Economic development in Denmark before and during the world war

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Publications of the

Carnegie Endowment for International Peace

Division of Economics and History

John Bates Clark, Director

Digitized by the Internet Archive

in 2008 with funding from

IVIicrosoft Corporation

http://www.archive.org/details/economicdevelopmOOwestrich

ECONOMIC DEVELOPMENT
IN DENMARK

f

Before and During the World War

BY

HARALD WESTERGAARD

PROFESSOR OF POLITICAL SCIENCE IN THE UNIVERSITY OF COPENHAGEN

OXFORD : AT THE CLARENDON PRESS

London, Edinburgh, New York, Toronto, Melbourne, Cape Town, Bombay

HUMPHREY MILFORD

1922

PEINTED IN ENGLAND
AT THE OXFORD UNIVERSITY PRESS

H^

NOTE BY THE DIRECTOR

The plans of the Division of Economics and History of
the Carnegie Endowment have been transformed by the
World War. Problems now calling for study transcend in
importance those with which this division has been deaUng
and material for research and record so far transcends any
that was formerly available that it will demand almost
exclusive attention for some years to come. A new world
has evolved suddenly out of the world which we knew, and
the transformation extends to the foundations of govern-
ment and of economic life.

The process of warfare itself is now so unHke that of former
days that many miUtary rules of the past have gone into the
scrap basket. The late war ended when its deadHest tools
had barely been brought into action. The peoples have
fought as they had worked, by machinery ; mechanical and
chemical engines of destruction have decided the result and
will decide in like manner the result of all wars of the future.
Machine shops and chemical laboratories will so largely
determine what armies shall win that fighting strength will
be as much a matter of available capital and of science in
applying it as of numbers of troops and strategy in directing
them. It is safe to say that the death -deaUng arts and instru-
ments will far surpass in destructiveness those which made
the late war so deadly, and to a soldier of the future the order
to march into a cloud of poisonous gas and a whirlwind of
missiles will resemble an order to plunge into the rapids of
Niagara. This is one central and obvious fact which the war
has taught us, and it has many corollaries, some of which have
to do with the increased costs of war and the importance

vi ' NOTE BY THE DIRECTOR

of the particular resources that make a nation powerful for
offence and defence ; but there are less conspicuous economic
facts which are more fundamental, since they may determine
where and when, if at all, wars shall hereafter occur.

Causes of warfare are always partly economic and those
which incited the recent one were mainly so. The business
plans of a powerful state reached to the ends of the earth and
60 crossed and interlaced the claims of other states that some
writers, then and afterwards, pronounced the war inevitable.
If we assume a settled purpose on the part of such a state to
encroach on the rights of others, we may say that it doubtless
was inevitable. The victory of the defending countries has
saved them from an immediate and intolerable domination,
but it cannot be taken as an assured fact that similar attempts
will never again be made. The economic inducement con-
tinues and the means may at some time be forthcoming.

Within the several states war has democratized industry,
giving to labour an increase of control — ^a change that, if
continued, will entail momentous consequences; but still
greater effects have been produced on the relations of states
to each other. The world as a whole has changed more than
its component parts, and the new relation of the parts to one
another is the critical element in the situation. The great
increase in the economic functions of governments is one cause
of this condition. Within the great international community
in which the several states are units extensive economic
functions have gravitated into the hands of governments and
caused them to face each other as business rivals and to deal
with each other in a multitude of ways in which the merely
self-seeking poHcy of private business is intolerable. Power
to invoke principles of justice and international law as inter-
preted by a competent court has become an indispensable
means of allaying strife, and this fact exalts to supreme
importance the high court of nations which has just been
estabhshed. It magnifies also the importance of the economic

NOTE BY THE DIRECTOR vii

facts and principles with which the law itself will have to
deal. It is not merely individual men or private corporations
who now meet each other in the rough and tumble of a world-
wide mart but states themselves, each representing its own
population and seeking to foster its interests as a zealous
and faithful agent. The chances of friction that are inherent
in ordinary commerce inhere to-day in vast international
transactions and will increase in the measure in which the
intercourse grows. All this means a great increase in incen-
tives to warfare, on the one hand, and in the motives for
preventing it, on the other. Private commerce unites more
than it separates those who participate in it, and it remains
to be seen whether international commerce will act in the same
way ; but, in view of what modern war means, the human
race will deserve to perish, and much of it will probably do so,
if the forces of strife are allowed to get the upper hand.
Whether they will or not — ^whether the recent economic
changes will tend to reduce warfare or to increase it — depends
on the ability of nations to create and maintain the instru-
mentaHties that in the new state of the world are necessary.

Certain it is that the feeling which prevails to-day, the world
over, is not one of security. The dread of fm-ther war is
greater than it was before 1914. In some areas war still
prevails, in others peace is held by a precarious tenure, and
in all it can be firmly estabhshed only by conscious and
inteUigent action by the states themselves. Mere exhaustion
holds war dogs temporarily in leash, but it will take more
than that to tame them as they must be tamed if peace is
made to last.

We here confront a wide difference between the several
states in comparative desire for peace and disposition to
maintain it. One portentous fact is the grim determination
of Russian communists to extend their system by crude
force from state to state. Bolshevism is government by the
few and largely the bad masquerading as government for

viii NOTE BY THE DIRECTOR

and by the people. In its mother country, Russia, the
economic measure by which it began its career was con-
fiscation of private wealth — ^in itself an ultra-democratic
measure. If this had brought in a true communism, it would
have been a ruthless and unjust measure for creating a peace-
loving state. A just and orderly democratizing of industry
in the several states would give new strength to the forces
of peace, and it would be highly improbable that any state
so influenced would try to extend its system over foreign
countries by miUtary invasion. Democracy, socialism, com-
munism, and bolshevism all appear in the aftermath of the
war. The first of them makes for future peace and so does
even the conservative element in the second, while all else
in the series means certainty of civil strife and danger of
international war.

The fact that during the war governments had to take on
innumerable functions that were formerly in private hands
has lent an impetus to sociaUsm and to the perverted growths
that have accompanied it, and it has created a new inter-
national system the meaning of which is profoundly significant,
though he who runs cannot so easily read it. There are
dangerous features in the system which the war evoked and,
happily for mankind, there are available safeguards which
were evoked with them and need to be retained if human
effort can do it.

By a compulsion that there was no resisting, the war forced
the nations of the Entente into economic co-operation with
each other. Commissions centring finally in the Supreme
Economic Council adjusted in a harmonious way questions
that would otherwise have led to rivalry and conflicting
action in purchasing war materials, securing ships, apportion-
ing food, controlling railroads, financing the war and doing
a multitude of other things with the one common purpose of
victory. The special compulsion of the struggle is over, but
it has left an aftermath of issues grave enough to make peace

NOTE BY THE DIRECTOR ix

insecure unless something equivalent to the Supreme Eco-
nomic Council survives in full efficiency. The agency that
did so much to win the war may do as much to prevent another
one, but to that end it will have to be guided by economic
principles, and it is a saving fact that these still survive.
The war has not aboHshed the law of demand and supply,
though governments may forget it. In the coming era they
must build better than they now know. Economic knowledge
must either go in advance of action and prevent disaster or
follow action and be learned from disaster. Beyond compu-
tation is the importance of attaining the knowledge and
using it when evil impends and prevention is possible.

John Bates Clark,
New York, Director.

September 27, 1920.

POSTSCRIPT

In justice to the distinguished author of this work, it should
be said that he completed it early in the year 1919, and that
delays connected with the preparation of the EngUsh edition
are mainly responsible for its late appearance. This will
account for the fact that important events, such as the
restoration of part of Sleswick to Denmark in 1920 and an
interesting act on insurance against invaUdity (May 1921),
have not been mentioned. Moreover, in the interval since
the manuscript was finished additional sources of information
have been opened. The author, therefore, would gladly
supplement the statements which this volume presents,
although the trend of the evolution in Denmark described
herein has not been essentially altered since the volume was
written. But it seems best to issue it as it stands, complete
as it well could be at the time when the manuscript was
sent to America, and to leave for the future the task of
presenting facts more recently made known.

J. B. C.

New York,

September 1, 1921.

CONTENTS

Half

Introduction ......

Early German Influence in Denmark .

Early Condition of the Danish Peasants

Condition of the Peasants in the Eighteenth Century

The Guild System of the Eighteenth Century

Social Developments of the Nineteenth Century

The Rise of the Lower Classes

The Free Constitution of 1849

Social and Economic Developments in the Second

OF THE Nineteenth Century ...
Beginnings of the Danish Labour Movement
Development of the Labour Movement
Employers' Associations • \ •

The Commission of 1875 .....
Beginnings of Social Insurance
The Commission of 1885 and the Development of Social

Insurance ....

Development of Accident Insurance
Development of Old-Age Pensions
Invalid Insurance .
Care of Widows and Orphans
Care of Consumptives
Care of Unemployed
Labour Exchange .

Factory Legislation in the Last Fifty Years
Further Development of Social Legislation
General Results of Social Legislation
Development of Agriculture
Development of the Co-operative Dairies
Further Development of the Co-operative Movement

PAGE

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2

8

4

7

9

11

16

I

1X9
22
28
26
28

81

38
42
46
48
49
50
55
56
62
64

60.
69

72

xu

CONTENTS

Condition of the Agricultural Labourer

Change of Conditions caused by the War

Legislative Measures rendered necessary by the War

Recent Social Legislation

Economic Changes caused by the War

Recent Fiscal Measures

Effect of Recent Fiscal Measures

Summary and Conclusion

INDEX . 103

page
76
80
82
88
91
94
97
99

ECONOMIC DEVELOPMENT IN DENMARK

BEFORE AND DURING THE

WORLD WAR

Introduction

The economic and social transformation which will be
a natural consequence of the World War will of course differ
in strength and character in the various countries. The
greatest change may perhaps be expected in the nations
which bore the brunt of the struggle, whether they emerged
victorious or vanquished. In time of war the individual is
naturally merged in the state to a much greater degree than
in time of peace. For the last four or five years the peoples
at war have been schooling themselves, so to speak, in
socialism. Now that the war is over they will seek to throw
off the restraints of the school ; but certain results of their
experiences will be deeply impressed upon them, in spite
of all reversion toward individualism.

But the small nations, which happily did not actively
participate in the World War, have also undergone changes
determined in strength and character by their entire preceding
development. The change of conditions in these small
countries may seem to offer a quite insignificant subject for
inquiry when considered from the standpoint of the world
at large. Their combined populations constitute but a small
percentage of the population of Europe ; that of the king-
dom of Denmark is not 2 per mille of the population of
the earth. Still, there is profit in such an inquiry. In the
whirling stream in which society is now drifting there is,
as it were, a current for each country ; and the smaller
the country, the easier the task of following its course. In
a diminutive state such as Denmark the same forces are

% , ECONOMIC P^VELOPMENT IN DENMARK

at work as in the great nations, so that a study of what
is happening here may help us to understand what is
happening elsewhere.

Early German Influence in Denmark

If we look at a map of Europe, we see that the develop-
ment of Denmark must have been strongly influenced from
the south. Had Jutland been separated from Germany by
the sea, it is apparent that many poUtical events which
contributed to bring about the recent world conflict might
have taken another course. But only under primitive
conditions do forests and wastes keep neighbouring peoples
apart. As populations increase and push forward from all
sides, there is a natural interchange of influence. That
southern Sleswick, originally Danish, thus became Ger-
manized, is no wonder. German artisans found their way
into Denmark and brought with them the customs of their
guilds ; and the language of Danish artisans to-day is clearly
marked by this influence. During the flourishing period of
the Hanseatic towns German trade found fertile soil in
Denmark, and Danish economic hfe was in many ways
dependent on Hamburg. Moreover, many Germans came
to Denmark in official capacities and acquired property
here. It is, nevertheless, remarkable that the results, in
spite of these influences, were characteristically Danish. At
the outbreak of the World War Denmark was in many respects
actually ahead of its great southern neighbour, especially as
regards social organization. The country had a decidedly
democratic constitution, the latest change in which — the
granting of suffrage to women by the Constitution of June 5,
1915 — was in reaUty independent of the great events then
agitating the world. That women were admitted into public
life in Denmark, first into municipal government, then into
parHament, was a quite natiual consequence of the general
trend of Danish opinion. Long before women were admitted
into the universities in Germany they had enjoyed free access

EARLY GERMAN INFLUENCE 3

to all schools in Denmark. General education had long
been at a relatively higher level, and the lower classes in
particular had better educational opportunities. The result-
ing difference between the two countries is perhaps most
strikingly illustrated in the respective conditions of their
agricultural populations. For a long period Danish agricul-
turahsts learned much from the south, but during the last
generation they themselves, in turn, have exerted an influence
extending far beyond the boundaries of their country. Well
equipped both technically and intellectually, they have
created a co-operative movement which has improved
agricultural production to a remarkable degree. It is also
characteristic that the labour movement, notwithstanding
the fact that Denmark acquired her principles of socialism
from Marx, Lassalle, and other practical and theoretical
German leaders, has developed on saner lines and with
greater strength here than in Germany.

Early Condition of the Danish Peasants
Some three hundred years ago a French writer, Pierre
d'Avity, in reviewing the Uving conditions and the character
of the natives of various countries, said of the Jutlanders:
' They are a strong people who eat and drink a great deal ;
they are provident and clever and chng to their own ; they
are quarrelsome, suspicious, and irascible, and fight stub-
bornly in defence of their opinions.' If this judgement is
true to fact, it is difficult to think of the Danish peasants
of that day as members of a cowed and oppressed class, in
spite of all the burdens that were imposed upon them.

From the Middle Ages until late in the eighteenth century
there was a continuous change to the disadvantage of the
peasants. Freeholds gradually disappeared and were replaced
by leaseholds. On taking over a patch of land the leaseholder
Tiad to pay a premium to the landowner or lord, besides
which he had to make a yearly payment called Landgildet
(ground-rent), which in most cases was an incommutable

B2

4 ECONOMIC DEVELOPMENT IN DENMARK

burden resting on his land. As a rule the estates of the
Middle Ages were not large, and the landowners often
had many holdings at a considerable distance from one
another ; but gradually a movement arose to extend and
combine them, and in this way the day of large estates
began. This again involved disagreeable consequences for
the peasants ; for the more the cultivation of large estates
developed, the more service was required of them. Moreover,
distinct efforts were made to bind them to the land. They
did not submit without opposition, to be sure, as shown by
the various peasant revolts ; but the times were nevertheless
unfavourable to them. Still in the year 1500 compulsory
service was not widespread in Denmark, and the character
of the leaseholds was not, generally speaking, very oppressive.
A leaseholder might even, if he wished, give up his lease and
remove to another estate.

But efforts to tighten the relation between owner and
tenant had long been growing. In the middle of the four-
teenth century, after the Black Death, the landowners tried
to retain the leaseholders by compelUng them to pay a
quittance-fee (Forlov) if they gave up a lease. This was
especially the case in Zealand and Laaland-Falster, where
at the end of the Middle Ages the practice took the form of
villeinage {Vornedskab), whereby the son of a leaseholder
was bound to take over a farm on the estate. Moreover,
increasing demands on the part of the Crown contributed
to the growth of villeinage. The maintenance of the army
and navy necessitated much carting and hauhng on the part
of the peasants, while the laying-out of the roads and the
building of fortresses and castles was largely their work.

Condition of the Peasants in the Eighteenth Century

The eighteenth centmy apparently brought an improve-
ment in the condition of the Danish peasant, for villeinage
was abolished in 1702. But shortly before that mihtary
service had been made compulsory throughout the country.

CONDITION OF THE PEASANTS 6

and the burden arising therefrom was increased in 1783 by
the intToHnotroTT'of bondage {^tavnsbaand), whereby all
peasants between the ages of fourteen and thirty-five were
bound to remain on the estate. In this way it came about
that military conscription rested entirely in the hands of
the landlords, who were thus enabled to keep their labourers.
In the course of time, moreover, the oppression of bondage
was increased by the extension of the age limit ; and when
to these heavy burdens were added the tithes levied for the
support of the church, the sum-total greatly hampered tne
pursuit and development of agriculture. Moreover, other
misfortunes, such as cattle-plague, contributed to aggravate
conditions, so that profits were reduced to a minimum and
the work of the peasants was characterized by laziness and
stupidity.

Towards the close of the century, however, things began
to look better. In France economists were pointing with
increasing emphasis to the great importance of agriculture,
and in line therewith were developing the physiocratic
doctrine. It was not physiocratism, however, which even-
tually dominated politico-economic theory in Denmark, for
the physiocrats are scarcely mentioned in the Danish litera-
ture of the eighteenth century. The foreign ideas which
may be said to have influenced the literature of Denmark
are rather those of the encyclopaedists. But it is more in
accord with the truth to say that the humane ideas which
subsequently led to the emancipation of the peasants sprang
forth spontaneously when the time was ripe for them. These
ideas were then, as it were, in the air.

In 1761 the Dowager Queen, Sophie Magdalene, took the
first step toward reform by exempting the peasants on her
estate of Horsholm, in the north of Zealand, from all services
and tithes against the payment of a fixed rent, and by making
them hereditary leaseholders with the right to sell and
mortgage. The peasants on her estate were thus placed, in
all essentials, in the position of freeholders. Some years

6 ECONOMIC DEVELOPMENT IN DENMARK

later Bernstorff followed her example on the Gentofte estate,
and other landowners did Ukewise. An ordinance of 1771
specified the amount and kind of compulsory service to be
rendered, and another of 1781 was intended to abohsh the
old system of ^common fields' — a sharing of agricultural
labour and produce which was no longer of any impor-
tance. This ordinance allowed an exchange of ' parcels '
or strips of land, so that the holdings of one man might he
in two or, at the most, three places.

In 1784 the King himself began to introduce reforms
on many of the crownlands in the north of Zealand. The
peasants were exempted from most of their former (obliga-
tory services^ land was allotted to them, buildings were
moved for them, and in many cases they were made owners
oriififiholders^^J^'mally, in 178(), an agricultural commission
was appointed to investigate the~ condition of the ^ntire
peasant class. Reforms then followed in rapid succession.
In 17»7 the question of land tenure was examined ; in
1788 the corn trade and cattle trade were declared free ;
in 1791 an important ordinance regulating tenant service
was issued, and in 1792 another concerning allotments.
Most important of them all was the abolition of bondage
in 1788, with a transition period of twelve years.
" These reforms were of the greatest value from every
standpoint, and wherever the^ were carried out they made
room for technical progress, profits from agriculture, which
until then had been very modest, increased considerably for
the reason that the peasants, released from many compulsory
services and protected against arbitrary demands, held
a stronger economic position and foimd it pauch easier to
pay their dues both to their landlords and to the statef

The majority of the peasants continued as leaseholders.
But after the system of ' common fields ' was abohshed
there was this change in favour of the landlords, namely,
that in leasing their land they could demand as high a rent
as the peasants would pay, the amount being determined

CONDITION OF THE PEASANTS 7

by free competition, [jjie landlords thus obtained an
advantage, while the peasants, though subject to increased
rent, were far more independent than before^
I These great social reforms of the eighteenth century were
" carried out under .peaceful conditions. In France the
emancipation of the peasants was brought about by the
great Revolution ; in Germany, where the oppression must
often have been extremely severe, it did not take place until
the nineteenth centiu*y.

It is well known that no such formal emancipation was
necessary m England, where it was accomplished by the use
of capital in the course of the country's normal economic
development. It may be said that Denmark was second to
England in its gradual, peaceful, social adjustments. But
agricultural reform in Denmark was much more beneficial to
the peasantry than it was in England. While in the latter
country, under the development of the system of great
holdings, the peasant class almost disappeared, being replaced
by the farmer and tne agricultural labourer, whose condition
was extremely poor, m Dengaaxk the peasant class survived
and came to form a solidflnd secure cofe~of the populatiDnP-
Atthe present day it actually holds almost as m^yTarms
as it did m the eignteenth century. y<^^ ^ '

The Guild System of the Eighteenth Century

In another respect economic changes in Denmark were
brought imder happier circumstances than in England.
Danish history shows no parallel to the English industrial
revolution marking the transition trom hand labour to
machine labour, (traditions dating from the time of the guilds

Still^«prsistpd m the f^ifh^P?^^^ n^rvHiry !4mQll €xvr^^^r^^

continued to ply their trades in theregtt« of their homes,
and their position, social and economic, did not greatly
differ from that of the journeymen. The latter usually Uved
in their masters' homes, until in due time they married
and established homes of their o\^ A census taken in

8 ECONOMIC DEVELOPMENT IN DENMARK

Copenhagen, after the great fire which devastated the city in
1728, shows that only in the carpenter's and mason's trades
did a majority of the journeymen live outside their masters'
homes. From a later date there is testimony that carpenter
journejmien were very independent in their relations with
their masters. In the other trades 85 per cent, of the workmen
lived with their masters. When his journeymen or his
apprentices lived with him, the master artisan generally
had three workmen in his house ; but a great many artisans
had no assistants at all. Apart from the carpenters and
masons, who on the whole did a considerable amount of
work considering the circumstances of the time, it may be
said that there was an almost equal number of masters and
journeymen, so that most of the journeymen could look
forward to becoming masters themselves. Proof of this is
furnished by the census of[l787. In that year the population
of the entire kingdom of I)enmark was about 840,0Q0^of
whom approximately one-fifth lived in the towns. The
artisan class comprised about 22,000 of the male inhabitants
of the towns, and the nimaber of masters and of journeymen
was about equal. Between the ages of twenty and thirty,
17 per cent, of this group were masters ; between thirty
and forty, 55 per cent. ; between forty and fifty, 74 per cent. ;
and above fifty, 81 per cent. These figures were shghtly
lower for the industrial world. Only about 6,000 of the male
inhabitants of the towns belonged to the industry, and
46 per cent, of them were either employers or sons of em-
ployers. But here too, the chances of becoming independent
rapidly increased with age. The average size of industrial
establishments must have been very small as compared with
those of the present da^

Where a young apprentice might expect soon to become a
master there was little reason for class distinctions, though, of
course, there was the ever-present difference of outlook on life
in the new generation and the old. But in the German guild
customs, with their clubs, journeymen's houses, &c., there

THE GUILD SYSTEM 9

were latent germs of discontent which might rapidly develop
if circmnstances permitted. Indeed, all the methods now
known to strikers were already in use. It was comparatively
easy to prevent masters from getting workmen, and even
whole towns were sometimes ' boycotted ' {geschimpft),
because they had in some way incurred the disfavour of the
journeymen.

But many excellent customs originated by the guilds of
the Middle Ages still existed, ^e problem of the labour
market, which in our day presents so many difficulties, was
then easily and naturally solved by the journeymen them-
selves. If no work could be provided for the journeyman in
a new town to which he went, he was given food and shelter
and money enough to live on until he reached the next
town. This was a kind of primitive unemployment insurance.
Of the guild as such, it may be said that it upheld
the modern principle of the right to work. Every master
had his own little group of customers and was thus
protected against too sharp competition on the part of his
guild fellows!)

Social Developments of the Nineteenth Century

It was primitive, homogeneous society that existed in
Denmark^ as in many other countries, in the eighteenth
centuryj but the enormous development which took place
in the next century led to many changes. As early as the
last decade of the eighteenth century the population had
begun rapidly to increase, and it continued to do so through-
out the nineteenth century. In 1801 the total population of.
Denin2jj£jma-92a,l}Qa; in 1901 it was_2.450.000. The great
technical development of both agriculture and industry
provided a better living and even a fuller and easier life in
1901 for a population three times as large as that of a hundred
years before.

