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In the second year of the experiment, the masons, roofers, white washers, and plasterers were excluded because for them the certainty of unemployment existed. It was argued that the theory of insurance presupposed protection only against an unexpected or uncertain emergency; then the insurance premium corresponds to the degree of probability of the emergency arising; but if the emergency is sure to arise, insurance appears to be unnecessary. Other trades were added in the place of those excluded, namely, workers in ammunition factories, shoemakers, hat makers, tanners, carriage makers, leather workers, bakers, pewterers, horseshoers, brass workers, bridge workers, saddlers, stonecutters, chiselers, dyers, turners, and glaziers. Other changes also were introduced. It was thought desirable to prefer for insurance such persons as have shown a tendency to some providence, and therefore the right to receive benefits was limited to persons having a savings-deposit book for at least one year. Persons keeping steady employment with the same employer were thought worthy of encouragement, as against workmen constantly changing one employer for another, and therefore the right to receive benefits was limited to persons who had worked for at least one year for the same employer. The same limits of the benefits remained, i. e., 40 days and a total of either 24 or 40 lire ($4.63 or $7.72). The required evidence of unemployment was simplified.

In the year 1898-99 further modifications were introduced. The required period of ownership of a savings account was reduced from 1 year to 3 months and subsequently to one month. The required period of continuous employment was also reduced from 1 year to 6 months. Women working in the specified industries were also admitted to this form of insurance, and the list of industries was extended to include the employees of military arsenals, tobacco manufacturing, and the manufactures of mineral and sparkling waters. Private employees and the management of government establishments endeavored to stimulate this form of insurance by special prizes and privileges. But all these modifications and changes in regulations failed to arouse the interest of workmen in this institution, and the possibility of losing the 5 lire (97 cents) of premium proved an effective barrier against any considerable extension of the system. According to the report of the directors, the main cause of failure was the insurance principle itself, as the danger of protracted unemployment was not great in Bologna, except in the building trades, to which the insurance principle was claimed to be inapplicable. As a result the insurance principle was entirely abandoned and in its place was substituted a system of individual savings for a definite purpose, with a subsidy to such savings added mainly to promote the habit of saving. New regulations were therefore prepared in 1901. The exclusion of the building trades was discontinued, since only by the difficulties of application of the insurance principle was this exclusion justified.

The basis of the new regulations was individual accumulations by means of deposits in the savings bank, upon which the bank was to pay interest. The interest upon the fund of 200,000 lire ($38,600) was to be distributed among this group of depositors proportionately to their deposits during the current year, but not to exceed the actual amount of deposits, or 40 lire ($7.72), to one person within any one year. These additional credits were to be interest bearing like the original deposits. The essential features making these saving deposits a form of unemployment relief are the rules that withdrawals from the account may be made only if proof is furnished that the depositor is at the time unemployed without any fault of his and that the withdrawals must not exceed 1.50 lire (29 cents) per day. These withdrawals must be made by the depositor in person, and if he, while out of work, endeavors to make withdrawals through another person without giving a satisfactory reason for such action he loses the credits already given him, with the interest accrued, and the additional credits due during the year. The additional credits and the interest accrued on these remain on the account of the depositor for the following year if not used during the current year. In case of death of the insured these credits and the interest accrued, if not used by the depositor, revert to the fund, while the contributions made by the insured and interest on these contributions revert to the heirs. Thus, a workman participating in this plan of unemployment relief does not run any risk of losing the savings made. The new plan of 1901 reduced itself to gratuitous contributions by the bank, without any risk on the part of the depositor. This proved more popular, and the number of depositors grew so large that it soon became doubtful whether it would be possible to pay the maximum bonus of 40 lire ($7.72) allowed by the regulation. As this maximum limit was likely to give rise to an impression that such bonuses would actually be paid, it was eliminated from the regulation, and the determination of the limit was left entirely to an administrative council.

In the same year persons under 18 years of age were excluded, and to persons from 18 to 21 years the daily compensation was limited to 1 lira (19 cents), because it was feared that in case the daily benefit was higher than the earnings of the young persons the system of unemployment relief might prove a factor for the encouragement of laziness and unemployment. Later it was also decided to exclude female wage-earners because of the difficulty experienced in establishing the lack of employment in lines of female work. Toward the end of 1901 the influx of depositors was so great that it was found necessary to increase the fund by another 100,000 lire ($19,300) and to limit the members to residents not of the province, but of the city of Bologna. The increase of depositors under this form continued, however, and by 1903 it became evident that a further reduction of the bonuses below an amount which would be at all adequate was necessary unless further restrictions were placed in the classes of persons admitted.

