits. Although the present system of insurance in Belgium utilizes the old machinery of trade-unions and communal subsidy, the administrative functions of the Ministry of Labor and Social Welfare through reporting, supervisory, inspecting, and control procedures are as centralized as in countries where purely national agencies administer the system. The National Government has even deprived communes and provinces of their right to decide whether or not they are financially able to pay their share of relief and benefit expenditures. Assessments for the national emergency fund are deducted from the taxes collected by the Federal Government before the sums due to the provinces and communes are allocated to them.

More than a year after the basic reorganization of the insurance system, steps were taken to remedy two other outstanding defects, the lack of coordination with public employment offices and the multiplicity of communal funds. Accordingly, on July 27, 1934, an order to take effect within 6 months abolished communal funds and substituted in their stead nationally controlled placement and unemployment offices which, in addition to placement activities, super-

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vise unemployment insurance societies and distribute to them sums placed at their disposal by the national emergency fund.

The history of the Belgian unemployment insurance system well illustrates the anomalies and inequalities which may exist in a country without the compulsion of a strong central control. The war and the depression there, as in England and an the rest of the European continent, created unemployment on a scale which swamped the existing insurance machinery. The need for emergency relief administered on a nation-wide basis as a means of preventing starvation and demoralization of its unemployed citizens inevitably strengthened central authority.

Administration.-The governing body of the national emergency fund and the labor office, two divisions of the Ministry of Labor and Social Welfare, are charged with the central administration of the unemployment insurance system in Belgium. The governing body of the national emergency fund is a permanent board which examines the statutes of unemployment insurance societies and recommends the societies for approval by the Minister. A director, a clerical staff, and an inspector comprise the personnel of the organization.

The labor office supervises and directs the work of labor exchanges and of the new placement and unemployment offices which, by a Royal Order of July 27, 1934, were to replace within 6 months the 72 local communal funds of the country. Each of the nine provinces of Belgium is required to have at least one and not more than three of these provincial employment offices with not more than six branches, except that the provinces of Luxembourg and Namur may share one provincial office. These offices are designed to take over the former functions of communal funds and to expand the work of the inadequate employment exchanges in order that the system may be unified and integrated with placement and emergency relief of unemployed workers.

The duties of the placement and unemployment offices are as follows: Determining eligibility for insurance of members of approved unemployment insurance societies; verifying the unemployment of workers who are receiving benefits; ascertaining the state of need; stamping unemployment cards; investigating the nonacceptance of work offered to unemployed persons; auditing the accounts of approved unemployment societies; distributing the funds allocated by the national emergency fund as subsidies to approved societies and their local branches; obtaining refunds from societies for unauthorized benefits paid to unemployed members; finding employment for idle labor, either directly or through the medium of employment exchanges established or approved by the Government. The 12 existing employment exchanges are placed under the authority of the

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placement and unemployment offices in the district in which they are established. The administrative cost of these placement and unemployment offices was first to be borne by the national treasury. An order of September 12, 1934, however, decreed that provincial and communal authorities should contribute toward the administrative expenses of the offices in their jurisdictions.

Each placement and unemployment office and subofflce is to have an appeals board with chairman, members, and secretary constituting a committee to supervise its activities. Three members represent workers' organizations and three represent employers, all appointed by the Minister of Labor and Social Welfare. The seventh member is appointed by the Minister as chairman and must be a person who has never been an employer or a worker. This board must meet regularly at least once a month to settle disputes regarding eligibility for insurance or the right to benefits. {10}

The insurance societies themselves are of four types, central, autonomous, auxiliary, and official societies. The central societies are organized by central trade-unions with local unemployment insurance societies corresponding to local branches of the union. Autonomous societies are those of unions without local branches or subdivisions and societies established by individual companies or groups of companies. Auxiliary societies are branches of either central or autonomous societies formed far the distribution of additional benefits, usually upon the payment of additional contributions. Official societies are those organized for workers who are not members of any other societies.

Coverage.{11}-Even though unemployment insurance in Belgium is a voluntary system, it has achieved coverage and uniform protection for practically the entire wage-earning population exposed to similar unemployment risks. The persons excluded are agricultural workers, domestic servants, musicians, dramatic and variety artists, independent workers, commercial travelers and insurance agents in the service of several employers, and part-time and seasonal workers. The age limits for insurance are set at 15 to 65 years. Belgium in December 1931 had a total population of 8,159,000. The number of gainfully occupied persons in December 1920 was 3,205,000. In September 1935 approved unemployment insurance funds had a total membership of 913,277 persons, of whom 14.9 percent were totally unemployed and 11.9 percent were intermittently unemployed. {12}

{10} "Organization of Unemployment Insurance in Belgium," Industrial and Labour Information, International Labour Office, voi. LI, no. 9, Aug. 27, 1934, p. 276.