But, meanwhile, the character of the community had
completely changed. In the rural districts a large class of

10 ECONOMIC DEVELOPMENT IN DENMARK

cottars or farm labourers had grown up alongside the seventy
thousand peasants ; and in the towns industries had developed
which gave employment to large numbers of workmen who
were widely separated, both socially and economically, from
their employers, even though there still existed a middle
stratmn of society whose time-honoured customs and modes
of thinking served, to a certain extent, to bridge the gap
between the upper and lower classes. (Moreover, the social
reforms of the eighteenth century had been carried out
without any pecuniary sacrifices ; indeed, they had brought
increased wealth to the country. This was not the case,
however, in the nineteenth centurg Almost all the land had
now been allotted ; and if the poorest class, the cottars,
were to be helped, large assessments or voluntary contribu-
tions had to be made for that purpose. The obhgation
to relieve the poor rested in no less degree on the growing
population of the towns. But in spite of all that had been
done, the general state of affairs was not auspicious. Tlie
large group of the ' poor ', so named in the census of 1787
without other quahfication, indicated that circimistances
were stringent even then and that the germs of coming
troubles were already developing.

As has already been stated, the peasants^ (freeholders and
leaseholders) formed the sohd core of the population. In
1787 they numbered '/4,UUU males over twentv vears of a^e.
There were also about ^^,000 cottars (males over twenty) and
between 3,000 and 4,000 ' landless men ' or farm hands,
besides 38,000 male servants and lt),()00 labourers over twenty
years of age, most of whom worked in the field. In 1911 the
peasants (large and small farmers) numbered about 6^00
males over eighteen years of age, besides 86,000 cottars.
I Thus the latter class increased fourfold, while the number of
farmers remained about the same. In addition there was
a very large nmnber of farm-hands and servants, of whom
the peasants employed about 60,000 over eighteen years of
age and the cottars between 6,000 and 7,000, as well as about

SOCIAL DEVELOPMENTS 11

33,000 labourers. Everywhere it is to be noted that the
lower classes greatly increased in numbers.

If we glance at the statistics of trade and industry for the
last foiu- generations, we note a similar change. In 1911
there were throughout the country about 72,000 male
employers over eighteen years of age, about 10,000 office-
workers and 138,000 workmen proper. Labour tended to
concentrate in the capital of the country, Copenhagen, in
a proportion of about five workmen to one employer; in
other towns there were approximately three workmen to
one employer ; in the country, scarcely one. But while
the industrial development of Denmark has been slight in
comparison with that of other coimtries, it has, nevertheless,
been sufl&cient to form a gulf between employers and em-
ployees. The strong class feehng of earher periods still
exists, but in a new form ; its basis is no longer trade rivalry,
but the antagonism of capital and labour, which often
develops to the point of open conflict.

It would not be correct to consider the changes in the
structure of society as chiefly responsible for our present
social ideas, since the latter would certainly have sprung
up even if the classes had remained in the apparent relative
conditions of 1787. But these changes must necessarily
have influenced our present problems and their solution,
giving them a different character and greater dimensions.

The Rise of the Lower Classes

The class distinctions of to-day are essentially different
from those of the past, and the difference .is manifest in all
countries. The social gap separating the peasant and the
noble in the eighteenth century was enormous ; and under-
lying it was a deep-rooted conviction that every man was
born into his class, whether that of noble, peasant, or plain
citizen. There might be a feehng of dissatisfaction among the
poor, and this feehng might even, under special circumstances,
lead to revolt. Almost all countries have known peasant

12 ECONOMIC DEVELOPMENT IN DENMARK

revolts. But in spite of dissatisfaction and revolt the
conviction persisted that every man must remain in the
class into which he was born. In the same way it was an
idea inherited from the Middle Ages that the conditions in
which an artisan or peasant lived must also be satisfactory
to his children and his children's children.

During the developments of the nineteenth century al
this necessarily changed. On the one hand, nimieroui
intermediate stages arose which made it possible for a success-
ful peasant or citizen to rise from the lowest class to th<
highest. Any member of the lower classes might hav«
' a marshal's baton in his knapsack '. Unfortunately
however, there were only a few marshals' posts, and the manj
who were left in the lower classes quite naturally began t<
compare their condition with that of their successful brethrei
who had risen to higher positions. The distinction betweei
the citizen, the peasant, and the noble was superseded by th<
distinction between the poor and rich. It was the goo(
lortune of Denmark that the sharpness of this distinction
was somewhat dulled by various favouring circumstances.

Great landowners, as has been sqjrl brfnrr^ ^ij^^<^t_n£^P3
at ifll the same position in Denmark as in manyntt^r roun.
tiies 7 even to-day the two thousand great farms comprise
only one-sixth of the Hartkorn (the Danish unit of land-tax)
Nor have our large manufacturers had such chances foi
outgrowing the swaddhng-clothes of handicraft as have
those of other countries. Moreover, education in Denmark
was at a comparatively early time so far advanced that class
distinctions were thereby largely removed. It is well known
that at a certain stage in the social^economic development
of a country strong demands are made for the education of
the lower classes, many thinkers considering it the most
important social problem to be dealt with. Its solution was
not everywhere so successful as it was in Denmark, where
education was made compulsory as early as 1739. But in
idauy places tlic quahl^i of the inatiULliorT^as poor. In

RISE OF THE LOWER CLASSES 13

the summertime most of the village schools were empty,
and often the teacher had had but little training and received
but Httle salary. But in 1814 a reform of the whole system
of elementary education was introduced. This reform, which
had been in preparation for some time, was very important.
For many years it made Denmark a model country in regard
to educational matters, although it was found impossible
to carry out the original plans in full on account of the
frugality of the taxpayers and the poor economic condition
of the country in general.

Access to university training has without doubt been
easier for people of moderate circumstances in Denmark
than in many other countries, and many gifted peasant boys
have been helped along to advanced studies and have thus
formed a hnk between the upper and lower classes. Of great
importance was the Royal Veterinary and Agricultural
College, which was founded in 1856 and soon superseded older
institutions. A group of excellent teachers here raised the
teaching to a high level and conducted valuable researches
in the various fields of inquiry. Early in the nineteenth
century, moreover, came an interesting development in the
form of high schools for adults, especially for young peasants.
These schools have played a very important part in the social
Kfe of Denmark, and honour is especially due to the famous
N. F. S. Grimdtvig for the impulse which he gave to their
. estabHshment. In a number of treatises he expounded his
idea, and in 1844 he succeeded in bringing about the founda-
tion of the first high school, which was in Rodding (Sleswick).
Some years later his example was followed in a few other
places, and after 1864 the movement progressed rapidly.
In the course of time many excellent men made their influence
felt in these schools ; and even though the amount of
knowledge obtainable in the short time that young men or
women could generally spend in school (as a rule only six
months) could be neither extensive nor thorough, it was,
nevertheless, sufficient greatly to widen their intellectual

14 ECONOMIC DEVELOPMENT IN DENMARK

horizon. Also a number of technical schools, agricultural
schools, and trade schools were eventually estabUshed, and
these, too, contributed a great deal toward raising the
intellectual level of the population.

The Free Constitution which Denmark estabhshed on
Jime 5, 1849, further contributed to this result. This
constitution was preceded by the estates general, provincial
consultative meetings which had prepared the population
for the great transition from absolutism to poUtical freedom.
The Free Constitution stood its test through aU the ensuing
changes and was a powerful means of elevating the Danish
people by giving all classes a part in political hfe.

In the first part of the nineteenth century, there was in
Denmark^s in almost all countries, a period of economic stag-
. nation^ " The Wars of Liberation had led to a general derange-
ment of business, which lasted well into the thirties and caused
much distress throughout the country^ The prosperity which
; had prevailed at the close of the eighteenth century, and which
had contributed to the great development of agriculture
after the introduction of the agricultural reforms, was now
brought to an end by a lowering of the prices of agricultural
i4ffoducts, which fell with great severity upon the farmers.
The protective pohcy of England exerted a highly unfavourable
influence, in that it hampered our agricultural exports and
further depressed our prices. Taxes were exceedingly heavy,
and in spite of arrangements that were made for facilitating
their payment many farmers were obliged to give up their
farms. All over the country poverty and scarcity reignecF
to an extent now difficult to appreciate. But the people
bore the stress of circumstances with hopeful resignation, and
j^ after 1830 conditions improved somewhat. Then followedj
a period of prosperity for Danish agriculture. But in othei
respects there were many adversities to be endured ; the firsi
years of the thirties, for example, were characterized by greal
epidemics, the year 1831 being the only year of the nineteenth
century in which there were more deaths than births.

RISE OF THE LOWER CLASSES 15

[During this long period of reaction little energy could be
expended for agricultural reform's. All that could be done
was to allow the farmers to take full advantage of the previous
reform measures. At the end of the eighteenth century loans
had been granted to leaseholders who wished to buy their
lands and cultivate them as freeholds, and these efforts
were continued during the first years of the nineteenth,
century. After a time they lessened somewhat, but the con-
version of the leaseholds into freeholds did not cease entirely.
In 1835 almost two-thirds of the farms were freeholds.

A reaction was also felt in trade and industry. Toward
the close of the eighteenth century there had appeared, in
connexionj with the more Uberal politico-economic movement,
a certain tendency to relax the ^uild restrictions. Plans had
even been formed for the complete abolition of the guilds.
As a matter of fact, however, the restrictions were only
shghtly relaxed. In 1800, for example, it was stipulated
that any journeyman who had worked steadily for four years
might become a free master, but might not empk)y an appren-
tice or journeyman. But even this limited concession was
withdrawn in 1822, and other reactionary regulations were
introduced. It cannot be said, however, that the guild
restrictions in Denmark were felt to be very severe. In the
towns, indeed, to which trade was chiefly confined, the guilds
were sharply distinguished from one another. But it was
comparatively easy to become a journejnnan, and when
a journeyman had made a masterpiece he was entitled
to become a master with the right to employ as many assis-
tants as he saw fit. Jn the country districts certain trades
were carried on freely or by special licence ; but the country
tradesmen were not allowed to work in the towru,

16 ECONOMIC DEVELOPMENT IN DENMARK

The Free Constitution of 1849

A new day, however, dawned on the country with the
introduction of the Free Constitution, which held forth many
promises of social readjustment. Now the aim was to bring
all these promises into effect. It was in conformity with the
fundamental idea of the new constitution, as well as with
existing economic ideas, to cut all ties with the past as quickly
as possible.^ If we look through the laws of the period, this
fact is vividly impressed upon us. These laws are evidently
based on the view generally prevalent at the time, that the
chief aim must be to organize the community with reference
to the free development of the powers of the individuaL The
individualist community was thus the great goal. The task
of the state was to be limited so far as possible to the pro-
tection of rights and the maintenance of order.

We may mention a few parliamentary acts that seem to
support this view. The constitution, of course, asserted
religious freedom. In 1851 an act was passed permitting
civil marriage for persons belonging to different sects or for
persons not belonging to any recognized sect. In 1855 an
act was passed releasing members of the estabhshed church
from the so-called Sognebaand (obligation to accept the
services of the pastor of their own parish) and permitting
them to have recourse to another pastor of the same church.
In 1857 compulsory baptism was abolished. Some years
later, in 1868, an act was passed permitting free congregations
to be formed within the estabhshed church by persons who
had been released from the Sognebaand and desired a pastor
of their own choosing. In reahty this law was not often
appHed, but it is thought to have been of great importance
as a sort of safety valve.

The constitution Ukewise asserted the principle of freedom
of speech, and a Press Act was accordingly passed in
1851. A few years later, in 1856, an act was passed
concerning elementary schools in the towns and rural

THE FREE CONSTITUTION OF 1849 17

districts. In the same year an act was passed to establish
public funds for the relief of the poor, in order to lighten
the burden resting on the customary poor relief funds. Be-
sides these there were several municipal laws for the govern-
ment of Copenhagen (1857) ; for the levying of taxes in
Copenhagen (1861) ; and for the government of the pro-
vincial towns (1868).

In regard to economic legislation proper, we may mention
an act of 1855 relating to charging of interest and bearing
the title : ' An Act whereby the rate of interest in certain
cases is made optional and the punishment for usi^y
is changed.' A number of acts were also passed to regulate
the carrying-on of certain businesses in the capital, such as
brewing and baking. Of the greatest importance, however,
was the comprehensive Trade Act of December 29, 1857,
which redeemed the promise of the constitution that all
restrictions of free and equal access to trade, which were
not calculated to promote the pubUc welfare, should be
aboKshed. By this act, which also asserted free trade, with
a short period of transition, as its leading principle, the
towns were largely deprived of their monopoUes, and the
guilds also lost their monopolistic position. The latter were
to continue as purely voluntary institutions, and the journey-
man's probation work was no longer to be compulsory.

With regard to agriculture, the aim was to abolish all in-
equality. Thus in 1850 an act was passed concerning privi-
leged and unprivileged Hartkorn. In the same year acts were
passed abohshing the service obUgation still resting on farms
and houses, and in the following year came an act to abolish
the right of killing game on lands where it was not connected
with the right of ownership. But the work of the parlia-
ment (Rigsdag) was soon entirely concentrated on furthering
the transition from leaseholds to freeholds. Various acts
were passed to facilitate the sale of leaseholds belonging to
the state, the university, and other public institutions. The
sale of leaseholds under fiefs and entails was encouraged by

1569.35 r>

18 ECONOMIC DEVELOPMENT IN DENMARK

an act of 1854. There followed, in 1861 and 1872, two
acts introducing varous improvements in the leases of
those who remained leaseholders, and several others con-
cerning sales. It was provided that a landowner who sold land
in lease might freely dispose of a part of it, in order, for
instance, to form new estates. The result was that in a short
time only a few thousand leaseholds were left, while still
a large number of houses were rented or let. For freeholders
no legislation was necessary. The times were^oodJiL£4)j-i.qgs^,
ci grainwere high and the value ot land was increasing. . ,

Less favourable, however, were the circiunstances of the
farm labourers, who were very poorly paid. Wages rose
about the middle of the century, to be sure, but not rapidly
enough to keep pace with the increasing cost of commodities.
The farmers helped their hands along to some extent by
their customary gifts, but the condition of labourers
in general was little to be envied ; and when old age came,
the poorhouse was often their only recourse. But to all this
the legislature paid little attention. In 1854 it passed a Ser-
vants' Act which protected the servants in various ways and
aboHshed the earlier regulation whereby children of peasants
were obliged to enter into service. Shortly before the intro-
duction of the Free Constitution an ordinance had been issued
(1848) which was designed to improve the condition of cottars
and lodgers and abohsh the master's right of punishment. The
owner of a house was thereby prevented from exacting any
work of a person who rented his house but was not in his
regular service. But beyond this the legislature did not go.

As the populations of the towns increased, the living
conditions of the lower classes grew worge and worse^ In
the middle of the century the housing question in Copen-
hagen was most discouraging. Little attention was paid to
the unhealthy condition of the overcrowded tenements in
some quarters of the city, and still less to other evils resulting
from it. The cholera epidemic in 1853 created some alarm,
to be sure, but did not lead to the adoption of any vigorous

THE FREE CONSTITUTION OF 1849 19

measures to prevent another similar occurrence. The Build-
ing Act of 1856 did not provide sufficient protection against
these nuisances, and the consequences were quick to appear.
Poor and inadequate as were the wages and housing condi-
tions of the working people, the latter were nevertheless
increasing in number, and it was obvious that they would not
long remain satisfied with the indifference manifested by the
government toward social questions. In the Emancipation
Acts they could see advantages for their employers, masters
or manufacturers, but it was difficult for them to see the
merits of a legislature which provided for them only the
poorhouse and otherwise mostly left them to shift for them-
K selves. Thus the circumstances of the tradesmen remained
I wretched ; and after the aboUtion of the guild system by
the Trade Act of 1857 they were left without any real organiza-
tion, even though the old guilds lived on as purely voluntary
institutions.

Social and Economic Developments in the Second Half of the
Nineteenth Century
The most important event in the history of Denmark in
the second half of the century was the war of 1864, which
deprived her of the duchies of Sleswick, Holstein, and
Lauenburg, and which was a more especial grievance in that
it separated the Danish inhabitants of northern Sleswick
from Denmark, and, in spite of a solemn promise of speedy
restoration, kept them under the heavy yoke of German rule.
This event was to become of prime importance, not only for
Denmark, but for the whole of Europe, as the hotbed of
subsequent European confficts and as an essential factor in
the growth of Prussia as a military state. For the economic
life of Denmark it was of still greater importance — just as
the separation of Norway from Denmark in 1814 — in that it
gave industry a strong impetus for attacking and solving the
many problems which pressed upon it within the country's
narrowed boundaries. As a result certain industries grew

C2

20 ECONOMIC DEVELOPMENT IN DENMARK

so rapidly that they not only suppUed the home market, but
also secured a foothold in the world market. The task was
further aided by a redistribution of the population, which, as
stated above, had rapidly increased throughout the nineteenth
|[ century. Agriculture could not employ everybody, and la,Tge
nmnbers were consequently thrown into trade and industry.
The importance of these changes may be shown by a tew
\ 'i p > statistics. At the beginning of the nineteenth centiu'y 929,000
people were Uving within the boundaries of Denmark ;
of these approximately a fifth Uved in the towns, being about
equally distributed between the capital and the smaller towns.
When the Free Constitution was adopted in 1849, the popu-
lation totalled 1,415,000, of whom the townspeople still
represented a fifth. The capital, which at that time had only
133,000 inhabitants, had grown very slowly in comparison
with the provincial towns and rurad districts, but from then
on it grew more rapidly. In 1860 it had 163,000 inhabitants ;
in 1871, 198,000 ; in 1901, 477,000 ; in 1916, 606,000. Thus
the time may soon come, if no unforeseen events occur, when
Denmark will have a capital with a million inhabitants —
:^2*^ a big head on a small body. During the same years the
* provincial towns also increased considerably ; in 1870 they

had a quarter of a miUion ; in 1901, half a miUion ; in 1916,
very nearly as many as the capital. In contrast with this,
the rural population remained almost at a standstill. In 1850
it numbered 1,116,000 people ; in 1916, 1,711,000 ; but of
these a third of a miUion hved in the suburbs of the old towns
or else in new towns which have grown up around railway
stations and in other places — a phenomenon which has com-
pletely changed the appearance of the country in the last
hundred years.

Villages built together have largely disappeared through the
exchange of land and the moving of farms ; and in addition
to the seventy provincial towns coming down from the Middle
Ages there are about five hundred new settlements which
have grown beyond all expectation. It is necessary for this

SOCIAL AND ECONOMIC DEVELOPMENTS 21

increased population to live, and not the least important
consequence of this necessity is the increase of the industrial
population.

The figures pertaining to trade and industry are very
instructive. In 1855 there were 56,000 male employers
and 42,000 employees or wage-earners — a proportion of four
to three; in 1870 the figures were respectively 67,000 and
48,000 — ^nearly the same proportion. Ten years later the
employers were still in the majority ; but in 1890 they were
considerably outnumbered by the employees, and in 1901
the proportion was nearly two to one (134,000 employees and
69,000 employers). In 1911, while the number of employers
had risen to 72,000, the number of workmen and office-
workers was about 158,000. Whereas in 1855 trade and
industry together (firms or individuals) had employed
about 100,000 workers, fifty-six years later they em-
ployed about a quarter of a million ; and whereas in 1855
the proportion of employers was 57 per cent., in 1911 it was
only 31 per cent. This comparatively short period therefore
witnessed a complete revolutions^ A corresponding impres-
sion of the movement may be obtained from the three indus-
trial censuses taken between 1897 and 1914.

The circumstances of the town labourer were by no means
easy. We have precise information for 1872 ; and as it has
been proved that during the first decade after the aboHtion
of the guild system workmen's wages were not essentially
changed, the figures we give may be taken to represent con-
ditions as they were during the whole period from 1860 to
1872. According to the statistics available, the average daily
wage in Copenhagen was 2-73 kroner ($0-73) for industrial
workmen and 2-38 kroner ($0-64) for artisans. The working
day was long — ten to eleven hours exclusive of time for meals.
The price of food was high, so that a workman, if he had
a family to support, could not provide for it even the bare
necessities of hf e. It was thus absolutely necessary for his wife
and children, so far as they could, to participate in the earning

22 ECONOMIC DEVELOPMENT IN DENMARK

of their own livelihood. Conditions were a Httle better in 1882,
as shown by a report for Copenhagen. The average daily wage
for an unskilled workman was then 2-37 kroner ($0-64<) ; for
a journeyman, 3 kroner ($0-80). Somewhat more might be
earned by piece-workers ; and as the price of food was
decreasing, some progress had been made even though wages
were still lamentably low. On the whole, however, it may be
said that the new period had not begun very auspiciously.

Beginnings of the Danish Labour Movement
As has been said before, the workmen, now that the guild
system was abolished, had no organization to fall back on.
The government manifested no special interest in their
welfare, and the soil was consequently fertile for labour
agitation. Nor did the workmen of Denmark lack inter-
course with the rest of the world ; not a few of them, indeed,
had lived many years abroad — mostly in Germany, in spite
of the mutual ill will engendered by the war of 1864.

It was especially the rise of the Commune in Paris, fore-
doomed as it was, which kindled the fire in Denmark. For
some time, however, it was not Danish workmen themselves,
but men outside their ranks, who carried the torch. The
leader in this first period of Danish socialism was Louis Pio
(1841-1894), who had become strongly imbued with social-
istic ideas and had propounded them in some pamphlets
published in 1871 and later in the weekly paper Socialisten
(The Socialist). In the same year he organized a branch of
The International Working Men's Association (founded in
London, 1864), which soon embraced a considerable nimiber
of members. In his positive proposals he was not particularly
radical ; but his speeches were defiant and provocative and
caused a great stir among the upper classes. When he, in
a stirring article, entitled ' The Cup is Full ', called a public
meeting for May 5, 1872, he and his associates were arrested
and charged with inciting revolt. The Danish branch of
The International was abolished, and Pio was sentenced by

THE LABOUR MOVEMENT 23

the Supreme Court to five years' imprisonment at hard labour.
He was pardoned in 1875, however, and on his release he
immediately resumed his activities. But his day of glory as
a leader was over. The workmen had now learned how to
manage their own affairs through their newly organized
trade unions. At a Convention in 1876 they founded The
Social-Democratic Labour Party, which was to carry on the
work of The International under the direction of a committee
of nine members. Pio, in recognition of his activities as the
originator of the movement, was placed at the head of this
committee, but he nevertheless felt disappointed and slighted,
and consequently lacked the self-rehance necessary to carry
on the struggle under the difficult conditions then existing
in Denmark. During the first few years after the Franco-
German War labour conditions had been surprisingly good.
Several strikes had been successfully carried through and had
led to increased wages and other improvements. Co-operative
societies had also been instituted, but they were successful
for only a short time. iThe world crisis of 1873, which brought
the period of prosperity to an end, dealt a severe blow to
Denmark, where it was followed by a long period of economic
depression. Workmen tried in vain during the last of the
seventies to organize strikes. Several trade unions were
dissolved and others had only an ephemeral existence.

The circiunstances confronting Pio after his release were
therefore anything but favourable, and in the spring of 1877
he left Denmark. To his party his departure seemed treachery
to the cause, and in reality he failed his cause and was
induced by the poHce to leave the country. His death, in
1894, brought his checkered and troubled career to an end.

Development of the Labour Movement

In the meantime the labour movement in Denmark lingered
along sluggishly. It was not long, however, before it received
a fresh impetus. In the eighties the trade unions began to
flourish. They aimed at first at higher wages, which were to

24 ECONOMIC DEVELOPMENT IN DENMARK

be obtained, if necessary, by strikes ; but soon other aims,
such as relief, sickness and burial funds, were also taken up.
Local unions were formed in the several towns, each for
a certain trade, and all were united in Federated Trade
Unions. These, in turn, were connected with the Social-
Democratic Society, the chief aim of which was to spread
socialistic doctrines.