All wage-workers under age were therefore excluded under the assumption that they had lighter obligations and often had the chance of obtaining relief from their homes. Persons over 65 years of age were also excluded because at that age unemployment assumes the nature of invalidity and must be handled as such. Notwithstanding these limits the cost of this system grew. very rapidly, and soon various abuses asserted themselves, such as deception concerning conditions of unemployment, voluntary unemployment, fraudulent deposits through loans so as to increase the available sum of benefits. The detection of these fraudulent practices became a very difficult matter. Against the commonest form of fraud, that of an employed wage-worker receiving unemployment benefits, the remedy was proposed of demanding the daily appearance of those claiming benefits so as to establish the fact of unemployment. It was even suggested that the unemployed appear twice a day, since it was quite apparent that no employed worker could absent himself twice a day from his shop and keep his employment. But the consideration of the discomfort to the unemployed by doubling trips in all kinds of weather, sometimes over great distances, with the temptation to spend, prevailed against this plan.

The measures taken for prevention of fraud were not altogether satisfactory, and in 1903 the director was forced to announce at a meeting of the unemployed that unless some method was devised to prevent fraud this activity of the bank would have to be discontinued. As a result a commission of labor delegates was elected, consisting of five members. The commission brought in the following suggestions: That the subsidized unemployed be required to assemble daily, that they remain there for 2 hours (1 to 3 p. m.), the doors being closed after the appointed hour.

This plan was not adopted because it was feared that it would cause too much complaint and irritation. The establishment of a vigilance committee was also suggested, but objection was found to it on account of the hostility to which the members of such committee would be exposed.

It proved difficult to suggest a way to counteract the other frauds mentioned.

Altogether there were 691 persons registered under this form of insurance or relief in 1903. Their deposits and other credits amounted on December 31, 1903, to 31,570.87 lire ($6,093.18). After the winter unemployment, i. e., on March 31, they equaled 20,252.64 lire

($3,908.76) and on May 31, 20,665.86 lire ($3,988.51). The fund from which interest is used to pay the bonuses to the persons insured equaled 356,300 lire ($68,765.90).

There evidently were two well-defined periods in the history of this experiment. As an insurance scheme it was a complete failure because the classes concerned refused to take any interest in the matter. In the latter stage it became a system of subsidizing individual savings and rapidly became popular, but led to various forms of malingery and fraud. It has also been pointed out that because of the total absence of any connection between this system of relief and the institutions for finding employment it had no influence on the reduction of the unemployment period.

The total number of savings books issued by the Bologna Savings Bank under the form of unemployment insurance up to October 31, 1904, was 865, of which 173 became extinct, leaving active accounts on that date of 692. By occupation, these owners of books were distributed as follows:

NUMBER OF SAVINGS BOOKS ISSUED FOR UNEMPLOYMENT INSURANCE BY THE BOLOGNA SAVINGS BANK UP TO OCTOBER 31, 1904, BY OCCUPATIONS.

(Source: Bollettino dell' Ufficio del Lavoro, Vol. IV, 1905.)

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This form of insurance was evidently used almost exclusively by the building trades, for whom some period of unemployment is certain. According to the regulations, the distribution of the bonuses to the accounts was made on December 31, and on the basis of the deposits made during the twelve months ending on October 31 preceding. In the following table is shown the amount of deposits for the year November, 1903, to October, 1904, by months, and it appears quite evident that the deposits did not rise to any considerable amount until toward the end of the year.

NUMBER AND AMOUNT OF DEPOSITS FOR UNEMPLOYMENT INSURANCE IN THE BOLOGNA SAVINGS BANK FOR THE FISCAL YEAR ENDING OCTOBER 31, 1904.

(Source: Bollettino dell' Ufficio del Lavoro, Vol. IV, 1905.)

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The total amount credited to these 692 accounts in October, 1903 was 18,931.02 lire ($3,653.69), so that the total amount deposited on October 31, 1904, reached the sum of 28,943.22 lire ($5,586.03). The amount of bonuses distributed was 7,440 lire ($1,435.92), only 328 persons qualifying for such bonuses. The total amount withdrawn for unemployment relief during the following eight months, November, 1904, to June, 1905, was 16,290 lire ($3,143.97), distributed, by months, as follows:

NUMBER OF DAYS OF UNEMPLOYMENT AND AMOUNT WITHDRAWN FROM THE

BOLOGNA SAVINGS BANK FOR UNEMPLOYMENT RELIEF FOR THE EIGHT MONTHS ENDING JUNE 30, 1905.

(Source: Bollettino dell'Ufficio del Lavoro, Vol. IV, 1905.)

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The entire activity of this form of insurance might be designated as an effort to encourage the saving of summer earnings for use during the winter unemployment. Some such process is inevitable in seasonable trades, like the building trades, to which almost all the beneficiaries of this plan belong. In the case of the Bologna Savings Bank a very high bonus of over 50 per cent is given to the persons practicing this form of saving.

Notwithstanding the modest limits of this activity, it was again felt necessary, in 1905, to "proceed cautiously," as the director of the bank states in his last report, () so as to prevent an undue pressure

a Bollettino dell'Ufficio del Lavoro, Vol. XIV, Oct., 1910, pp. 697-702.

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