CHAPTER X

OLD AGE BENEFITS OF FRATERNAL AND TRADE UNION ORGANIZATIONS

FRATERNAL INSURANCE

The earliest forms of mutual assistance and insurance benefits organized by the middle and working classes were through the agency of fraternal organizations. Many of these had their beginning in the mediaeval trade guilds. The industrial revolution, with its resultant hazards, spurred and swelled these organizations tremendously until there have been developed the numerous fraternal orders and secret societies now in existence most of which have benefit provisions of one form or another.

The fraternal organizations, as incorporated associations, supply to their own members on a co-operative plan, various forms of insurance—largely against sickness, death and disability. When confronted with problems of old age relief, these societies, ordinarily raise only sums sufficient to cover contingencies as they arise. This usually results in the younger generations granting aid to the older members with the expectation that in their old age they, too, will be provided for in a similar manner. The inevitable effect of this is that as the burden of supporting the older members becomes heavier, fewer younger members are attracted into these societies. Furthermore, many of the younger group, when confronted with heavy assessments, drop out and leave the older members to hold on until the final collapse. It is, therefore, not surprising to discover that the early history of these societies, as insurance instruments, is strewn with financial wrecks. Few of these societies have even today adjusted their rates on a scientific basis or upon actuarial principles, and many are still insolvent.

Of the hundreds of fraternal societies in the United States the number of those having benefits which may be classed as old age pensions is insignificant. Only three out of 117 fraternal associations in Massachusetts in 1807 had such benefit provisions. Still more negligible is the number of aged who are actually in receipt of such benefits.

“A Circular of inquiry addressed to 60 of the leading fraternal beneficiary corporations organized outside of the State of Massachusetts brought 36 replies. Of the associations replying, 31 stated that they pay an old age pension and annuity allowance, or gratuity in some form. Five have no old age benefits. Some of the latter, however, pay benefits for total and permanent disability. The age of 70 is the usual age at which an old age pension is payable. Twenty-four societies out of 26 answering the inquiry on this point give the age 70, and two the age 75, as the pensionable age. In many cases permanent disability is also required as a condition for the receipt of an old age pension. The amount of the pension is commonly one-tenth of the face value of the insurance certificate carried by the member. It is usually provided that the one-tenth shall be paid annually until the whole amount of the certificate has been canceled, or for ten years, or until the age of 80. Twenty-five associations pay this amount of benefit. Two societies pay only one-twentieth of the amount of the certificate; one pays one-fifth in five installments; and one pays one-half of the certificate upon its surrender. The great majority of the societies have thus far paid nothing on account of old age benefits, as they have been organized but a short time and payments are not yet due. Fourteen societies report payments on this account, as follows: $100 for two members; $200 for one member; $200 for two members; $400 for one member; $400 for two members; $3,886.40 for 12 members; $7,276.58 for 17 members; $2,642.73 for 24 members; $5,700 for 34 members; $5,125 for 56 members; $10,000 for 200 members; $14,800 for a number of members unstated; $48,021.85 for 385 members; and $104,788 for 748 members.”[224]

The Pennsylvania Commission also studied 155 fraternal organizations listed in the Report of the Insurance Commissioner of that State. The membership of many of those organizations ran into the thousands. The report listed 85 fraternal corporations with charters from other States and 58 with charters from Pennsylvania. In the case of the former only nine were listed definitely as giving old age benefits. The number of Pennsylvanians receiving such benefits was 31. A letter of inquiry addressed to all the Pennsylvania organizations brought thirty-nine replies. None of these paid old age benefits as such. Thirty-two paid no benefits which could even be classified as superannuation allowances, although a number paid disability benefits.

On May 11th, 1821, the Indiana State lodge of the Eagles adopted the following resolution:—

“WHEREAS, Modern industry, with its intricate, swiftly moving machinery, and rush for production, requires the steady nerve, ready initiative, and exhaustless energy of youth, and places the elderly workman at a serious disadvantage, even if it does not debar him from employment; and

“WHEREAS, Experience has proved that the remuneration received during his productive years is, in many cases, through no fault of his own, utterly inadequate to enable the workingman to “lay by” sufficient to provide for the non-productive years of later life—statistics showing that in the United States, alone, there are 1,250,000 such old-age dependents on public and private charity; and