In the middle of the eighties the membership of the trade
unions had grown to about 20,000. This was but a fraction
\ of the total number of workers in Denmark, to be sure, but
I it was nevertheless sufficient to secm'e for the working class
I as such a considerable political influence. From that time
Ion the labour movement advanced rapidly.

As stated above, it was especially from Germany that
sociaHstic ideas spread to Denmark. The German Gewerk-
schaften, rather than the Enghsh trade unions, served as our
model, and it was particularly the teachings of Lassalle and
Marx which were set forth in our socialistic press. No really
new and independent ideas were developed. On the whole
it may be said that the labour party had less need of learning
sociahstic theories than of adopting an efficient pohcy which
would gradually bring it into effective co-operation with the
other poHtical parties in Denmark.

We may form an idea of the progress of the Danish labour
movement in two ways : first, by following the growth in
the membership of the trade unions ; second, by noting the
results of parHamentary elections. At the close of the last
century the total membership of the trade unions was about
100,000. During the first years of this century the number
decreased a little, but it soon rose again during the great
revival of trade. In 1913 it was 150,000 ; in 1917, about
200,000. In 1886 the trade unions were consoHdated in
the Federative Trade Unions of Copenhagen {Samvirkende
Fagforeninger i Kobenhavn), and twelve years later there was
formed a national organization called The League of Federated
Trades, which enrolled most of the members of the older

THE LABOUR MOVEMENT 25

association. There were a few trade unions that declared for
greater independence and stood apart from the federation ;
but all together they formed a compact and soHd body which
was arrayed, politically and socially, against all the other
classes of society. In 1892 the Federative Trade Unions
of Copenhagen had introduced into its constitution a clause
providing for mutual support in case of strikes, and this
principle was also included in the constitution of the League
of Federated Trades. If the members of one trade union
resolved to go out on strike, and the chief organization ap-
proved the action, contributions were exacted from the other
trade unions and used for the support of the strikers. More-
over, the trade unions also maintained certain international
connexions, chiefly in Scandinavia, through which they might
expect assistance in case of a conflict with ' capital '.

The procurement of higher wages was of course the main
object of these organizations ; but they also interested them-
selves in other matters in behalf of labour, such as support
of the unemployed, exchange of labour, regulation of appren-
ticeship, etc. Some of these objects have now been taken
over by other institutions, as we shall see further on, but the
trade unions have nevertheless remained in close touch with
the work.

The second standard by which to measure the growing
strength of the labour movement is furnished by the parUa-
mentary and municipal elections. As early as 1872 the
workmen of Copenhagen nominated candidates for election
to the Folketing (Lower House), one of whom was Pio, but
they received very few votes. Nor did they fare much better
at the next elections. Still, they received an increased number
of votes, and it was becoming apparent that several consti-
tuencies would eventually become socialistic. Finally, in
1884, the social-democrats seated two representatives in
Folketing ; and steady progress followed thereafter. In
1892 some 20,000 social- democratic votes returned only two
members, but in 1901 the number of votes was nearly 40,000

26 ECONOMIC DEVELOPMENT IN DENMARK

and fourteen socialists, out of a total of a hundred and fourteen
representatives, took their seats in the Lower House. In 1910
twenty-four socialists were elected by 99,000 votes (28 per
cent, of all the votes cast). Had the number of candidates
elected corresponded exactly to the number of votes received,
the party would have seated thirty-two representatives ;
but the social- democrats voted chiefly in the urban districts,
where the nmnber of electors was generally greater than in
the country. In 1913 the social- democratic candidates re-
ceived 107,000 votes (nearly the same proportion as before),
and this time won thirty-two seats. The social-democrats
now stood second, numerically, in the Lower House. The
new Constitution of Jime 5, 1915, made no essential difference
in the comparative strength of the party. In 1918 the
social-democrats obtained 262,000 out of 921,000 votes (men
and women), or 28 per cent. ; and they elected thirty-nine
of the one himdred and forty members of the Folketing —
likewise 28 per cent. The party now stood second to the
' Left ' with its forty-six members, and the ' Radical Left '
stood third with its thirty-nine members. Simultaneously
with this increased membership in the Folketing the social-
democrats also succeeded in entering the Landsting (Upper
House), in which the election of 1915 won for them four of
the sixty-six seats ; and in 1918 they won fifteen seats.

It is almost needless to say that evidences of the growth
of the social-democratic party are also to be found in the
municipal boards of several towns, not the least in Copen-
hagen. At the election in 1917 for the municipal board of
the capital the social-democrats won thirty out of fifty-five
seats ; in Aarhus, the second largest town in Jutland, eleven
out of nineteen ; in Esbjerg, nine out of nineteen, and so on.

Employers' Associations
The strength of this movement, which held workmen of
all occupations in closer union than had ever been the case
in the time of the guilds, naturally demonstrated the necessity

' EMPLOYERS' ASSOCIATIONS 27

of employers' associations. After the abolition of the guild
system a number of the more important guilds had combined
to organize masters' unions, which partly undertook the task
of apportioning the old relief funds and partly set themselves
to guard the interests of their several trades. Similar associa-
tions were formed in the provincial towns ; and soon there
arose a great number of employers' associations which were
to form the basis of an entirely new development. For some
time these new associations did not have as solid an organiza-
tion as those of the labourers ; but in 1879 there was founded
the association of the Joint Representatives of Trade and
Industry, which gradually gathered a large number of mem-
bers and soon became firmly consoHdated — especially after the
Industrial Council (Industriraadet) was formed, in 1910, to
protect the interests of industry. The latter was of especial
importance for the economic life of Denmark during the World
War. The relationship to the workmen rested with another
institution, the Employers' and Masters' Union (Arbejds-
giver og Mesterforening), founded in 1898 on the basis of
a smaller association which had been in existence for several
years. It is very firmly organized and exercises a very con-
siderable authority over its members, for whom its General
Assembly is authorized to declare lockouts.

The new association soon had an opportunity to test its
strength. A growing antagonism between the two parties
had long been smouldering, the employers complaining of
a disposition on the part of the men to break the rules, the
men, on the other hand, demanding freedom from all rules.
In 1899 they came to an open rupture. The trouble began
with an apparently slight disagreement among the joiners
in some towns in Jutland. The chief organizations came to
an agreement in the matter, but this agreement was renounced
by the journeymen. A joiners' lockout was then declared
for the whole country, although the journeynien joiners
withdrew tbeir objections. But the Employers' Association
now made claims upon questions of principle, and as the

28 ECONOMIC DEVELOPMENT IN DENMARK

journeymen would not agree to these claims the lockout was
extended to include all the building trades and the iron
industry. The conflict was settled after several months by
the so-called September Agreement. The various rules then
laid down might be interpreted as a victory for the employers,
even though many of them could not be enforced without
opposition. But definite resolutions were adopted with
regard to the declaration of strikes and lockouts, which, it
was stipulated, were not to begin without due notice. More-,
over, the right of the employer to conduct and distribute
work was acknowledged ; and the chief organizations on
both sides were to co-operate to check the excessive con-
sumption of spirits. Any violation of this agreement was to
be dealt with in a court of arbitration (Permanent Court of
Arbitration established by an act of April 3, 1900). llo this
way the road was cleared for the social development of trade
and industry during the following decadey

The Commission of 1875
Other factors had long been at work to create in Denmark
a development of class relations corresponding to the demands
that had grown up all over the world. In September, 1875,
a commission was appointed to investigate and report on the
circmnstances of workmen. The report, which was submitted
at the end of three years, did not lead to any practical
measiKes of importance, but by its motley contents it aroused
a wide discussion of many questions. Its recommendations
and proposals reveal a truly remarkable conflict between
old and new ideas. Declaring that the Trade Act of 1857
was too radical a departure from the established pohcy, it
demanded greater restriction of trade. A few members even
proposed a reversion to the conditions existing at the time
of the guilds. Some advocated co-operative unions, and
others declared themselves in favour of a system of profit-
sharing between employers and employees. The latter
idea was just at that time engaging the attention of political

I

THE COMMISSION OF 1875 29

economists, some of whom upheld itas the panacea for all social
ills. Some members advocated a strengthening of contract
relations between employer and employee by the introduction
of a contract book with definite rules as to time of notice,
prohibitions against employing any workman who had not
been formally released from his previous contract, etc. Some
of the members advocated workmen's courts to which work-
men and employers might have recourse for the settlement of
labour questions of all kinds. No special mention was made,
however, of the important question of wages. The proposals
referred mainly to local questions and consequently could not
be of any real value for problems of the next generation.
As regards funds for the relief of sick workmen, a minority
of members proposed the re-introduction of compulsory
contributions or assessments, while others advocated volun-
tary contributions from the workmen themselves. Finally,
there was proposed an Employers' Liability Act whereby
compensation should be granted to men injured at work or
to their surviving famihes in cases of fatal accidents. While
some members advocated the furthering of old-age pensions
by voluntary contributions to a pubhc fund, a minority
declared itself in favour of compulsory contributions
in this case as well. Of the new measures proposed
were those for Savings Banks for poor people ; easier
access to school education, and limitations of work on
Sundays. Moreover, in consideration of the increasing
importance of machinery in industry, recommendations were
also made for the introduction of low power engines in small
manufacturing establishments. This last reconmiendation
shows more distinctly than anjrthing else the contrast between
the old and new ideas. The industrial census of 1914 shows
that even then only 7 per cent, of the quite small concerns,
conducted by a single proprietor without assistants,
had introduced engine power, in spite of our great
technical progress along other Hnes. Between 1906 and 1914,
however, the increase in the use of machinery, calculated

30 ECONOMIC DEVELOPMENT IN DENMARK

in horse power, was from 113,000 to 230,000 — an increase
of more than a 100 per cent, in not more than eight
years.

Beginnings of Social Insurance
By the time the report of the commission was pubhshed
a strong turn of the tide had taken place in the outside world
and had contributed to bring about a corresponding change
of attitude in Denmark. In Germany the short-lived free
trade movement had given way to a protective policy.
Political economists had freed themselves from the old idea
of the social-economic harmony resulting from free competi-
tion and free initiative. ' Professorial socialism ' (Catheder-
sodalisinus), with its demand for the intervention of the state
in behalf of the lower classes, was popular in the universities.
The German government had entered into the struggle
against the socialist movement with firm resolve, but with
little success. In 1878 it passed a Sociahst Act which led
only to a closer consohdation of socialistic ranks. As
counterbalance to anything which might arouse dissatisfac-
tion among the lower classes, on November 17, 1881, Bis-
marck issued the famous Imperial Message concerning
workmen's insurance, which set forth basic principles foi
legislative measures, not only in Germany, but also in severa
other countries. In solemn form the message declared thai
the cure for social ills was not exclusively to be found in \hi
suppression of social-democratic excesses, but in positive
efforts to promote the well-being of the workmen ; and if
proposed, in the first place, a workmen's compensation la\i
and a further provision for sick fimds and old-age and invahc
pensions. Results followed quickly. In 1 883 a law on sick fundi
was passed introducing compulsory insurance, two-thirds of ij
to be paid by the workmen and one-third by the employer!
fethe following vear came a workmen's compensation act which
)ugiit to light the great change of opinion that had taken
tee since l»7l as to tne responsibility of employers in case

SOCIAL INSURANCE 31

ofaccidents^ for it enjoined on employers organized in large
mutual vocational societies (Berufsgenossenschaften) to pay
compensations to men injured at work or to their surviving
families in case of fatal accidents. Finally, in 1889, the
complicated old-age andinvalid insurance was introduced
by the so-called Klebegeseiz, which entitled wage-earners
and office-workers with low salaries to insurance in cas^~i;Tf-
invaliditv or on the completion of their seventieth year. The
payment was regulated by means of stamps affixed to
receipt cards, one-half to be paid by the insured and one-half
by his employer ; moreover, the government was to add
a contribution of fifty marks a year to each pension. In
1911 the whole system, which was somewhat extended and
improved during the following years, underwent its last
great change under the comprehensive Imperial Act, which
brought about conformity between the regulations concerning
workmen's insurance and the attempt to establish widows'
funds. But no steps were taken toward the solution of the
great and difficult problem of unemployment insurance.

In this way the road was opened for compulsory insurance
in Germany, and it is not surprising that a similar movement
was initiated in Denmark. The results gradually achieved
in this country, however, proved to be of an essentially
different character, and the fact is that we may boast of
having introduced a system which is in many ways far
simpler and yet very effective. If the country had not
been so small, it would undoubtedly have been overrun by
committees from all over the world appointed to study our
system, which in certain points has indeed served as a basis
for other countries to work on.

The Commission of 1885 and the Development of Social
Insurance

In 1885 a second Workmen's Commission was appointed
in Denmark which had a more Hmited task than that of
1875. Its original aim was to formulate a proposal for an

V

32 ECONOMIC DEVELOPMENT IN DENMARK

accident insurance, but this aim was afterwards extende(

to include a sickness insurance as well ; and, indeed, it was

only upon this point that the proposals of the Commissioi

had any direct bearing. After two years of work the Com'

p mission handed in its report. With regard to sick funds

it proposed not to disturb the existing system of Friendlj

Societies, but rather to encourage this form of self-help ii

^^ every possible way. When the guild system was abolishec

^ the majority of the compulsory journeymen's funds, whicl

were often combined with extra voluntary contributions

had been taken over by voluntary journeymen's clubs

Besides these, however. Friendly Societies of another sori

were then in existence throughout the country. In 1866

the total membership was estimated at 20,000, but after

that it increased rapidly ; in 1874 it amounted to 87,000,

and in 1885 the total membership of about one thousand

Friendly Societies was estimated at about 120,000. Generally

speaking, therefore, the individual societies were small.

Inasmuch as the system of Friendly Societies had led to such

good results, it seemed quite proper to continue working

along the same Unes.

The Friendly Societies had not operated entirely without
outside support. In the capital most of them were recognized
by the municipality — which meant that their members,
when their need was proved, received treatment at reduced
rates in the Kommunehospital for themselves, as well as free
cure and attendance for their wives and children. Moreover,
physicians did a great deal of work for them at low rates.
But the societies, although their payments to the members
were ordinarily small, were often hard pressed for funds,
so that it was sometimes necessary to raise money to cover
deficiencies by extraordinary means, i. e. by festivals of
otherwise. But while the activity of the Friendly Societies
could not be extensive from an economic standpoint, great
advantages of another kind were derived from this form of
self-help. The administration and inner life of the societies

THE COMMISSION OF 1885 33

was an excellent source of training for their secretaries,
cashiers, district managers, auditors, etc., so that they must
be credited with having contributed a great deal to the moral
and intellectual uplift of the population. The Commission
of 1885 consequently expressed a unanimous opinion in
favour of their continuance and development as voluntary
institutions, and this opinion was acted upon in the bill
brought before the legislature. In this way were established
Unes along which Danish social insurance was to develop
during the succeeding generation.

Some years passed, however, before this matter was
finally adjusted. An act of April 12, 1892, made it possible
for the Friendly Societies to secure government recognition,
and they obtained considerable advantages in return for
a certain control to which they had to submit. Individual
societies were Hmited to a certain place or trade ; only
persons with a modest income were admitted ; persons
suffering from chronic diseases could be admitted as members
only on certain conditions. The act granted a government
subvention of 500,000 kroner to the recognized Friendly
Societies — an amount, however, which was soon considerably
exceeded. The amount receivable by each society might
reach a maximum of 2 kroner (%0'M) per annum per member,
plus one-fifth of each member's subscription. Moreover,
members and their children under fifteen years of age were
to receive treatment in hospitals at reduced rates, as well as
free transportation of doctor or midwife in rural districts,
when they themselves had no horse or wagon. The help
given by the societies was generally to consist of free medical
treatment and a daily allowance of between 40 ore ($0-11)
and two-thirds of their earnings. This help might be granted
for a period of at least thirteen weeks in twelve consecutive
months. An inspector was appointed to supervise the
recognized societies ; and to establish a contact between
the societies ^nd the inspector it was agreed to hold an annual
meeting of delegates from the societies either for the various

1569.35 Tk

34 ECONOMIC DEVELOPMENT IN DENMARK

provinces or for the whole country. Furthermore, the
several boards were to elect a general council for the
discussion of questions concerning the societies, and this
council was to submit to the government proposals for
withdrawal of its recognition of any society which had acted
in questionable or unsatisfactory manner, even if it had not
openly violated the provisions of the act.

The last provisions especially contributed to fmiher the
development of the Friendly Societies. In their delegates
and the council they now had a mouthpiece, and a system
of common rules and regulations was established which
proved to be of great value. The choice of Mr. Th. Sorensei
as Inspector — a practising physician who had been a member
of the Commission and who won the confidence of the Friendlj
Societies to a truly remarkable degree — contributed greatly
to the thri\dng of their funds. He supervised the interests
of the societies in a genuinely democratic spirit, and it was
largely due to his influence that the delegates appointed were
most valuable to the cause.

The rapid growth of the movement under this act shows
to what extent the principles involved harmonized with th<
Danish way of thinking. At the close of 1893 there were
457 recognized societies, comprising 116,000 members. A1
the close of 1915, when the act of 1892 ceased to be in force
the mmaber of societies had increased to 1,546 and the numbei
of members to 892,000. Thus the time seemed near whei
half of the adult population of the country would be memben
of some Friendly Society. The female members sHghtly out
numbered the males ; and it must be noted that, according
to the act, a married woman had to be an independent
member in order to participate in the advantages offered.

If the question is asked whether the voluntary system o
Friendly Societies has reached down to those classes fol
which it was intended, it must be admitted that we hav<
no guaranty of it such as we would have in a compulsory
system. But an examination of the social position of th<

THE COMMISSION OF 1885 35

members seems positively to indicate that the great increase
in nimibers during recent years is from the lower classes,
the servants and labourers, and that the day is not far off
when nearly all of the poor people will be members of one
or another of the recognized Friendly Societies. While
a few people still shun them, it is of very great importance
that they have given the lower classes of the community
an opportunity to exercise self-government and, through
their delegates and the council elected by them, to contribute
to the further development of the cause.

A committee was appointed in 1910 to amend the act, but
the amendment was not completed until 1915 ; and the act
which went into effect at the close of that year did not contain
any essential changes. The rules relating to the government
subvention were modified in various ways ; for the capital
the amount of the subvention was limited to 4-65 kroner
($1-25) per annum per member; for the provincial towns
to 4- 15 kroner ($111); and for the rural districts to 3- 65 kroner
($0-98). A deficiency fund was also established which was to
make up, during the first years, any deficit in the amount
previously contributed in accordance with the old act.
These limits will probably be abolished by further legislation.
The act further empowers the municipality, within certain
Hmits, to help poor members of recognized societies in the
payment of their subscriptions, and to do this without the
consent of the higher authorities. To this must be added
the grants made in the last few years in conformity with the
Jaws passed to alleviatethe high cost of living— a matter
to which we shall refeFTateE OFvery great^mportance,
moreover, is the duty which the law imposes on the
municipahties to furnish free transportation to the sick,
or to physicians and nurses, in rural districts, and to reduce
hospital charges. The state further sets apart considerable
simis for consumptive hospitals and for lunatic asylums.
Xs regards membership, the new law contains an extension
of the previous provision regulating the admission of persons

D2

36 ECONOMIC DEVELOPMENT IN DENMARK

suffering from chronic diseases, and imposes upon the
societies the obhgation to receive such persons when they
otherwise satisfy the requirements of admission. The same
paragraph of the new act contains a sort of promise ol
invaUdity insurance, running : ' until in other ways means
shall be provided by special regulations to help persons suffer-
ing from chronic diseases and the hke.' Persons who cannot
now be classed as poor may be admitted as ' passive '
members (paying a subscription), with the right at a latei
period to participate in the advantages offered by the society
in case their circumstances should necessitate it.

A very important point is the relation of the societies t<
physicians. Gradually, as the friendly societies extender
further and further, the physicians found it more and mor<
difficult to maintain their former philanthropic position. H
consequently became necessary for them to present claimi
for money which the societies did not always understand
with result that disputes arose between them. The new law
accordingly, provides for the establishment of an arbitratioi
council, that is, a conciliatory council, to which such disputei
can be referred. While the societies are, of course, under th<
control of the state, they still have an independent administra
tion to a great extent, both severally through their own annua
assemblies and jointly through the co-operation which hai
come about in the course of years.

The several societies have combined in a number of Central!
Societies, each with its special board, and these again,
through their chairmen, form a committee. Moreover,
meetings of delegates are held to consider such questions
as are of importance for the whole sick fund institution.
Finally, there is the Friendly Society Council, previously
mentioned, the membership of which is now fixed by the
new law at nine.

Since the law went into operation, in 1916, the new
arrangement here briefly described has considerably furthered
the sick fund institution in Denmark. A few figures will bear

THE COMMISSION OF 1885 37

out this statement. At the close of 1917 the 1,550 societies
comprised not less than 991,000 members, or half of the adult
population of Denmark. Of these 1 1 ,000 were victims of chronic
diseases and were admitted only under reservation. Funds
to the amount of 11,000,000 kroner (about $3,000,000) had
been collected, while the annual income was 13,000,000 kroner,
of which 3,700,000 came from the state and 300,000 from the
municipalities. The largest outlay was for medical assistance,
amounting to more than 5,000,000 kroner, i. e. about 5 kroner
per member. This amount has increased at a rapid rate,
since a few years ago it was only 4 kroner. The outlay for
medicine, bandages, etc., was 1,200,000 kroner ; for treat-
ment in ordinary hospitals, as well as in consimiptive
hospitals and lunatic asylums, 1,700,000 kroner ; and for
pecuniary assistance (inclusive of help to women in confine-
ment) 3,400,000 kroner. The administration cost upwards
of 1,000,000 kroner.

A large number of recognized societies also established
burial funds, and a very considerable niunber of these have
combined in a reinsurance fund which has contributed still
more to enhance the sense of union.

The above description will convey a general idea of the
friendly societies of Denmark and of their value as means
of self-help offered with the greatest possible freedom. In
only one point is there an apparent breach of the principle
of free determination. This is the law of 1908 (later amended)
concerning the employment of foreigners, the so-called
' Polaklov '. It relates to a Friendly Society organized for
the benefit of Polish workmen, the support of which is
compulsory upon their employers, but is aided in part by
a government subvention. These foreign workmen who five
for a while in Denmark are of course entitled to effective
protection, but they cannot be expected to possess that
privilege of voluntary association which belongs to Danish
workmen.