{11}Industrial and Labour Information, International Labour Office, vol. LIII, no. 7, Feb. 18, 1936, pp. 206-207.

{12} Ministry of Labour Gazette (Great Britain), vol, XLIII, no. 12, December 1938, p. 483.

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Contributions: Contribution rates throughout the early history of the insurance system have varied with individual societies and with age and occupation within a given society. A Royal Decree of May 31, 1933, doubled the rates then in existence and provided that contributions should be so calculated as to cover the risk of unemployment in normal times. The minimum rate was set at 2.50 francs per week. Early in 1935 the rates were again increased by a decree that existing rates were to be raised by 1 franc per week for all contributors except (a) those under 18 years of age and (b) those employed in public service and Government monopoly undertakings, where the rates were to be increased by 1 franc per month for manual workers, 1.25 francs for salaried employees, and 50 centimes for persons under 18 years of age. In other undertakings the rates for workers under 18 were to be increased by 50 centimes a week. The maximum contribution per member was limited to 3 francs a week.

The increases, however, were not to be required of members of societies which were in a position to meet their liabilities for a year to come. The national treasury deposits with the national emergency fund an amount equal to two-thirds of the annual contributions of members of each approved unemployment insurance society, as the Government's financial share in contributions.

The unemployment insurance societies collect contributions from their members weekly, fortnightly, or monthly, according to the rules of the particular group. In some instances society agents collect at the homes or work places of their members; sometimes a central location is selected by a representative of the society for the receipt of contributions; but more often the member pays his insurance contribution weekly at the society headquarters together with his union dues. A stamp method is rather generally used as a receipt for payment.

Benefits. Individual societies in Belgium are permitted to establish their own rates of benefit for unemployment. The National Government has, however, set a maximum to the amount and duration of benefits which a society may grant.

Amount of Benefits.-During periods of unemployment for a maximum period of 60 days in a year an eligible insured contributor is entitled to statutory benefits from his insurance society. Under certain conditions he is also entitled to family and supplementary allowances from the national emergency fund. The total of his benefits may not exceed two-thirds of his normal wages unless he has three children or more, in which case the maximum is set at threefourths of the basic wages. If an insurance society is insolvent, the national emergency fund undertakes the responsibility of paying its covenanted benefits.

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The statutory benefits of unemployment insurance societies vary with the societies themselves, but in no case may such benefits plus the benefits derived from membership in an auxiliary society exceed the basic grants of the national emergency fund which are established at different rates according to age and family responsibility, as shown in the following tabulation

Supplementary allowances are granted by the national emergency fund to persons in receipt of statutory benefits in accordance with age, family responsibility, and size of community. These benefits are the following:

The national emergency fund also grants family allowances to unemployed persons in need, even though they are in receipt of statutory benefits. The rates for these family allowances as established on May 31, 1933, are payable in respect of an unemployed person's dependent children and of his wife if, without other work, she manages his household. The rates are as follows:

A person is considered in a state of need if his maximum weekly income is below stated amounts which vary according to age, family

{13} This rate applies to partially unemployed married women; totally unemployed married women are excluded from benefits.

{14} T'he minimum age was raised from 14 to 15 years on July 14, 1933.

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responsibility, and size of community in which the person resides. These are given in table 3.

Duration of Benefits.-The length of time during which benefits are payable varies with individual societies. The maximum stipulated duration of statutory benefits is 60 days a year divided equally between two 6-month periods.

Post-statutory benefits are payable normally for 30 days in a year but may be extended to a total of 300 days in a year for the combined statutory and post-statutory benefit period.

Waiting Period.-A waiting period of 3 days is required at the beginning of each 6-month benefit period, and, in addition, a regular

waiting period of 2 days a month is required for the receipt of benefits. The month is calculated as beginning with its first Monday and ending with the last Saturday preceding the first Monday of the next month. Sundays and legal and local holidays are not reckoned as days of benefits and are not counted in the waiting period.

An advance equal to statutory benefits for the 3-day waiting period or fraction thereof may be paid to persons who have been completely unemployed for at least 2 weeks. The advance must be repaid in full or in part when the beneficiary is again employed.

Statutory Conditions for the Receipt of Benefits.-Insured persons who are capable of work, who are under 65 years of age, and who have been employed for at least 6 months in the preceding calendar year are eligible for benefits in case of involuntary unemployment

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if they have been regularly enrolled members of unemployment insurance societies for at least a year. If, however, the unemployment is the direct result of a strike or lockout, or of dismissal from employment with subsequent refusal to accept new work under conditions customary in the region, the insured person is not qualified to receive benefits until a month has elapsed since he showed willingness to resume work. Belgian nationals who accept employment abroad are also ineligible for benefits until a month after their return.

