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BENEFICIARY FEATURES OF AMERICAN TRADE UNIONS

BY

JAMES B. KENNEDY, PH.D.

Professor of Political Economy in Wells College

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SERIES XXVI    NOS. 11-12

JOHNS HOPKINS UNIVERSITY STUDIES

IN

HISTORICAL AND POLITICAL SCIENCE


Under the Direction of the

Departments of History, Political Economy, and
Political Science

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November-December, 1908

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TABLE OF CONTENTS.

INTRODUCTION
CHAPTER   I. Insurance Against Death and Disability
CHAPTER  II. Death Benefits
CHAPTER III. Sick Benefits
CHAPTER  IV. Out-of-Work Benefits
CHAPTER   V. Superannuation Benefits
CHAPTER  VI. Administration





PREFACE.

This monograph had its origin in the investigations of American
trade-union activities which have engaged the attention of the Economic
Seminary of the Johns Hopkins University since October, 1902. It was
begun and completed while the author was a graduate student at the
University.

The study is based on a survey of the beneficiary activities of national
and international trade unions. While no attempt has been made to study
in detail the various forms of mutual insurance maintained by local
trade unions, frequent references are made thereto, inasmuch as the
local activities have usually an important genetic connection with the
national. The sources from which information has been secured are the
trade-union publications in the Johns Hopkins University collection and
important documents at the headquarters of different unions. These have
been supplemented by personal interviews with prominent officials and
labor leaders.

The author wishes to acknowledge the assistance received, at every stage
of the work, from Professor Jacob H. Hollander and Associate Professor
George E. Barnett of the Department of Political Economy of the Johns
Hopkins University.

J.B.K.




BENEFICIARY FEATURES OF AMERICAN TRADE UNIONS.


INTRODUCTION.


The American trade unions have developed beneficiary functions far more
slowly than the trade unions of England and Germany. Only since about
1880 has there been any considerable increase in such activities. Prior
to that time the national unions with few exceptions paid no
benefits.[1] The local unions, here and there, developed beneficiary
systems, but these were not continuous nor, in many cases, important.

[Footnote 1: The term "benefit" is used in this monograph to include all
forms of mutual insurance other than those directly connected with the
enforcement of trade-union rules by collective bargaining. "Strike
benefits" and "victimized benefits" are thus without the scope of the
study.]

The history of trade-union beneficiary activities in the United States
may be roughly divided into three periods. In the first, extending from
the beginning of the century to about 1830, the local associations laid
great stress on their beneficiary functions. The societies of printers
organized from 1794 to 1815 in the most important American cities were
typical of the period. In all of them, as far as the extant records
show, the beneficiary functions were regarded as equally important with
the trade-regulating activities. American trade unionism owed its origin
as much to the desire to associate for mutual insurance as to the desire
to establish trade rules.

The second period, from 1830 to 1880, was marked by the subordination of
beneficiary to trade purposes. The maintenance of a minimum rate and
other trade policies came to occupy the foremost place in the program of
the local unions. In this period national unions were formed in many
trades.

The new national unions were not strong enough to establish beneficiary
systems. Moreover, at many points the establishment of local benefits
conflicted with the success of the national organizations. A local union
was usually forced to impose certain restrictions upon claimants of
benefits, either an initiation fee or a requisite term of membership, in
order to protect its funds. Such limitations on the full participation
of all members in the benefits of membership militated severely against
the carrying out of the prime function of the national unions--the
nationalization of membership. The leaders in the trade-union movement
of this period were interested chiefly in strengthening the relations of
the local unions. They saw, therefore, in the local benefits a hindrance
to the accomplishment of their aims. By 1860 it had become a fairly well
accepted doctrine that a trade union should not attempt to develop
beneficiary functions. It was argued that since the expense of
maintaining benefits made the dues of members higher, persons who might
otherwise join the unions were prevented from doing so. The leaders of
the Iron Molders for years opposed the introduction of beneficiary
features on the ground that the development of such activities was
likely to interfere with the trade functions of the organization. In
1866 President Sylvis for this reason vigorously opposed the
introduction of a national sick benefit.[2] As late as 1895 the veteran
president of the Iron Molders--Mr. Martin Fox--counselled the Union
against developing an extensive beneficiary system.[3] The same views
were entertained by the leaders of the other more important unions of
the period.

[Footnote 2: Iron Molders' Journal, Vol. I, p. 309.]

[Footnote 3: Proceedings of the Twentieth Session, 1895, Report of the
President.]