38 ECONOMIC DEVELOPMENT IN DENMARK

Development of Accident Insurance
While sickness insurance thus took its course, accident
insurance was for a long time unknown. The report of th^
Commission of 1885 proposed an arrangement very similar
to the German system, whereby all workmen employed in
the cultivation of lands, or in woods, or in industry, or in
loading, imloading, etc., should be insiu-ed in public insurance
companies. The proposal itself indicates a departure from
the old idea that wages should be sufficient to cover all
insurance expenses to the new attitude that expense incurred
by a workman through an accident occurring while he is at
work attaches to the employment and should be borne by
the employer. That this view has come to prevail in Denmark
as well as in Germany, shows to what extent ' professorial
socialism ' has spread. The compensation proposed was
a yearly pension to the workman injured or to his surviving
family in case of fatal accidents, the money to be obtained
from a tax on the Hartkorn, as well as from the employers
in the industries and trades comprised under the act.
The legislature did not accept this proposal, however, and
several years passed before an agreement relating td an
accident insurance was arrived at. In the meantime the
matter was left to private initiative, and several employers
voluntarily introduced insurance for their workmen. The
act of January 7, 1898, took this voluntary development
into consideration and fixed upon the employers within
the trades and industries specified in the act the responsibility
for compensation. It permitted them, however, to transfer
the risk to an insurance company, provided only that the
company was one recognized by the government. This
management of accident insurance was quite different from
the German method. Thereupon there grew up a niunber of
new insiu-ance companies which assumed the risk for the
compensations awarded to injured workmen, or to theiri
surviving families, by the Workmen's Insurance Coimcil.
The natural outcome of this was the abolition of the system

ACCIDENT INSURANCE 39

of annuities. When an accident occurred, a lump sum
compensation was awarded, and it was considered a private
affair of the people concerned whether they spent the money
judiciously or injudiciously, whether they used it to start
some new commercial industrial or agricultural enterprise,
or whether they merely wasted it. On the whole this liberaHty
seems to have been justified, the results bearing witness to
the progress and common sense of the people thus benefited.
The Workmen's Insurance Council upon which it devolved
to apply the act, and especially to fix the compensations,
was composed of representatives of both employers and
workmen working in amicable co-operation. Legislation was
continued along these lines, and a considerable nmnber of
activities were gradually brought under the accident insur-
ance. In 1900 it was extended to the Danish fishermen ;
and, with the support of the state, independent fisher-
men were also allowed, on tlie payment of a low premium,
to participate in it. In 1905 came an act for Accident
Insurance for Seamen, which went a step further by enjoining
on the employers the obligation to cover their risks by
transferring them to an insurance company recognized by
the government. Finally, in 1908, an act was passed which
extended accident insurance to agricultural workers on
estates of a certain value, the owners of which were Hkewise
bound to transfer their risks to recognized companies ; but
the act also allowed both workmen and employers to effect
voluntary insurance without regard to the size of the estate.
On the whole it may be said that this system had a good
effect. It may, indeed, be taken for granted that only very
few employers did not transfer their risks to a recognized
insurance company. On the other hand, an obHgation im-
posed upon them to do so could not be considered arbitrary
interference with personal freedom when nearly all employers
in the occupations concerned actually had insured their risk.
This is the principle laid down in the long needed Codification
of July 6, 1916 (which went into force on April 1, 1917),

40 ECONOMIC DEVELOPMENT IN DENMARK

which at the same time added an extraordinary extension —
that such insurance should affect not only industry, but also
trade and commerce, public employees, shop clerks, etc.,
as well as domestic servants permanently or temporarily
employed in private households ; also persons engaged in
forestry, agriculture, and horticulture, as well as in shipping
and fishery. The duty to insure oneself is laid down as
a principle, but the individual is left free to choose the
company in which the insurance is effected. The law of
July 6, 1916, has thus permanently drawn a very large
part of the population under its influence, and it admits,
moreover, a voluntary arrangement for certain independent
groups.

If we examine the decisions made with regard to the duty-
of insurance or the reference of accidents under the law, we
find that a great hberaUty underUes its extensive regulations,
even in cases which, hastily considered, would seem to lie
outside the scope of insurance. Under the law, for instance,
comes such casual assistance as might be rendered in getting
a wagon out of the mud or in helping a neighbour to catch
a stray calf. If a nursemaid is injured when playing with her
master's child ; or if a seamstress working at home for
a master tailor runs a needle into her eye in leaning over to
tend her little daughter who sits beside her trpng to sew ;
or if a six-year-old child helping on her father's farm is injured
when leading a cow home from the field — all such cases Uke-
wise come under the law. So, too, a bathing accident from
a ship, or from a boat belonging to the ship, is considered
within the law. A death which formerly would have been con-
sidered an indisputable suicide may now be attributed to
insanity. An explosion due to lack of caution is not now called
a ' case of gross neghgence '. Moreover, the same regard is
shown for those, who, besides the person injured, may suffer
from an accident ; for example, if a servant girl has been
helping her parents in the payment of taxes and the like, an
injury to her gives them a just claim for compensation. If an

ACCIDENT INSURANCE 41

employer has neglected to insure an injured employee, he
is liable for the compensation ; and if the damage is not
covered by this compensation, the remaining amount is
recoverable from the insurance companies. The amount
thus imposed on the companies, as well as the expense which
a liberal construction of the law will occasion, is certainly
of but little financial importance. The thirty mutual
societies, nine joint-stock companies and two insurance
companies serving the interests of Danish ship-owners,
fishermen, and seamen are apparently prospering under
this law, and dissatisfaction on their part is rare.

The Workmen's Insurance Council, which is at the head
of the whole system, and which in conformity with the
provisions of the law decides whether any compensation
shall be paid and, if so, ^'^hat the amount shall be, will
naturally, by the reason of its very composition, look first
to the interests of the insured. The composition of the
council corresponds to that which has served well in the
Friendly Societies. It consists of four departments ; one
for industry (including private servants and the like), one
for shipping, one for fishery, and one for agriculture. In
each department there are three members appointed by the
Crown, one of whom is the chairman of the council, two
representatives of the employers and two of the workmen ;
these, as well as the representatives of the persons voluntarily
insured, are appointed by the government. The representa-
tives of employers and workmen are appointed after nomina-
tion by institutions officially authorized to do so, namely,
the Danish Employers' and Masters' Union, the League of
Federated Trades, the Federative Agricultural Unions, and
the Federative Danish Cottars' Unions. These organiza-
tions act as states within the state, and by mutual negotiations
they have settled many disputes in such a way that the
result, as stated above, is generally to the advantage of the
insured.

Further development is of course possible. It may be

42 ECONOMIC DEVELOPMENT IN DENMARK

along the line of greater concentration, as, for example, by
placing all risks in one or two public insurance institutions
only ; or it may consist in increasing the amount of com-
pensation in view of the decreased value of money. In
general, however, the system has been perfected, and certain
problems have been solved in a manner satisfactory to the
lower classes of the population.

Development of Old-Age Pensions
While in this branch of social insurance there is no great
divergence from the German system, although a considerably
wider scope has been given to private initiative, in the matter
of old-age pensions, on the other hand, a quite different
arrangement is to be observed.

The question of voluntary old-age pensions has been under
consideration in Denmark for many years. The Workmen's
Commission of 1875 proposed that the state should establish
an old-age pension fund for the poor. When the matter was
debated, a majority was in favour of making it a voluntary
fimd, to which the state and the municipality should con-
tribute sums equal to the contributions of the insured, but
not exceeding 20 kroner per annum per capita ; and for
certain workers (servants, factory hands, and apprentices)
between the ages of fifteen and twenty, employers should
make certain payments. A minority, on the other hand,
insisted upon a full compulsory insurance system. In 1880-
1881 there was discussed in the Folketing a private bill which
was closely connected with this subject and which proposed
that a certain amount of insurance should be compulsory
for all persons between the ages of fifteen and twenty-two,
and that further voluntary insurance should also be allowed ;
also that members of the working class between the ages of
twenty-two and forty-two should receive allowances from the
state and the municipality to aid them in the purchase of
an annuity payable at the age of sixty. The bill, however,
did not meet with general approval. Moreover, a proposal

OLD-AGE PENSIONS 43

made by the government in 1883 for the introduction of
volmitary old-age insurance with aid from the state for
persons between the ages of eighteen and forty-five suffered
the same fate. The latter bill was brought in again the
following year in an amended form, but with a similar result.

It is not surprising that things came rather to a standstill
in this matter. In the eyes of most people old age is a very
remote condition, and those who are not unusually provident
are far more attracted by matters of immediate concern.
Insurance against sickness is to them a far more vital matter
than an old-age pension ; and as soon as a man has married
and settled down he thinks first of providing for his wife
and children. This is so much more the case because the
annuities obtained seem to most people too small to com-
pensate for the necessary sacrifices.

The discussion of old-age pensions was, nevertheless,
continued on the basis of the government proposal. But at
the end of 1890 two leading members of the Folketing,
Messrs. Berg and Horup, brought in a very different bill
for the estabUshment of old-age pensions for the poor.
This bill proposed that the poor should be allowed to pur-
chase annuities at low rates, but also that a permanent
grant of annuities should be made for all persons over sixty-
two years of age who had no means of support, the necessary
fimds to be raised by a tax on liquor. Soon afterwards
a bill was brought in from another quarter proposing a system
of old-age pensions partly built upon compulsory insurance
and recommending a beer or malt tax to cover any grant
made by the state. The matter was now ready for decision ;
and when ten members of the Folketing presented as an
alternative to the Berg-Horup proposal a bill entitled ' old-
age pensions for respectable poor people outside the poor-
relief system ', it was passed by both Houses with a sur-
prising unanimity and became a law after a lapse of only
one month.^ This act, passed on April 9, 1891, has since
been amended, but it still reteiins its original character and

44 ECONOMIC DEVELOPMENT IN DENMARK

has played a very important part in Danish social policy.
The principle embodied in it is very simple ; the only hint
of a claim on the ground of former self-support lies in the
condition that the person who receives help shall for some
years have been independent of the poor relief system. The
act entitles every one who has reached the age of sixty,
and is incapable of supporting himself and his family, to
a pension of sufficient amount to provide the necessaries
of life, together with medical treatment and attendance in
case of sickness. The support may be given either in money
or in kind, the amount to be fixed by the municipality
concerned, with the understanding that one-half shall be
paid out of the state, but that this half shall not exceed
a total of 2,000,000 kroner.

This act may be looked upon as an extremely bold step,
since nobody could predict what heavy burdens it might
impose upon the pubUc. The enormous increase of expense
gradually incurred in the years to come would perhaps have
alarmed the proposers, had they realized at the time how
much money this single measure was destined to cost. But
the act contained two important advantages. In the first
place, it avoided the costly and troublesome apparatus of
insurance with its compulsory payments, which did not
seem to offer any real return for all the trouble and pecuniary
sacrifices involved. In the second place, it could enter into
operation immediately, or upon very short notice, whereas
an annuity started now would be payable only after a lapse of
many years, and would, moreover, be far less satisfactory for
the reason that its calculations would be based on the incomes
of the present generation, which would perhaps not begin
to receive its payments until nearly half a century later, when
the exigencies of life and the purchasing power of money would
probably have changed to such a degree that the amounts paid
would be entirely insufficient. These two advantages of the
Danish system are very apparent when the latter is compared
with the German ^Z^ieg^se^^ with all its compHcated apparatus.

OLD-AGE PENSIONS 45

Naturally the act was severely criticized by economists.
On the one hand, it was asserted that it involved a certain
arbitrariness in the amount of the annuities. One munici-
pality might be very niggardly, another very liberal. The
Berg-Horup bill would have answered better, it was contended, .
in that its pensions would be fixed amounts, whereas those
of the new bill might easily create very great burdens. The
other objection was of a more serious nature. There was
grave danger, it was claimed, that the people would tend to
become careless and extravagant if they were assured
support in their old-age. Moreover, persons who had denied
themselves things in order to save a little money would
receive nothing ; while those who had spent all their earnings
would be taken care of by the state and the municipality.
There seems to be no special occasion to fear this, however,
especially after a Uberal amendment having been made
enabling the people concerned to have a legacy, their
dwelling, or a little income from an annuity. Even now
municipalities may, on their own initiative, introduce a system
of fixed rates, as Copenhagen has done.

The cost of the old-age pension system has greatly increased,
as might have been expected, for the reason that an increasing
number of old persons who previously would have come under
the poor-relief system are now receiving old-age pensions.
But this has come about under the influence of the general
rise in prices and in apprehension of the needs of the people
to be supported. For this reason the amount of the pension
has been increased, though somewhat irregularly, since each
municipality determines the amount of its own pensions.
The government subvention was originally limited, as already
stated, to 2,000,000 kroner ; after some years this limit was
extended to 2,500,000 kroner, and in 1902 the Hmit was com-
pletely abohshed. In the fiscal year 1904-1905 the public
expense had increased to 7,000,000 kroner; five years later
it was about 10,000,000 kroner-, and in the last fiscal year
before the war it was 14,000,000 kroner. During the World

46 ECONOMIC DEVELOPMENT IN DENMARK

War it rose with enormous rapidity; in 1916-1917 it was
20,000,000 kroner. Approximately 70,000 persons, all told,
benefited by the system, besides about 20,000 who were
dependent upon them. A considerable proportion of the
people who have reached the age of sixty are now receiving
old-age pensions, and approximately one-fourth of them
are men. The percentage increases greatly with advancing
age.

Invalid Insurance
Several attempts have been made to amend the act.
The fixed rates of the Berg-Horup bill have had many
friends, and strong declarations have been made in favour
of extending the act to include invalids under sixty years
of age. It must be acknowledged that in this respect the
German system has a great advantage over the Danish
system. In 1903 a new committee was appointed, which,
after several years, handed in a report. In this report two
principles stand over against each other. On the one hand
it was proposed to let the existing arrangement for sixty-
year-old persons apply to younger invalids as well. This was
a very simple solution, but it aroused some apprehensions
on account of its expense. Now that the state and the
municipahty had bound themselves to spend so much upon
the old, it was thought right and proper that a tax should
be imposed as a sort of premium for a certain number of
years on those who would benefit by the pension, in order
to lighten the burden resting upon the general public. The
chief proposal was to the effect that every person in the
country should pay from his eighteenth year, for fifteen
successive years, an annual contribution of 24 kroner as
a premium, for which he would receive an annuity in case
of invalidism, or at the age of sixty-five ; and this annuity
would be supplemented, if necessary, by a government
grant. This arrangement was not adopted, however, and
it was therefore to be inferred that public opinion favoured
more and more the simple solution of allowing people to

INVALID INSURANCE 47

receive invalid pensions on the principle of the old-age
pensions, i. e. without having to make payments towards
them. During the World War money became easier, and
expense is consequently not so carefully considered now as
it was formerly, even though it may weigh heavily enough
on an already strained budget. At the same time the trend
of opinion is more and more towards sociahsm, even among
people who continue to cling to individualism. It might be
expected, therefore, that development in this direction would
soon appear in the Danish old-age pensions act.

Such an amendment would place Denmark on a level with
Australia. It is interesting to note that a system of old-age
pensions similar to the Danish was adopted in New Zealand
in 1898 ; but the rates there were fixed, as the intention
was to grant an annual income of a specified amount. The
age limit for males is sixty-five instead of sixty. This
example was followed later in Australia, where an act was
passed entitHng any person in the whole commonwealth,
upon certain conditions, to an old-age pension from the age
of sixty-five and to an invalid annuity from the age of
sixteen. From Australia the principle spread to England,
where, in 1908, old-age pensions were introduced for all
persons over seventy whose incomes did not exceed a certain
sum per annum and who complied with certain rules. In
England the great National Insurance Act of 1911, which
was a radical departure from all inherited ideas of social
policy, supplemented the pension act of 1908 by introducing
a compulsory insurance, with contributions to the premiums
by the state and the employer, designed to give aid in
cases of sickness, permanent invalidism and unemplojnnent.
To this extent the social policy of England has diverged
from that of Denmark ; but Denmark may certainly pride
herself on having been the model for England, though in
a roundabout way with Australia as an intermediary.

48 ECONOMIC DEVELOPMENT IN DENMARK

Care of Widows and Orphans

The train of ideas which led to the passage of the old-age
pension act was bound to extend to another case, namely,
to the care of widows. In Germany the great Imperial
Act of 1911, by which all the various insurance acts were
consohdated, took widows into consideration, but wag
chiefly concerned with invalid widows. At the same time
an annuity was introduced for the support of legitimate
children whose fathers were dead, independently of the
invalidity of the father.

In Denmark the lines already laid down were closely
followed, and an arrangement was thus elaborated which was
simple and yet much more comprehensive. The act ol
April 29, 1913, gives indigent widows the right to a govern^
ment allowance for the support and education of theii
legitimate children, the maximum of which is fixed at
100 kroner ($27) annually for children under two years,
80 kroner ($21) from two to twelve years, 60 kroner ($16) from
twelve to fourteen years (mth exceptional prolongation to
the eighteenth year), with a deduction applicable to widows
in such circumstances that they do not require the whole
sum. One-half of the expense is borne by the state and the
other half by the municipaUty. By an act of March 4, 1918,
the rates were increased 50 per cent. This system is much
less burdensome upon the pubhc than that of the old-age
pensions. There are in all about 8,000 widows with about
20,000 children, and the expense in 1917-1918 was 1,300,000
kroner. Thus the new measure entered easily into the old
system.

But there next arose a closely allied question. During
the last generation there has been a remarkable change of
feeling in regard to the position of illegitimate children.
The old attitude made it difficult for them to get on in the
world, for instance, in obtaining apprenticeship to an artisan.

CARE OF WIDOWS AND ORPHANS 49

In the course of time, however, the matter came to be con-
sidered from a much more humane point of view, and in
1908 the legislature came to the aid of unmarried mothers
by passing an act entithng them to get the alimony which
the father owes, paid in advance by the pubHc. But if illegiti-
mate children are thus helped, there is much to be said in the
support of the argument that legitimate children should not be
put in a less favourable position. The Widow's Act becomes
in reality an act of justice to the woman who has married.

Care of Consumptives
It was pointed out above that the Danish old-age pension
act lacked the necessary supplementary provision for the
support of invahds. In regard to this matter, however,
it must be noted that one of the chief causes of invalidism,
tuberculosis, is being vigorously attacked in Denmark, not
only by private institutions but also by the state and
municipaUties. In Germany invalid insurance has ^ven
rise to the establishment of a large number of sanitoriums,
for it is evident that the insurance institutions are directly
interested in this matter. But in Denmark, without this
stimulus, the struggle against tuberculosis has sensibly
advanced. An act of 1905 proposing ' Measures to Overcome
Tuberculosis ' (later amended and modified, the last time in
1918) lays down a number of hygienic regulations. Teachers
who are dismissed on account of having contracted infectious
tuberculosis are thereby entitled to a pension amounting to
two-thirds of their salaries ; and the same applies to other
officials and office-workers who come in contact with the
population in such a way that there is danger of their spread-
ing infection. The act further provides that the state or
municipahty may require persons suffering from tuber-
culosis to be placed in hospitals or may take other
measures to prevent the spread of the disease, the expense
to be borne by the state and municipality jointly. An
act of 1905 (later amended), concerning pubHc allowances

1569.36 T^

50 ECONOMIC DEVELOPMENT IN DENMARK

for the treatment of persons suffering from tuberculosis,
provides that subsidies may be granted to sanitoriums
recognized by the state within a certain limit ; and that any
support granted by the state or municipality to famiUes whose
natural bread-winners are receiving treatment in these sani-
toriums does not come under the head of poor-relief. The stat<
may contribute an amount not exceeding one-half the cost o:
building such sanitoriimis or hospitals, within a certain sum
for the acconMnodation of each patient. Thus a very large
number of hospitals for tuberculosis patients have gradually
been erected, and several thousand patients are treatec
yearly.

But there is another important task which begins only
when the patient leaves the sanitorium. Our forefathers
lived in a happy or unhappy ignorance of hygiene and the
dangers of infection. To eat out of the same dish, drink
out of the same cup and smoke the same pipe appeared to
them neither unsavoury nor unsafe. Modern bacteriology
has educated people more or less, however, and tuberculosis
patients themselves return to the occupations of everyday
life as apostles of the observance of rules of cleanliness anc
prudence. But with this growing enlightenment there has
sprung up a dread of infection, which sometimes makes it
difficult for a patient discharged from a tuberculosis sani-
torium to obtain work. If he is skilled in office-work, foi
example, his fellow- workers in the office may shun him as one
infected with plague. It is, therefore, a very important
duty to help such people, who though they are well and abh
to work, are imable to find employment. And this does
not apply only to persons who have recovered from tuber-
culosis ; it applies to all persons who by disfavour of th(
times are enrolled in the great army of unemployed.

Care of Unemployed
Here is a problem which was little known in the days o\
the guilds. Unemployment during their journeys was aB

CARE OF UNEMPLOYED 51

established feature of the training of the journeymen ; it
was a pleasant time in their lives, which they might some-
time look back upon with pleasure. Outside the fixed frames
of society there were, indeed, not a few vagrants and idlers ;
but they were scarcely more numerous in proportion to the
population than they are to-day, except in troubled times
when war or other disasters had devastated the land. To
a great extent private charity took care of such people then,
just as it does now.

But under the modern tendency toward speciaUzation,
which apportions to each man his occupation and to each
trade its field, that is to say, under the increasing industrializa-
tion of the community, a reserve army of the unemployed
is a natural and unavoidable development. It will vary in
size according to the pressure of business, but it will always
be large enough to claim attention, even though it does not
include vagrants and persons unable to work. Since almost
all the activity of the community has now been massed, the
individual elements which perhaps foxmd it just as difficult
to get along before now come to form a more or less compact
body which lays its claims before society.

For a long time the trade unions included labour exchange
and support of the imemployed in their programmes. Because
of their aggressive attitude, however, they were less able
to secure government recognition and support for this work,
since they gave ' unemployment support ' not only to their
members who were out of work, but also to those who were
out on strike. It is natural, therefore, that employers always
looked askance on labour exchange as practised by trade
unions. In this respect German social poHcy also had no
great achievement to boast of. The leading legislators in
Germany were not in favour of unemployment insurance
as it had been practised in Switzerland, for instance, in
Berne, or in Belgium under the so-called Ghent system.
Various proposals were made, to be sure, as, for instance, that
of compulsory savings from wages for the support of the

E2

52 ECONOMIC DEVELOPMENT IN DENMARK

unemployed ; but on the whole attention was concentrated on*
labour exchange. In not a few places municipalities or philan-
thropic societies established employment offices governed
jointly by employers and employees ; and under the stress
of the World War centralized efforts were made as the various
countries imposed the establishment of these offices cAi their
municipalities.

All this activity in the field of unemployment insurance
furnishes proof of the independent development of social
ideas. Adam Smith and Turgot announced the principle
of man's right to work, and they built upon it. They set
forth as a prime necessity the abolition of all trade restric-
tions, so that all men might use their powers as they thought
fit. But the working classes insisted more and more urgently
that work should be assigned by the state. That the attempt
made in France, in 1848, to carry out Louis Blanc's ideas
of the right to work failed, was no great misfortune ; in
truth, it was not even loyally supported. But the claim
increased in urgency, until in the eyes of many people it
came to represent the prime right of man. At the close of
the last century the social-democrats of Switzerland under-
took to solve the problem by a referendum, but they were
unsuccessful. The Unemployment Insurance Fund estab-
lished in Berne in 1893 was one of the results of their agitation,
however, and from that time on the question of unemploy-
ment had its place on the order of the day in all countries.
To procure work might be extremely difficult, not to say
impossible, even though many municipalities in hard times
made great efforts to start some new enterprise, as was the
case in many English towns toward the close of the last
century ; but the workmen had a clear right to exist, even
when unemployed.

It was in Norway and Denmark that the first great step
was taken in this direction. Denmark was better prepared
for it through the previous development of legislation ;
but Norway was a little quicker and came out a length

CARE OF UNEMPLOYED 63

ahead. In Denmark it devolved upon the above-mentioned
Committee on InvaHdism of 1903 to consider this question,
which naturally had to be solved in conformity with existing
laws. The Friendly Societies act was a good model. If
a neutral unemployment society could be established, the com-
munity might support it as well as the friendly societies ; for
the sick and the unemployed have an equal claim to help to
self-help. And what was quite as important for Denmark,
the very man to bring about such a result was in the present
committee, namely, the above-mentioned Mr. Th. Sorensen,
Inspector for Friendly Societies, who had played so notable
a part in carrying through the former act. He could count
on the support and confidence of all the people in the com-
munity with whose representatives he would be called upon
to work.

The Norwegian act, passed in 1906, provided that govern-
ment grants should be made to voluntary unemployment
funds on the sole condition that no support should be given
in cases of strikes or lock-outs. At first the project met
with little sympathy ; even the workmen looked upon it
with suspicion, which disappeared or was overcome very
slowly, and only after the act had been amended. This
suspicion did not exist in Denmark ; and after the act
recognizing unemployment societies was passed, on April 9,
1907 (amended by a subsequent act of April 8, 1914), it was
not long before a considerable number of societies applied
for government recognition.

