Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 5, 1881

No. 286.
Mr. White to Mr. Evarts.

[Extract.]

Legation of the United States,
Berlin, February 21, 1881. (Received March 9.)

No. 182.]

Sir: The opening of the Imperial Parliament (Reichstag) took place on the 15th instant. Very little interest was manifested in the ceremony itself, since neither the Emperor nor the Chancellor took part in it.

But upon the speech from the throne very general attention was concentrated. It was expected to contain a programme for a new system of dealing with taxation and labor throughout the empire, of which the public has heard much for some time past. Intimations as to the immediate future of Europe, whether peaceful or warlike, were also looked for.

As to the general concerns of Europe, the speech was neither full nor clear, yet, on the whole, indicated expectations of peace.

As to the internal affairs of the empire, public expectation was more than realized. Bills were announced of the greatest importance to the millions concerned, and of deep interest to all students of politics throughout the world. For the idea which underlies and permeates them all is socialistic; the idea that the advancement of the laboring classes is to be left not merely or mainly to individual foresight or energy, but to society as a whole, acting through its constituted authorities. These bills are presented with the express declaration that the Imperial Government thus begins to redeem the promise made at the introduction of the law for the repression of socialist excesses in October, 1878—a promise to prepare measures for the relief of the working classes. On this point the speech lays stress in more than one passage.

These measures, which seem generally considered as only a first installment, involve relieving the working classes of direct taxation, the creation of a system of guilds or trade corporations, a change in the laws regarding crimes committed during intoxication; but, above all, a system under which the state shall insure certain large classes of workmen throughout the empire, in view of disability or death, the premiums to be collected in stated proportions by government officials from employers, employed, and sundry local boards.

Of course, this cannot strictly be called the beginning of government upon the socialistic theory, since we have already seen here the absorption of the railways by the Prussian State, and various other measures clearly based on the theory that “that government is best which governs most;” but it is clearly the beginning of a new stage in the practical development of the theory, a development which I am assured, after talking with many of the most noted statesmen and thinkers of the empire, will go on logically to embrace all workmen under a State insurance scheme, which would seem to have no logical end short of that which the extreme socialists have advocated as the “organization of labor.”

These projects will no doubt meet with much opposition and be considerably amended, but the expectation generally is that, in their main features, they will become law. It has been thought by many that Bavaria would declare against them, but the recent speech of the Bavarian minister, President Lütz, seems to indicate ultimate acquiescence in the national insurance scheme by the second of the leading German states. With Prussia and Bavaria acting together, there is little indeed to be feared from the lesser governments.

Whatever may be the value of the other parts of the plan, that which proposes to remove the taxation from working classes, will hardly gain universal applause, since the result is arrived at, not by retrenchment either of military or civil expenditure, but by substituting indirect for direct taxes.

* * * * * * *

Any one who has studied at all thoughtfully the chancellor’s idea of government can hardly fail of the conclusion that these measures are the legitimate result of a certain theory which he has long cherished. Its germs lie in his character, and they have been developed not only by his own reasoning, but by that of his most intimate advisers. This theory appears to be simply that the empire must thrust its roots clown among the working classes; that it must draw support from their most cherished interests and hopes; and that all classes must be impressed more and more with the idea that provision both for their own present wants and for the future wants of their families depends first of all upon the stability of the central government.

I inclose a translation of the Imperial speech, and of the national insurance bill; also the original text of the same in full, with annotations.

I have, &c.,

AND. D. WHITE.

[Inclosure 1 in No. 182.—Translation.]

Speech from the throne.

Honorable Gentlemen: His Majesty the Emperor and King has been graciously pleased to commission me to open the sittings of the Reichstag.

The imperial budget to be laid before you without delay will enable you to review the results hitherto yielded by the tax reform inaugurated two years ago, and still further promised by it. In the economic and financial outcome thus far reached the allied governments view an appeal to proceed further in applying the fundamental idea of that reform, so as in this way not only to bring about the financial independence of the empire, but also to put within the reach of the Federal States farther means of reconstituting their taxation system, of alleviating pressing burdens, and of bettering the lot of the working classes. How much the imperial treasury can already hand over to the separate States for these purposes will only be apparent on the surpluses from the new customs being definitely ascertained. Even now, however, the allied governments believe it their duty to aim at the increase of the revenue to be applied to such objects by a new stamp law and brewing-tax arrangement.