Transfer of membership from one society to another after the completion of 1 year's membership does not entail a further qualifying period unless the laws of the society to which the transfer is made require an additional period. But the transferred member is not entitled to receive benefits in excess of those authorized by the society with which he was formerly affiliated until 6 months of membership in the new society have elapsed.

A person who fails to pay contributions to the unemployment society for 13 weeks is struck from the membership rolls unless his delinquency of payment is the result of incapacity for work. Persons so incapacitated are bound to pay their arrears in full, except that their arrears shall not accrue for repayment beyond a period of 6 months.

In general, for eligibility to benefits an insured contributor is required to register for work at an employment office twice each clay, but he is permitted to absent himself from this registration on not more than 3 half days a week if he utilizes this absence to seek work. Proof of the search for work must be offered in the application for such leave of absence.

When employment exchanges are notified of vacancies for unskilled labor, if the conditions of work and wages offered correspond to the conditions customary in the district, these positions are offered first to insured persons who have been unoccupied for the longest time and who do not appear to have made sufficient effort to obtain employment. If such offers are refused, the person may be deprived of benefits for at least a month even if the position offered is not in the insured person's usual occupation and is at a distance from his ordinary place of work.

Method of Payment.-Benefits are usually paid weekly by the society agent who collects contributions. The procedure is in general as follows: (1) The unemployed member presents a certificate from his employer as evidence that his unemployment is involuntary; (2) he presents his payment card for record of the date, period, amount, and character of all the benefits he has received and for certification of the fact that he has registered at an employment exchange; (3) he presents his membership card as a record

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of his contributions; (4) he produces certification from the employment exchange that no suitable work is available.

The payment of benefits through the society includes in almost all instances the subsidy from the national emergency fund and its family and supplementary allowances.

SWITZERLAND {15}

The first attempt at unemployment insurance in Switzerland was made in Basel Town in 1789. All workers in the lace and ribbon factories contributed 2 percent of their wages, which was turned over to officials chosen by the town council. Before any benefits could be distributed, however, the revolution of 1789 halted the operation of the fund, and the contributions were returned to the contributors.

Switzerland is also credited with the first attempt to introduce a compulsory unemployment insurance law. The Canton of St. Gall enacted a law in 1894 permitting communes in its territory to provide compulsory unemployment insurance for certain workers. The commune of St. Gall was the only one to establish a fund under this act. It began in 1895 and ceased to function in 1897 because workers with rather stable employment moved to neighboring towns to avoid joining the fund. Left with the bad risks the fund soon showed a considerable deficit.

At the opening of the twentieth century Switzerland had made but little progress in dealing with the recurrent problem of unemployment, although experimentation with public employment exchanges and private unemployment insurance funds provided the basis for further developments. The experience with relief measures during the war and post-war periods showed conclusively that some permanent method of dealing with unemployment was necessary. The voluntary unemployment insurance funds did not offer a sufficiently broad and stable basis to cope with the problem. The various unemployment insurance funds had functioned during the war period and had been informally and irregularly subsidized by public authorities. The Confederation, after consideration of the question, decided to formalize and place the subsidies on a permanent basis and thus encourage the development of funds.

Switzerland is a democratic country with a Federal constitution like that of the United States, in that the central authority is limited to delegated powers. The 25 cantons of the Confederation are en-

{15} Data on the Swiss unemployment insurance system have been taken from Spates, T. C., and Rabinovitch, G. S., Unemployment Insurance do Switzerland (Industrial Relations Counselors, Inc., New York, 1931) ; Industrial Relations Counselors, Inc., An Historical Basis for Unemployment Insurance, op. cit.; "Unemployment Insurance in Switzerland", Monthly Labor Review, vol. 40, no. 5, May 1935, pp. 1203-1207,

tirely autonomous except with respect to powers delegated to the Federal Government. No provision in the constitution authorizes the Confederation to enact unemployment insurance legislation, much less to make it compulsory for the cantons, or even to subsidize unemployment insurance funds voluntarily created by the cantons. Any of these steps would require an amendment to the constitution by a vote of a majority of the Swiss electors and of the cantons.

The Confederation likewise had no power to set up a system of employment exchanges but in 1909 had subsidized exchanges as a method of stimulating the placement of the unemployed workers.{16} This same principle was utilized, in view of the constitutional difficulties involved, to promote and assist the development of insurance funds.