The Danish act asserted that unemployment societies
must have but one object, namely, to insure their members
against the consequences of unemployment. They must
be neutral ; they must not be used to aid strikes or to
support persons whose want of employment is self-occasioned,
or who refuse to accept work assigned to them by the Board
of the Society or a municipal employment ofiice. Although the
societies are neutral, they are generally managed by persons who
are the leaders of the trade imions. The inspection is on the

54 ECONOMIC DEVELOPMENT IN DENMARK

whole managed as in the case of the friendly societies. The
funds are derived partly from the subscriptions of the members,
partly from government grants and voluntary or obUgatory
subventions from the municipaUty. According to the act of
1914 the government is bound to pay one-half of the total
sum subscribed by the members. It is also authorized to
make a grant to any Emergency Fund that may be estab-
lished to give support under extraordinary conditions of
imemployment ; and if such a fund is estabUshed, the munici-
pality is likewise bound to make contributions to it.

The right to this support is conditional. The applicant
must have been a member of the society and have paid
subscriptions during the preceding twelve months ; further,
he must have passed through a certain number of days of un-
employment. The daily support allowance is limited to between
half a hrone ($013) and two kroner ($0-54), and, at the most,
to two-thirds of the applicant's ordinary working wage.

The societies appoint delegates who meet once a year
to discuss their activity and co-operation. In the support
of the cause, the law further provides a council composed
of the Inspector, two members appointed by the Folketing
and two by the Landsting, besides six members elected by
the delegates of the unemployment societies. This council
serves as an intermediarj'^ between the various societies ; its
duties are to establish rules for the transfer of members from
one society to another, to endeavour to homogenize the
rules for granting aid and to present the case when one of
the societies ought no longer to be recognized. As is the case
with the friendly societies, a council of this kind contributes to
no small extent to the growth of the unemployment funds by
inspiring the working classes with confidence and securing
their co-operation. The increase in the number of members
has been considerable. On March 31, 1918, there were
sixty-two recognized. societies with 221,000 members, whose
subscriptions during the year 1917-1918 amounted to
2,400,000 kroner. The state ordinarily contributed 1,000,000

CARE OF UNEMPLOYED 55

kroner, but owing to the high cost of living, it increased
the amount to 3,100,000 kroner. The municipahty contri-
buted 700,000 kroner. Most of the grants were for
' day-money ' ; comparatively small amounts were given
for journeys, removals, or food. A simi of 144,000 kroner
was set aside for the above-mentioned Emergency Fund.

By the passage of this act Denmark contributed a great
deal, as has been said, toward the general solution of this
great problem. In 1911 came the great British reform based
on the principle of compulsory contributions ; but it was
naturally hampered by the developments of the war. The
war also interfered with the movement in Denmark and
prevented voluntary unemployment funds from becoming
the great lever in social reform that they might have been.
If it had been possible for the movement to develop quietly
under the favourable conditions which had prevailed in
Denmark at the beginning of this century, there is no doubt
that this branch of social insurance would have received much
greater sympathy from all classes of society.

Labour Exchange
An essential supplement to unemployment insurance is
labour exchange. In this field, too, England has progressed
very far through the passage of the State Labour Exchange
Act, which went into effect on January 1, 1910. Denmark
introduced her state labour exchange by an act of April 29,
1913, after a municipal labour exchange office had existed
in Copenhagen for a number of years. The Act authorizes
the Secretary of the Home Office to grant government
recognition to municipal employment offices estabhshed by
county, town, or parochial governments separately or jointly.
They are governed by councils composed of an equal number
of employers and employees chosen by the municipal council,
with a chairman sanctioned by the Secretary of the Home
Office. In Copenhagen the office also acts as a central
bureau for the whole country under the management of

56 ECONOMIC DEVELOPMENT IN DENMARK

a Director of Labour Exchange and a council in which, as
in the subordinate councils, there is an equal representation
of both interests, four members appointed by the Secretary
of the Home Ofl&ce on nomination by the Danish Employers'
and Masters' Union and the Federative Trade Unions of
Denmark, and the rest elected by the town council. Labour
exchange is gratis and does not cease during labour conflicts ;
but when the office is informed of such a conflict by a trade
union, it must notify the workers in that trade by bulletins,
posted in the office or otherwise. When a workman is assigned
work outside the place in which he Kves, he may receive
pecimiary aid for his traveUing expenses up to one-half the
price of his ticket.

A considerable amount of co-operation with the recognized
unemployment societies is impHed, since the latter are
obligated to forward each week to the labour exchange office
in the district concerned a Ust of all members in the district
who are receiving unemployment support. On the other hand,
the unemployment societies can receive information from
the labour exchange office through which a member out of
work has obtained employment. Other things being equal,
members of recognized societies have a prior right to appoint-
ment. A recognized unemployment society must not grant;
support to members who refuse, without giving any satis-
factory reason, to accept any suitable employment assigned;
to them by the board of the society or by a municipal
employment office.

On the whole, much has been accomplished. Many
municipal offices have been founded, and they are working
well and keeping in close touch with the unemployment;
societies.

Factory Legislation in the Last Fifty Years

The workmen's insurance, or rather, the national in-

suremce, which we have briefly described has done much

for the benefit of the lower cleisses. The results may best be

FACTORY LEGISLATION 57

summed up, perhaps, as follows : a great step has been taken
toward community within society ; and, on the whole,
Denmark has gone as far as, if not farther than, any other
country toward communism, without having had to renounce
the principle of individuaUsm. Thus even the conservative
elements of the population may participate in the great
work with a hearty good will.

The series of measures which have been taken to the end
of socializing the body politic is, however, not yet complete.
Numerous laws concerning the inspection of factories and
the regulation of working-hours, as well as the settlement
of trade disputes, were passed during the last generation.
These laws did not propose any startingly new principles ;
for the most part they followed the lines of foreign legislation,
which before the outbreak of the World War was well on
the way to become international, as though the League of
Nations were already in existence.

The growth of industry led to the passing of a Factory
Act in 1873. Its scope is apparent from its title : ' Act
Concerning the Employment of Children and Young People
in Factories and Workshops using Machinery, and the Public
Inspection thereof.' The act did not extend its protection
to adults, which was quite in conformity with the spirit of
the times. It appointed two inspectors for all workshops run
by machinery and employing persons under eighteen years
of age. It prohibited the employment in factories of children
under ten years and provided that children between the ages
of ten and fourteen might only work for six hours a day ;
moreover, their hours for attendance at school were to be
respected, and they were to be free on Sundays. Young
persons between the ages of fourteen and eighteen might
work ten hours a day.. The act further provided that in
building such workshops sufficient regard should be paid
to the health and safety of the workmen. This last provision
was one which in the hands of an energetic inspector might
have prevented much evil, but it did not accompUsh much,

58 ECONOMIC DEVELOPMENT IN DENMARK

as a matter of fact for the reason that the terms in which
it was couched were not sufl&ciently expHcit.

An act of 1876 concerning hohdays was of Httle benefit
to the working people, and it seems to have been devised
chiefly in the interest of the estabhshed chm-ch. It prohibited
sales in shops on Sundays between the hours of 9 a.m. and
4 p.m., so that the hours of Sunday rest for tradesmen were
seven at the most ; and in some or all of these they might
be working behind closed shutters. During the same seven,
hours any noisy work inside or outside the house that might
disturb the peace of the Sabbath was prohibited ; but this
did not prevent quiet work in a workshop or warehouse or
in the field. Private efforts to induce storekeepers to limit
their sales on Sundays were usually unsuccessful, but they
nevertheless roused society to a sense of the need of having
recourse to the strong arm of the law. A successful pre-
liminary step was taken in 1891, when sales in shops after
nine o'clock on Sunday mornings were prohibited and fac-
tories were compelled to stop work at the same hour ; but
numerous exceptions were made for particular industries.
A further step was taken in 1904. In general the prohibitions
were extended to cover the whole of Sunday, and tradesmen
thus at last obtained the full hohday. The long hours which
many tradesmen had been compelled to work were limited
by an act of 1908 providing that shops should be closed
at 8 p.m. ; but there was the imfortunate exception that on
Saturdays they might be kept open until 11 p.m., and this
without the compensation given elsewhere, as in Austraha,
in the form of an early closing hour on some other day of the
week. In this respect Denmark has lagged behind most of
the countries with EngUsh- speaking populations, where
almost all workers have a half-hoUday on Saturday. Only
by slow degrees and individual initiative and influence have
we arrived at early closing hours for banks and business
ofl&ces. The reason formerly given for a late closing hour
on Saturday was that workmen were paid off on that evening ;

FACTORY LEGISLATION 59

this reason is no longer valid, however, since wages are now
generally paid earlier in the week. By arrangements made
with employers the trade unions to no small extent protect
their members against Sunday work. Many wage contracts
now call for considerably increased rates of payment for work
done on Sunday or at night.

The Factory Act of 1873 had a comparatively long life
considering the rapid growth of industry. An Apprentice
Act of no great importance was passed in 1889, and in the
same year there appeared an act for the prevention of acci-
dents due to machinery by which the system of inspection
was slightly extended. But on the whole conditions remained
unchanged.

Finally, in 1901, a new Factory Act applying to factories
and large artisan workshops was passed. It contains several
provisions which strengthen the control and inspection by the
state. It fixes the lower age limit for working children at
twelve years and reduces the maximum number of working
hours. By a special clause it authorizes the municipalities
to restrict or prohibit the employment of children and
young persons in occupations other than those specified,
in the act, with the exception of agriculture, shipping
and fishery-^a provision of which several municipalities have
taken advantage, for instance, in restriction of the work of
children in distributing milk, bread, and newspapers. For
women, the act takes into account only their period of con-
finement. It contains special provisions for the regulation
of the sanitary condition of factories to insure cleanUness and
good ventilation. It stipulates that in winter the workmen
shall have access to a warm room in which to take their meals,
that the lighting of all rooms shall be sufiicient, etc. The
responsibility for the execution of these provisions is laid
upon a Director for the Inspection of Labour and Factories
and a number of assistant inspectors. Of great importance
has been the establishment of a Labour Coimcil similar in
membership to the previously mentioned councils. It consists

60 ECONOMIC DEVELOPMENT IN DENMARK

of a Chairman appointed by the Crown and eight members
appointed by the Secretary of the Home Ofl&ce, of whom at
least three must be employers and at least three workmen.
Employers' and workmen's organizations have the right of
nominating these latter members. This Council has more;
than justified its appointment. It has co-operated in deter-
mining dispensations from the act, as well as in framing
the above-named municipal measures, trade regulations anc
bills. It has taken the initiative in examining conditions ii
domestic industry and the sources of ill-health in the various
trades.

Following the New Factory Act of 1901, an act concerning
work in bakeries and confectionaries was passed in 1906 anc
amended in 1912. The original act had provided for a possibh
amendment at the end of ten years, but it was not unti
April 29, 1913, that a new act was passed. This act of 1919
prohibits the employment of children in workshops sub j eel
to state inspection before they shall have left school, anc
provides that the Medical Council of the Health Depart-
ment shall appoint one of the members of the Laboui
Council.

The discussion of this act brought forth many conflicting
opinions. No provision had been made for the protection
of women other than the old one relating to their period o:
confinement. In Denmark, as in all other civilized countries,
sentiment in favour of women's emancipation had been grow-
ing very rapidly. Women had risen to political equality with
men, and efforts were being made to secure their admission
to public office. More and more they had come to be regarded
as above any claims for special protection. If they were to
be the political equals of men it was contended that they must
have the same access to night work ; a prohibition against
it would be an offence against their self-determination. An
intended provision prohibiting night work for women, which
had really sprung from humane considerations and was in
conformity with foreign legislation, consequently had to be

I

FACTORY LEGISLATION 61

omitted. The act therefore did not get the extension which
was wanted and which perhaps twenty or thirty years ago
would have been greeted as beneficial by those whom it
was meant to protect.

On the whole it may be said that a strong individualism,
in spite of a great movement toward socialization within the
Danish community, is still to be found in the lower classes.
In some trades the nimaber of apprentices has increased to
such an extent that in the near future it may be difficult for
a young man to find work in the trade for which he has
trained himself ; but the working classes will not hear of
laws that will restrict the freedom of their children in the
choice of a trade.

This individuahsm confronts us at many points. Help to
self-help is an extraordinarily deep-rooted idea. Heretofore
the initiative for the launching of many movements useful for
society, as in philanthropy, education or science, has been taken
by private persons ; but little by little a large part of the burden
will eventually be laid upon the public. Now one society,
now another, will with more or less right lay claim to govern-
ment recognition and support, and in this way private initia-
tive will co-operate with the community as a whole. Without
private initiative the movement might never have been
started. Perhaps one of the most striking examples is that
of the Hedeselskabet (Heath Society), which was founded
in 1866, after years of more or less futile endeavour to plant
the vast wastes of Jutland, under the direction of Mr. E. M.
Dalgas. It attacked the problem with such energy and
success that after a while the state began to aid the project,
at first granting very small subsidies, but later on steadily
increasing them. By this co-operation between the state and
individuals very large waste areas have been converted into
valuable farms or plantations. After the loss of the province
of Sleswick, Denmark took great satisfaction in thus getting
some small compensation for it.

Again, co-operation has brought about a signal advance

62 ECONOMIC DEVELOPMENT IN DENMARK

in education. The high schools before mentioned have
demanded and received government support. The elemen-
tary schools for the lower classes, which have been public
institutions from the start, were at first supported largely
by the municipahties, but recently they too have demanded
and received government support. Those for the upper
classes were to a great extent started by private individuals.
Preparation of pupils for the university was often given by
private schools, but gradually this state of affairs became
untenable. It was difficult for the private schools to obtain
sufficient patronage to pay the salaries of their teachers,
unless they were content to cater exclusively for the ' upper
ten '. The secondary schools of Copenhagen therefore formed
an association which undertook to reduce the former dis-
astrous competition. This prepared the way for a claim to
government and municipal support ; and at last the decisive
step was taken — ^the taking over by the state and the munici-
paUty of most of the secondary schools. The guaranty that
the parents should have a voice in the education of their
children lay in the Councils of Parents, which, Uke the councils
of the Friendly Societies and other institutions, insured
protection ag£iinst arbitrary control by the state and muni-
cipaUty.

Further Development of Social Legislation
A few more institutions of very great importance for the
promotion of social welfare in Denmark may be mentioned.
Conflicts between labour and capital occur in Denmark, just
as they do in all other civiUzed countries, and many times it
has been suggested that they be suppressed by the state in
order to maintain the social peace. But the introduction of
compulsory arbitration and similar measures has rarely been
looked upon with favour by either of the opposing parties.
Possessed of a sohd organization and enjoying that govern-
ment recognition, so often mentioned, which places the
control of many of their affairs in their own hands, they feel,
Uke states within the state, that they are better able than

DEVELOPMENT OF SOCIAL LEGISLATION 63

the government to guard their own interests. In these
conflicts, with their constantly threatened strikes and lock-
outs, they see a struggle which in the long run will be bene-
ficial. Records furnish proof of many declarations of open
war, to be sure, and consequently of many lost working-days ;
besides these, however, many disputes have been quietly
settled either by a satisfactory agreement between the local
organizations or by a decision of the central organizations.
Only occasionally have the conflicts been fought out before
the open curtain.

The great lock-out of 1899, culminating in the September
Agreement, has already been mentioned. Some years later,
in 1908, a new conflict arose between the newspaper pro-
prietors and their typographers. Here for the first time the
government intervened, and it was the Secretary of the Home
Office who finally conciUated the contending parties. Out
of this intervention grew certain measures for the settlement
of all such conflicts, conformably with other social develop-
ments in Denmark. By an act of 1910 the existing Court of
Arbitration, which had been established for the settlement
of all disputes concerning violations of the September Agree-
ment, was superseded by a Permanent Court of Arbitration
(den faste Voldgiftsret), which also was empowered to settle
all violations of other agreements. Its composition rests
on the principle of parity representation. An equal
nimiber of judges is chosen from each of the two contending
organizations, the members of which then appoint by vote
their chairman and one or two deputy chairmen ; if they
cannot agree upon the appointment, they are appointed by the
chairman of the Supreme Court in Copenhagen. The state
pays the expenses. The Court- has the power to sentence the
organization found guilty of violating the agreement to a so-
called ' penance ' and can execute the sentence. Before the
estabhshment of this Court of Arbitration some gener«d rules
for the settlement of trade disputes had been adopted, and
the central organizations recommended that these rules be

64 ECONOMIC DEVELOPMENT IN DENMARK

incorporated by the inferior or local organizations in their
agreements. The rules thus became the basis for the de-
cisions of the Permanent Court of Arbitration.

Besides this Permanent Court created for the settlement
of legal disputes, provision was made at the same time for
the settlement of disputes over conflicting interests by a State
Arbitrator, appointed by the Home Office after nomination
by the Permanent Court of Arbitration. If the State Arbi-
trator considers the dispute to be of great importance for the
organizations concerned he may on his own initiative, or at
the request of one of the contending parties, call them together
for a discussion of the matter in his presence ; and they are
bound to obey his summons. In endeavouring to conciUate
the parties the Arbitrator, after consulting representatives of
the central organizations, makes conciliatory proposals. The
method of appointing a State Arbitrator, confirmed by
a subsequent act, has proved most satisfactory, and many
large and small disagreements have been satisfactorily settled
in this way. Some cavillers may contend that equally good
results might have been attained without a State Arbitrator.
There can be no doubt, however, that a person of social
prominence, supported by an act of Parhament, possessed
of a thorough understanding of both the legal and the psycho-
logical aspects of the dispute, and backed by the authority
of the Home Ofl&ce, is in a position to effect a happier decision
for everyone concerned than could be arrived at in any other
way. Moreover, the experience of such a person in each new
case will increase the value of his decision in the next. Certain
it is, at all events, that state arbitration has become an
established feature of our industrial life, so much so that
neither party would willingly have it abolished.

General Results of Social Legislation

Many changes have taken place in little Denmark during
the past generation in the relation of the state to the indi-
vidual, as well as in the relations between certain classes of

RESULTS OF SOCIAL LEGISLATION 65

society. So far we have been considering industry ; we
will now turn our attention to agriculture. But first we may
ask whether and to what degree the measures described have
benefited all parties ; whether the increase of wages and the
improved circmnstances of the workmen have put a heavier
burden on the employers than they can well bear. But this
is a question which it is impossible to answer categorically.
So extraordinarily many elements are involved in it that the
value of each one cannot be justly estimated. In all countries
the conditions of the working class have improved pari passu
with certain measures adopted by their respective govern-
ments ; but whether this or that system is the better, it is
impossible to say. All that can be said is that the measures
adopted in Denmark are in harmony with the whole trend
of Danish thought, and this is the best guaranty we have
that they have benefited both the employer and employee.
It is a matter of fact that wages have steadily increased since
the be^mning of what we call social legislation. Statistics for
Copenhagen show that the daily wage of journeymen in-
creased bu per cent, between jge^ and i\){)\) ; that^ nn^killpd
workmen, 67 per cent.; and that of women, 58 per f^pnt.
These are, indeed, nominal wages only. The main question
is whether in Denmark, as in Western Europe, the price
level has risen or declined. The answer is that it has
fluctuated. In 1870 prices were high. In 1895 the price
level reached its lowest point, after which it rose steadily
from year to year until the World War broke out and caused
an enormous advance in prices. In the first half of 1914
]Drices were at the same level as in 1876 ; in 1909 they were
a little lower than in 1882. Thus it may be said with
absolute certainty that the real income toFthe workman was-
ffleatfer in 1969 limn Iwcnly scverTyears^efore, evgn though
it may beasgerteH that the movement in the index numbers.

Avill not exactly correspond to the rise in the expenses of
ihe workmen. Indeed, the rise in prices may for a time
have counterbalanced the catalogued rise in wages, as was

1569.35 ^

66 ECONOMIC DEVELOPMENT IN DENMARK

the case in the period between 1898 and 1904. But in the
long run there has been some real gain ; and to this gain
may be added the sums which have come to the workmen
through social insurance. To what extent this may have
benefited the working class as a whole cannot be decided for
particular trades or industries, but we may be sure that it
has been to its general advantage.

Development of Agriculture

The legislation so far described has been in the interest
not only of trade and industry, but of all the classes of society
concerned. It has therefore been of great service to th(
agricultural population. But in this case we are confrontec
with so many special problems besides, that it will be neces<
sary to examine the social and economic development some
what more closely.

In 1870 all prices were high, and particularly the price o
grain. The times were good for agriculture, and the wealthiei
classes of the agricultural population had prospered. In th(
early seventies the price of farms was two or even three times
as high as it had been twenty-five years before. To some,
extent this was due to more scientific husbandry and to the
new buildings which the prosperous farmers could afford to
erect under the influence of the good prices. On the whole,
agriculture made great progress in the |j;fn^^Rtiftn whWi
preceded^ llie be v en Lies" Between 1850_and 1870 tb*^ p^^-
duction of gram seems almost to have doubled ; to this can^e
^lemcrease m price due to tEe excellent state of the market.
After 1875, however, the price of grain dechned in a marked
degree. This was largely due to North American competition,
as a result ot winch enormous quantities of grain were thrown
"into the European market. In the course of twenty years
^the price of wheat fell about 40 per cent, and the price* of
rve 30 per cenL The result was the value of farms soon
decreased. In the early eighties land values were still high,
even three times as high as in the forties ; but after 1884

DEVELOPMENT OF AGRICULTURE 67

the decline was rapid. Within ten years the average price
per Tonde Hartkorn had fallen 15 per cent, and was still
falling. This state of affairs bore the more heavily on the
farmers for the reason that many of them had availed them-
selves of the new facilities for obtaining loans from credit
associations which came into existence from the middle of the
century. In good times it was very advantageous. A farm
valued at, say, 100,000 kroner and mortgaged up to 70,000
kroner would give its owner a net capital of 30,000 kroner.
If its value increased 15 per cent, while it was still under
mortgage, the net capital of the owner would be increased
by 15,000 kroner or by 50 per cent. But when prices went
down, on the other hand, the case was reversed. A decrease
of 15 per_cent. on 100,000 kroner meant that the owner's net
capital was reduced by exactly one-half. Farmers who had
raised larger loans in order to satisfy joint heirs or to make
improvements, or because otherwise they could not have
taken over so large a property, suddenly found themselves
reduced to penury, their whole fortune having been swallowed
up by the debt. This was the fate of many farmers, most of
whom, as always is the case at such times, had a very vague
idea of the cause. Many of them were of the opinion that if
the transition from the silver standard to the gold standard
had not been carried out in 1873, the depression of the last
quarter of the nineteenth century would not have occurred.
The silver standard and bimetalism consequently had many
enthusiastic advocates in those days.

The change was more severely felt for the reason that many
farmers during the prosperous years had become accustomed
to easy circumstances and were now compelled to lower their
standard of living. It is always easier to become accustomed
to a large income than to return to a small one. But the
sturdy and economical Danish peasants soon adjusted them-
selves to their straitened circumstances and energetically set
about to keep what they still had. And this brings us to a very
interesting and instructive chapter in Danish economic history.

F2

68 ECONOMIC DEVELOPMENT IN DENMARK

If we turn to the statistics, we find that not all agricultural
products went down in price. Beginning with the early-
seventies and running through the following twenty years, the
price of bacon is seen to have fallen only 8 per cent. Butter
even rose in price by 13 per cent. This indeed was explained
by a thorough improvement in its quality, but it was at all
events a hint of great importance for the farmer.