“WHEREAS, Such charity, with its brand of pauperism, inflicts an unjust stigma upon those unfortunate victims of our industrial system who have expended the energy of their vigorous years in production for the benefit of society; and

“WHEREAS, The pension is not a form of charity, but an honorable recognition of hitherto not fully rewarded service; and

“WHEREAS, Among civilized nations, the United States is the only prominent one that has not in some form or other recognized the obligation of the state to the humble toilers whose labours are the basis of its prosperity; and

“WHEREAS, The Fraternal Order of Eagles is particularly interested in this question, not only because of the economic status of a large portion of its membership, but also because of its fundamental principle of upholding justice. Therefore, be it

“_Resolved_ by the Indiana State Aerie, That we are in favour of governmental old age pensions, and that we invite our sister State Aeries and the subordinate Aeries of the Order to unite with us in requesting the Grand Aerie of 1821 to take such action as will awaken public sentiment to the wisdom of State and Federal provision that shall remove from the minds of the labourers of the land the haunting fear of want and pauperism in old age.”

TRADE UNION SUPERANNUATION BENEFITS

Mr. Samuel Gompers, President of the American Federation of Labour, stated in a letter addressed to the “Committee on Miners’ Home and Pensions”: “The general purpose—that the organization ought to take care of its aged and indigent members, and to make some provision for their welfare and protection—is a most worthy one. It is in accord with the general fraternal concept that underlies the whole organized labour movement. It has much in common with the more sensitive social conscience that has led to general provisions for those in want.” He further warns that “Many of the proposals for social insurance are of a compulsory nature. Wage-earners now find themselves confronted by this alternative; either labour organizations must make more comprehensive and more adequate provision for trade union benefits, or else they will have forced upon them compulsory social insurance under the control and direction of government agencies. Compulsory social insurance will inevitably result in supervision by the Government of the normal activities of trade unions and in the delegation to governmental agents of all matters that vitally affect the interests, the rights, the welfare and the freedom of wage-earners.”

It is also the general conviction of trade unionists, that a pension paid by the union to its old members is of inestimable value. Trade union experience, with established benefit features, has proved these to be sources of strength. They are “holding and binding the membership together in a bond of human sympathy, winning the admiration and respect of even those who are opposed to union organization.” As an organizing factor, it is invaluable. It attracts and prompts to identify themselves with labour organizations, members who would perhaps otherwise remain on the outside. The fact that a member is rewarded for loyalty to the union by being provided for in his declining years not only promotes greater promptness in the payment of dues, but reduces the lapses of dues to a minimum. Furthermore, it causes many to consider well before contemplating the severing of their connection with the union for any but very serious reasons.

It would appear from the preceding that among trade unions at least—where the principle of fraternal brotherhood is most firmly established—there would be found complete measures and comprehensive schemes for the protection of their members in their declining days. This, however, is not the case; and thus far, the American labour movement has done comparatively little in the way of providing opportunities for protection against old age. While it is true that the more radical element in the labour unions abhor the idea of belonging to an “insurance company” rather than to a class-conscious labour organization, the influence of this group has as yet been comparatively ineffective and the lack of old age provisions cannot be credited to its opposition.

The 1808 Report of the United States Commissioner of Labour lists 18 Trade Union organizations as paying benefits for temporary disability and death. Four of these pay benefits for temporary disability, permanent disability, and death; three pay benefits for temporary disability, permanent disability, death and superannuation, and two pay benefits for temporary disability, permanent disability, death and superannuation and death of members’ wives. Of the 83 unions that pay death benefits, 18 pay permanent disability benefits. Only four were paying superannuation benefits. Four other unions were at that time accumulating a fund for the payment of superannuation benefits which are now in operation.

THE INTERNATIONAL TYPOGRAPHICAL UNION

The first American Trade Union to institute an old age pension system was the International Typographical Union. The history of the pension system of this labour organization is so interesting and indicative of the whole problem of fraternal insurance that it is of value to discuss it at length. This union, which began to take care of its aged workers as early as 1882, has ever since been in the vanguard of the movement to extend old age pensions to all persons. As early as 1884 the International Typographical Union opened its Union Printers’ Home at Colorado Springs, Colorado, in order to take care of the old and infirm members, “who through their steadfast loyalty and many sacrifices to the I. T. U. have made the present organization possible.” After several years of experience with this Home—generally conceded to be a good one—the I. T. U. became aware of the fact that many aged and incapacitated members were unable to avail themselves of the benefits of the Home because of family ties and long associations in their respective communities. Once this was realized, to further insure the members against abject poverty and public or private charity, an old age pension system was established at the annual convention of the Union in 1807. This became operative in March, 1808.