The Federal Law of 1924.-The Federal act for the payment of subsidies to unemployment insurance funds was enacted by the Federal Assembly on October 17, 1924. The law provides that Federal subsidies are to be granted to funds based on the principles of insurance which comply with conditions specified in the act. These conditions relate to (1) the objectives, administration, and membership of the funds; (2) the benefits payable to members; (3) the conditions entitling members to benefits; (4) the repayment of any subsidies from unused balances upon the dissolution of any fund; and (5) the conditions under which partial unemployment benefits may be included in the insurance system. In addition to these provisions, the law specifies the amount of Federal subsidies to be granted to funds and the general provisions for Federal recognition and supervision of the funds.

Under the section of the act dealing with the conditions relating to the objectives, administration, and membership of the funds are found the following four conditions: (a) The fund shall not be carried on for profit or for any purpose other than the relief of unemployment; (b) it shall have its own books and accounts and shall give guaranties for the proper administration of its moneys; (c) it shall have precise regulations respecting the contributions of members, the benefits payable, and the utilization of the assets and surplus balance; and (d) no member of one fund shall be at the same time a member of another fund.

The act stipulates that the funds shall not pay more than a maximum of 50 percent of normal earnings to members who have no legal dependents and a maximum of 60 percent to members with legal dependents.

{16} By virtue of the ratification of the first resolution adopted at the International Labor Conference at Washington in 1919 for the establishment of a system of free employment exchanges, Switzerland assumed an international obligation which became the authority for issuing in 1924 an order requiring each canton to set up the number of exchanges sufficient for the need and coordinated with a central exchange.

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The 1924 act provides that the funds shall not pay benefits unless the insured person becomes unemployed through no fault of his own, registers at an employment exchange, is unable to find suitable employment, and produces a certificate from his last employer stating the reason for his unemployment. Subject to the approval of the Federal labor office registration at trade employment exchanges may be substituted for registration at public employment exchanges. The funds are eligible for subsidies only if they provide that members are not entitled to benefits unless they have belonged to the fund and paid contributions for at least 180 days and have served a waiting period of at least 3 days after registration. The maximum period of benefits allowable is 90 days in a period of 360 days, but by resolution of the Federal Council, the executive authority of the Government, the benefit period may be extended beyond 90 days during times of continued depression. The funds are required to provide that unemployment as a result of a collective labor dispute disqualifies the member for the period of the dispute and for 30 days thereafter; that incapacity for work disqualifies the member for the duration of the incapacity; and that members who refuse to accept suitable employment, who make insufficient effort to find employment, who fail to comply with regulations, who supply incomplete information, or who attempt to obtain benefits unlawfully shall not be entitled to benefits.

The act of 1924 contains a provision covering the conditions under which the funds may pay compensation for partial unemployment. In such cases, the combined income from unemployment compensation and the actual earnings of the insured person shall not exceed 80 percent of the normal earnings for those with dependents and 70 percent in the case of all others. The right to compensation shall cease when, during a period of 360 days, the combined compensation is equal to full benefit for 90 days.

The Federal subsidy to public funds organized by the cantons and communes, and to private funds administered jointly by employers and employees, is set at 40 percent of the benefits paid in conformity with the rules. The subsidy to trade-union funds is 30 percent. The variation in the amount of the subsidies was made on the assumption that public and joint funds would have poorer risks. The Federal Assembly specifically reserved the right to increase the subsidies temporarily by not more than 10 percent.

The legislation has additional provisions regarding the conditions under which Federal subsidies are to be obtained. The Federal labor office is given the right to inspect at any time the business operations of a fund subsidized by the Confederation and to receive statistical data. The Federal Council is empowered to make the rules and regulations necessary to administer the act. end to designate

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the authority competent to decide matters relating to subsidies. The act provides that the Federal Council may prescribe the minimum number of members which will entitle a fund to receive subsidies and that the subsidy may be reduced if it, together with other subsidies from public funds, would exceed a certain percentage of the benefits paid. The Federal Council may, in view of special circumstances, lay down further conditions for the payment of Federal subsidies or may grant certain relaxations temporarily. Advances from the Federal subsidy may be granted to the fund if necessity is shown. The payment of the Federal subsidy may be made conditional on its being used to increase the benefits or to prolong the period during which benefits are payable or to constitute a reserve fund. The Federal subsidy is not to cause any reduction in benefits or in contributions of the insured persons.

The Federal Orders of 1925 and 1929.--Federal rders, from time to time, have extended, modified, and more explicitly defined the provisions of the act of 1924. Order I of the Swiss Federal Council, issued April 9, 1925, became effective on April 15, 1925, and stipulated in greater detail the procedure by which recognition of funds was to be made by the Federal labor office. It provided that where recognition by the labor office is refused or withdrawn, by virtue of some alteration in the provisions of the fund, appeal may be made, within 14 days, to the Federal Council. Any decision of the labor office regarding subsidies and conditions upon which they are to be granted may be appealed, within 14 days, to the Federal Department of Public Economy, whose decision is final. The Federal labor office is given authority to lay down certain forms and principles of procedure relating to notification of unemployment, employer's certificate of dismissal, and statistical reports, which must be approved by the Federal Department of Public Economy.