(With surprising quickness Danish agriculture shifted the
helm, .b'acing conditions as they were, Uenmark now"^t5faetf
her attention t|> bacon and butter ; and instead ofexporting
grain she now be^an to import it. depending former supply
more and more on North America and the other granaries
of the world, in order to increase her output of the more
valuable products. A few tigures will show the revoliItiOh
wmch took place. In 1870 the value of Denmark's excess of
exports of grain was 38,000,000 kroner ; in the early eighties
it was almost nil, and now the grain import increases from
year to year. At the opening of the present century she was
importing grain to the value of 50,000,000 kroner per annum,
and the following years brought a further rise. Rye and wheat
were the chief grains imported, but maize was also imported in
rapidly increasing quantities. Other important animal foods
were also imported, particularly oilcakes, as well as an in
creasing quantity of fertilizer. All this bears witness to the
great change in our agricultural economy. And if we glance
at the exports, the picture will be complete. Toward the^d
of the sixties the annual exports of butter amountedto about
D,UUU,OuO kilos ; at the beginmng of this century ^ffieyTia'd
increased to VU,UUU,UUU kilos, ihe exports of cattle increased
irom upwards of bu,UUU head' at the close of the sixties to
more than 100,000 head fifteen years lateK These exports
were reduced in 189J2, indeed, by JjinglanS^s prohibition o
the importation of cattle from the continent and the barriers
raised by Germany in 1897 under alleged reference to sanitary
conditions ; but to offset this Denmarkthen began slaughter-
in^ at home and exporting meat. Tlie change is especially
noteworthy in the case of ^wine> bacon and ham. From an

a

I

DEVELOPMENT OF AGRICULTURE 69

annual export of 40^00 hogs at the clnsft of t.hp sivfips^ t,}iP_
niiTnber innrpflsPfJTrniboiit 280,000 dTirinjD;l;he next fifteen
years. When Germany, in 1887, stopped importing living
swine, Denmark began to do her own slaughtering, and year
by year her exports of bacon and ham steadily increased, imtil
at^he opening of the new century they amounted to^
70.000.000 kiios per annum, gutter angt)acon are now the
chief exports of Denmark.

Tfwe consider the areas under cultivation, we find corres-
ponding facts. In 1871 the area planted to fodder-plants
was between 5,000 and 6,000 ha (one ha is about 2-5 acres).
I'en years later it was three times as large, and in 1901 it had
grown to 142,000. In the present century this figure has been
doubled. During the same period the raising of live-stock has
undergone a remarkable change. In the sixties the breeding
of sheep reached its maximmn ; in 1866 there were in all
1,900,000 sheep in the country, whereas at the outbreak of
the World War there were only 500,000. Intensive agriculture
leaves no room for sheep. On the other hand, the number
of cattle increased from 1,200,000 in 1866 to 2,500,000 in 1914.
But the increase in the number of hogs has been enormous ;
in 1866 there were 400,000 hogs in the country ; in 1900,
1,500,000 ; and in 1914, 2,500,000. During the same time,
moreover, the breed had greatly improved, and there is there-
fore a greater profit per head. Nor is it not only large farms
that have profited by the change. The small holdings are
more intensively cultivated than the large ones, so that in
1909 the number of hogs on holdings of a few hectares was .
three times as great, in proportion to the area, as on holdings
of. from thirty to sixty hectares.

Developme7it of the Co-operative Dairies
An important part in these changes has been played by the
co-operative movement in Danish agriculture. In the middle
of the nineteenth century the quality of D^anish butter was
generally poor. That made by the peasants was very coarse,
and the only fairly good butter was that produced on large

70 ECONOMIC DEVELOPMENT IN DENMARK

estates and known commercially as ' estate butter '. Some
special improvements for dairy work, such as cream separa-
tors, etc., had been introduced on the large farms, especially
1 after 1870. Attempts in various places were made at estab-
i lishing private collecting dairies which received the milk from
the neighbourhood and tried to obtain a uniform product. But
the projectors of these establishments found many difficulties
in their way. They had no control over the persons who
Hcontracted to supply the milk and often found them lacking
in cleanliness. Moreover, it was difficult for them to dispose
of the skim-milk and butter-milk ; and then, too, there were
added difficulties of transportation. Many of the private
dairies consequently had to close down, and then it was that
the co-operative movement was started, the first co-operative
dairy having been opened in 1882 in a village in Jutland. In
the co-operative system all persons who furnished milk ran
the same risk and were jointly and severally Hable, and
profits were divided in proportion to the amount of milk
delivered by each of the co-operators. The system was
surprisingly successful, and it was not long before it was in
operation all over the country. In 1909 there were 1,157 co-
operative dairies, as compared with 2B8 collecting dairies
and 90 estate dairies. Of all the cows in Denmark only one-
sixth were outside of the co-operative dairies.

The co-operative association pays the current price for all
I the milk delivered to it, and the individual members take
\ over the skim-milk and buttermilk at a fixed price which is
often very low. Accounts are balanced at short intervals,
a certain sum being held over as a contribution toward the
defrayal of operating expenses. At the close of the financial
year the considerable surplus is divided among the members
in proportion to the amount of milk each has delivered,
regard being taken to the percentage of butter fat.

The difficulty of procuring the necessarv funds for buildings,

achinery and initial operating expenses was overcome wifl

'omparative ease bv that principle of sohdarity which seems^

CO-OPERATIVE DAIRIES ( Tl)

natural to the rural population, especially in small nnpr- i^
Tminities where t.hp inhflhit^nts all know one another. The ;
members of each dairy association contracted to remain in
it for a specified length of time ; and its large membership was
a good guarantee of its solvency. As a rule the loans are \\
quickly repaid, so that the risk assumed by individual '
members is never very large. Generally the time soon
comes when the members can get interest-carrying co- '
operative securities in the existing capital in proportion _y
to the milk dehvered. The constitutions of the corporations
are simple, each member generally having but one vote,
whatever the size of his holding and his contribution of milk.

Thp cn-npprfltivp dfliries have been of great value to Danish \
agriculture in tJiat ihey have made i:arming an industrial '

enterprise involving the use of machinery. The superiority
oiestate butter to peasant butter consequently no longer
exists, and the butter of all co-operative dairies, whether it
comes from large, mediiun-sized or small holdings, has equal
rating in the foreign market. The exportation of live-stock
and" rneat has reacted upon the dairies in a manner greatly
to their advantage, partly because all cows unsuited for milk
production are at once profitably disposed of, and partly
because the by-products of the dairies are in demand for hog-
raising. In certain respects the co-operative dairies give
the owners of small holdings the advantage of working on
a large scale, while, on the other hand, much work that is
better suited for small holdings is handled by individuals.

The development of this movement has not been entirely
without social drawbacks. Farmers of earlier generations
were naturally more or less liberal with their milk, whereas
now they are tempted to count every ounce. But the con-
sequent decline in gifts or payments in kind to their hands is
more than balanced by the indubitable rise in wages.

The co-operation of the Danish farmers in dairy work led, >^
of course, to other similar developments. Local associations j
were formed which, in 1899, were consolidated under the
name of the Co-operative Danish Dairy Associations. The ^

72 ECONOMIC DEVELOPMENT IN DENMARK

flatter was reorganized in 1912 as ' The Central Organization
of Danish Dairy Associations ', the purposes of which were ..
to guard the common interests of the dairies, to note exchange |
quotations, to compile dairy statistics, etc. A now abolished
association sought to introduce a common trade-mark to
protect exported butter against imitations. Finally, an act
of 1906 legalized a common trade-mark for all butter prepared
from pasteurized cream. An act of 1911 prohibited the use
of this trade-mark (Lur Brand) on butter containing more
than 16 per cent, of water, which was thereby debarred from
exportation. The Danish Dairy Farmers' Association, incor-
porated in 1887, has established an accident insurance, a reUef
fund, etc. It also organizes exhibits and works in various
other ways for the common welfare.

Further Development of the Co-operative Movement
The principle of co-operation was bound to extend to the
exploitation of other agricultural products. In 1887 co-
operative slaughter-houses and bacon factories were estab-
lished in the face of no little opposition on the part of private
bacon factories and from various other quarters. This
opposition was gradually overcome, however, and in 1909
about half the number of all pig herds in Denmark (compris-
ing two thirds of all the pigs) were in co-operative bacon
factories. These are run chiefly with an eye to export. The
money for^figtabjishin^ them is generally raised by loans,
a tirst mortgage, a second mortgage to be repaid in instal-
ments, and a working loan. It testifies to the growing
understanding of the value of this business that the first
mortgage is now often granted by the town in which the bacon
factory is located, even in towns where at first such a factory
was strongly opposed by the local government. Profits are
divided between the members of the corporation in proportion
to the value of the pork delivered by them, and as a result of
strict classification the pork received has greatly improved
in quality. Here too we find associations ; the slaughter-
houses have their mutual accident insurance, and are repre-

THE CO-OPERATIVE MOVEMENT 73

sented in the Joint Co-operative Bacon Factories of Denmark,
which has worked with energy to further exportation. It
greatly influenced the ' Acts concerning Domestic Animals '
passed in 1902 and 1912. The latter supports the breeding
of domestic animals by government grants for cattle exhibits ;
by subsidies to horse and cattle-breeding societies ; by the
support of control societies ; and by subsidies to stations for
pig breeding. All this is performed in co-operation with
the associations. Thus the management of the hog-
breeding centres is placed in the hands of the co-operative
bacon factories.

An interesting supplement to this exploitation of farm
products is the co-operative exporting of eggs. Starting on
a very small scale, this business has become a really important
source of revenue for the country. It was inaugurated in
1895 by the Danish Co-operative Egg Export Society, which
now has many branches. Each branch has a distinctive
number, and each member of the branch also has a number.
These numbers must be marked on the eggs before they are
delivered to the egg-collector of that branch, and a strict
supervision of the members is thus easily maintained. This
society also encountered difficulties at the start, but it soon
succeeded in securing recognition for its eggs in the London
market, where they brought good prices. From the mmierous
branches all over the country the eggs are sent to packing
centres, where they are examined and packed for export.
The poultry raisers have not co-operated with anything Uke
the alacrity of the bacon manufacturers ; still, in 1909, about
20 per cent, of the poultry farms and about a fourth part
of the poultry were enrolled in the numerous branches. One
half of the net proceeds is distributed to the branches in
proportion to the value of the eggs dehvered ; and the other
half is set aside for a reserve or operating fund in which the
several branches have shares. Each branch is an independent
body which provides its own necessary capital by raising
loans on the unhmited liabihty of its members, as was the
case in the co-operative dairies. It was remarkable for the

74 ECONOMIC DEVELOPMENT IN DENMARK

Danish Co-operative Egg Export Society that it at once
took up the export; it was a development from the top.
In the butter export the case was reversed; the various
produce societies were formed, the local co-operative .1:
societies, and only then followed associations for the export |
of butter.

The__butter export to England prospered well, energetic v
wh!5Iesale dealers having greatTy simplmed and speeded the I
sales. But the co-operative dairies were not satisfied with
the returns ; and in 1888 they organized The Farmers of
Denmark Butter Export Association. This organization was
never recognized by the majority of the co-operative
societies, however, and in 1908 it was forced out of business
on accoimt of some imposture. In the nineties, however,
a nimiber of new export unions sprang up, and by 1914
they had taken over one fifth of the whole butter export
trade of Denmark. Many of the co-operative bacon factories
also combined in an independent association. Finally, the
Danish Bacon Agency, founded in 1902, now embraces
a great number of the co-operative bacon factories.

Cattle-breeding societies were first founded in 1884 with
the simple aim of procuring a bull of excellent breed and
at the same time cows of the members are kept under
control. In 1887 an act was passed granting subsidies to
these societies (amended and extended in 1902, and again,
as mentioned before, in 1912). Similar action was taken to
improve the breeds of horses and, to a less extent, the breeds of
hogs. A more important movement for improving the breed of
domestic animals was started in the nineties by the control
societies, which undertook to tabulate the quantity of milk
yielded by the individual cows and examine the effect upon
them of the quantities and constituents of various kinds
of foods. These societies again have associated in greater
associations.

All this co-operative work, conducted along the Hue of
the friendly societies which have a parallel in the numerous
live stock insurance societies and similar institutions, in-

'.A

THE CO-OPERATIVE MOVEMENT 75

volves an education of the rural population which is of high ^'
value. The officers of the various associations, who are
leaders in the struggle for existence, are trained to a sense
of responsibility, encom-aged to ascertain the progress made
by other nations in parallel situations, and inspired to devise
new methods for their work in a manner quite foreign to the
tradition-bound and almost stagnant condition of agriculture /
of former days.

The list of co-operative enterprises in Denmark does not
end with those so far enumerated. During the last generation
a number of co-operative supply societies were formed on the
ordinary principle of cash payments for purchases and
division of the profits among the subscribers. Contrary to its
development in England, the movement has found favour
chiefly in the rural districts, where an extraordinarily large
nimiber of co-operative stores are now flourishing, and where
a considerable part of the population has fallen in with the
movement. It has spread but slowly in the provincial
towns, and not until very recently did it seem hkely to
reach the capital. The small rural co-operative societies
have much the same character, many of them supplying
their members with grain, fodder, manure and grass seed,
besides the ordinary household commodities. Here, too,
a need arose for united effort, and there was founded
The Co-operative Wholesale Society of Denmark, which has
gathered most of the local stores. It has acted not only as
a commercial medium, but also through production (thus of
tobacco, margarine and boots). To this is added a number
of purchasing societies the object of which is to procure
goods for the farmers, such as seed and manure ; as the
farmers, when purchasing these goods, were often defrauded^V

The principle of co-operation is also taking root in many
other fields. There are co-operative societies for the erection
of dwelling-houses, for instance, and a co-operative bank
was established in Aarhus, the charter-members of which
are co-operative societies. Finally, the great connecting link \
between all Danish co-operative enterprises is the Co-opera- i

0*=

76 ECONOMIC DEVELOPMENT IN DENMARK

tive Committee, founded in 1899 and composed of repre-
sentatives of all of them. It has considered many questions
of common interest, such as : the prevention of competition
between the various societies ; the auditing of accounts ;
the methods of book-keeping ; the marking of Danish
butter, etc. It took the initiative in establishing the co-
operative bank, and it has represented the Danish co-opera-
tive movement at the great international congresses which
have been held from time to time for the discussion of.
principles of co-operation.

The conditions which have thus developed are quite in
accord with those which have developed in other departments
of the economic and social life of Denmark. They are the
result of free choice and independent action on the part of
each individual, combined with a well organized effort of the
community to effect a solution of common problems.

Condition of the Agricultural Labourer
It cannot be said that the Danish government has done
much for the betterment of agriculture. The question of
the parcelUng out of land was acted upon by the legislature
in 1897 and again in 1906, when it was determined how much
of a parcelled-out property must be left to preserve the
integrity of the estate. Only a third of the Hartkorn was
restricted, while the rest might be freely disposed of. This
ruling must be considered in connexion with the modern
efforts for procuring access to the establishment of small
holdings. As early as the eighteenth century efforts had been
made to better the condition of the farmers, but little atten-
tion had been paid to that of the cottars. The right of a land-
lord to punish his cottars was aboUshed in 1848, and a law
was also passed providing that a contract for the lease of
a house must contain no provision for payment in labour.
But the question of small holdings was not taken up
until the end of the nineteenth century, when an agricultural
commission (appointed in 1894) considered conditions of

THE AGRICULTURAL LABOURER 77

allotments. Five years later an act was passed by which the
state might lend to applicants who fulfilled the conditions
for becoming state cottars an essential part of the total value
of the holding at a very moderate rate of interest. About
9,000 small holdings have thus been created, and at the same
time other ways of furthering allotments have been devised.
In 1906 an act was passed granting government loans to
societies or associations which would buy large properties
for allotment purposes ; and an act of March 20, 1918,
created a fund of 5,000,000 kroner to be loaned to small
farmers and traders for the defrayal of operating costs. But
pubhc opinion was not satisfied with this. The desire for
further changes, such as the abolition, of restrictions, such as
entails and fiefs, on the sale of land, the forced sale of land
held by the Crown or by the established church, etc. — had
become very strong, and a new agricultural commission was
accordingly appointed in 1910. Its proposals will be dealt
with below.

The above-described revolution in the status of the agri-
cultural classes has greatly broadened the base of the social
pyramid. As the lower classes have increased in numbers
far more rapidly than the upper classes, not a few who might
have preferred to gain their livelihood on their own farms
have flocked, as in other countries, into the towns, with
'many petty trades, men and manufacturers. Many philan-
thropists would fain see them back on the farms again.
'^ To form an idea of the condition of the lower classes of the
agricultural population, we must have recourse first to the
statistics of wages. In 1872 the annual income of an agri-
cultural labourer who paid for his own food was about
407 kroner ($109). Food was dear, though certain other
necessaries of life, such as lodging, were comparatively cheap;
but on such an income it was practically impossible for a family
to live, unless the head of the house had some land of his own,
or unless his wife and children were able to eke out his earn-
ings. But far worse was the condition of a labourer who
boarded at the farmhouse. The supporter might hve com-

78 ECONOMIC DEVELOPMENT IN DENMARK

paratively well ; but the better he lived, the worse the other
members of his family lived. An agricultural labourer who
boarded at the farmhouse received, on an average, 216 kroner
( $58) a year, so that the value of his food might be estimated
at about half of his income. Under such circumstances he
had barely enough for his daily needs ; for insurance against
sickness or accident there was Uttle left over, and still less for
pleasures or for newspapers or other reading, ^le custom
of boarding the farmhand seemed too deeply rooted to be
changed^y As an author wrote some years later in regard to
it : 'It was based on the idea that a man could not work
on such food as his family had to be content with.' This
view may still be found among workmen in the towns, where
it is a matter of course that the head of the family gets more
abundant and more nourishing food than his wife and
children ; but for the farmhand of forty years ago who owned
no land, it was misery. Generous employers sometimes
supplemented the terribly inadequate wage by gifts, such as
milk ; but these gifts were not sufficient to insure even
a tolerable living, and the worker had no legal right to
claim them.

If the farmhand was so poor that he could barely make
the scantiest living under the most favourable conditions,
he was still worse off in the case of sickness or accident ; and
his only recourse in old age was the poorhouse.

But toward the end of the century the condition of farm-
hands began to improve. By 1892 their wages had risen
to 486 kroner ($130) when they provided their own food
and to 315 kroner ($84) when they boarded at the farm-
house. This was a greater advance than the figures
would seem to indicate, for the price of food had greatly
dechned during the preceding twenty years. Moreover, that
social legislation had begun, which in various ways secured
a labourer, if misfortune came upon him. The statistics for
1910 show a further advance in the annual wages to 689
kroner ($185), and in spite of the higher price of food the
farmhand could now get more for his money. On the other

THE AGRICULTURAL LABOURER 79

hand, the wages of the farm labourer were considerably lower
than those of the city labourer. It is not surprising, there-
fore, that dissatisfaction arose in the rural districts and that
socialistic ideas began to spread rapidly.

Meanwhile, a new influence had arisen in certain agricul-
tural circles, namely, that of Henry George, whose doctrine
was received with great favour by the middle classes, especi-
ally by the small farmers, who saw in the introduction of the
single-tax system great possibilities for a happy social life.
But it did not take root in the towns, where the workmen
based their views of Hfe for the most part upon purely social-
istic ideas. There was some agitation on the question of the
unearned increment in the towns, but it did not exert much
influence upon the course of legislation.
Y As stated above, the Agricultural Commission of 1910
Brought forward proposals to release land held in tail and in
fief from these restrictions and to enjoin the sale of lands
held by the Crown and by the church. At this point we meet
with an interesting turn in the tide of public opinion. Toward
the middle of the last century the old-fashioned leaseholds,
had been abolished. Free proprietorship had come to be
considered the best guarantee of social happiness, and there
are many people to whom this principle still seems indispu-
table. Its appHcation brought about, in 1903, the abolition
of tithes; in 1918, of leaseholds and other land restrictions,
a fixed sum being paid annually instead of the contributions
according to the price of grain. Of late, however, the
pendulum of public opinion has swung in the opposite direc-
tion. Fear has been expressed that if the pubHc lands are sold
for cash legitimate interests will be injured by reason of fluc-
tuations in the value of money. A new principle has therefore
been advanced, namely, that land, instead of being sold for
the full amount in cash, should be subject to an annual assess-
ment to be revised at regular intervals so that it should
correspond to the current purchasing power of gold. On these
terms the church and other institutions may part with their
land without misgivings. This principle was presented by the

80 ECONOMIC DEVELOPMENT IN DENMARK

Agricultural Commission of 1910 in its reports, and the
government accepted the principle.

This is the point which we have now reached in Denmark,
and apparently without any influence from without. The
new ideas would have made their way even if the war with its
enormous revolutions had not come.

Change of Conditions caused by the War

I have tried to describe the development of social ideas
in Denmark up to the outbreak of the World War in August'
1914. A question now remains to be discussed : How have
circumstances influenced or changed these ideas during the
past five years ?

It is worth while to consider some salient facts which
underHe all the changes that have taken place since the
beginning of the war.

Denmark has not, within its small domain, the varied
wealth of raw materials to be found in larger countries.
It has no minerals worth mentioning, no coal fields or mines.
It is an agricultural country. Industries may be and have
been developed, but only by procurement of the necessary
raw materials from abroad. Before the war there was a brisk
foreign trade, which brought coal and other necessaries into
the country and carried out large quantities of agricultural
products ; but during the war all this was suddenly changed.
Various markets were closed ; supplies from abroad were
procm-ed under ever-increasing difficulties ; and certain
industries were compelled to either shut down altogether
or else to keep going under great disadvantages. Agriculture
suffered from lack of f ertiUzer and cattle from lack of fodder ;
margarine factories lacked oil ; textile factories lacked wool
and cotton, etc.

When the World War broke out Denmark had a large
supply of Hve-stock. The number of horses was 567,000,
and there immediately began a large foreign sale of them at
high prices. This was stopped by the government, however,

CHANGES CAUSED BY THE WAR 81

and in the summer of 1917 the nmnber was the same as it
was three years before ; but in July 1918 the scarcity of
provender had brought it down to 545,000.

With regard to cattle, also, it was necessary to take
measures to prevent a too rapid reduction of their number,
which in the summer of 1914 was 2,500,000. To this end an
export duty on cattle was established in 1916 for the benefit
of the home market. In the summer of 1917 the number of
cattle had reached the earlier mark ; but here also the
scarcity of fodder brought about a new loss, reducing the
number to 2,100,000 in 1918. Most striking, however, was
the loss in swine, of which before the war we had 2,500,000.
In the summer of 1917 we had only 1,700,000. Still, even
this was more than we had in 1909 ; but the difficulty of
getting feed, coupled with the bad harvest of 1917, caused
a further decrease, so that in 1918, in spite of all efforts to
stimulate hog-raising, the number had fallen to 621,000, or
less than a fourth of the number of four years before.

The grave condition of Danish agriculture, and the effect
it necessarily had upon the food situation throughout the
entire country, may be shown by the commercial statistics.
The net imports of unground wheat in 1913 totalled
132,000,000 kilos ; of maize, 403,000,000 kilos. The wheat
imports declined from year to year, and in 1917 they totalled
only 35,000,000 kilos ; and in the same year the maize
imports totalled only 241,000,000 kilos.

Of oilcakes of all kinds the net imports in 1913 were
585,000,000 kilos ; in 1917, only 154,000,000 kilos ; the import
of these goods was thus only a fractional part of what it was
a few years before. The imports of fats for the manufacture
of margarine, which had become an important girticle in most
households, likewise gradually decreased ; in 1917 they were
between a fourth and a fifth of what they were in 1913. The
decrease of imports was reflected in the exports of butter,
which in 1917 were only two thirds of what they had been
four years before. The imports of fertilizers were also

1669.36 Q

82 ECONOMIC DEVELOPMENT IN DENMARK

reduced and in 1917 were only a fraction of what they
had been.