Already at the opening of the Imperial Parliament, in February, 1879, His Majesty the Emperor, referring to the (socialist) law of the 21st of October, 1878, expressed the hope that the Reichstag would not refuse its further co-operation in the path of legislation for the cure of social evils. The remedy, however, will not have to be exclusively applied in the shape of an effort to repress Socialist excesses, but will also have to be equally sought for in a positive attempt to promote the welfare of the laboring classes, and in this respect care for the indigent and the incapable must occupy a prominent place. In the interest of those His Majesty the Emperor has primarily caused to be laid before the federal council a workingman’s accident assurance bill, aiming at meeting a want equally felt by laborer and labor-giver. His Majesty the Emperor hopes that this will be approved in principle by the allied governments and welcomed by the Imperial Parliament as complement to the legislation directed against the tendencies of social democracy. The provisions hitherto in force for protecting laboring men from the perilous consequences of incapacity to work, resulting from accidents or helpless age, have proved to be insufficient, and this inadequacy has contributed not a little to induce members of this class to seek means of relief in assisting the efforts of social democracy.

In the same stage, too, and in a closely related region, there is a bill calculated to regulate the constitution of the guilds by affording means for organizing the isolated powers of persons engaged in the same trade and forming them into corporate societies, thus raising their economic capacity as well as their social and moral efficiency.

On repeated occasions has the Reichstag expressed the wish that the survivors of imperial officials should be provided for by law, and in conformity therewith a bill will be laid before you in favor of the widows and orphans of those public servants.

A very considerable increase in the number of crimes and offenses committed in a state of drunkenness, and thus at present beyond the reach of criminal chastisement, has necessitated an extension of the existing penal code, and a bill to this effect will therefore be placed before you for approval.

Some changes in the constitution aiming at the establishment of biennial budget periods had already been submitted to you in the previous session, and as the allied governments are now, as formerly, under the weight of difficulties inseparable from the annual and simultaneous sitting of Imperial and Provincial Parliaments, they will again lay before you the undisposed of bill.

With the Governments of Greece and Brazil negotiations are pending for the conclusion of consular conventions. I hope that this will be achieved in the course of the session, and that before its close your approval of these treaties will be obtained.

In all foreign states the German Empire is in the enjoyment of peaceful and benevolent relations, and in particular our political attitude to the great empires our neighbors corresponds to the friendship which personally knits His Majesty the Emperor to the rulers thereof. Among the European powers there prevails not only a full agreement of their will to preserve peace, but also no theoretical difference of opinion as to the essential aims of the negotiations now pending between them. I am therefore empowered to give expression to the trust of His Majesty the Emperor that the unity of the powers will succeed in preventing even partial breaches of the peace in Europe, or, at any rate, so limit them as that they neither affect Germany nor its neighbors.

[Inclosure 2 in No. 182.—Translation]

Project of a law in regard to the insurance of the workmen employed in mines, manufactories, and other industries, against the results of accidents happening to them in consequence of their employment.

We, William, by the grace of God Emperor of Germany and King of Prussia, decree, in the name of the Empire, with the approval of the Federal Council and Parliament, as follows:

§ 1. All the workmen and employés in mines, salines, reducing establishments, quarries, excavations, docks, the construction of buildings, building yards, manufactories, and smelting works, whose yearly wages or salary is not over 2,600 marks, are by the provisions of this law to be insured against the consequences of accidents occurring in their employment, by an insurance institution to be established by the government and managed on its account.

To the above-mentioned, belong by the terms of this law those employments also in which steam boilers or machinery moved by natural forces (such as water, steam, gas, hot-air, &c.) come into use, with the exception of ships and railways, as also that class of works in which a machine not belonging to the workshop is only temporarily used.

Under wages or salary, in the meaning of this law, are included percentage of profit and payment in kind. The value of the latter is to be estimated according to the local market price. The value of yearly work, so far as it is not regulated by the total of the fixed weekly sums, is three hundred times the daily wages.

§ 2. The imperial insurance office has its location and headquarters at Berlin. Complaints of insurance management can be brought against the office according to the choice of the insured, either before the competent court of the seat of the institution, or of the seat of the branch office which has negotiated the business.