The act of 1924 merely states that an insured person should receive benefits if unemployed through "no fault of his own" and if he is "unable to find suitable employment." Section IV of the first order defines in greater detail the scope of these two terms. Dismissal on account of gross or deliberate negligence, refusal to work, disregard of rules or a contract, and voluntarily leaving without good cause (except when continued employment would be contrary to a collective agreement or to the usual wages or conditions of work in the trade) are to be regarded as faults of the insured. Suitable employment is defined so that the capacity of the insured, the future exercise of his trade, and his health and morals are safeguarded. It is provided that exceptions may be made with regard to accepting either employment made available through a strike or employment under conditions contrary to a collective agreement covering the insured, as well as employment which is inacceptable in view of the conditions

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and wages in the trade. In cases of reduced working capacity, employment at a correspondingly reduced wage may be regarded as suitable. In allotting employment away from home, insured persons with dependents must be given special consideration. The Federal Department of Political Economy is authorized to prescribe further provisions for the definition of the two terms.

The order provides that the rules governing partial unemployment should be applied to any insured person who becomes temporarily unemployed without terminating his employment contract and therefore, suffers a loss of earnings.

Notification to and supervision by the employment exchange is necessary for partial unemployment only when there is a loss of full working days, when the loss of earnings is more than half the normal wage, and when no other adequate system of supervision exists. These provisions also apply to homeworkers. If an unemployed worker accepts relief work or other employment outside his trade, he may be compensated for the loss of earnings according to the provisions for partial unemployment. He must nevertheless register at the employment exchange and accept any suitable employment in his trade.

The order provides that public funds must accept members of other recognized funds who have voluntarily resigned or have been released through no fault of their own, provided they have fulfilled their obligations to the fund and are not unemployed at the time of transfer. Such members must be granted the same rights as other members after they have paid contributions for 4 weeks. The qualifying period to elapse before a member is entitled to benefits in such a case is to be reduced according to the period during which the insured has paid contributions in the former fund.

Order II, dated December 20, 1929, came into force January 1, 1930. Among other things it provides that Federal subsidies shall not be granted to funds with a membership of less than 200, except in special cases and that recognition may be withdrawn from funds whose financial position does not guarantee the payment of benefits. The amount of the Federal subsidy is to be reduced in proportion if the total subsidies granted by public authorities exceed 80 percent of the benefits paid. Exceptions may be made to permit the creation of an adequate reserve fund.

In addition to the provisions in the previous law and regulations, unemployment caused by holidays, loss of earnings resulting from regularly recurrent work, such as stock-taking, cleaning or repairs to the plant, or unemployability, is not compensable. Where unemployment results from a slight fault of the insured, benefits may be paid him after the expiration of not less than 4 weeks. Where the insured has received the maximum benefits for 3 consecutive

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years, the maximum shall be reduced by at least one-half in the fourth year, excepting in times of depression or other special circumstances.

The Federal Department of Public Economy is authorized to enact special provisions for members belonging to seasonal occupations and shall provide for a special waiting period, reduction in the period of benefits during seasons when there are good possibilities of getting employment, and establishment of special rates of contributions.

Unemployment Insurance During the Depression.-The depression necessitated significant changes in the unemployment insurance laws and regulations in Switzerland. It was soon found necessary to increase the amount of Federal subsidies. On September 23, 1931, the Federal Assembly authorized the Federal Council to increase the subsidies 10 percent in certain specified industries for the calendar year 1931 and for any other industries seriously affected by the crisis for the period October 1 to December 31, 1931. The next year, on September 29, 1932, the Assembly authorized the Council to pay subsidies to seriously affected industries for 1932 of not more than 45 percent of benefits paid to public and joint funds and 40 percent to trade-union funds. A law enacted October 5, 1933, authorized the Federal Council to subsidize funds in certain industries for the year 1933 and in other seriously affected industries for the months between October 1 and December 31, 1933. This subsidy to public and joint funds was not to exceed 43 percent, and to trade-union funds 38 percent of benefits paid. The increases in the subsidies were made on the condition that cantonal and communal subsidies were not to be decreased and that when the subsidies paid by Federal, cantonal, and communal authorities exceeded 90 percent of benefits, the Federal subsidy would be reduced in proportion.

