report() to be equal to 187.60 rubles ($96.61); according to the factory inspectors' reports for 1900 to 1904 the annual earnings were as follows:

AVERAGE ANNUAL EARNINGS OF WORKMEN IN RUSSIA, 1900 TO 1904.

An average earning power of about $105 per annum gives an average daily wage of approximately 35 cents; the average compensation for death contracted for by the employers amounted to about $350, or 1,000 times the daily wages, and the average compensation for permanent disability was about $450 or about 1,200 to 1,300 times the daily wage. The pension for permanent disability varied from about 5 to 10 per cent of this sum, depending upon the age of the injured, and so may be estimated at from $22 to $45 a year. Small as these compensations were, the system of insurance on a whole was more liberal to the workman than the then existing legislation. An official report upon the activity of the insurance companies in this line stated that "industrial conditions have advanced ahead of existing legislation which does not any more meet the demand of actual life."

The number of persons insured individually against accidents in private insurance companies increased from 1,148 in 1888 to 15,171 in 1898, the amount of the insurance against death at the end of the respective years being $5,198,956 in 1888 and $41,652,216 in 1898, and the insurance against permanent disability $6,220,654 in 1888 and $50,770,406 in 1898. The average amount of the death insurance per person decreased during this period from $4,529 to $2,746 and that of the permanent disability insurance from $5,419 to $3,347. The amount of premiums received increased during the ten years from $24,593 to $181,598, the average premium per person being $21.42 in 1888 and $11.97 in 1898. These figures show that the individual accident insurance included few persons of the working class.

The total amount of premium received and the benefits paid by the insurance companies as well as the other expenses of the companies in connection with accident insurance and the surplus remaining, are stated for both forms of insurance combined. The amount of benefits paid under the two forms of insurance has increased from $17,947 in 1888 to $585,548 in 1898. The expenses of the insurance companies

a Strakhovanie rabochikh v Rossii, 1909. A. A. Press.

other than for benefits, amounted to $275,204 in 1898. The reserve surplus and profits for 1898 was $318,994, or 46 cents per capita.

The business of accident insurance evidently was fairly remunerative, and the total profits were rapidly growing, amounting for the entire decade to nearly $900,000, notwithstanding the very high expenses for commission to obtain business (over $560,000) and for administration (nearly $500,000). Thus for the eleven years for which the statistical data are available $3,859,871 was received as premiums for insurance, while only $1,861,289 or less than one-half was used for actual compensation of the injured employees.

While with the increase of the volume of business the average per capita charge for administration had declined materially during the ten years, 1889 to 1898, the cost of commission for obtaining new business has shown a slight increase. There was a decline in the total per capita expense, from 90 cents in 1889 to 39 cents in 1898, and apparently the greater part of it appears in the increased per capita benefits paid to the injured employee. The per capita amount of compensation increased from 44 cents in 1889 to 84 cents in 1898, while the profits of the insurance companies which were high in the earlier years declined considerably. Under the influence of competition from newly organized accident insurance companies, the proportion of the premiums paid to the insured in benefits increased from 21.6 per cent in 1889 to 49.6 per cent in 1898. In 1898 the expenses other than for benefits were 23.4 per cent of the premiums and the surplus 27 per cent. The average premiums increased with the increase of the sum of insurance and also with the assumption by the companies of the civil liability of the employers from $0.70 per workman in 1888 to $1.46 per workman in 1898. Assuming the average wages for these 10 years to have been about $105, the average rate of insurance increased from seven-tenths of 1 per cent to about 1.4 per cent of the wage expense; it was considerably higher in some industries, as for instance in mining, which perhaps explains the small number of miners insured. This excessive cost of private insurance was mentioned as an argument for compulsory state insurance during the deliberations of the Congress of Commerce and Industry in 1896. It was also claimed that in actual practice private insurance did not prove as favorable to the employees as in theory, the insurance companies often forcing the injured workman to accept a very low compensation.

New regulations for insurance companies, issued after the act of June 2 (15), 1903, went into effect, provide substantially that the insurance company shall assume all the duties and responsibilities under the law of June 2(15), 1903, in consideration of the payment of a premium, agreed upon between the insurance company and the employer, in terms of a definite percentage of the latter's wage expense. It was the avowed purpose of the law to stimulate the insurance of

the employers' obligations under the law, although such insurance was not made obligatory. Rules for the regulation of such insurance were issued by the minister of interior on December 22, 1903 (January 4, 1904).

The insurance company may decline to accept any insurance without stating its reasons for so doing. The employer must furnish the insurance company with an exact account of its wage expense, including the expense for board and lodgings of the employees and other forms of remuneration for work. Such a contract relieves the employer of all responsibilities according to the law, the insurance society assuming all such responsibilities; it receives information of all accidents, and must meet its obligations without delay; and it makes agreements with the injured or members of their families. Whenever the accident is due to the fault of the insured employer, as established by the courts, this does not relieve the insurance company of its responsibility to the injured employee; but the insurance company may recover the cost of the compensation and pensions from the employer. Such insurance may be organized with participation of the insuring party in the profits, and then 75 per cent of the profits must be redistributed among the insured employees according to the amount of annual premiums paid. This was a modification of the plan of collective insurance.