Of course, it was not only agriculture that suffered under
these circumstances. The supply of coal fell below one-half
of the normal quantity, and the people had to be most
economical in the use of it. The scarcity of coal and raw
materials forced many industries to shut down.

The first years of the war, however, occasioned compara-
tively little privation in Denmark ; even 1916 was a good
agricultural and commercial year. It was not until America
entered the war that real trouble began. This is shown by
the statistics of unemployment for 1917 and 1918. The
great efforts made through commercial treaties with the
belligerent countries to obtain suppHes could not make up
for the general scarcity. In 1916 organized workmen were
unemployed 1,900,000 days ; in 1917, 3,600,000 days ; and
the statistics for 1918, calculated on the basis of the first
nine months of the year only, show a new doubling to
7,000,000 days.

Legislative Measures rendered necessary by the War

It is not surprising that the government was now forced
into a series of encroachments upon the economic life of its
subjects. Denmark was hving under the same conditions
as most of the other countries, and was having, on the whole,
the same experiences. Immediately after the outbreak of
the war an act was issued (August 6, 1914), whereby the
Minister of Justice was authorized temporarily to prohibit
the exportation of certain goods. On the following day a pro-
visional act was promulgated authorizing the government to
take steps to regulate the price of foodstuffs and other
commodities, and permitting it, after full compensation,
to take over such supphes as were necessary for the Hfe of
the nation. On the following day, again, a Price Regulating
Committee was appointed with authority to take such
measures as it deemed necessary to supply the coimtry with
essentials. In this way there was initiated a state socialism

LEGISLATION CAUSED BY THE WAR 83

of which nobody could have dreamed before. At the
same time need was felt of taking other measures which
completely overturned all previous ideas. To prevent
runs on the savings banks, as well as on the other banks,
an act of August 2 provided that the Secretary of
Commerce could limit strictly the amounts which might
be paid out on pass-books or deposit-vouchers; and
since a run was made on the National Bank by people
anxious to exchange notes for gold, so that the square in
front of the building was hterally jammed, another act was
passed on the same day suspending the obhgation of the
National Bank to redeem the notes, leaving it to the
discretion of the bank to redeem them or not. The first of
these two acts soon became superfluous ; for as soon as the
people had recovered from their first panic, money flowed
into the banks to an extent never known before.

The neutraUty of Denmark during the World War created
for her unique economic opportunities. There was a great
demand for goods which she had on hand or could readily
procure. Shrewd merchants and manufacturers recognized
their opportunity, and in a very short time many of them
made large fortunes. But this was not to the advantage of
the majority. In the eager race to purchase the commodities
which Denmark was able to deliver, prices rose and the
populace was in danger of serious privation. It required
an enormous amount of negotiation with the belUgerent
countries to secure export licences for the goods which
Denmark needed in return for those which she was able to
deliver, and it was not an easy task for the representatives
of commerce and trade on whom it devolved to conduct
these negotiations to make satisfactory arrangements.

The measures taken to secure the necessary goods for the
population brought forth a steady stream of export prohibi-
tions, besides an extraordinary nmnber of price regulations.
In most cases these regulations established maximmn prices,
sometimes by agreement with the manufacturers concerned.
But it is obvious that such measures could not be satisfactory

G2

84 ECONOMIC DEVELOPMENT IN DENMARK

in the long run. Once a scarcity of goods is felt, fixed prices
are of no use ; and confusion necessarily results when there
is no rise in price, as in a free market, to bring about the
balance between the supply and demand. Various regulating
measures on the part of the state became necessary, and
such measures characterized the whole period of the World
War, as well as the first period following its termination.
When to all other difficulties was added the bad harvest of
1917, one can readily understand the many reasons for the
socialistic policy that was adopted. But in reality the policy
of Denmark did not differ from that of other countries in
which the populations were living under similar circumstances.
Very soon the scarcity of various foodstuffs was felt. As
early as the end of August 1914, the state felt obliged to
take over the stores of wheat in the capital, after making
due compensation to the owners, and a few days later these
stores were handed over to the municipahty of Copenhagen.
At the end of the year the state took over large quantities
of rye, and early in 1915 a shipment of wheat flour from
abroad. But this was not enough ; the freedom of the
farmers was early interfered with, and after consultation with
existing organizations of farmers it was voted to prohibit
the use of rye and wheat for fodder and for spirituous Hquors.
The first of these prohibitions was issued in September,
1914 ; they were later extended to include sugar and sugar-
beets. Moreover, the production of rye and wheat bran was
restricted. In the autumn of 1915 an assessment upon grain
was levied ; a certain part of the rye and wheat harvested
was reserved for human food, every farmer being notified
of the quantity he was bound to deliver. Pursuant to an act
of April 3, 1917, the state took over the whole crop of rye
and wheat, with the exception only of the quantity necessary
for each farmer's household. This was consequent upon the
rationing of bread and flour which had begun on April 1,
1917, and which allowed a rather large quantity for each
person. The system involved the well-known apparatus
of bread-cards. A Corn Act of August 3, 1917, authorized

LEGISLATION CAUSED BY THE WAR 85

the Secretary of the Home Office to take over all the rye
and wheat of the uncommonly poor harvest of that year,
as well as a portion of the barley and oat crop. It further
authorized him to command every municipahty to purchase
potatoes for its inhabitants, even if it were necessary to
compel the farmers to sell. The quantity of grain to be
surrendered was calculated according to the value of land
as tillable soil. The arrangement had its drawbacks, as,
for instance, it might follow that farmers could scarcely
get the necessary fodder for their horses. But here, as
wherever regulations were made, a series of committees was
appointed; one Permanent Agricultural Committee, the
members of which were for the most part elected by the
organizations ; a general Food Council and local Food Councils
for each separate district.

In the following year another Corn Act was passed. It
authorized the Secretary of the Home Office, after agree-
ment with the farmers, to cause potatoes to be raised,
and it permitted the state to take over all sugar beyond
what was necessary for the population. Further, it made
provision for supplying pork to the people. As stated above,
the number of hogs had very greatly diminished during
the war, and the most sparing consumption of pork was
enjoined. By an act of December 10, 1917, the Secretary
of the Home Office was authorized to take measures for
rationing pork, and the ensuing measures interfered greatly
with the independence of farmers. In August 1918 it was
decided that slaughtering at the farm could be allowed
only on certain conditions and exclusively for household
consumption.

The supplies of butter and milk were no less guarded.
At the close of 1917 butter had to be rationed. A note of
October 20 fixed a maximum price considerably below the
export price ; and later on there was a further reduction.
An act of December 10 of the same year provided that the
state should pay the expense of the rationing system arising
from the sale of butter at the reduced prices. The milk

86 ECONOMIC DEVELOPMENT IN DENMARK

supply was regulated by the establishment of an export
duty on milk, cream, and cheese. An act of December 21,

1917, which was to remain in force until the end of October

1918, secured a certain quantity of milk for each individual
at a fixed price, the state granting a subsidy of 8,000,000
kroner to be distributed among the communities according
to their population. This act was replaced in November
1918 by a new act to supply butter, milk, cheese, and poi*k
on the same system ; and a tax was also planned upon
cream sold within the country.

In order to insure the meat supply for the home market
at a moderate price, an export duty on live stock was estab-
lished by a note of July 7, 1916. The duty was to be levied
at such a rate that meat in the home market might be sold
at a reasonable price. The arrangement was laid down in
an act of July 23, 1918. It is tempting to have to remind
of ' dumping ', only the home price in this case is lower
than the export prices.

The list of such measures on the part of the state is by
no means exhausted. Directly it was attempted to influence
the supply of necessary goods, for instance, by encouraging
the production of food at home, one effect of that poUcy
was to increase the production of fuel at home. By an act
of April 20, 1917 (amended on March 20, 1918), the Secretary
of the Home Ofl&ce was authorized to enjoin an increased
felling of trees on all forest lands. Indirectly the aim of
government was to increase the producing power of agriculture
through the importation of fertilizers. The Secretary of the
Home Office was authorized to purchase Norway saltpetre
for the account of the state and to sell it to consumers at a
considerably reduced price (act of March 7, 1918). The
government also subsidized fishing to a considerable extent,
so as to reduce the cost of fish. Various commodities,
such as petroleum and oil, as well as technical fats, soap,
tea, coffee, and sugar, were placed under control. At the
close of the year 1916 the state took over the expense arising
from the sale of sugar at a considerably lower price than it

LEGISLATION CAUSED BY THE WAR 87

could be imported for, and after February 9, 1917, sugar
was rationed.

All these provisions, the preparation and application of
which necessitated the creation of many committees and
councils, as well as the building up of a considerable adminis-
trative apparatus, was necessarily distasteful, of course, to
a large part of the population, even though it be admitted
that Denmark was better off than most of the neutral
countries. The pressure was most severely felt by agriculture,
which is the true stronghold of individualism. One of the
beneficial, though indirect, results of the restrictions was the
falling off in the production of spirits consequent upon the
scarcity of grain. While the champions of liberalism main-
tain that prohibition or limitation of spirits was not according
to reason, it is nevertheless a fact that sentiment against
alcoholism, which has been growing in Denmark during the
last decade, has been greatly increased by the experience
during the war.

While the Danish population was thus obhged to submit
to a number of restrictions, the fact must not be overlooked
that the various trades worked hand in hand with the
government, and that their organizations were allowed to
take many independent measures designed to control the
supply of goods to individual traders. This was especially
the case with the ' Joint Council of Trades ', formed in
February 1917, and consisting of members elected by the
organizations of agriculture, commerce, shipping, and in-
dustry. This Joint Council brought about co-operation
between these trades : e. g. the Textile Manufacturers'
Association undertook to import cotton ; the Industrial
Council established a Coal Distribution Office for industries
working conjointly with two coal councils appointed by
government, one for English, the other for German coal.
Moreover, the Joint Council succeeded in bringing about
the importation of a quantity of turpentine, which was then
distributed among painters, etc. This voluntary action was
quite on a par with the action of the state.

88 ECONOMIC DEVELOPMENT IN DENMARK

Recent Social Legislation

Several of the above-described measures were adopted
for the special benefit of the lower classes of the community.
Where prices were not directly fixed, it was attempted to
limit profits from sales. A note of February 1, 1917,
prohibited exploitation of the opportunities created by the
war, and provided that goods were not to be sold at a higher
price than that previously current, if the increased price
could not be proved due to the increased expenses for the
seller in connexion with the manufacture, purchase, or costs
of the goods. It prevented articles which passed through
several hands from being sold at more than the original price,
thus prohibiting profits by middlemen as far as the transfer
from one seller to another might involve an apparent reason
for an increase in the price. Other means of limiting profits
were devised through the many new taxes established during
the last years of the war, as will be shown later.

In view of the stringent need of the lower classes the
municipalities were authorized to spend considerable sums
for their rehef ; and the state also made considerable grants.
The acts of December 22, 1915, December 28, 1916, and
December 21, 1917, authorized gifts of money through the
Municipal Relief Funds and other institutions such as the
recognized Unemployment Funds, as well as reductions in
the price of food and fuel for the whole population and
especially for the poor.

The condition of the unemployed was considered. The
number of unemployed increased especially on account
of the unrestricted submarine war, and they must be
helped. The act of 1914 relating to Unemplojnnent Funds
had provided that the members should have passed
through a period of carene, no support being given to
a workman until he had been a subscribing member for at
least twelve months. This provision was temporarily
suspended by an act of October 27, 1917, and much relief
was thereby rendered possible. Eventual provisions that an
unemployed member should receive relief only at certain

RECENT SOCIAL LEGISLATION 89

periods of the year, or after a certain waiting time, were also
suspended. A labourer could now be entitled to support even
if he had work on four days of the week. Extra sums were
paid through the Unemployment Societies to their members
in addition to the statutory relief, or as relief extended beyond
the time fixed in the statute. A considerable additional sum.
is now fixed, so that members who pay regular premiums
receive at least 1-75 kroner ($0-47) a day from the combined
sources. The unemployed, on certain conditions, also receive
help in pajnng their rent, and further sums are allowed under
special circumstances by the Municipal Rehef Fund, e.g. if
they have several children, if they are in ill health, or if
they have heavy debts. This act was superseded by a new
one of February 8, 1918 (to remain in force until June 30,
1918 — later prolonged to the end of November), which made
still better provision for the unemployed, raising the minimiun
relief to 2-75 kroner {$01 4)) a day for full subscribing members
with famihes to support. That the unemployed thus received
a considerable amount of support is apparent from the
provision that the daily sum should not exceed three-fourths
of the current daily wage, not including assistance toward
the payment of the rent, support from the Municipal Relief
Fund, or a share in the relief measures taken by the munici-
pality, pursuant to the act, for all inhabitants of the munici-
pality or for those whose incomes were under a certain sum.
It is the state which in the first instance will have to bear
the burden in conjunction with these measures. Again,
a new provisional act was issued on July 1, 1918, which in
no wise altered the principles of the previous one ; on the
contrary, it increased the state grants. But between the lines
we can read an admission of its own shortcomings, since it
provides for the appointment of a committee to make
proposals for amending the act, it being presumed — and
that is indeed characteristic — ^that in cases where the support
received through the Unemployment Societies is inadequate
for the support of a workman's family, the deficit must be
made good from the Municipal Rehef Fimds.

90 ECONOMIC DEVELOPMENT IN DENMARK

By all this legislation Denmark posits clearly the right
of the citizen to exist. This principle has been so far recog-
nized by all civilized countries that they acknowledge as
a duty the establishment of a Poor ReHef System. But in
most countries the relief given through such a medium
involves certain limitations of political rights ; and, more-
over, it is generally rather small. No such limitation,
however, is attached to the legislation described, where,
indeed, help has recently been given so freely that the un-
employed workman is under no great inducement to return id
work. The Act of February 8, 1918, was intended to create
such inducement by providing that the aid given must not
be so great as not to give the workman real economic interest
to obtain work. But such a law naturally does not form any
bulwark against an army of non-workers, and many complaints
have been made of the abuse of its provisions. It is not
surprising that a workman, who has a weekly wage of
28 kroner and who is consequently entitled to 21 kroner
weekly in the form of unemployment support, is not tempted,
to return to all-day labour for a paltry 7 kroner more by
taking employment but prefers to receive unemplojnnent
support and then perhaps supply his income by some odd
work which is outside the control. A case in point recently
came before the Unemployment Council. A member of an
unemployment society in the neighbom'hood of Copenhagen
refused to accept a permanent position because on some days
of the week he could earn 12 to 14 kroner per day ; he there-
fore refused the position offered and demanded support from
his society for the days on which he had no work. The council,
however, decided against him.

To prevent such misuse of funds a new act was issued
on November 30, 1918 (to remain in force until the end of
1919), whereby the conditions for receiving help were made
more strict. Control of the unemployment societies over
their members was increased, and attempts were made to
bring about a closer co-operation with the pubHc employment
ofl&ces. In addition to the current aid, 2 kroner per day

RECENT SOCIAL LEGISLATION 91

during the winter and 1-5 kroner per day during the j&ve
summer months are now granted to each householder, and
assistance toward the rent is a httle more Hberal. But
the source of the difficulty does not seem to have been reached.
Still the thought seems to find expression in the new act,
that a duty to work ought to be attached to the right of
existence; but on this point there will doubtless be much
argument before its rationality is made clear.

The founding of unemployment societies on the basis
created by earher legislation was a long step in the direction
of help to self-help ; but in using the unemployment
societies as the institutions through which to make govern-
ment grants legislation imwisely followed the line of least
resistance. Through the use of the existing institutions as
examining boards and as treasuries their significance as
insurance societies became vague, and their position will be
difficult when normal conditions are restored.

Future historians will certainly see in the Danish use of
the unemployment funds during the present period of high
prices a reflection of the English Allowance System of the
eighteenth century, which Malthus attacked so vigorously.
Just as that system aimed to give the unemployed workman
the minimum necessary for his existence, the present Danish
system aims to give him an income up to a certain limit. In
i;his connexion it is interesting to note that, according to the
£ict, a workman who is wiUing to accept unaccustomed work
outside his own trade may receive from the fund a temporary
addition to obtain the wage which is customary for the
Avorkman of that time when he, on accoimt of faiUng practice,
(»n not earn this wage by his work.

Economic Changes caused by the War
The change of economic conditions during the World
War will be the chief excuse for this indulgent pohcy. Evi-
dences of a surprising increase in the incomes of the majority
ctf the population are numerous, statistics of taxation showing
them to have trebled between the years 1906 and 1918.

92 ECONOMIC DEVELOPMENT IN DENMARK

Before the war incomes had grown rapidly, but nowhere
near as rapidly as during the war, when they doubled in
the course of three years. Moreover, the capitals of joint-
stock companies increased from 854,000,000 kroner in about
1912 to 1,330,000,000 kroner in about 1917. Savings Bank
deposits increased from 575,000,000 kroner in 1901 to
858,000,000 kroner on March 31, 1914 ; but in the next four
years the figure mounted to 1,255,000,000 kroner. Still
greater was the increase of business in Banks of Deposit ;
from 395,000,000 kroner at the close of 1901 the sum increased
to 906,000,000 kroner in 1913, and again to 2,441,000,000
kroner in 1917, having almost trebled, accordingly, in those
four years. Thus we may go on giving proofs of the rate
at which the money economy of the country changed.

In considering these circumstances we must bear in mind
that the purchasing power of money greatly decreased.
During the war the prices rose on an average by 90 per cent.,
whereas during the previous fourteen years they had risen
by one third altogether, consequently in the proportion of
1 to 2-5. This consideration will greatly reduce our estimate
of the amount handled by the Savings Banks and Banks of
Deposit. The country's increase in wealth, though real, is
not nearly so great as it appears to be.

Various economists have attributed the rise of prices to
the great increase in the volume of paper money issued in
Denmark as in all other countries. In 1910 the note circula-
tion of the Danish National Bank amounted to 92,000,000
kroner ; in August 1914 it had reached 147,000,000 kroner —
an increase which cannot be looked upon as extraordinary
in view of the great development of industry and commerce.
But during the next four years it increased to 365,000,000
kroner, i. e. in the proportion of 1 to 2-5. The above explana-
tion is founded on statistics of earlier days. The truth is
more Hkely to be found in the fact that banks are the instru-
ments of the economic community, and not the reverse ; in
other words, the banks must adapt their issue of notes to

ECONOMIC CHANGES AND THE WAR 93

the requirements of the community, with a change, if neces-
sary, in their foundation regulation.

Proofs of an apparently growing wealth are further
furnished by the fluctuation of wages. In 1915 the wages
of an agricultural labourer had reached the very modest
average of 850 kroner ($228) per annum ; in 1918 provisional
statistics show an increase to 1,390 kroner ($373). The
figures indicate a gain of nearly 64 per cent. ; but in reaUty
the purchasing power of the agricultural labourer had rather
decreased during the war.

In trade and industry the figures are considerably higher.
The average hourly wage of a skilled mason in the capital
rose from 87-5 ore ($0-23) in 1913 to 150 ore ($040) in
1918; that of an unskilled mason from 61 to 117 ore
($0-31) ; and that of a male workman in a boot factory from
52-5 ($014) to 113 ore ($0-30). These figures seem to
indicate that the wages of unskilled labourers have kept
pace with the times as regards purchasing power, but that
the same scarcely applies to skilled labourers. It is possible,
however, that conditions will be more favourable for work-
men after the inevitable struggle for higher wages which
will be kept up now that the war is over. They will fight
to the utmost for the maintenance of the level now reached,
even though the price of food, fuel, and clothing decreases.
But meanwhile the rise in wages will be neutralized by the
rise in prices.

All this reminds one of the old story of Munchausen who
pulled himself up by his hair. Prices rise and labourers demand
higher prices ; increased wages are then followed by increased
prices, and increased prices in turn lead to a demand for
increased wages, and so on. Only one class of the community
loses by this movement, namely, the persons who receive
fixed salaries, and who see their capital and income reduced,
so to speak, to half what it was. This, too, is a loss sustained
by pensioners, annuitants, and officials. Accordingly,
officials are agitating for the introduction of a sliding

94 ECONOMIC DEVELOPMENT IN DENMARK

scale which will automatically follow the fluctuation of
prices.

These conditions are not surprising. At the very start
the war afforded Denmark considerable economic advantages.
The shipping trade appeared extremely prosperous, in spite
of great losses in tonnage, and the agricultural population
at once reaHzed large profits, for instance, by the sale of
their horses. But in the following periods the production
has declined by reason of failing supphes, whereby the
country was largely thrown back on its own resources.
Thanks to the good cultivation of the soil, however, and to
the high position of our agriculture, the result was sur-
prisingly good, everything considered, though not so good but
that the population was obliged to practise strict economy.

Recent Fiscal Measures

The measures instituted to help the lower classes of the
population out of all these difficulties could not have been
carried through, of course, without imposing great burdens
on the state and municipalities. The result is a very great
increase in taxes and an enormous growth of the public
debt, as well as a deficit in the national budget which it
may be very difficult in the future to make good. Danish
legislators, like those of all countries, have had to use all
their wits to create new sources of revenue. It would be
too much of an undertaking to go through all their legislation,
but a few outstanding features may be mentioned.

During the nineteenth century the income tax was a
municipal assessment ; only under certain extraordinary
circumstances did it become a state tax. Originally the
principle on which it was based was that of a proportionally
equal tax for all. In the early part of the century (1810)
a tax of 4 per cent, per anniun was established on all incomes,
with a deduction or exemption of 320 kroner ($86) appljdng
to every income. Later on the exemption was somewhat
enlarged. An act of February 19, 1861, relating to taxes

RECENT FISCAL MEASURES 95

in Copenhagen, fixed the same percentage upon all incomes
exceeding 2,400 kroner ($643) ; smaller incomes were
taxed on a decreasing scale, and those below 800 kroner
($214) were exempted altogether. Orthodox economists in
the middle of the last century considered such taxation just ;
some, indeed, maintained that the rich ought to pay propor-
tionately less, because they caused the treasury less trouble.
Even such men as John Stuart Mill would not hear of a pro-
gressive income tax ; and the famous English Income Tax,
which has been a model for similar taxation outside the
boundaries of the United Kingdom, was not so constructed
as easily to admit of a sliding scale. The modern trend of
thought is obviously that the individual does not stand as an
isolated member of society who receives a service from the
state and pays for it, but is a member of an organism who,
according to his power, contributes to a common purpose.

It would be extremely interesting to follow more closely
this change of opinion which is the basis of the transition
to the modern system, with its progressive rates applying
especially to persons with very large incomes. Simultaneously
with this change of opinion we find in many places, step by
step with the advance of socialistic ideas, the centre of
gravity removing from indirect to direct taxation. In
Denmark this is seen in the Customs Act of 1908, which is
one of the few liberal customs acts we now have. The real
transition began in 1903, with a change in the entire fiscal
system by levying an income and property tax for the state
(after the deduction of a certain small untaxable income)
of 13 per mille on the lowest ^income and 25 per mille
on the highest, the increase to stop only at 100,000 kroner.
The property tax was fixed at 0-6 per mille on the value
of the property.

These taxes became the starting-point for the later
legislation. In 1909, on account of the Defence Acts, income
and property taxes were raised, and three years later they
were raised again, when the property tax ranged from

96 ECONOMIC DEVELOPMENT IN DENMARK

14 to 50 per mille, i. e. double the maximum of 1903. The
income tax now ranges from 0-67 to 1-25 per mille.