In addition to these changes, the continuation of unemployment necessitated both the extension of the statutory period of benefits as well as the introduction of crisis relief to those individuals who had exhausted their rights to benefits. Beginning in 1930, temporary measures increased the statutory duration of benefits from time to time. An order of November 4, 1933, authorized the Federal authorities to extend the benefit period from 90 to 120 days during the yeai 1933 to certain classes of workers, on condition that, during the period of extension, benefits did not exceed certain rates varying between 4 francs a day for unmarried persons under 22 years of age living at home, and 8.10 francs a day for married persons with dependent children.{17}

Besides the extension of the statutory period of benefits, the Federal Assembly found it necessary, by a law of December 31, 1933,

{17} Industrial and Labour Information, vol. L, no. 7, May 14, 1834, pp. 242-243.

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to set up a relief scheme to supplement the insurance system by offering a special subsidy for the cantons and for intercantonal associations of workers in certain occupations paying emergency allowances to the unemployed. Workers who had exhausted their statutory right to benefits and who were in need might receive such allowances, although exceptions were made to these rules for those individuals who had not completed the required qualifying period or who were not insured for other formal reasons. The duration of the relief was fixed at 150 days a year. The subsidy was set at one-third the amount of crisis relief given but could be increased, under certain circumstances, to three-fifths of the expenditures.

A number of measures dealing with crisis relief were enacted thereafter. An order of the Federal Council of October 23, 1933, went into effect December 1, 1933, {18} and stipulated that the maximum period for which emergency benefits were to be payable in the course of a year be raised to 190 working days. This period might be extended, however, to 310 working days for unemployed persons who, through no fault of their own, were not entitled to benefits from any insurance fund.

Emergency benefits may be paid only to unemployed persons in need, in an amount not to exceed 50 percent of the earnings of persons without dependents, or 60 percent for those with dependents, provided that such benefits do not exceed certain maximums established on the basis of locality, age, number of dependents, and the time of year. Emergency benefits may be replaced wholly or in part by benefits in kind. The payment of benefits is conditional upon legislation by the cantons, 18 of which had taken action, dealing principally with the unemployed in those industries most seriously affected by the depression. {19}

A more basic revision of the Swiss system was put into effect for the duration of the depression by Order IV of the Federal Council, enacted February 27, 1934, and effective April 1, 1934. {20}

The act of 1924 provides that funds should not pay benefits to exceed 50 percent of earnings for wholly unemployed persons without dependents, and 60 percent for those with dependents; 70 and 80 percent of earnings, respectively, were set as the maximum benefits for persons partially employed. The actual amount of benefits granted was paid according to the provisions of the fund of which the insured was a member. Order IV, however, fixes the maximum amount of wages to be taken into consideration for the purpose of

{18} RecuedE o//loteE des loia et ordonnancea de is con/ddEration auisae, nouvelle a4rie, Tome 49, ann6e 1933 (Imprimerie des Hoira B.-J. Wyss, 3. A., Berne, 1934), p. 873.

{19} Industrial and Labour Information, vol. L, no. 7, May 14, 1934, pp. 244-24b.

{20} Recueil officiel des lois et ordonnances de la confederation suisse, nouvelle serie, Tome 50, annee 1934 (Imprmereie des Hoirs K.--J. Wyss, S.A., Berne, 1934), p. 191; cf. Industrial and Labour Information, vol. L, no. 7, May 14, 1934, p. 243.

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calculating total and partial unemployment benefits. Thus, unemployed persons with more than one dependent are to be considered as receiving a maximum wage of 16 francs a day; those with one dependent, 12 francs; and those with no dependents, according to whether they are over or under 22 years of age, 10 or 8 francs, respectively. Any earnings in excess of these limits give rise to a supplementary benefit calculated at a reduced rate of 30 percent. Modifications of the waiting period and disqualification provisions of the previous law, made by this order are discussed below.

Administration.-Administrative coordination exists in Switzerland only insofar as the public authorities specify forms and procedures, audit accounts, and collect information from the various funds. Simplification and uniformity are obtained through standards established by the legislation providing for the granting of subsidies. The public funds, of course, are administered directly by the public authorities creating them. Each public authority treats separately with each fund. Since the public employment exchanges function for both the insured and noninsured portions of the population, no data are available on the real administrative cost of the Swiss insurance system. It is the endeavor of all funds to limit the costs of administration to not more than 15 percent of receipts, but during the depression this proportion has probably been exceeded. {21} Administrative costs have been generally low but are highest in the public funds which require the organization of a special staff.

There is no provision in the Federal law regarding procedure for the settlement of grievances or disputes which may arise from conflicting interpretations of the law regarding claims to benefits. Disputes and appeals are settled in different ways by the different funds and by cantonal or communal regulations. In some funds, disputes are heard by the cantonal courts, whose decision is recognized as final by the Federal labor office.