The plan, as originally adopted, provided for the payment of four dollars per week to members 60 years of age, having a continuous active membership in good standing of years, unable to obtain sustaining employment at the printing trade, and not earning more than $4.00 per week at the trade. At the 1810 Convention the law was amended so as to render eligible to pension, members 70 years of age, having a continuous active membership in good standing of ten years. Provision was also made in the law for members totally incapacitated for work whose applications for admission to the Home had been disapproved by reason of their affliction; such members were required to have twenty years’ continuous active membership in good standing.

In 1811, at its convention in San Francisco, the I. T. U. finding that the preceding amendment still did not reach a large number of men whom it was necessary to assist and also that the experience of the first few years of its pension fund warranted a further extension of the benefits, increased the pension allowance to five dollars per week to the following three classes of members:

First: Members 60 years of age who have been members in good standing for a period of twenty years, including and ante-dating the enactment of the pension law, and who find it impossible to secure sustaining employment at the trade. Applicants under this provision of the law must have been members in good standing at the time the pension law became effective and must have maintained active membership since that time.

Second: Members who have reached the age of 70 years and who have been in continuous good standing for a period of ten years and who find it impossible to secure sustaining employment at the trade.

Third: Members who are totally incapacitated for work, who have been continuous active members for twenty years, and whose applications for admission to the Home have been disapproved because their afflictions are such as to render them ineligible for entry to that institution. In January, 1820, the pension was further increased to six dollars per week.

The fund for the payment of pensions is provided by a tax of one-half of one per cent. of the weekly earnings of all members.

Since March, 1808, when the assessments were first made, the total receipts of this fund up to May 31, 1820, were $3,856,161.08, from the tax assessment, $204,833.58 was derived from interest, and $1,378.50 from returned pensions. The total receipts were $4,085,467.02.

The expenditures made during the same time were $3,022,448 paid to pensioners; and $86,158.26 for administration and registration system. The balance of the fund on May 31, 1820, was $886,858.76.

The financial operations of this fund during the first few years were declared eminently satisfactory. So much so that when the receipts in the first year exceeded the amount expended there was a temptation to reduce the amount of assessment. Gradually, however, it was found that although the assessments continuously increased, the expenditures on pensions grew steadily until in 1817 the latter exceeded the total income by nearly $20,000. At the 1817 Convention of the I. T. U. it was, therefore, recommended that the provision whereby a member at the age of 70 of but ten years standing was entitled to a pension be repealed. This was done the following year. During the year 1818, however, the income from assessments exceeded the amount expended on pensions by more than $200,000, although the number of pensioners during the same year increased from 1,483 to 1,510. The secret of this remarkable revival lies in the increased average earnings of the members of the International Typographical Union upon which the assessments are based. The annual wages of the I. T. U. members increased, according to the Secretary of the Union, from $1,264.88 in 1818 to $1,615.25 in 1818.

From the above conditions it is obvious that the future of the Old Age Pension Fund of the I. T. U. is neither stable nor secure. Should there be a depression in business or a lowering of wages the existence of the fund is threatened, unless the accumulated revenue fund is sufficiently large to protect it. Otherwise, it will necessitate either a reduction in the pensions or an increased rate of assessment.

Up to May 31, 1820, 3,083 applications for pensions by the I. T. U. were received. Of this number 82 petitions were disapproved, 82 were withdrawn and 2,808 were approved. Death removed 1,388, leaving 1,510 pensioners on May 31, 1820. The high death rate of 45.23 per cent. among these pensioners is significant. This is doubtless due to the advanced ages of the pensioners. The average age of all applicants is 64.24 years. The membership of the unions having members on pension in 1820 was 57,520. The pensioners’ represented 2.62 per cent. of the membership of these unions which in return constituted over three-fourths of the total membership of the I. T. U. During the fiscal year ending May 31, 1820, 156 pensioners were added.

