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exceed $850 per annum, and who is landless. In his annual report for 1911 the superintendent of workers' dwellings thus summed up the benefits from the act: “Except for the deposit of ten pounds ($18.67) no capital is required; the land is cheap, the government being able to secure convenient blocks at a lower price than is ordinarily paid for single sections; the cost of erection is reduced to a minimum. there are practically no legal charges, and every facility will be given to purchasers to pay any extra sums off the principal owing whenever they may be able to do so." (1911 Report, p. 2.)

Government guaranty of bonds of building companies. The province of Ontario, Canada, has developed a method of combining government aid and private initiative through the guaranty of bonds of incorporated companies which devote themselves to the improvement of housing accommodations. A recent report of the Bureau of Labor of the province gives the following account of the plan:

“An important act was passed (May 6, 1913) to encourage housing accommodation in cities and towns. This law enables city or town councils to guarantee the bonds of an incorporated company with a share capital, whose main purposes are the acquisition of lands in or near a city or town in Ontario, and the building thereon of moderate sized dwellings to be rented at moderate rents, if the council is satisfied that additional housing accommodation is urgently needed, and provided that the main purpose of the company is to help in supplying need and not to make profits. The by-law guaranteeing the bonds must be approved either by the ratepayers or by the provincial board of health. Before the guaranty is given the location of the lands selected and the general plans for the houses shall be approved by the council, or a committee thereof. The total amount of the securities to be guaranteed shall not in the first instance exceed 85 per cent of the value of the lands and improvements. A council which guarantees the bonds of such a company may be represented on the board of directors by one member of the board. The company may not declare a dividend exceeding 6 per cent per annum, but if the dividends in any year do not amount to 6 per cent, the deficiency with interest may made up in any subsequent year or years. Any profits remaining after paying a 6 per cent dividend, making up any deficiencies, and providing a reasonable contingent fund, shall be expended in acquiring more lands, improving the housing accommodation, or redeeming the capital stock. The shares so redeemed shall not become extinct, but shall be held by a board of trustees.”l

Under this act and very shortly after its passage, the city council of Toronto voted to guarantee bonds to the amount of $850,000 in


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1 Fourteenth Report of the Bureau of Labor of the Province of Ontario, 1913. Toronto, 1914, p. 308.

favor of the Toronto Housing Co. This company had been active in
pushing the above legislation.”

Farm loans and housing in cities. The problem here under discussion has two aspects: (1) The provision of proper housing facilities. (2) Ownership of homes. The matter here under discussion bears a close relationship to the problems of farm tenancy and farm loans, discussed in Bulletin No. 13 of this series.


2 United States, Department of Labor, Bureau of Labor Statistics, Bulletin, Whole No. 158, Government aid to home owning and housing of working people in foreign countries. Ost. 15, 1914. Washington Gov. print, 1915, p. 439.

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Compulsory health insurance. Compulsory health insurance has been adopted in a large number of industrial countries since its first adoption in Germany in 1883. For some years there has been a strong movement for the compulsory health insurance in this country, and this movement has been primarily directly by the American Association for Labor Legislation, which has prepared a model bill upon the subject. The proposal of this association has been introduced in a number of state legislatures. The movement for compulsory health insurance did not begin actively in this country, until after workmens' compensation laws had been passed in a number of states.

In a number of states, commissions have been appointed to investigate the subject of health insurance. A Massachusetts commission reported in 1917 in favor of compulsory health insurance, but a second commission in 1918 made a contrary recommendation. Perhaps the three most important reports prepared by state coinmissions are those of California in 1917, and of Ohio and Illinois in 1919. The California and Ohio commissions reported in favor of health insurance, and the Illinois commission against health insurance.

In view of the fact that compulsory workmen's compensation laws have been upheld by the United States Supreme Court and that some of these laws are organized upon an insurance basis, it is possible that the courts would uphold the validity of compulsory health insurance. However, this matter is doubtful, and the California commission recommended the adoption of a constitutional amendment expressly authorizing compulsory health insurance. A proposed amendment was submitted in California in 1918 and rejected by the people. The text of this proposed amendment is here quoted: "It is hereby declared to be the policy of the State of California to make special provision for the health and welfare and the support during illness of any and all persons, and their dependents, whose incomes, in the determination of the legislature, are not sufficient to meet the hazards of sickness and disability, and for the general industrial welfare in this connection. The legislature may establish a health insurance system applicable to any or all such persons, and for the financial support of such system may provide for contributions, either voluntary or compulsory, from each of the following, namely, from such persons, from employers, and from the state by appropriations.