Coverage.-At the end of September 1934 there were, in addition to the Federal law, orders, and regulations respecting unemployment insurance, the laws of 24 cantons on the subject, the regular subsidies of 1,620 communes, and the rules and regulations of 197 funds. These laws and these relationships constitute the unemployment insurance system of Switzerland.{22}

Since the enactment of the Federal law all the 25 Swiss cantons have enacted legislation based upon and supplementing the Federal law. Thirteen cantons now have compulsory unemployment insurance legislation, for specified classes of persons; eight cantons grant to the communes the right to decree compulsory insurance;

{21} Unemployment Insurance in Switzerland", Monthly Labor Review, vol. 38, no. 1, July 1931. p. 28.

{22} Dix ans d'assurance-Chomage en Suisse", La vie economique, septieme annee, no. 11, novembre 1934. p. 507.

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and four cantons have voluntary insurance. All cantons except one grant regular subsidies to recognized funds {23} in addition to the Federal and any communal subsidies.

All the cantons which have adopted compulsory insurance have found it necessary to create public funds as the only possible method of covering all the eligible persons. The public fund is essential to permit all workers not already members of a trade-union or a joint fund to become insured as demanded under the terms of the cantonal law. The compulsory laws specify the extent of coverage, exempting certain groups from compulsory insurance for such reasons as age, occupation, income, apprenticeship, and employment tenure.

It should be noted that even in the cantons and communes which have extended the compulsory features of the law beyond the workers subject to the factory laws the act does not apply to professional workers. Many wage earners or salaried workers whose situation is too difficult of coverage by the normal insurance organization are excluded. This group includes those whose situation leaves them more or less on the verge of unemployment or in need of assistance. Homeworkers are nearly everywhere excluded as well as persons working by the day in the employer's home, peddlers, commercial travelers, members of the liberal or intellectual professions, employees in the administrative and public services, and employees with incomes above a certain limit.

The development of unemployment insurance in Switzerland has resulted in large part from the initiative of trade-unions and associations of employers. Some of the central employers' associations founded joint funds open to the personnel of certain branches of activity over all Swiss territory. In addition, numerous regional employers' associations established joint associations open to many establishments having the same type of activity or located in the same region.

There were 149,650 insured members of 60 funds at the end of September 1925. This number increased to 539,830 in 197 funds in 1934.{24}

At the end of September 1934 the Federal Office of Industry, Arts and Crafts, and Labor estimated that 62.6 percent of the wage earners in the most important occupational classes usually covered by unemployment insurance were members of unemployment insurance funds, as compared with only 28.6 percent at the end of September 1927.{25}

{23} Le ddveloppement de 1'esaurance--Chbmage dens lee cantons", La vie 6conomique, 8° :"Le no. 1, janvier 1936, pp. 38-37.

{24} Ibid., p. 36.

{25} "Les chomeurs assures contre le chamage", La vie economique, 8e annee, no. 2, fevier 1935, p. 95.

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A majority of the persons covered by unemployment insurance in Switzerland are covered through membership in trade-union funds. At the end of September 1934, 51 percent of the total number of persons insured in Switzerland. were enrolled in trade-union funds, 30.6 percent in public funds, and 18.4 percent in joint employer-employee funds, as compared with 64.2, 17.7, and 18.1 percent, respectively, in 1927. {26} Membership in all types of funds has steadily increased, but the rate of increase for public funds has been faster than that for trade-unions.

The depression no doubt led many previously uninterested persons to join insurance funds. Probably in most cases they have joined municipal funds, since the joint and trade-union funds would be less inclined to accept new members at such a time, and in cantons with compulsory insurance all workers covered by the laws would already be members of some fund. The joint funds have experienced the most rapid rise during the depression both in number of funds and membership. There are three main reasons for this. Federal subsidy to these funds is higher than to trade-union funds; employers' contributions lead to a reduction in the contributions of the insured; and the workers have learned that employees who are not members of the joint fund are dismissed first.

The fund which has the largest number of members is the. Swiss Federation of Metal Workers and Watch Workers, a trade-union fund, consisting of 65,699 members at the end of December 1934. The largest public fund had a membership of 40,999--the Zurich communal fund, in which insurance is compulsory by communal law. The largest joint fund is the Basel general joint fund consisting of 6,970 members. In December 1934 there were only 77 funds out of the 199 existing which had 1,000 members or more, but these 77 funds (representing 37 percent of the number of funds existing) include nearly 85 percent of all members insured in Switzerland. {27}

Contributions.-Although most of the funds have increased their members' rates of contribution greatly during the depression, the average of the members' contributions has declined until in 1933 it was 23.1 percent of benefits paid out, somewhat below the 30 percent required by law. Certain funds in which members are in activities suffering from little unemployment still contribute amounts equal to 50 percent and more of benefits. {28}

{26} "Le developpement de 1'asaurance-Chomage dans les cantons", La vie economdque, 8e annee, no. 1, Janvier 1935, pp. 39-40.