THE ORDER OF RAILROAD TELEGRAPHERS

The Order of Railroad Telegraphers has established a pension fund for life annuities to old and faithful members of the order who have reached an advanced age in life, as well as to those totally disabled through physical and mental infirmities. In order to be eligible to membership, one must be a member continuously for at least five years, immediately prior to the filing of application for membership with the pension fund. Members 60 years of age and over are not eligible to membership in the pension fund after January 1, 1816.

The fund is maintained from an admission fee of five dollars from all applicants for membership in the pension fund and from a semi-annual assessment thereafter “equal to an equal division of $240 over the period ensuing between the age of the applicant at the time of admission to the pension fund and his 65th birthday after which his or her assessments shall cease.”

When a member of the pension fund attains the age of 65, he is paid a monthly salary of $20 during the balance of his or her natural life.

In order to obtain a total disability pension, eight years’ membership is required. The assessments cease as soon as placed on retirement roll.

The pension fund is entirely self sustaining and can in no way create any financial liability to the Order of the Railroad Telegraphers.

The Secretary and Treasurer of the Order writes: “We will probably discontinue our pension plan at our next convention, due to the fact that this proposition has not received the support of our members as was anticipated. If it is discontinued, all money paid into the fund will be returned to the members of this department.”

THE BRICKLAYERS’ FUND

The Bricklayers’, Masons’ and Plasterers’ International Union of America has an Old Age and Disability Relief Fund. This Union provides that when a member has been in continuous good standing for a period of twenty or more years, and has passed the age of sixty and who through some bodily infirmity is unable to secure sustaining employment at any occupation and has no means of support, he is then entitled to make application and receive five dollars per week benefit from the Relief Fund.

A member who meets with some accident while working at his trade on a building, during working hours, and is incapacitated from work, and who has ten years of continuous standing to his credit, is entitled to disability relief, of five dollars per week.

The widow of a member, entitled to old age or disability relief, who is without means of support and who has reached the age of sixty years at the time of her husband’s death, is entitled to the five dollar weekly payment until she dies or remarries.

It is provided in the by-laws, that each member shall pay into the treasury of the International Union such relief dues as may from time to time be levied by the International Union in convention assembled. The present assessment to the fund is fifty cents a month for each member.

This Union has jurisdiction over the United States and Canada. The general average membership for the first five years’ existence of the fund was approximately 72,000. About 4.67 per cent. of the membership made application for relief, of which only about two-thirds were approved. In May, 1820, the union had on its rolls 1,387 old age beneficiaries; in addition 83 were receiving disability benefits and 248 widows were on the relief list. Each of these was drawing five dollars per week as a pension. The Secretary of the union states:

“Our experience shows that the number on the relief roll is continually growing larger, although the last two years the increase has been very small, but it will continue to grow larger for the reason that the percentage of claims rejected are for the reason that they lack a year or two from being old enough, or a year or two from having the required number of years continuous good standing.”

OTHER UNIONS

The Brotherhood of Locomotive Firemen and Enginemen reports “an insurance feature in which every member must participate if he is able to pass the required medical examination,” but “has no Old Age Relief Fund.”

The Order of Railway Conductors of America has a relief fund. All members of this Order are eligible to participate and receive assistance from this Fund, provided they are totally disabled and without means of support for themselves and families.

It is encouraging to note that the labour organizations which have established pension systems of late, have learned somewhat from the experience of their predecessors and are at least attempting to adjust their rates on a more sound actuarial basis; and in addition they provide many other safeguards for the stability of their funds which do not exist in the earlier systems.

The Pension Association of the Brotherhood of Locomotive Engineers was first authorized in 1812 and was revised and readopted May 22, 1818. Its constitution provides that after the passage of this law, no one 60 years of age and over shall be admitted to membership. On and after June 30, 1816, no application shall be received for membership to the Pension Association from those who have reached the age of 50 years. And on and after December 31, 1818, no one can join who has reached the age of 45 years, while after December 31, 1820, members who have reached the age of 40 years are barred from membership. It is also provided that only such members of the B. of L. E. who are earning at least $60 per month are eligible to membership in this Association; also “no person who is out of employment temporarily caused by sickness or injury, can become a member of this Association, during such period.” In addition to these restrictions, “All applicants for membership in this Association will be required to pass a physical examination by a competent and reliable physician, and those having physical or mental defects may become members of this Association, provided that proper and legal waivers be furnished by such applicants exempting this Association from any and all liabilities resulting therefrom.”