§ 3. The organization and administration of the imperial insurance office will be, so far as this law does not provide any regulations therefor, governed by rules fixed by the Emperor in co-operation with the Federal Council (Bundesrath).

Those rules especially apply to the following points:

1. The composition and duties of the managing board.

2. The proper offices and their functions to be opened in connection with the circuits of the higher administrative authorities.

3. The formation of a reserve fund.

4. The administration and investment of the cash funds, and especially of the reserve fund.

5. The principles according to which the yearly accounts are to be made up, and the auditing of them.

6. The publication of the balance-sheets.

7. The form of the announcements to be made by the office and in what papers they are to be published.

§ 4. The tariffs and conditions of insurance will, in so far as this law does not provide for them, be determined by the Federal Council (Bundesrath).

The tariffs must undergo a revision every five years at least.

§ 5. The object of the insurance is a compensation for the injury which results from a bodily wound producing an incapacity for work of more than four weeks, or death.

§ 6. The compensation to the insured in case of injury shall consist of—

1. The cost of the medical treatment from the beginning of the fifth week after the occurrence of the accident.

2. A payment to be made to the injured person from the beginning of the fifth week after the occurrence of the accident for the duration of his incapacity for work.

This is to be reckoned according to the amount of the average wages which the injured person has received during the time of his labor on the works where the accident occurred.

If his services have lasted longer than a year, then the average wages of the last year are to serve as a basis.

The compensation is to consist—

a. In case of entire incapacity for work and for the duration of it of 662/8 per cent. of the wages.

b. In case of partial incapacity for work and for the duration of it a fraction of the income under “a,” which is to be measured by the amount of remaining capacity of not less than 25 per cent. and not more than 50 per cent. of the full wages.

§ 7. The compensation to the insured in case of death shall consist of—

1. Ten per cent of the yearly wages as compensation for costs of burial.

2. In case of death later than four weeks after the accident, the cost of the medical treatment after the expiration of that period, and aid to be granted during the further time of his illness to the amount of 662/8 per cent. of the previous pay.

3. A payment to he made to the survivors of the deceased from the date of death, and to be estimated according to the terms of § 2, No. 2, clauses 2 and 3.

This amounts to—

a. For the widow of the deceased until her death or her remarriage, 20 per cent. of his wages; for each surviving child of the marriage with the deceased until the completion of its fifteenth year, 10 per cent. of the wages, which, however, must not exceed 50 per cent. of the wages.

b. For every motherless orphan, as also for every orphan whose mother marries again, during the period up to the completion of their fifteenth year, 10 per cent., but for all the children together not more than 50 per cent. of the wages.

c. For the ascendants of the deceased, if he was their only support, 20 per cent. of the wages until their death, or until the necessity for it ceases.

If there are several claimants under the above c, then compensation will accrue to parents before grandparents and to male claimants before female ones.

If the claimants under c conflict with those under a and b, then the claim of the former is only valid so far as the maximum amount of the compensation has not been claimed by the latter.

§ 8. Any claims which the insured have against registered aid societies or other societies insuring against illness, death, or incapacity suffer no prejudice through the terms of the compensation in the preceding § § 6 and 7.

Provincial regulations under which such societies are required to give assistance to injured workmen or their survivors become inoperative when the provisions of this law apply in the case.

§ 9. For every industry included in § 1 a collective insurance covering the persons employed in it must be taken out by the payment of a fixed premium, which is to be estimated every quarter by the amount of wages or salary paid during the past quarter to the persons employed.

§ 10. The rates of premium for the different kinds of work, according to the classes of danger, are to be based on a percentage of the wages or salary; so that the costs of the management of the insurance office, in addition to the payment of the compensation, will be covered by the premiums.

§ 11. The premiums are to be paid:

1. For those of the insured whose earnings (according to § 6, No. 2, clause 4) amount to 750 marks and under, two-thirds by those for whose account the work is done, one-third by the local poor board (§ 5 of the law concerning the location of charities of 6th June, 1870) in whose district the work is situated, so far as no other association has been legally substituted for it by one of the Federal States.

2. For those of the insured whose earnings amount to over. 750 marks, one-half by those on whose account the work is done; one-half by the insured.