{27}"Les ch8meurs assuros contre le chomage", La vie economique, 8e annee, no. 2, fevier 1935, p. 97.

{28} "Dix ans d'asaurance-Chomage en Suisse", La vie economique, septie annee, no. 11. novembre 1934, p. 506.

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The ratio of members' contributions to their wages, however, is extremely small, representing only from one-tenth to three-tenths of 1 percent of wages in many funds.{29} The average annual contribution of the worker was 10.59 francs in 1929. In that year employees' contributions amounted to more than 50 percent of benefits paid out. In 1933, when the average annual contribution per worker was 27.6 francs--or over two and one-half times more than the average for 1929--employees' contributions totaled only 23 percent of benefits, or less than one-half as much as in 1929. {30} These figures testify to the expenditures during the depression.

The subsidies of the various public authorities now amount to more than 80 percent of all benefits paid out.{31} During the years 1925-29 the average proportion of public subsidies to benefits paid was slightly more than 65 percent. {32} The increase during the depression resulted, of course, from the increase in subsidies during this time, both Federal and local. The percentage of subsidies paid by the cantons and communes averaged 42 percent for 1933 as against 35.5 percent for 1929. {33}

Benefits.-Although the actual amount of benefits paid to an unemployed individual is determined by the provisions of the fund of which he is a member, a limit is set by the Federal law. As previously stated the maximum payable may not be in excess of 60 and 50 percent of normal earnings for persons with and without legal dependents, respectively. The average amount of benefits paid in 1933 was 5.34 francs per day.{34} The average amount of benefits was much higher during the depression years 1930,33 than during the previous years.

Over 215,000 individuals were compensated for loss of earnings through the Swiss unemployment insurance system during 1933. This number represented 40.5 percent of the total number insured. In 1930, 25.7 percent of the total number insured received compensation during the year.

Duration of Benefits.-The Federal law provides that the maximum period for which benefits are payable is 90 days within 360 days, but the Federal Council is given authority to extend this period

{29} Cf. Spates and Rabinovitch, op. cit., pp. 224-260.

{30} "Dix ans d'asseurance-Chomage en Suisse", La vie economique, septieme annee, no. 11, novembre 1934, p. 506.

{31} The amount of the subsidies plus the amount of members' contributions need not total an even 100 percent. If more money goes into the fund in a certain year than is paid out in benefits, this merely means that a portion is set aside as reserve for the following year.

{32} Metropolitan Life Insurance Co., Unemployment Insurance, Monograph one (revised edition) (New York, February 1935), p, 59.

{33} "Dix ans d'asseurance-Chomage en Suisse", La vie economique, septieme annee, no. 11, novembre 1934, p. 505.

{34} Ibid.. p. 507.

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in times of depression. During the year 1933 the statutory period of benefits to certain groups of workers was extended to 120 days under certain conditions. The average duration of benefits per beneficiary per year was 59 days for the year 1933. While the average duration of benefits has increased steadily during the operation of the system, the largest increase took place in 1932 when the average duration increased from 48.1 days in 1931 to 61.2 in 1932. The average duration of benefits per member was 23.9 days in 1933 as against only 4.8 in 1929 and 9.7 days in 1930.{35}

Waiting Period.-The minimum waiting period required by the Federal Law of 1924 was 3 days after registration, although some of the various funds specified longer periods under certain conditions. Order IV in 1934 liberalized this regulation by providing that the insured person need not serve another waiting period if he has not had full-time employment for at least 3 consecutive months. The waiting period for partial unemployment is only 24 hours with the same condition that if the insured has not had 3 consecutive months of full-time employment an additional waiting period is not to be required.

Qualifications for Receipt of Benefits.-The 1924 act provided that the funds should not pay benefits unless the insured person became unemployed through no fault of his own, had registered at an employment office, was unable to find suitable employment, produced a certificate from his last employer stating the reason for his unemployment, and paid contributions for at least 180 days. Order II of 1929 required individuals to be employed 150 days during the year preceding application for benefits in order to qualify under the definition of a person "normally employed in regular work." Special circumstances such as depression, sickness, or military service serve to modify the 150-day requirements.

Disqualification From Beneflts.-Order IV of 1934 modified the provisions of previously existing laws by providing that any person who becomes unemployed through his own fault or does not take advantage of suitable employment is excluded from benefits for at least 4 weeks in minor cases and 12 weeks in serious cases, and, in addition, the maximum duration of benefits for the individual is reduced at least 20 days for the benefit year or following year.

The definitions of "fault" and "suitable employment" were contained in Order I of 1925 discussed above.

{35} Ibid.