Benefits are extended to the following: First: “Any member of this Association in good standing, who was in active service at the time of enrollment as a member, but who from physical or mental cause is totally and permanently disqualified, or has been retired on account of old age, shall from the funds of this Association a monthly pension as hereinafter provided.

“Any member of this Association who voluntarily retires from active service will not be entitled to receive a pension on account of old age until he has reached the age of 65 years.”

Second: “Any member of this Association, in good standing, who was not in active service at the time of enrollment as a member of this Association, who from physical, mental, or other cause, is unable to perform any kind of remunerative employment, or who has reached the age of 70 years, shall receive from the funds of this Association a pension as hereinafter provided; provided further, however, that no member shall receive a pension for disability caused by his use of intoxicants, or unlawful acts.”

Third: “All members of this Association, who are 65 years of age and are in active service, may if they so elect, voluntarily retire permanently from such service, and thereupon become eligible to a pension at once. All other members who have reached the age of 70 years shall be granted a pension.”

The contributions and the pensions of this Association are graded, and vary in accordance with the age and period of contribution. The amount of dues paid by each member follows:

“All active members under the age of 30 years shall pay 50 cents per month.

“All active members from the age of 30 to 35 years shall pay $1.00 per month.

“All active members from the age of 35 to 40 years shall pay $1.50 per month.

“All active members from the age of 40 to 45 years shall pay $2.00 per month.

“All active members from the age of 45 to 50 years shall pay $2.50 per month.

“All active members from the age of 50 to 55 years shall pay $3.00 per month.

“All active members from the age of 55 to 60 years shall pay $3.50 per month.

“All active members from the age of 60 to 65 years shall pay $4.00 per month.

“All active members from the age of 65 years shall pay $4.50 per month.”

The pensions allowed are based upon the following scales:

“Any member of this Association who has been declared a pensioner by the board of Governors, who shall have paid dues for 60 months, or less, shall receive a pension from this Association for the remainder of his life, of $25.00 per month.

“Those paying the dues from 61 months to 120 months, $30.00 per month.

“Those paying the dues for 121 months to 160 months, $30.00 per month.

“Those paying the dues for 161 months to 180 months, $35.00 per month.

“Those paying the dues for 181 months to 240 months, $40.00 per month.

“Those paying the dues for 241 months to 300 months, $45.00 per month.

“Those paying the dues for 301 months to 360 months, $50.00 per month.

“Those paying the dues for 361 months to 420 months, $55.00 per month.

“Those paying the dues for 421 months to 480 months, $60.00 per month.

“Those paying the dues for over 480 months, $65.00 per month.”

The Brotherhood of Locomotive Engineers also has in addition an Indigent Fund and an Insurance Relief Fund.

The Pressman’s Union adopted a pension plan, by first creating a sinking fund from the accumulations of a 25 cent assessment per month for all members for five years, before the payment of pensions became operative. This, it is believed, will create a sufficient fund which when placed on interest will insure stability and prevent the gradual increase of the per capita tax as was the case with other established funds.

Since 1813, District Number 21, United Mine Workers of America, has had the following pension system:

Each member pays 40 cents assessment per month, which may be raised or lowered when necessary.

All members, 60 years of age, when they have discontinued work in the mines, or those physically disabled from performing further labour in and around the mines, having no other means of support, and who have been in good standing for five years preceding January 1st, 1813, receive $3.00 per week. Those joining the Union after January 1st, 1813, are not eligible to benefits unless they have been members in good standing for five years prior to making application for pension.

THE UNITED MINE WORKERS OF AMERICA

At the 1816 International Convention of the United Mine Workers of America, a Committee was appointed “to investigate and report on the advisability and possible cost, to the International Union, of erecting and maintaining a suitable home wherein to care for the aged, infirm and decrepit members.”

After a careful investigation of the Soldiers’ Home, and Homes for the Aged, maintained by the different unions, and fraternal organizations, in the United States and England, the Committee reached the conclusion that “taking the estimate of other homes, it would cost about $40.00 per month for each resident for clothing, food, medical attendance and medical supplies.”

The Committee further reported that “The question of pension, with or without a home, was early called to our attention, and as the different organizations with whom we came in contact either had pension systems in active operation or were preparing to adopt pension systems, we deemed it advisable to gather all the data possible on the subject.” In comparing the safeguards adopted by other organizations, and in its “endeavours” to select such as are actually necessary, to make the plan a success, the Committee at the 1817 International Convention of the U. M. W. A. recommended the following plans for creating and maintaining a pension system.