Shortly after the close of the Civil War the rapid growth of mutual
insurance companies attracted the attention of many trade unionists. The
formation of insurance associations under the auspices of the national
unions with a membership limited to the members of the unions was
discussed in the most important organizations of the day. In many of
them voluntary associations of one kind and another were inaugurated.
The Granite Cutters, the Iron Molders and the Printers all experimented
after this fashion. Only in the railway brotherhoods did these insurance
systems develop into a permanent feature.

The development of beneficiary functions by the leading national unions
began about 1880. The benefits administered by these organizations do
not interfere with the nationalization of membership. A new theory as to
the relation between the beneficiary and the trade functions began about
1880 to gain wide acceptance. It was argued and with much force that the
benefits were a direct aid in the accomplishment of trade purposes.
While some leaders of the older school have seen in the rapid
development of beneficiary functions a danger to the unions, the greater
number who have come into positions of authority since 1880 have
steadily advocated the establishment of benefits.

The table on p. 12 gives the year in which the principal national unions
were organized, together with the date and order of introduction of
their national benefit systems.

This change in the attitude of American trade unions toward beneficiary
activities is illustrated by the fact that while in the older American
trade unions, such as the Typographical Union, the Cigar Makers' Union
and the Iron Molders' Union, many years elapsed between the founding of
national organizations and the institution of national benefit systems,
of the national unions organized since about 1880, some, as for example,
the Granite Cutters' Union, the Brotherhood of Painters, the Metal
Polishers' Union, and the Wood Workers' Union, incorporated provisions
for the payment of benefits in their first constitutions, and many
others adopted benefit systems within a few years after organization.

==========================================================================
|                                      |Date of |  Date of   |Order of
|                                      |National|Introduction|Introduction
|       Name of Organization.          | Organi-|of Benefit  |of Benefit
|                                      | zation.| System[4]  | System
--------------------------------------------------------------------------
| Typographical Union................  |  1850  |    1891    | 11
| Hatters' Association................ |  1853  |    1887    |  6
| Stone Cutters' Association.......... |  1853  |    1892    | 13
| Glass Bottle Blowers................ |  1857  |    1891    | 12
| Iron Molders' Union................. |  1859  |    1870    |  2
| Cigar Makers' Union................. |  1864  |    1867    |  1
| Typographia, Deutsch-Amerikanischen. |  1873  |    1884    |  5
| Iron, Steel and Tin Workers......... |  1876  |    1903    | 22
| Granite Cutters..................... |  1877  |    1877    |  3
| Carpenters and Joiners, Brotherhood. |  1881  |    1882    |  4
| Tailors' Union...................... |  1884  |    1890    |  8
| Painters' Brotherhood............... |  1887  |    1887    |  7
| Pattern Makers' League.............. |  1887  |    1898    | 16
| Barbers' Union...................... |  1887  |    1895    | 15
| Plumbers' Association............... |  1889  |    1903    | 23
| Machinists' Association............. |  1889  |    1893    | 14
| Metal Polishers' Union.............. |  1890  |    1890    |  9
| Wood Workers........................ |  1890  |    1890    | 10
| Garment Workers' Union.............. |  1891  |    1902    | 21
| Boot and Shoe Workers' Union........ |  1895  |    1898    | 18
| Tobacco Workers' Union.............. |  1895  |    1896    | 17
| Leather Workers on Horse Goods...... |  1896  |    1898    | 19
| Piano and Organ Workers............. |  1898  |    1898    | 20
| United Metal Workers................ |  1900  |    1900    | 24
------------------------------------------------------------------

[Footnote 4: The dates given indicate the years in which the unions
first succeeded in adopting national benefits of some kind, and not the
dates on which successful systems were inaugurated. For example, the
Cigar Makers' system of travelling loans adopted in 1867 and its
"endowment plan" adopted in 1873 were unsuccessful and the present
system was not adopted until 1880. (Cigar Makers' Journal and Program,
twentieth session, pp. 57-63.)]