The same principles were applied to inheritance taxes.
The act of 1861 provided a progressive rate according to
the relationship of the heirs but without regard to the size
of the estate. This was changed in 1908, and the tax now
had a moderate progression. ' It was considerably increased
in 1915. During the war the rapidity of legislation gave
people Httle time to consider the various proposals that were
submitted. Principles went by the board. It was all-
important to discover sources for direct or indirect taxes.
No originahty could be displayed, the given models were
followed and money was taken wherever it could be found.
To this extent there was something to go by, as the war
circumstances had created unprecedented fortunes and
incomes, on which the state naturally had its eye. Indirectly,
taxation was imposed by an act of 1915 introducing a stamp-
tax on the transfer of bonds, the so-called Exchange Act which
was increased in 1916 and made to yield several miUions;
directly, by various acts increasing the tax on incomes and
property. The rates were raised in 1915, further an extra-
ordinary provisional income tax law was passed providing
that the taxpayer should pay, besides his usual income-tax,
a considerable tax on the amount by which his present profits
exceeded his average profits for the three preceding years.
In 1916 the law was amended so that the Excess Profits
Tax for very great incomes rose as high as 25 per cent.
The following year a provisional supplement was added to
the income and property tax applying to incomes of over
6,000 kroner and fortunes over 20,000 kroner at a rapidly
progressive rate.

Besides these there was a series of indirect taxes. The
remarkably low duty on gin had been raised in 1912, and
in 1917 it was raised again. In the same year an additional
duty was also imposed on wine, and a tax was imposed on
cigars and cigarillos, and an increased tax on cigarettes.

RECENT FISCAL MEASURES 97

That the municipahties also devised new plans for taxation
can occasion no surprise. Finally, the autumn of 1918
brought a long list of proposals for the establishment of new
taxes and the increase of the old taxes, in order to enable
the government to make both ends meet. Outside of all this
we have further the measures mentioned above, as the duty
on the export of cattle, a duty which had its special
purpose.

On the whole the outstanding feature of the modem
system of taxation in Denmark lies in a certain principle
of equivalence ; as in the age of mercantilism, several duties
were used to cover special expenses. A duty was imposed
upon the Life Insurance Companies for their control, another
upon the Savings Banks to cover their control, another for
censorship of theatres determined in the licences, and still
another for inspection of boilers, etc. An act of 1916 pro-
vided that the shipping trade should contribute toward the
supplies of the coimtry, partly in tonnage, which through the
Council of Freight should be procured as cheaply as possible,
and partly in money, a srnn of 11,000,000 kroner being imposed
in proportion to the taxable incomes of the companies.

Effect of Recent Fiscal Measures
The effect of these measures on the finances of the state
will appear from some figures. In the fiscal year 1910-1911
the current revenues of the state totalled 91,000,000 kroner.
In 1913-1914, or immediately before the World War, they
totalled 124,000,000 kroner. During the war they swelled to
such a degree that in 1917-1918 they had reached 375,000,000
kroner. The income and property taxes, which seven years
before had yielded 12,000,000 kroner, now yielded 239,000,000
kroner, or nearly two-thirds of the total revenues. In 1910-
1911 the taxes on commercial transactions and the inheritance
tax brought in 9,000,000 fcrori^r, and in 1917-1918 they brought
in 40,000,000 krmer, of which 19,500,000 accrued from the
stamp-tax and 13,000,000 from exchange duties. During

98 ECONOMIC DEVELOPMENT IN DENMARK

the same period consumption duties rose from 46,000,000 to
71,000,000 krmier, of which duty on gin brought in 18,000,000
as against 4,000,000 in earUer years ; the duty on beer,
11,000,000 as against 6,000,000. Meanwhile, the customs
duties yielded during the war conditions so adverse to
commerce only 30,000,000 kroner, as against a previous
32,500,000 kroner, A falling off of income is found in govern-
ment enterprises, as in the state railways, which showed
a deficit of 10,000,000 kroner in 1917-1918, against a surplus
of 5,000,000 kroner in 1910-1911. The large incomes during
the war did not prevent a great increase in the national debt,
which was nearly doubled between March 31, 1911, and
March 31, 1918. On the latter date it was 603,000,000 kroner,
an amount which, however, a wealthy country such as
Denmark can easily carry, and which is very small in
comparison with the debts weighing upon the beUigerent
countries.

It is especially in the budgets of the Secretary of the Home
Office and the Secretary for the Defence that we find the very
large expenses corresponding to these figures. In 1910-1911
the expenditures of the War Office were about 20,000,000
kroner, of which between 4,000,000 and 5,000,000 were for
fortifications, buildings, etc. In 1917-1918 they had increased
to 86,000,000 kroner, of which 68,000,000 were for the
measures of safety on account of the war. For the Navy
Office, the expenses rose from 9,000,000 to 26,000,000 kroner,
of which 17,000,000 were for measures of safety. The
budget of the Home Office increased from 13,000,000 kroner
in 1910-1911 to 124,000,000 kroner in 1917-1918 ; of the
latter sum 18,500,000 kroner were used for purchase of com
and flour; 2,900,000 kroner for subsidies for importing
maize ; 1,300,000 kroner for the production of yeast ;
4,200,000 kroner as compensation to the rye and wheat
growers for grain surrendered. Butter producers received
a subsidy of 13,900,000 kroner, a sum which will be much
greater in the coming financial year. The reduction to the

EFFECT OF RECENT FISCAL MEASURES 99

people of the price of milk cost the state 8,000,000 kroner, and
the slaughter-houses received 13,100,000 kroner for the
slaughtering of hogs for the home market. As some small
compensation for these extraordinary expenses, there is
a surplus from fuel of upwards of 1,000,000 kroner, and
a penalty on farmers for insufficient deliveries of grain of
800,000 kroner. The rehef funds received a grant of 3,300,000
kroner ; aid to the unemployed amounted to 14,900,000
kroner ; while the municipalities received from the state
19,200,000 kroner pursuant to the laws passed to alleviate the
high cost of living. Of course, the cost of the whole rationing
system and of the numerous councils was not small. Besides
900,000 kroner for the administration of grain supplies, more
than 500,000 kroner was spent on price-regulating boards,
councils, and committees, and 760,000 kroner on food-cards.
To all this, finally, must be added from the accounts of the
Finance Department the increase in salaries of functionaries
to make up for the high war prices, amounting to upwards
of 30,000,000 kroner.

Summary and Conclusion
At this early date it is impossible to decide whether the
government has acted wisely or unwisely in pursuing the
policy outlined above. Criticism will scarcely condemn its
efforts to check the exportation of goods which were needed
by the populace, or to cut down by taxation the large in-
comes resulting from abnormal market conditions during the
war, or to control prices and regulate the consumption of
bread, sugar, butter, etc. These measures are interesting as
proof of the enormous growth of the power of the state
during the last generation. In France, in 1792-1793,
attempts were made in vain to supply the nation with the
necessaries of life. The Convention prohibited, under penalty
of death and seizure of the produce, the exportation of
grain and flour. On September 29, 1793, maximum prices
were fixed for a number of goods, and the exportation

H2

100 ECONOMIC DEVELOPMENT IN DENMARK

of all raw materials was prohibited. Just as lighting was
recently regulated in Denmark, so too it was prohibited
in Paris to prevent a rise in the price of candles. But before
the close of 1794 the law fixing maximum prices had to be
repealed. In the modern community conditions are entirely
different. Of course, there have been many violations of the
law, both large and small, as well as many attempts at
smugghng and profiteering. On the whole, however, it may
be said that the laws have worked satisfactorily. Posterity
will probably be more critical of the many measures regula-
ting agriculture, as the branch where, as mentioned before,
individualism has a strong influence. The question will be
asked : Could not the powerful agricultural organizations
have accomplished the task of securing the necessary supplies
for the country without any interference from the state ?
Further, the measures that were adopted to relieve the
pressure of high prices will be looked at askance. The
increase of salaries for the hordes of functionaries who other-
wise would have been unable to make both ends meet under
the great increase in the cost of living will not be censured,
and much has been said in praise of the efficient support given
to the unemployed, although it need not have been done
through the recognized unemployment societies whose whole
rule of being, as above mentioned, was thereby quite upset.
The main question will be whether, on the whole, it was
prudent for the state to act as guardian of the population,
and in that capacity to procure commodities at a cheap rate
for the people and at a large cost to the state and munici-
palities, and whether so many direct grants should have been
made. It will be asked whether a little less interference
would not have been better. No doubt the consequence
would have been that wages would have risen as prices rose.
The working classes would then have needed no outside aid,
and the upper classes would have had heavier expenses but
lighter taxes. Most people will prefer such an arrangement,
even though the result, whether surplus or deficit, be the

I

SUMMARY AND CONCLUSION 101

same. It would have involved a greater increase in the
salaries of functionaries ; the officials and employees of the
state and municipality would have had to be helped ; but
the administration, on the other hand, would have been much
more simple. Many pros and cons may be put forward by
critics according to the view they take of society. The many
new laws, taken together, constitute a great advance toward
state socialism ; but it is a question whether this advance
has not been so strenuous that wide circles of the population
will not feel a reaction and breathe a sigh of rehef when the
former conditions are restored ; or whether, indeed, the
pendulum may not swing back beyond the limit attained
before the war. The events of the war have influenced
movements which were in process of gradual development
before they began, and it is a question whether the slow but
sure development then progressing might have been the
happier for the country.

It must not be overlooked that strong forces are in opera-
tion to bring about an entirely new social order. While the
Danish social- democracy is really a conservative party, the
aim of which is gradually to secure real progress for the lower
classes by means of energetic legislation, and as far as possible
to co-operate with the other parties in so doing, for several
years there have been elements within the ranks of the party
which, under conceivable circumstances, may cause great
trouble. The younger members of the party have often
shown impatience with the slow and cautious methods of the
older men. In Denmark, as in all other countries, the Syndi-
calistic Movement regards itself as the more genuine expres-
sion of the teachings of Karl Marx. Parliament is looked down
upon as an anachronism, and there is a desire for immediate
and vigorous action, which would bring us to the verge of
anarchy. We cannot impeach the motives of these young
men. They may be firmly convinced that the community
will adjust itself wisely to unchartered freedom when the
old bonds have been broken ; that the people of their own

102 ECONOMIC DEVELOPMENT IN DENMARK

accord will work unanimously in friendly co-operation for
the common good ; and that the resulting conditions will
be happier than those under which we are now living. But
it is to be wished that this end may be approached, not by
the exhortation of the untaught masses, but by studious
deliberation and quiet reflection on the lessons of history.
These ideas were growing among the social-democrats of
Denmark during the last years before the outbreak of the
war, although the party was so strictly discipUned that it
presented on several occasions a sohd front to the other
parties. During the progress of the war conditions naturally
changed. Foreign elements, largely of Slavic origin, appeared
in Copenhagen ; and when Bolshevism conquered Russia
it won much sympathy in certain quarters here. The Syndi-
calistic Movement thereby gained ground, though it met with
strong opposition from the old social- democracy. Especially
within certain trades these teachings, with their touch of
ideeJism, supported, as it is, by the longing of youth for
immediate action, have secured a firm foothold. The party
has a press which openly defies all its opponents, and not the
least the old leaders of the social-democratic party. For some
time to come they may not essentially distm-b the quiet
development of affairs ; but our day has been so full of
surprises that here, too, we may look for the unexpected to
happen. We are justified, however, in holding that few
countries are better armed against sudden catastrophes than
Denmark ; and, if she is spared bolshevist or syndicahstic
influence from without, she shows signs, as I hope will appear
from this treatise, of a healthy and independent progress, on
the lines of her past efficiency and the ideals of her population,
toward the solution of the social problem in such a way that
it may offer an example to be imitated in several points.

i

INDEX

Accident insurance, 32 ; development

of, 38-40.
Agriculture 1 Commission (1786), 6;

(1894)76; (1910) 79-«0.
Agricultiu-e, 5 ; reforms in, 6-7, 14,

17 ; development of, 66 ; decline in

price of agricultural products, 68 ;

value of co-operative dairies to, 71 ;

effect of Worid War on, 80-«2 ; effect

of rationing on, 87.
Allowance system (England), 91.
Arbitration : Permanent Ciourt of, 28,

63-64 ; state arbitrator, 64.
Artisans, 7 ; number and proportion of

(1787), 8 ; wages of (1872), 21.
d'Avity, Pierre, 3.

Bacon, 68 ; establishment and work-
ing of co-operative factories, 72.

Barley, 85.

Berg-Horup BiU, 43, 45, 46.

Blanc, Louis, 52.

Bolshevism, 102.

Bondage, introduction of, 5 ; abolition
of, 6.

Bread cards, 85.

Budget, 98.

Burial funds, 37.

Butter, 68, 69 ; ' estate butter ', 70 ;
export trade in, 74 ; decline in
export of, 81 ; rationing of, 85.

Cattle, exports of, 68 ; export duty on,

81, 86.
Cattle-breeding societies, 74.
Central Organization of Danish Dairy

Associations, 72.
Cheese, export duty on, 86.
Children, care of illegitimate, 48-49 ;

employment of, 57, 59, 60.
Cholera epidemic, 18.
Class distinctions, 8, 11, 28.
Coal distribution, 87.
Compulsory insurance, 30.
Compulsory service, 4.
Constitution (June 5, 1915), 2, 26.
Consumptives, care and employment

of, 49-50.

Control societies, 73, 74.

Co-operative movement, 3, 23, 28 ;
co-operative dairies, 69-72 ; in agri-
culture, 72 ; Danish Dairy Farmers'
Association, 72 ; co-operative bank,
75 ; erection of dwelling-houses, 75 ;
Co-operative Committee, 75-76 ;
value of, to rural population, 75 ;
co-operative stores, 75 ; co-operative
supply societies, 75 ; Co-operative
Wholesale Society of Denmark, 75.

Copenhagen, legislation for, 17 ;
housing question in, 18-19 ; average
daily wage in (1872), 21 ; trade
unions of, 24-25 ; growth of Social
Democratic Party in, 26 ; labour
exchange office in, 55 ; schools in,
62 ; increase of wages in, 65 ;
taxation in, 94-95 ; Slavic immigra-
tion, 102.

Com Act, 85.

Court of Arbitration, 63.

Cottars, number of, 10 ; abolition of
punishment by landlord of, 76.

Cream, export duty on, 86.

Customs Act (1908), 95.

Dalgas, E. M., 61.

Danish Bacon Agency, 74,

Danish Co-operative Egg Export

Society, 73.
Danish Employers' and Masters' Union,

41, 56.
Defence Act (1909), 95.

Education, 2-3 ; progress of, 12-14.
Eggs, co-operative exportation of,
' 73-74.
Employers and employees, relative

numbers of, 11, 21 ; growing

antagonism between, 27.
Employers' Associations, 26-28.
Employer's Liability Act, 29, 38.
Employment offices, 62.
Encyclopaedists, 5.
Excess Profits Tax, 96.
Expenditures, fiscal, 98-99.
Exports, regulation of, 83-84.

104.

INDEX

Factory Act (1873), 57, 59; (1901)
59; (1913)60.

Farm labourers, 18 ; wages and con-
dition of, 77.

Federated Trade Unions of Denmark,
24 ; Federative Agricultural Union,
41 ; Federative Danish Cottars'
Union, 41.

Federative Trade Unions, 24-25, 56.

Fertilizer, importation of, 68 ; decline
in importation of, 81, 86.

Fishery, subsidization of, 86.

Folketing (Lower House), 25, 26, 42,
43, 54.

Food Council, 85.

Forlov (quittance-fee), 4.

Free Constitution (June 5, 1849), 14,
16, 18, 20.

Freeholds, 3, 5, 6, 17, 18 ; free pro-
prietorship of land, 79.

Friendly Societies, 32-37, 41, 74.

George, Henry, 79.

Grain, price of, 66 ; exports and

imports of, 68, 81.
Grundtvig, N. F. S., 13.
Guild system, 7-9, 15, 17 ; abolition of,

19, 21, 22.

HaHkom, 12, 17, 76.

Hedeselskabet (Heath Company), 61.

Hogs, increase in raising and export of,

69 ; loss of, 81 ; state regulation of

slaughtering of, 85.
Holidays, 58.
Horses, breeding-societies for, 74 ;

foreign sale of, 80.
Hospitals, reduction of charges in, 35 ;

increased building of, 50.
Housing question in Copenhagen, 18.

Illegitimate children, care of, 48-49.
Income tax, 94 ; revenue from, 97.
Incomes, increase of, in 1916-1918, 92.
Indirect taxes, 96-97 ; revenue from,

97.
Individualism, 1, 16, 47, 57, 61-62, 87.
Industrial revolution, 7.
Industriraudet (Industrial Council), 27,

87.
Industry, 19 ; proportion of employers

and employees in, 21 ; use of

machinery in, 29-30.
Inheritsmce tax, 96 ; revenue from, 97.
Insurance : unemployment, 9, 25, 31,

50^5, 88-«9, 90, 99 ; compulsory.

30 ; accident, 32, 38-39, 72 ; sick-
ness, 36 ; invalid, 46 ; National
Insurance Act (England), 47 ; life
insurance companies, 97.

International Association of Labourers,
22.

Invalid Insurance, 46.

Invalid Pensions, 30.

Joint Coimcil of Trades, 87.

Joint Representatives of Trade and
Industry, 27.

Journeymen, 7 ; number and propor-
tion of, 8, 9; legislation in regard
to, 15; unemployment of, 51 ;
wages of, 65.

Klebegesetz, 31, 44.

Labour Council, 59-60.

Labour Exchange, 25, 51 ; interven-
tion of state in, 55.

Labour movement, 22 ; progress of,
24-26.

Land, tenure of, 6 ; values of, 66-67 ;
new principle in regard to sale of,
79.

Landgildet (ground-rent), 3.

Landsting (Upper House), 26, 54.

Lassalle, Ferdinand, 3, 24.

League of Federated Trades, 24, 25,
41.

Leaseholds, 3-5, 15, 17, 18 ; abolition
of, 79.

Legislation : Church Acts, 16 ; Press
Act, 16 ; Municipal Acts, 17 ; Trade
Act (1857), 17, 19, 28; Servants'
Act, 18; Building Act, 19 ; Friendly
Societies, 33 ; Employer's Liability
Act, 29, 38 ; Codification of July 6,
1916, 39-^0 ; Berg-Horup Bill, 43,
45^6; Old Age Pensions, 43;
National Insurance Act (England),
47 ; Widows and Orphans, 48 ;
Tuberculosis, 49 ; Unemployment,
53 ; Labour Exchange, 55 ; Arbitra-
tion, 63; War Legislation, 82;
State Labour Exchange Act (Eng-
land), 55 ; Factory Acts, 57, 69-60 ;
Com Act, 85 ; Customs Act (1908),
95 ; Defence Act (1909), 95.

Life Insurance Companies, duty on
management of, 97.

Live stock, 69, 80 ; export duty on, 86.

Loans to small farmers, 77.

Lock-outs, 27, 28, 53, 63.

INDEX

105

Machinery, use of, in industry, 29-30.
Maize, increase in importation of, 68 ;

decline in importation of, 81.
Margarine, 81.
Marx, Karl, 3, 24, 101.
Masters, 8, 9, 15 ; Unions of, 27.
Meat, 71 ; exportation of, 86,
Medical care, 32, 33.
Military conscription, 5.
Milk, co-operative production of, 70-

71 ; establishment of export duty

on, 86.
Mill, John Stuart, 95.

National Bank, 83 ; note circulation

of, 92.
National debt, increase of, 98.
National Insurance Act (England), 47.
Nitrate, purchase by government of, 86.
Norway, unemployment insurance, 52-

53.
Notes, redemption of, 83 ; circulation

of, 92.

Oats, 85.

Oilcakes, 68 ; decline in importation

of, 81.
Old-age pensions, see. Pensions.
Orphans, care of, 48.

Parliament {Rigsdag), elections to, 25.

Peasants, 3-7, 10.

Pensions : old-age, 29-30, 42-47, 49 ;

invalid, 30, 46.
Permanent Agricultural Committee,

85.
Permanent Court of Arbitration, 28,

63,64.
Physiocracy, 5.
Pio, Louis, 22, 23, 25.
Pdaklav, 37.
Population, 1 ; in Denmark, 1787, 8 ;

in Denmark, 1801-1901, 9 ; peasant,

10 ; distribution of, 20.
Poor relief, 17 ; municipal relief funds,

88, 90.
Potatoes, 85.

Poultry raising, co-operation in, 73.
Press Act, 16.

Price Regulating Committee, 82,
Prices, 14 ; advance in, caused by

World War, 65, 92, 93 ; effect of

exportation on, 83 ; regulation of,

83-84.
Private and public schools, 61-62,
Profit-sharing, 28-29.

I Profits, limiting of, 88.
j Property tax, 95.

Railways, decreased revenue from, 98.
Rationing, 84, 85 ; of bread, 85 ; of

petroleum, oil, fats, soap, tea, and

coffee, 86 ; of sugar, 87 ; cost of

system of, 99.
Revenues, fiscal, 97-98.
Royal Veterinary and Agricultural

College, 13.
Rye, 68 ; state appropriation of, 84.

Savings banks, 29, 83 ; increase in

deposits of, 92.
September Agreement, 28, 63.
Servants' Act, 18.
Sheep, decline in breeding of, 69.
Sickness insurance, 32, 36, 38.
Single tax, 79.
Slaughter-houses, 72-73.
Sleswick, 2, 13 ; loss of, 19, 61.
Smith, Adam, 52.
Social-Democratic Labour Party, 23 ;

growth of, 25-26, 102.
.Social Democratic Society, 24.
Socialism, 3, 22 ; spread of, 24 ;

' Professorial socialism ', 30 ; trend

of opinion toward, 47 ; advance

toward state socialism, 101.
Sognebaand, 16.
Sorensen, Th., 34, 53.
Spirits, prohibition of use of wheat and

rye for manufacture of, M, 87.
State arbitrator, 64.
State Labour Exchange Act (England),

55 ; (Denmark), 55-56.
Strikes, 23, 25, 28, 53.
Sugar, 84, 85, 87.
Sunday work, 29, 58.

Taxation, 14, 17, 79, 88, 94-97;
income from, 97.

Textile Manufacturers' Association, 87.

Town labourers, 21.

Trade Act (1857), 17, 19, 28.

Trade Marks, 72.

Trade Unions, aims of, 23 ; member-
ship of, 24 ; principles and objects
of, 25 ; support of unemployed by,
51.

Trades, joint Council of, 87.

Tree felling, 86,

Tuberculosis, 49-50 ; unemployment
caused by, 50.

Turgot, 52.

Turpentine, 87.

106

INDEX

Unearned increment, 79.

Unemployment Council, 90.

Unemployment : insm-ance, 9 ; care
of unemployed, 25, 31, 50-55, 88-90 ;
in Switzerland, 51-52 ; in Bel-
gium, 51 ; compulsory savings to
support, 51 ; Norwegian Act, 53 ;
cost of helping unemployed, 99.

Unemployment Insurance Fund
(Berne), 52.

Unemployment societies, object of, 53 ;
government support of, 54 ; increase
in membership of, 54 ; statistics for
1916-1918, 82, 90-91.

' Village community ', 6.
Villeinage, 4.

Wages, rise of, 18, 19 ; average daily
wage in Copenhagen, 21-22 ; of

farm labourer, 65-66 ; rise in wages
of farm labourer, 77-78 ; advance
in, caused by World War, 93 ; sliding
scale of, 93-94.

Wheat, 68 ; decline in importation of,
81 ; state appropriation of, 84, 85.

Widows, care of, 48.

Women, position of, 2 ; changed
attitude toward, 60.

Working hoiu^, 21.

Workmen's Commission (1875), 28-
30.

Workmen's compensation, 30.

Workmen's Insurance Council, 38, 39,
41.

World War, 1, 2 ; rise in cost of old-
age pension during, 45-46 ; eco-
nomic changes caused by, 80 ; effect
of, on food situation, 81 ; legislation
caused by the war, 82-88.

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