Another form of insurance is also recognized, known as "insurance of employers' liability." This is a combined form of insurance, as it covers both the liability under the new law of 1903, and under the general civil laws when the new law is not applicable. Under this form of insurance the obligations of the insurance company are toward the employer and not toward the injured employee, and the obligations of the employer toward the workmen are not transferred by law. The agreement as to the amount of compensation is made between the employer and employee, but in presence of a representative of the insurance company, and the amount of the compensation agreed upon is binding upon the insurance company only when approved by its representatives; otherwise the insurance company assumes obligations only up to the amount approved by its representatives. It is evident that under such contract the employer will rarely agree to anything not acceptable to the insurance company. If, therefore, an amicable settlement is found impossible, the insurance company assumes all obligations which may be imposed upon the employer by a court of law, provided, however, that the insurance company is not responsible if the accident was due to the criminal negligence of the employer, as established by the verdict of the court. The obligations of granting medical assistance are not assumed by the insurance company.

This is a form of insurance of the employer rather than of the employee, and it does not fulfill the requirements of the compensation act in regard to insurance of workmen. These conditions somewhat approach the form of insurance proposed by the St. Petersburg Mutual Insurance Society, which failed to receive the approval of the Government in 1898.

From the first day of the application of the new law serious difficulties arose between the employers and the insurance companies. The law clearly meant an important extension of the rights of the employees, which was equivalent to an increased burden upon industry. But there were no definite data by which the cost of this law to industry could be determined, for the available statistics of accidents in Russia were for only one year and were incomplete. Insurance seemed the only way for the manufacturers to protect themselves from excessive losses; but in view of the increased amount of compensation as compared with that paid by the private insurance companies prior to 1903 the insurance companies were uncertain and the rates quoted to manufacturers for insurance were very high, being for some industries 10 or even 14 per cent of the wages. A concerted movement was started among employers to obtain from the Government some delay of the date of enforcement of the law; petitions to that effect from the mining operators and metallurgical establishments of the south, the iron and steel manufacturers of the Baltic Provinces and the north, and from the manufacturers' association of St. Petersburg. But all these petitions were declined by the authorities, and the law went into effect on June 1 (14), 1904.

Two courses were left open to the employers who objected to the excessive rates quoted by the private insurance companies: Either to take the risk upon themselves and carry no insurance, or to organize mutual insurance companies. In the beginning a majority of employers preferred the first course, while the larger establishments organized private insurance funds for themselves. The experience of some industries during the first year established the fact that the cost was far below the estimates of the private insurance companies. As a result the amount of private accident insurance rapidly fell since 1903. Unfortunately it was impossible to obtain complete data in regard to the activity of all private accident insurance companies since the enactment of the law. But the tendency is sufficiently clearly demonstrated by the data in regard to the insurance company "Rossiia," which was the leading accident insurance company in Russia. In 1898 356,179 wage-workers out of a total of 684,766 insured, or 52 per cent, were insured in "Rossiia." In the year 1905 there were only 87,015 persons insured, being a decline of 75 per cent in 8 years. The number of persons insured under the collective form in this company for the 7 years 1900 to 1906 is shown, together with

the amount of insurance carried, in the following table. The decrease is seen to have been over 80 per cent. The decline began as early as 1901, when the probability of some law granting compensation to injured workmen became strong, and because of the growth of mutual insurance. From 1902 to 1903, when the law was passed, the decline was 22.2 per cent, or nearly one-fourth. In 1904, when the law went into effect, the decline was almost one-half.

NUMBER OF PERSONS INSURED AND TOTAL AND AVERAGE AMOUNT OF INSURANCE AGAINST ACCIDENTS UNDER THE COLLECTIVE ACCIDENT INSURANCE OF THE ROSSIIA COMPANY, 1900 TO 1906.

EMPLOYERS' MUTUAL ACCIDENT INSURANCE ASSOCIATIONS.

A movement toward mutual accident insurance appeared among the more progressive manufacturers in the middle of the nineties, simultaneously with the growth of private insurance. The Riga plan was the first outgrowth of this movement.

The authorization by the Ministry of Finance of the by-laws of the "Riga Society for Mutual Insurance of Manufacturers and Artisans against Accidents to their Workmen and Employees" in January, 1898, marked a definite step toward progress. A plan of a mutual insurance company was also elaborated by the manufacturers of Odessa which was more liberal than the Riga plan, but after the approval of the Riga plan by the Government the Odessa employers accepted its by-laws for their own organization.

The Riga society, though a purely voluntary association, considerably influenced further legislation, and therefore deserves special consideration. In addition, as an organization of the employers only, it extended its liability, i. e., the liability of employers, beyond the limits established by law and most favorable judicial decisions. The society undertook to conduct the defense, in all cases where a lawsuit had been instituted, and to meet the burden of a judgment. While this determines the responsibility of the society toward the employers, the by-laws separately stated the obligations toward the employee,