It is maintained that the establishment of beneficiary features is a
direct aid to a union in carrying through its trade policies. In the
first place, successful systems of benefits, whether they attract
members or not, undoubtedly retain them. Sharp and sudden declinations
in membership during industrial disturbances are thus prevented. The
effect of the panic of 1893-1897 was peculiarly instructive in this
respect. Many labor unions suffered a considerable decline in members.
The Typographical Union lost about ten per cent. of its membership, the
Brotherhood of Carpenters about fifty per cent., while the Cigar Makers
with a highly developed system of benefits lost only one and one half
per cent. The trade unionists naturally regard it as peculiarly
desirable that the members should not abandon the organization when the
difficulty of maintaining wages and conditions is greatest. To hold in
hard times what has been gained in good times is a vital point in
trade-union policy. The trade unionists realize that the chief work of
the unions is not so much in advancing wages in good times as in
preventing recessions when employment is scarce. President Strasser of
the Cigar Makers has pointed out that the Cigar Makers came through the
depression of 1893-1897 with very slight reductions in wages. This
result he attributed to the beneficiary system which held the membership
in good standing.[5]

[Footnote 5: Cigar Makers' Journal, Vol. 26, September, 1901.]

It is, of course, impossible to estimate with any degree of precision
the effect of trade-union benefits in retaining members. Certain unions,
such as the Cigar Makers and the Typographia, having compact
organizations with highly developed systems of benefits lose almost none
of their membership in periods of depression. The experience of the
Cigar Makers is peculiarly instructive since we are here able to note
the effect due to the introduction of a system of benefits. In 1869 the
membership of the union was 5800. No benefits were paid except the
strike benefit. In 1873 the membership had fallen to 3771, in 1874 to
2167, in 1875 to 1604, and in 1877 to 1016. A noticeable increase set in
about 1879 and by 1883 the number of members was 13,214.[6] In the
depression extending from 1893 to 1897 the membership of the Cigar
Makers remained almost stationary. The following table shows the number
of members for each year from 1890 to 1900:

1890..24,624    1984..27,828    1898..26,460
1891..24,221    1895..27,760    1899..28,994
1892..26,678    1896..27,318    1900..33,955
1893..26,788    1897..26,347

[Footnote 6: Cigar Makers' Journal, Vol. 10, Aug., 1885; Vol. 19, May,
1894, p. 8. The records of initiations and suspensions for various
periods in the history of the union also show the increase in the power
to retain members. During 1877-1879, with only strike benefits in
operation, 3000 members were initiated and 2750 were suspended; from
September, 1879, to September, 1880, with strike and travelling benefits
in force, 5453 were initiated and 1853, or 33.9 per cent., were
suspended, while from September, 1880, to September, 1881, when a sick
benefit was also being paid, 7402 were initiated, and 1867, or 25.2 per
cent., were suspended. (Cigar Makers' Journal, Vol. 6, June, 1881, p. i;
Vol. 7, October, 1881, p. 3.)]

The Typographia, the only other American trade union which has developed
its system of benefits as fully as the Cigar Makers, held its membership
equally well during the depression of 1893-1897. The following table
shows the membership of the Typographia from 1890 to 1900 by years:

1890 ...1233       1894 ...1204       1898 ...1100
1891 ...1322       1895 ...1092       1899 ...1071
1892 ...1382       1896 ...1115       1900 ...1044
1893 ...1380       1897 ...1083

The falling off in membership in 1894 and 1895 was due only to a very
small extent to defections. The introduction of the linotype decreased
the opportunity for employment in the trade, and the gradual shrinkage
in the amount of German printing done in the United States due to the
falling off in German immigration was accentuated by the depression.

While the two unions having the most highly developed beneficiary
systems thus show an ability to retain members during periods of
depression, it would be absurd to assume that this result is solely the
effect of the establishment of the benefits. The Cigar Makers' Union in
1892 would undoubtedly have held its membership better than it did in
1872 even if it had developed no benefits. It is interesting in this
connection to note that while in the depression of 1873-1878 the
membership of the Typographical Union fell from 9799 to 4260, a loss of
forty per cent., and the number of local unions decreased from 105 to
60, in the great depression of 1893-1897 the membership fell from 31,379
in 1894 to 28,096 in 1897, a loss of only ten per cent. Part even of
this small loss was due to the withdrawal of the pressmen and
bookbinders from the organization. It thus appears that the
Typographical Union with a death benefit of sixty-five dollars and a
home for the aged held its membership almost as well as the Cigar Makers
with their much more highly developed beneficiary system. The change in
the power of the Typographical Union to retain its membership was
obviously due not so much to the establishment of beneficiary features
as to the greater support which it gave its members in collective
bargaining.