“(1) An old age disability pension fund is hereby enacted by an assessment of 40 cents per month per member, which shall automatically be raised or lowered as necessary under the direction of the board of trustees hereinafter provided for, but in no case shall the assessment exceed 50 cents per month per member.

“(2) Said assessment shall be in full force and operation on and after April 1, 1818.

“(3) A sinking fund shall be created by the accumulation of said assessment for a period of three years from and after April 1, 1818.

“(4) That on and after April 1, 1821, all members in good standing who have reached the age of sixty-five years and who have been continuous members in good standing for a period of ten years immediately preceding their application for pension and have paid their regular monthly assessment to the pension fund for at least three years, whose earning capacities have been reduced to less than twenty-five dollars per month, and who have no visible means of support other than their labour, shall be eligible to receive a pension of twenty dollars per month payable monthly.

“(5) That on and after April 1, 1821, any member who has been a continuous member in good standing for ten years immediately preceding his application for pension and who has paid his regular monthly assessment to the pension fund for at least three years and who is totally incapacitated for work by reason of accident or sickness of a permanent character, who has no visible means of support other than his labour and who has been denied aid from compensation laws or has tried and failed to recover reasonable damages for injuries sustained, shall, upon satisfactory proof, be allowed a pension of twenty dollars per month, payable monthly; the trustees to have the right to appoint a physician or physicians to make an examination if they deem it necessary.”

From a canvass of 608 miners’ locals with a total membership of 120,568 the Committee has learned that there were 4,188 members from 60 to 65 years old; 1,828 from 65 to 70 years of age, and 156, from 70 and over. In addition there were also 1,487 incapacitated members under 60 years of age.

The Committee admitted that this was a very large per cent., as compared with the membership of other organizations, but recommended the adoption of 65 years of age as the minimum age for the payment of pensions.

It accepted the experience of the International Typographical Union as a safe guide for its own contemplated plan. It stated that in the latter Union there is a fraction more than 22 pensioners to each 1,000 members, which they assumed would hold true of their own membership. Since that time the miners have given up the plan of establishing their own pension fund but have instructed their committee to work for the passage of old age pension laws.

During the Convention of the United Brotherhood of Carpenters’ and Joiners of America in September, 1820, the officers of the Union were instructed to formulate plans for an old age pension system for the members of the organization.

The experience of even the firmly established and best intentioned fraternal pension systems in this country has not proved these to be very satisfactory instruments. It is, doubtless, this recognition that has prompted the International Typographical Union to adopt the following resolution at its 1817 Convention:

“Whereas, The United States of America is the only great nation in the world (excepting Russia) that does not provide old age pensions for its worn out and worthy workers; and

“Whereas, The consequent necessity of American workers to provide their own benefits is a gross injustice, and frequently ends in failure through no fault of the workers; and

“Whereas, The Government of the United States of America has demanded that its citizens protect the honour of the nation with their lives in a great war, while this Government has not in the past been responsive to the demands of its workers to protect their honour; therefore, be it

“Resolved, That the International Typographical Union, in convention assembled, endorse and urge the passage of the old age pension bill introduced in Congress by George I. R. Sherwood, for the benefit of all American workers.”

And in May, 1820, the Pennsylvania State Federation of Labour also adopted by a unanimous vote the following resolution:

“Whereas,—The United States is now the only industrially developed country that has as yet made no provision for the aged and superannuated workers, and

“Whereas,—The recent Report of the Pennsylvania Commission on Old Age Pensions shows conclusively that the problem of old age is largely due to the industrial development of our state as a result of which aged workers are relegated to the industrial scrap-heap as useless and of no value as soon as their pace begins to slacken, and

“Whereas,—It is now obvious to all that with prices soaring skyward from day to day, and with wages never catching up with the advancing prices, it is absolutely impossible for the wage-worker to provide for old age from his own earnings, and

“Whereas,—The only present alternative facing the aged worker is either that of going to the poorhouse or accepting charity, as even when the worker attempts to save, by denying himself and his family the most essential comforts, he often fails at the end because of sickness or unemployment, which is not only an evil and unjust, but ultimately works to the detriment of industrial efficiency, as well as the welfare of the State, and