§ 12. The insurance is to be effected by the board of management of the local poor board or by the Federal State which has (according to § 11) to pay the premium.

For this purpose the responsible persons of every work existing in their district at the time of the taking effect of this law, as also of every work newly started after this date, must, within a delay of four weeks, make a declaration to the proper managing officer of the Imperial Insurance Company, giving the locality of the work and the amount of the salary or wages paid at the time.

Upon the sending of this declaration to the proper branch office the insurance is considered concluded.

The local poor boards or the respective Federal States are thereupon furnished with a certificate in duplicate, which includes the description of the work and the rate of premium fixed for it, one copy of which is given to the contractor of the work.

§ 13. An appeal to the decision of the higher authorities against the amount of premium which has been assessed can be made within fourteen days from the issue of the certificate by the parties responsible for the premium. This decision has no retarding effect.

The decision of the higher authorities is limited to the question whether the classification of the kinds of danger by the Federal Council has been rightfully applied in the disputed case.

Further measures against the assessment of the premium are impossible.

A refusal of insurance can be opposed under the corresponding application of the regulations contained in clauses 1 and 4.

§ 14. The amount of the premium reckoned according to the rate fixed, and the amount of the wages and salaries for every industry in the district which is insured, must be sent by the managers of the local poor board or the Federal State to the proper officer of the imperial insurance office within four weeks after the end of every quarter, inclosed with a statement concerning the persons employed during the past quarter on the said works, and the wages and salaries received by them, which are to be given according to the forms to be furnished for the purpose by the imperial insurance office.

A receipt is to be given for the payment thus made.

§ 15. The contractors of the works are required:

1. To make a declaration concerning every work in operation at the time of the going into effect of this law, as also of every one begun since then which would come under § 1 of this law, within fourteen days, giving the nature of the work, the number of persons employed on it for wages or salary at that time.

2. Within fourteen days after the end of each quarter they are to pay in the quota of the premium due from them and the persons employed by them, inclosing a calculation of the latter as given in the form mentioned under § 14.

3. To report within fourteen days any changes in the plan or object of the work which affect the classification of the kinds of danger.

The declarations and payments prescribed in Nos. 1, 2, 3 are to be sent in to the communal authorities of the place where the work is situated unless the provincial central authorities designate some other officers for the purpose, and are to be forwarded by the latter within the time specified by the provincial central authorities to the direction of the local poor board or the proper officers of the particular Federal State.

§ 16. The contractors of the work are entitled to charge the amount of the premium which the persons employed by them have to pay against the amount of wages or salary earned by them when their wages or salary is paid.

This calculation is based upon the wages or salary paid in the course of the quarter for which the premium is to be paid on the bases of an estimate to be furnished for the inspection of all the parties interested.

§ 17. Amounts of premium in arrears will be collected in the same way as communal taxes.

§ 18. If an insured work is discontinued, then the contractor, within eight days, must announce it to the authorities designated in § 15, and the latter must within a further space of eight days announce it to the proper administrative officer. Simultaneously with the notification the amount of the premium for the time since the end of the last quarter, calculated by weeks, must be paid in, accompanied with an account. Every week begun is considered as completed.

Whoever does not properly conform to the requirements in giving notice is held responsible by the imperial insurance office for such amount of premium as he would have had to pay if the work had lasted until the supplementary notice in the course of the last quarter.

§ 19. The imperial insurance office has the right, through authorized agents, to verify the contractor’s calculation of the premium when based on correct grounds, and for this purpose to inspect on the premises their business books, in which the payments of wages and salary are kept. The contractors are obliged to lay before the agents of the imperial insurance office the said business books for their inspection.

The persons intrusted with this inspection must make oath to impart facts which come to their knowledge in the inspection to no one except the superior officers of the imperial insurance office.

§ 20. Written notification from the contractor or his lawful representative is to be given to the local police of every accident happening in the insured work, through which any person employed on the same is killed or suffers bodily injury which will probably result in incapacity for work of more than four weeks, or in death.

This notice must, if the work is situated in a city of more than 2,000 inhabitants, follow at the latest within two or at most three days after the moment when the responsible person has knowledge of the death or the injury.

This notice can be furnished for the contractor by the person who has charge at the time of the accident of the work or the part of the work where the accident happens.

The form and contents of the announcement will be decided by the imperial chancellor.