A comparison of the effect of the depression of 1893-1897 on the
Typographical Union and on the Brotherhood of Carpenters makes the point
still clearer. In 1893 when the depression set in the per capita
expenditure of the Typographical Union for beneficiary features was
$1.50, while that of the Carpenters was $1.40. The death benefit in the
Carpenters' union was graded in such a way as to offer an additional
incentive to retain membership. The two unions were, as far as the
development of benefits is concerned, on about the same plane. As has
been noted above, the Printers lost almost none of their members. The
Carpenters lost from 1893 to 1895 over half of their membership. The
following table shows the membership of the Carpenters by years from
1890 to 1900:

1890....53,769      1894....33,917       1898....31,508
1891....56,937      1895....25,152       1899\
1892....51,313      1896....29,691            ...68,463
1893....54,121      1897....28,209       1900/

It is obvious that beneficiary features are only one of several factors
in retaining membership.

How far benefits attract members into the unions it is difficult to
estimate. In the Cigar Makers' Union, the membership in 1880 was 4440,
while in 1881 it was 14,604, an increase of 228 per cent. The increase
in 1880 over 1879 had, however, been very large. How far the rapid
increase in 1881 was due to the development of the beneficiary system
and how far to the natural growth consequent upon a period of industrial
activity can only be conjectured. In much the same way the rapid
increase in the membership of the Iron Molders, from 20,920 on January
1, 1896, to 41,189 on January 1, 1900, was certainly not due primarily
to the introduction of the sick benefit into that union.[7] The Boot and
Shoe Workers introduced a system of sick benefits on January 1, 1900. At
that time the union had a membership of 2910; at the close of the year
the members numbered 10,618, and on January i, 1904, the number had
increased to 69,290.[8] This phenomenal increase was not due chiefly to
the desire of the boot and shoe workers to insure themselves against
illness, but to the policy of the union in unionizing shoe plants by a
liberal granting of the use of the label.

[Footnote 7: Iron Molders' Journal, Vol. 33, p. 73; Vol. 36, p. 78.]

[Footnote 8: Proceedings of the Fifth Convention, Detroit, 1902; Shoe
Workers' Journal, Vol. 5, February, 1904, pp. 19, 25.]

The causes of an increase in membership are usually so intertwined that
nothing can be proved statistically as to the effect of the introduction
of beneficiary systems. The executive officers of the unions with
beneficiary features are, however, a unit in declaring that the desire
to secure the advantage of the benefits does attract members.[9]

[Footnote 9: Barbers' Journal, Vol. 10, p. 10; Shoe Workers' Journal,
Vol. 2, April, 1901, p. 6.]

A second effect of the introduction of benefits is the strengthening of
the national treasury. The ordinary trade unionist is not disposed to be
liberal in voting supplies to his national officials for trade purposes.
A union without beneficiary functions usually has small reserve funds or
none at all. The effect of the introduction of beneficiary features is,
in the first place, to increase the funds which may in an emergency be
used for strike benefits, and more important, perhaps, the members,
accustomed to paying a considerable sum weekly or monthly for benefits,
are less reluctant to vote assessments adequate for carrying on
vigorously the trade policies of the union.

Finally, certain trade-union benefits aid even more directly in
accomplishing the trade purposes of the unions by tiding the members
over illness or unemployment. An unemployed journeyman, or one
impoverished by illness, unless supported by his union is tempted to
work below the union rate. A starving man cannot higgle over the
conditions of employment. The unions recognize that in time of strike
they must support the strikers. The establishment of out-of-work
benefits is urged on much the same ground.

While these considerations have been effectual in leading the great mass
of American trade unionists to believe in the advisability of developing
beneficiary systems in connection with their unions, the real reason
for the rapid growth of benefits lies, of course, in the desire of the
members to participate in such beneficiary systems. The development of
beneficiary systems has, therefore, not been guided chiefly or largely
by the consideration as to what benefits would most aid the trade unions
in enforcing their trade policies. The unions have chosen rather to
develop those benefits for which there was the greatest need. Taking the
Report of the American Federation of Labor as a convenient summary of
the beneficiary activities of American trade unions, it appears that in
1907 of sixty-seven national unions paying benefits of all kinds,
sixty-three paid death benefits, six paid benefits on the death of
members' wives, twenty-four paid sick benefits, eight paid travelling
benefits and six paid out-of-work benefits. The benefit which is most
effective as an aid to the enforcement of collective bargaining is
out-of-work relief. This it will be noted has been adopted by very few
unions. On the contrary, the death or funeral benefit of small amount is
far and away the predominant form of national trade-union benefit.
Probably no other benefit offers as little support to the militant side
of trade unionism. The reasons for the greater development of this
benefit are, first, the great need among many trade unionists for
benefits of this kind. Only within recent years has the funeral benefit
been widely obtainable from ordinary insurance companies. Secondly, the
administration of a small funeral benefit presents few difficulties as
compared with the sick or out-of-work benefit.