1 A full review of the subject with respect to Illinois will be found in the Report of the Health Insurance Commission of the State of Illinois. 1919. p. 647. See also Report of the Ohio Health and old Age Insurance Commission, 1919, p. 448.

"The legislature may confer upon any commission or court, now or hereafter created, such power and authority as the legislature may deem requisite to carry out the provisions of this section.

“The provisions of this section shall not be controlled or limited by any other provision of this constitution, except the provisions thereof, relating to the passage and approval of acts by the legislature and to the referendum thereof."

Unemployment insurance. The subject of unemployment insurance assisted by governmental funds has not been actively discussed in this country but may be presented in some manner to the constitutional convention. This whole subject will be found thoroughly discussed in a book by I. G. Gibbon, Unemployment Insurance. A study of schemes of assisted insurance (London, 1911).

Old age pensions. Governmental pension schemes exist in Illinois for teachers and for a number of classes of local employes. A full statement regarding these pension schemes will be found in the reports of the Illinois Pension Laws Commission. In the Pension Laws Commission Report for 1918-19 will be found a full review of the constitutional aspects of legislation providing for pensions of public employes. Another type of so-called pension legislation in this state is that which has to do with mothers' pensions. There has been no effort to enact pension legislation in this state other than that based either on the notion that a pension is part of an official compensation or upon the notion that the pension is a means by which the state takes care of its wards. In the case of People v. Abbott, 274 Ill. 380 (1915) the Supreme Court said as to pensions of public employes : "Such pensions generally are not considered donations or gratuities. The rule in the majority of jurisdictions is that the legislature has power to require municipalities to pension their employes and raise the funds for that purpose."

A plan of old age pensions involves different constitutional elements from the pensions just referred to, although old age pensions may perhaps be constitutionally justified on the ground that they constitute a legitimate means of preventing pauperism.

Old age pensions have been adopted in a number of countries. A full review of English legislation and its operation will be found in a book by H. J. Hoare, Old Age Pensions (London, 1915).

The subject of old age pensions has been investigated in recent years by several state commissions. A report of a special commission in Massachusetts in 1910 was adverse to old age pensions and compulsory old age insurance and recommended that if any scheme were adopted it should be a voluntary contributory scheme. A report was made in 1919 by a Pennsylvania commission on old age pensions. This report gives a complete review of old age pensions in all countries which have adopted such a plan. It discusses separately the voluntary and subsidized systems; the system of compulsory, contributory old age insurance; and the non-contributory or straight pension system. In 1919 also a report on health insurance and old age pensions was made by the Ohio Health and Old Age Pension Insurance Commission.

2 'Report of Illinois Pension Laws Commission 1916. Report of Illinois Pension Laws Commission, 1918-19.

Little has been done in this country in the form of legislation regarding old age pensions. Massachusetts adopted in 1908 a plan of savings bank insurance which was intended to enable wage earners to secure life insurance or annuities at the lowest possible cost, and to encourage savings among workingmen. The expense of administering the savings bank insurance is borne largely by the state. Wisconsin in 1911 adopted a state insurance system, although the expense of the administration in this state is paid from the insurance funds.

"No system of old age pensions is in force in continental United States but the territory of Alaska has an optional system whereby an aged person may receive a monthly pension of $12.50 in lieu of going to the Pioneers' Home at Sitka. The recipient of a pension must be 65 years of age or over and a resident of Alaska for 10 years or since 1905. Arizona adopted an old age pension plan through an initiated act adopted November, 1915, but being crude and plainly unconstitutional in its form, it was promptly declared void by the Arizona Su

preme Court."3

The New Hampshire House of Representatives sought in 1917 the advice of the Supreme Court of that state as to the constitutionality of old age pensions. New Hampshire has a constitutional provision that “Economy being a most essential virtue in all states, especially in a young one, no pension should be granted but in consideration of actual services; and such pensions ought to be granted with great caution by the legislature and never for more than one year at a time.” The court took the view that the constitutional provision prohibited a system of old age pensions. A similar view would almost necessarily be taken by the courts, upon the basis of constitutional provisions regarding pensions in Maryland and South Carolina.

Constitutional problems in connection with social insurance. The constitutional problem with respect to social insurance primarily concerns the use of public funds in aid of such schemes. It may be regarded as constitutionally doubtful whether the general assembly of this state may appropriate or authorize the appropriation of public funds for the payment of unemployment or health insurance or of old age pensions. A full discussion of the constitutionality of old age pensions will be found in F. J. Goodnow's Social Reform and the Constitution (New York, 1911).

3 Report of Ohio Health and Old Age Insurance Commission r 271.

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