“Whereas,—It must be recognized that the worker who has helped to create the wealth of this country and who has spent the greatest part of his life in productive labour, has by his work, made sufficient contributions to the progress of the state and nation to entitle him to a living when industry or exhausted health longer permits him to work for a living, and

“Whereas,—The Pennsylvania Old Age Pension Commission plans to submit a bill to the 1821 State Legislature providing for a state system of old age pensions, therefore

“Be It Resolved,—That the Pennsylvania Federation of Labour in convention assembled in Altoona, goes on record as urging the above Commission to submit such a bill to the Legislature, and the Federation further urges every State Senator and Assemblyman to do his utmost in helping to promote this sadly needed and humane Legislation, and be it further

“Resolved,—That the secretary of the Federation be instructed to include in his questionnaire to candidates for the State Legislature, a question regarding the candidate’s attitude to proposed legislation on the question of Old Age Pensions, and no candidate shall be endorsed by the State Federation who has declared himself against such Legislation.”

That attempts made by the working classes to provide against old age may frequently end in failure, is well borne out from the preceding analyses and is generally recognized. Labour organizations and labour leaders have therefore been most active in agitating for governmental pension systems in old age. Knowing the difficulties confronting them in establishing their own provisions, labour unions have repeatedly declared that “The responsibility of caring for the veterans of industry who in times of peace have been the mainspring in the work of material progress, and in times of war have always been ready to sacrifice their all, either in the field of active operations or in bearing the burdens of taxation and support, should as a matter of right and justice rest upon the Government.”

The inadequacy of the present means of protection in old age is thus evident from the preceding three chapters. Under the present conditions of costs of living and wages, thrift and individual savings sufficient for old age cannot be seriously considered possible for many wage-earners. Neither can the industrial concerns be depended upon to take care of their aged workers, since they have no assured permanency and take care of only a fraction of the workers they employ. While the recent Federal Retirement plan will take care of many a needy employé, there still remain thousands of other Federal employés as well as employés of states and municipalities who need to be protected. The fraternal and trade union old age benefit funds are generally insecure and, at best, the number that they can protect is inconsiderable.

The insufficiency of the present methods of aged relief in the United States is succinctly summarized by the Pennsylvania Commission regarding such provisions in that state. The Commission states that:

“Of all the multifarious forms of industrial, municipal and fraternal pensions in the State the number of Pennsylvania wage-earners actually on pension lists in 1818 hardly reached ten thousand. In the seventeen leading industries listed the number of former Pennsylvania employés actually receiving old age pensions was 2,152. The number of wage-workers receiving pensions from concerns having no regular pension system would hardly exceed an additional five hundred. Of all the railroad workers in the State only about four thousand aged employés are receiving old age support. However, even if these systems were operated more extensively, it is clear that they are largely dependent upon the arbitrariness of the employer, which makes the receipt of a pension very uncertain for many employés. The period of service required is often too long. These schemes, it was apparent, discriminate unfairly against those who cease to be employés. In a few cases in the contributory schemes, employés either do not have their contributions returned or have them returned without interest. Generally industrial pensions are considered merely deferred wages. These industrial systems specify that a pension may be terminated at any time; that the establishment of such a system is not to be construed as conferring a contractual right, and that the company reserves the right to discharge an employé or terminate the system at any time.

“Of the nearly fifty thousand public school teachers in Pennsylvania, only a little more than 600 are receiving pensions from the various pension funds. The number of policemen, firemen, and other municipal and State employés in the State receiving old age pensions did not exceed 1,700. The inadequacy of protection against old age provided by trade unions, or fraternal organizations has already been discussed. It was seen that most of these are not established upon sound actuarial principles. Many have become insolvent and many more are liable to dissolution at any time. As a rule, all these pension funds are exempt from the strict supervision required of private insurance companies. The total number of pensioners in the State (not including pensioners of the United States) constitutes three per cent. of the total population over 65 years of age in the State. In other words, only three out of every hundred or thirty out of every thousand persons, 65 years of age and over, were protected by old age benefits in Pennsylvania in 1818. This percentage is computed on the total population 65 years of age and over as given by the 1810 Census. It is obvious that it would be still lower if the increase in the aged population during the past eight years was taken into consideration.”[225]

PART FOUR OLD AGE PENSIONS: WHAT THEY ARE AND THEIR OUTLOOK FOR THE UNITED STATES