While the principle that trade-union benefits are an aid in collective
bargaining has not led to the development in American trade unions of
those varieties which might be supposed to have an advantage in this
respect, the form of some of the benefits has been shaped in accordance
with this theory. Thus, there is a tendency to grade the amount of the
benefit according to the length of membership, the intention being to
make it more serviceable in retaining members.

In practically all the unions trade-union benefits originated with the
local unions. With the introduction of national systems the unions have
pursued different policies with regard to the degree of freedom allowed
the local union in paying benefits. The national unions that pay
benefits may thus be divided into three classes according to their
relations with the local unions. In the first class are those unions
that pay insurance against death and disability.[10] These unions
reserve to the national union the exclusive right and authority to issue
insurance but permit the local organizations to pay other benefits. In
the second group are those unions that pay death, sick or out-of-work
benefits from their national treasuries, but prohibit the local unions
from paying similar benefits. The unions that have patterned after the
Cigar Makers' Union belong to this group. The chief of these are the
Deutsch-Amerikanischen Typographia, the Iron Molders' Union, the
Journeymen Plumbers' Association, and the Piano and Organ Workers'
Union. Finally, the largest group of unions paying benefits permit the
local unions also to pay similar benefits. The principal unions of this
character are the Typographical Union, the Brotherhood of Carpenters and
Joiners, the Brotherhood of Painters, and the Amalgamated Wood Workers'
Union. In general, the more highly developed the beneficiary functions
of the national unions become, the less freedom the local unions are
given in carrying on such functions. The tendency is therefore to
replace local with national benefits. The local unions still play,
however, a large rôle in the payment of benefits. It is probable that
the aggregate sum disbursed by local unions in the United States for
such purposes does not fall far short of the amount expended by the
national unions.

[Footnote 10: Order of Railway Conductors, Brotherhood of Locomotive
Engineers, Brotherhood of Locomotive Firemen, Brotherhood of Railroad
Trainmen, Order of Railroad Telegraphers, Switchmen's Union, Brotherhood
of Maintenance-of-Way Employees, and National Association of Letter
Carriers.]




CHAPTER I.


INSURANCE AGAINST DEATH AND DISABILITY.

The distinction between systems of insurance on the one hand and systems
of death benefits on the other is not so much one of quality as of
quantity. Legally the distinction lies in the fact that in the case of
insurance a signed contract known as a policy is given to the insured,
while in the case of a benefit no policy is issued. This difference is
not of economic importance. Ordinarily, however, where a trade union
issues insurance policies to its members the amount paid is larger than
in the case of a death benefit. The establishment of insurance systems
has thus been confined to a few organizations. The membership of these
unions receive relatively high wages and are regularly employed. The
highly important rôle which insurance systems have played in the
formation and working of these unions and the general similarity of
their experiences make it desirable to treat insurance against death and
disability separately from the more common death benefits.

The unions which have been successful in establishing insurance systems
are the seven principal unions of railway employees, viz., the Grand
Brotherhood of Locomotive Engineers, the Order of Railway Conductors,
the Brotherhood of Locomotive Firemen, the Brotherhood of Railroad
Trainmen, the Order of Railroad Telegraphers, the Switchmen's Union of
North America, and the International Brotherhood of Maintenance-of-Way
Employees and the National Association of Letter Carriers.

The oldest of these organizations, the Engineers, was formed at Detroit,
August 17, 1863, as the "Brotherhood of the Footboard," and was
reorganized at Indianapolis, Indiana, August 17, 1864, under the present
name. Under the original constitution, foremen and machinists as well as
engineers were admitted; but since February 23, 1864, membership has
been restricted to locomotive engineers.[11] The Brotherhood was
prosperous from the outset, and at the twenty-first convention in 1884
Grand Chief Arthur reported 258 subordinate divisions with 16,000
members; at the sixth biennial session in May, 1904, Grand Chief Stone
reported 652 divisions with 46,400 members.

[Footnote 11: Locomotive Engineers' Journal, February, 1867.]

