MAJORITY REPORT : RESERVATION. 
298 
portioned to the number of employees, we doubt whether in 
discussions on the reactions of the cost of Health Insurance on 
the trade and industry of the country, the consequences of the 
present arrangements are always appreciated. At present the 
contribution made by employers to the Health Insurance Fund 
is roughly proportioned to the wages bill, but the wages bill has 
no necessary relation to the profits of a firm. In consequence, a 
firm employing a large staff will contribute largely to the Health 
Insurance Fund, even though it be in a depressed trade and may 
not at the time be covering even overhead expenses; on the other 
hand, provided it employs few men, a prosperous firm will 
contribute but little. It follows from this that the ultimate 
incidence of the tax and its reaction on trade may vary greatly 
from one industry to another. In certain cases it may doubtless 
be possible in large measure to pass the burden on to the 
consumer ; elsewhere this may be wholly impossible. ~~ When 
account is taken of the further contributions for Unemployment 
Insurance and Widows’ Pensions very large sums may be involved 
in the case of a firm employing many men, and in extreme and 
unfavourable circumstances the burden of the social services may 
become almost crippling. We consider it all the more important 
to emphasise that there can be no easy generalisation as to the 
incidence and the effects of the insurance contribution, since so 
eminent a writer as Mr. R. G. Hawtrey has recently lent the 
weight of his authority to the doctrine that °‘ the employer’s 
share falls on the workmen just as much as the rest ”’ and he 
describes as a ‘‘ transparent device '’ the arrangement under 
which a part of the cost is ** ostensibly ’* imposed on the em- 
ployer. We are not aware of anything either in economic 
theory or in actual practice which justifies this conclusion. The 
burden imposed by social insurance on industry is in certain cases 
very real and, unfortunately, it is at present most onerous where 
there is least capacity to bear it, in those industries, as it happens, 
which are most essential to the country’s prosperity. In the case 
of the sheltered occupations little inconvenience may arise; the 
burden may be borne or passed on. But in the case of the 
unsheltered industries, where the full rigour of foreign competition 
has already produced a position of grave embarrassment reflected 
in the unemployment returns, it is not permissible to regard the 
burden of social insurance as negligible and free from possible 
detrimental reactions on the prosperity of the country and 
indeed on the employment of the worker. 
4. Apart from these two questions there are, further, three 
matters of general principle, in certain respects inter-related, on 
which, as it appears to us, not a little misapprehension prevails. 
We should like the following observations on these questions to 
be read not merely as supplementing, but perhaps to a certain 
limited extent as modifying, our concurrence in the terms of the 
Report signed by our colleagues.