§ 21. The superintendents of the works which are under the direction of the imperial and state authorities must notify their superior officers.

§ 22. The local police authorities, and in the case of § 21 the proper superior authorities, must send in as soon as possible to the higher civil authorities the notice of the accident which has reached them, with an abstract of the details of the same in an accident register kept by them, and at the same time to inform the proper administrative authorities of the imperial insurance office of the accident.

§ 23. Each accident brought to their notice is as soon as possible to be subjected to an examination by the local police authorities, by which is to be ascertained—

1. The cause and nature of the accident.

2. The killed or injured persons.

3. The nature of the resulting injuries.

4. The place of abode of the injured person.

5. The survivors of the persons killed by the accident who can under § 7 of this law claim compensation for injuries.

The imperial insurance office and the persons responsible under § 11, No. 1, for the payment of the premium can, either by proxy or in person, be present at the investigation. For this purpose timely notice is to be given them of the time appointed for it. Also, as far as possible, other participants and experts are to be summoned on the order of the imperial insurance office and at its expense.

To all persons interested an inspection is allowed of the protocols taken at the investigation, as also of other proceedings, and on demand a copy of the same by paying for it.

It is obligatory on the officers superintending the works indicated in § 21 to conduct the investigation according to the foregoing regulations:

§ 24. If insured persons are killed in an accident, then the competent officers of the Imperial Insurance Company, immediately after the close of the investigation (§ 23), or in case death supervenes, as soon as they have the knowledge of it, shall occupy themselves with the fixing of the compensation.

If the accident only resulted in the wounding of insured persons, then after the lapse of four weeks from the accident the fixing of the compensation for such wounded persons who are then entirely or partially unable to earn their living is to be attended to.

For those injured persons who, after the lapse of four weeks, are still under medical treatment the fixing of the compensation to be given is to be limited to the time until the end of the cure, but is not to be settled until the end of the cure.

§ 25. Claimants of compensation for whom compensation has not been officially fixed must send their claims, to avoid exclusion, before the end of a year after the accident, to the competent officers of the imperial insurance office.

If the claim for compensation is allowed, then the amount of compensation is to be at once settled, otherwise the claim for compensation must be refused in writing.

Rejected claims for compensation are barred if there has been no attempt to establish them judicially within three months after the delivery of the refusal.

§ 26. The police authorities are required at the request of the imperial insurance office to seek out such facts as would affect the fixing the proper compensation and the amount of the same.

§ 27. The contractors by whom the killed or injured persons were employed at the time of the accident are obliged to furnish to the imperial insurance office on their demand a summary of the wages or salary earned by the same during the time of their employment, or, in case this has lasted more than one year, for the last year.

§ 28. The imperial insurance office must send to every person entitled to compensation a written notice showing the amount of compensation to be delivered by the proper police authorities, from which the amount of the compensation and the manner of its calculation can be seen. In the case of compensation for injured persons who have become incapable of work, it must be expressly stated in which category this incapacity for work exists.

§ 29. The decisions of the imperial insurance office as regards these questions can be contested by ordinary judicial proceedings. An appeal is barred after three months from the delivery of the notice of the decision.

§ 30. After the definite settlement of the compensation a certificate must be sent to the beneficiary stating the amount awarded by the imperial insurance office, with notice of the time and place of payment.

The terms of § 25, clause 1, are, however, only applicable in case of the subsequent death of the injured person. An increase of the compensation fixed in § 6 can only be demanded for the time after the notice of the higher claims.

§ 31. The imperial insurance office can either in whole or in part capitalize the compensation which is granted for incapacity for work on the demand of the person entitled to compensation and with the approval of the committee of the local poor-board in whose district he resides, or, in the absence of this, of the competent provincial poor-board.

With the payment of this capital all claim is extinguished to the compensation or any part of it.

§ 32. On the demand of the officials of the local poor-board in whose district the relatives of the person entitled to compensation reside, or failing this, the competent provincial poor-board, the imperial insurance office can turn over a part of the compensation of the person entitled to it to the poor-board for the benefit of those relatives as a guarantee against want, in case the person entitled to compensation fails to properly perform his legal requirements.

§ 33. Claims for compensation against the imperial insurance office, can neither be pledged, assigned, nor attached.