The Brotherhood of Locomotive Engineers is not only the oldest of the
railway unions, but was the first to institute national beneficiary
features. Three years after its organization, in September, 1866, the
grand division levied an assessment to raise a fund for "widows and
orphans and totally disabled members." The law was unsatisfactory, and
few subordinate divisions paid the assessments prior to the Cincinnati
convention of October, 1867. This convention ordered all assessments
paid at once, and on December 2, 1867, $1212.40 was paid over to the
chairman of the board of trustees. This was the nucleus of a fund which
reached $10,787.63 on March 1, 1871. On account of charges of
mismanagement and the slow growth of the fund repeated efforts were made
to repeal the "fund" law, but without success. At the Nashville
convention of 1870 a committee appointed to consider the disposition of
the fund at the expiration of the five years recommended that the entire
sum be paid back to the subordinate divisions. The grand chief opposed
this use of the fund, since he regarded it as the Brotherhood's
"strongest pillar."[12]

[Footnote 12: _Ibid.,_ Vol. 5, p. 294.]

Before the expiration of the five-year period, however, on December 3,
1867, the Brotherhood founded an insurance association.[13] On March 13,
1869, the secretary-treasurer reported: number of members admitted
during 1868, 2426; amount of claims paid, $31,920; average amount of
each claim, $1520.09; cost per member, $19. At Baltimore, on October
21,1869, by-laws were adopted providing for assessments of $1 per member
for each death, and 50 cents for each case of total disability,[14] and
at the annual convention of 1871 President Sherman reported that for the
three and one half years of the life of the association there had been
86 deaths and 88 assessments, aggregating $196,358.50, an average of
$3278.

[Footnote 13: _Ibid.,_ Vol. 3, p. 232.]

[Footnote 14: Locomotive Engineers' Journal, Vol. 4, p. 31.]

The industrial depression of the seventies decreased the membership, but
with the revival of trade an increase set in. Since January 1, 1890,
insurance has been compulsory upon all members of the Brotherhood under
fifty years of age. In January, 1890, the association numbered about
8000, and on January 1, 1897, it had increased to 18,000. During the
twenty-five years of voluntary insurance $3,122,-669.61 was paid in
death and disability benefits, and at the close of 1896 this total had
been increased to $5,771,214.61.[15] Ten years later, December 31, 1906,
the membership had grown to 49,328, with $97,799,500 insurance in force,
and the total aggregate paid in death and disability claims had reached
$10,323,181.60.

[Footnote 15: _Ibid.,_ Vol. 25, p. 951; Vol. 31, p. 504.]

The next organization of railway employees to be formed was the
"Conductors' Brotherhood," at Mendota, Illinois, July 6, 1868. Being
desirous of a more comprehensive organization, a few conductors issued,
in November, 1868, a circular to the railway conductors of the United
States and the British Provinces. As a result of this effort, the Grand
Division of the Order of Railway Conductors was organized at Columbus,
Ohio, on December 15, 1868.[16] For a period of twenty-two years the
organization grew slowly against much opposition. From 1877 to 1890 the
Order was exclusively beneficiary, and many of its members withdrew to
organize the "Grand International Brotherhood of Railway Conductors of
America." In 1890 the National Convention decided to make collective
bargaining one of its functions, and the members of the International
Brotherhood joined the Order of Railway Conductors in such numbers that
a year later the Brotherhood disbanded. On January 1, 1890, there were
249 subordinate divisions and 13,720 members; on January 1, 1904, there
were 446 divisions with 31,288 members.

[Footnote 16: Proceedings, 1868-1885 (Cedar Rapids, 1888), p. 13.]

The convention which founded the Grand Division of the Order of Railway
Conductors also instituted a mutual insurance association. The
association thus formed was a voluntary society. Members paid $1 upon
each death or each case of disability and the amount thus collected
constituted the "benefit" paid.[17] At the first annual session held in
Chicago in June, 1869, efforts were made to create a permanent insurance
fund, but without result; and at the second session held in Buffalo, New
York, in October, 1869, after lengthy discussion, the benefit law,
adopted in 1868, was unanimously repealed.[18] For a year the Order had
no insurance feature; but at the third session in October, 1870, a
definite plan was adopted.[19]

[Footnote 17: Proceedings, 1868-1885 (Cedar Rapids, 1888), p. 19.]

[Footnote 18: _Ibid.,_ p. 42.]

[Footnote 19: _Ibid.,_ pp. 48-49.]

