The experience of the governmental offices al ready not afford conclusive evi dence either for or against public insuranee. Pradie fire insurance offices have been maintained for many years by some of the Prnssian towns and by some of the Swiss communes. All sorts methods hate been tried—governmental monop oly with elmtpull.ory insuranee. governmental monopoly with voluntary insurance. compulsory insurance with choice of public or private office, and voluntary insurance with the same choice. The experienee of the public offices is on the whole. unfavorable to governmental insurance. The governments have generally found it neces sar• either to intnaluce a large amount of for mality and supervision, thus tendering the busi ness unpopular, or to adopt a loose classifica tion of risks. which, in eases where the com petition with private companies taus le,1111111 in the better risks going to the private companies trial a more accurate classilivation, and the poorer risks going to the Government alive. Finally, all these public offices are on so intuit a scale, generally limited to a single town or commune. that they have failed to realize the great advantage which comes trout a large num ber of well-distributed risks. viz. the relatively slight fluctuation in loss front year to year.
The English Gmernment has for nearly forty years otn.rot life insuranue to its citizens through the Post•otlice Department. It has trade 110 at• tempt to develop the business, either through personal canvassing by its agents, after the manner if private companies, or through adver tising. The amount of business written has been very small. This experienee, however, is not conclusive as to the results of a similar ex• periment in the United States, when the habit of is more thoroughly established than in any other country, except possibly New Zealand.
New Zealand furnishes the only example of a thoroughly successful governmental life insut ance office. In this ease, however, the success of the (Mice has been largely due to the deliberate aolopthm of the methods of private emnpanies, especially the solicitation of business through agents paid by commissions. This has prevented the (Alice from realizing any great economies of umnagetnent, and its rates do not ditTer much front those of private otliees. NeW Zealand is Said to have a greater per capita amount of life than any other country. and a little over half the business is taken out through the lnrblie olliee.
The experienee of European governments in establishing eompulsory insurance of working is of little service in estimating the value 4d governmental insurance. Germany has the most thorough system of workingmen's insurance, and its methods may he taken as typical. The hnst• is organized in three separate departments acchlent insurance, sickness insurance, and old age and invalidity insurance. All the indemni ties paid for aecidents, as well as the cost of adtninistration, are borne by the employers; the laborers make no contribution in any form. To the indemnity for sickness and the cost of nmn agement the employers contribute ;me-third and the laborers two-thirds. 'rho cost of manage
ment of the oI41 age and invalidity insurance is borne by the Government, and the Government also makes a contribution to uwnry pension grant ed; if the remainder of the pension, one-half is paid by the employers and one-half by the lalair ers. It is clear, therefore, that it is only by a loose use of language that the term insurance can be applied to the system. It is in reality an elaborate system of poor relief, and its success or failure has little significanee for the question of the practicability of the publie management of insurance On scientific principles. The eon elusion is therefore Unavoidable, that while the economie and social benefits of insurance are dispote_ and while the advantages of on ideally perfect system of governmental insurance would be many and great, the political dangers involved in the extension of governmental activ ity into this field, and the experience of such governmental offices as have been estab lished, both point to the necessity of extrnne caution in attempting to introduce the system of governmental insurance.
The only feasible alternative to governmental management of the insurance business is gov ernmental regulation of private companies. This is the method actually in use in nearly all civi lized countries. The degree of regulation and supervision varies greatly from one country to another. There is as little of it in England as in any country, and as much of it in the United btates as anywhere. in the latter country each State regulates the business within its own bor ders, and imposes such restrictions on the activi ties of the companies as it sees fit. The most general provisions are the requirements of annual reports from the companies, exhibiting in detail the business for the preceding year, and the requirement of a reserve bearing a certain ratio to the amount of insurance in force. Some of the States have. shown a disposition to impose vexatious conditions upon the companies, the only effect of which is to increase the cost of in surance within their borders. But however reason able the laws of each State, considered by them selves. may be, the variation in the requirements of different States, and the multiplication of reports and examinations, impose a great deal of unnecessary expense on the companies. all of which in the end must come out of the policy holders. Insurance men and State officials alike join in the attempt to bring about greater uni formity among the requirements of the different States. It would be a great gain in this respect, as well as for other reasons, if the National Government would take over the regulation and supervision of the insurance business. Unfortu nately, the United States Supreme Court, in the ease of Paul vs. Virginia, has ruled that the business of insurance is not commerce; that consequently it is not interstate commerce when an insurance company incorporated in one State carries on business in another; and that, there fore, the regulation of the business is reserved to the individual States.