§ 34. All the proceedings and documents necessary for conducting the business between the imperial insurance office and the persons insured are duty and stamp free.

§ 35. If in any of the works coming under § 1, for which an insurance against accidents has not been concluded by the Imperial Insurance Company, any person employed therein is killed or suffers any bodily injury which results in incapacity for work either complete or partial of more than four weeks, then the contractor is liable to the payment of the compensation fixed in § § 6 and 7, if he cannot prove that he has properly carried out the directions contained in § 15, No. 1.

If this proof is forthcoming, then the same duty falls on the local poor-board or the Federal State, which, under § 12, was required to arrange the insurance.

As regards the fixing and paying the compensation the rules of § § 22 to 34 are applicable.

§ 36. If an accident is caused by the gross negligence of the contractor, or in case he is not the reponsible person, of his authorized agent, or through his disobedience of the general directions given him, or other irregularities than under § 120, clause 3 of the “Gewerbe Ordnung,” the contractor becomes liable for all expenses incurred by the Imperial Insurance Company under the terms of this law on account of the accident. In place of the compensation to be given in this case its capitalized value may be taken.

§ 37. For building purposes he is considered as a contractor under this law who undertakes the construction of the buildings on his own account. If the construction is transferred to him by another contractor, who has in the first place undertaken it, then is the latter responsible as contractor for the carrying out of the responsibilities falling upon the contractor under the terms of this law.

§ 38. Whoever presents an account under § 15, No. 2, or a statement under 27, made on wrong data, is, as far as there is no provision for it under § 263 of the criminal code, punishable with a fine up to 1,000 marks.

§ 39. Whoever refuses to produce his account books under § 19 will be punished with a fine up to 150 marks.

§ 40. Whoever does not fulfill the duties incumbent upon him under § 15, No. 3, and § 20, is punishable with a fine up to 100 marks.

§ 41. Whoever does not furnish the notice demanded by § 15, No. 1, or the estimate demanded in No. 2, within the prescribed space of time, is punishable with a fine up to 50 marks.

§ 42. The § 2, of the law of 7 June, 1871, concerning compensation for injuries to those who are killed or wounded in the workshops of railways, mines, manufactories, &c., has no longer force as regards injuries and deaths for which compensation can be given under this law.

Claims for compensation for injuries sustained through accidents in work which these persons or their survivors have on the ground of other legal ordinances, will be entertained to the extent that the persons entitled to them must regard what is owing them for the injury as their share of what would be due them under this law.

§ 43. Workmen for whom an insurance is granted for the consequences of accidents are authorized to conclude with the imperial insurance office an additional insurance on their own account.

The purpose of this insurance is the guarantee of an addition to the compensation provided for in § § 6 and 7.

The amount of the addition is fixed by the person who takes out the insurance, but must not exceed the half of the amounts fixed in § § 6 and 7.

The insurance premium is calculated according to the insurance tariffs prescribed by this law.

§ 44. The workmen employed in the service of others, for whom no insurance is prescribed under this law, can be insured by the imperial insurance office against the consequence of working accidents.

The object of the insurance is:

In the case of a complete or partial incapacity for work, a compensation to be paid to the injured person during the continuance of it.

In the case of death, a compensation to be paid to the survivors, designated in § 7, during the period there prescribed.

The person who takes out the insurance designates the amount of the policy, but the amount in the case of entirely incapacitated workmen shall not exceed 600 marks, or, in the case of death, 450 marks.

§ 45. By the decision of the Federal Council, the business of the Imperial Insurance Company in life insurance, for the workmen employed in the service of others, may be extended to the amount of 6,000 marks.

The extension of the business to the cases of incapacity for work from sickness or old age remains reserved for further legislative enactment.

§ 46. The tariffs for the terms contained in the preceding § § 44 and 45, clause 1, as also those in § § 43, 44, 45, clause 1, will be decided by a resolution of the Federal Council.

The insured shall, in regard to the settling of the insurances and the payments of the premiums, receive the same facilities of business which are allowed for legally necessary insurances. For this purpose employers, as also provincial and communal authorities, must take it upon themselves to act between the imperial insurance office and the insured so far as is consistent with the provisions of the insurance.

§ 47. The time at which this law will go into effect will be decided by a decree of the Emperor in agreement with the Federal Council.