From the adoption of this plan to the session at Buffalo, in 1881, the
insurance department remained of small importance, and only nineteen
claims were paid, aggregating $1672. At almost every annual session
during this period the reports of the grand chief conductor and the
grand secretary-treasurer showed that the department was losing ground.
At the session of 1881, the secretary-treasurer reported the "very
unsatisfactory condition of the department," and said: "A complete
revision of its laws can no longer be postponed, if we keep it from
going to pieces altogether."[20] In 1882 the insurance laws were
amended, and an immediate improvement began in the condition of the
department. In 1891 the insurance became compulsory. On April 1, 1891,
there were 3950 members and the outstanding risks amounted to
$9,875,000, while on April 1, 1893, there were 11,436 members, carrying
insurance to the amount of $24,963,000. On January 1, 1891, only 27.21
per cent. of the Order carried insurance, as against 64.07 per cent. in
May, 1895. During the financial and industrial depression of 1893-1896
the Order maintained its prosperity; and on December 31, 1906, the
reports showed 34,142 members in the insurance department, with
outstanding insurance aggregating $64,997,000 and a grand total of
$9,563,567 benefits paid since organization.

[Footnote 20: _Ibid.,_ pp. 395, 435.]

The Brotherhood of Locomotive Firemen was organized at Port Jervis, New
York, on December 1, 1873, as a benevolent association. In 1885 it
became a labor organization with a "protective policy."[21] During the
first fifteen years of its history its growth was retarded by the great
strike of 1877, by the opposition of the International Firemen's Union,
by the difficulties with the Knights of Labor in 1885, and by the
Chicago, Burlington and Quincy strike of 1888. These checks were only
temporary, however, and by the close of 1893 the Firemen had 510 lodges
with 28,681 members. During the next two years there was a heavy falling
off to 484 lodges with 21,408 members. Since 1895 the growth has been
rapid, and the present membership is about 55,000.[22]

[Footnote 21: Locomotive Firemen's Magazine, Vol. 14, p. 998.]

[Footnote 22: _Ibid.,_ Vol. 14, p. 998.]

At its first annual convention in 1874 the Brotherhood established an
insurance feature, which after the first four years was made compulsory.
The Firemen suffered a temporary check by the strike on the Chicago,
Burlington and Quincy, but were assisted by a loan of $25,839.60 from
the Engineers, and regained sufficient strength to withstand the
financial and industrial depression of 1893-1896. In 1897 Grand Master
Sargent said, "The condition of the beneficiary department excels by far
any previous period in the history of the Brotherhood--so far as prompt
payment of claims and the dispatch of business of the department."[23]
The present membership of the insurance department is practically the
same as that of the Brotherhood, 58,849. The total outstanding insurance
amounts to $75,559,000, and since its organization the department has
paid $9,971,615 in death and disability claims.

[Footnote 23: _Ibid.,_ Vol. 13, p. 247; Vol. 24, p. 195.]

The Brotherhood of Railroad Trainmen was founded at Oneonta, New York,
September 23, 1883, under the name "Brotherhood of Railroad Brakemen,"
which it retained until January 1, 1890, when, "because many of its
members had been promoted in the service, the more appropriate name of
Brotherhood of Railroad Trainmen was adopted." The membership consists
of conductors, brakemen, train baggagemen, train flagmen, yard masters,
yard foremen and switchmen. On August 31, 1893, the membership was
28,540, but on December 31, 1894, it had fallen to 22,359, and at the
close of 1896 it had reached the low water-mark at 22,326. Since 1896
the increase has been rapid and on December 31, 1904, there were 721
lodges with 74,539 members.[24]

[Footnote 24: Proceedings of the Seventh Biennial Convention, 1905
(Cleveland, n.d.), p. 121.]

The Brotherhood of Railroad Brakemen provided in its first constitution
for death and disability insurance. Up to the end of the fiscal year,
August 31, 1893, the membership of the insurance department increased
rapidly, but with the financial and industrial depression the membership
decreased, so that in May, 1895, it showed a reduction from 28,000 to
about 18,000. The membership of the beneficiary department at the close
of the year 1904 was 71,146, or 95.43 per cent of the membership of the
Brotherhood, and the total amount of insurance paid from date of
organization to January 1, 1906, amounted to $11,725,059.83.[25]

[Footnote 25: Trainmen's Journal, Vol. 23, p. 100.]

The Order of Railroad Telegraphers was instituted at Cedar Rapids, Iowa,
June 9, 1886. To it is admitted "any white person of good moral
character, eighteen years of age and employed on a railroad as a
telegrapher, line repairer, leverman, or interlocker, including all
employees connected with operation of signal towers and interlocking
plants."[26] By April 30, 1893, the membership numbered 17,780. A rapid
decrease reduced its strength to 10,114 on April 30, 1894, to 6684 on
December 30, 1894, and finally to 4976 on December 31, 1895. On August
1, 1904, the membership had increased to 37,700.[27]

[Footnote 26: Constitution, 1903 (St. Louis, n.d.), pp. 5, 7.]

[Footnote 27: The Railroad Telegrapher, Vol. 21, p. 292.]

Although the Order paid benefits almost from its organization, it was
without an effective system of insurance until January 1, 1898, when the
present system was established. The first constitution, 1886, provided
that local divisions should exercise every honorable means to assist a
member in need, and at the session in 1887 a voluntary insurance
association was established under the name of "Mutual Life Insurance
Association of North America." The insurance failed entirely to attract
any considerable part of the membership, and up to July, 1890, the total
amount paid was only $2430.05.[28] In 1896 the Grand Division appointed
a committee to devise a plan for a system of insurance. The plan
reported was submitted to referendum vote in December, 1897, and became
operative on January 1, 1898.[29] From March 1, 1898, to June 15, 1899,
applicants were received without an entrance fee, and during this period
the success of the department was practically assured. The insurance is
compulsory on all members. At present there are about 38,000 members
carrying insurance, the mortuary fund has a balance of $120,000, and the
total amount of insurance paid aggregates $142,000.

[Footnote 28: Vol. 6, p. 310.]

[Footnote 29: Vol. 14, p. 880.]

A local organization of switchmen was effected at Chicago on August 18,
1877, but a national union was not formed until February 22, 1886, when
the Switchmen's Mutual Aid Association was inaugurated. At the first
annual session in September, 1886, the grand master declared that the
purposes of the organization were "to wage war against discrimination
made by arbitrary employers; to organize for benevolent purposes; to
amicably adjust labor disputes by arbitration; and for mutual aid to its
members."[30] The Association was forced by the defalcations of its
treasurer to disband, and a new organization, the Switchmen's Union, was
formed. Since this reorganization in 1897 rapid growth has been made
under the management of conservative officers. On January 1, 1903, the
Switchmen's Union had a membership of 14,000.

[Footnote 30: Switchmen's Journal, Vol. 2, p. 247.]

The first constitution provided for death and disability insurance. At
the second session in September, 1887, the grand master reported $15,000
paid for death and disability claims during the year.[31] Until the
disbanding of the Association in 1894 the insurance department was
successful. In 1901 the Union without a dissenting vote adopted a
compulsory system of insurance. During 1902 $6,151,200 of insurance was
issued, during 1903, $2,906,600; while at the close of 1902 $4,779,600
of insurance was in force, and at the close of 1903 $6,679,200. The
total amount paid in death and disability claims since reorganization
has aggregated $207,335.75.

[Footnote 31: Switchmen's Journal, Vol. 1, p. 244.]

The present International Brotherhood of Maintenance-of-Way Employees
has suffered many vicissitudes in its development. It was organized in
the summer of 1887 as the Order of Railway Trackmen, and admitted into
membership foremen in the maintenance-of-way department, road masters
and bridge and building masters.[32] In October, 1891, this
organization, with a membership of 600, united with the Brotherhood of
Railway Section Foremen, an organization with 400 members. The new union
took the name of Brotherhood of Railway Trackmen of North America. Prior
to 1898 the Brotherhood was almost exclusively a fraternal insurance
society, but in that year collective bargaining was added to its
functions. In 1903 the organization became the Brotherhood of
Maintenance-of-Way Employees. It admits to membership "persons employed
in the track, bridge and building, water and fuel department, and signal
and interlocking service." During the last five years the membership of
the Order has shown considerable increase. In 1903 over 15,000 members
were added, making a total of over 40,000 on January 1, 1904.

[Footnote 32: Advance Advocate, Vol. 7, p. 106.]

Originally the insurance was compulsory. At the convention of October,
1893, it became optional and remained so until October, 1894, when it
again became compulsory. Owing to opposition from members carrying
old-line insurance and from the uncertainty in the number of assessments
levied each year, the St. Louis convention of 1896 reverted to a system
of optional insurance. Previous to the adoption of this plan the Order
had paid death, total disability and partial disability claims to the
amount of about $75,000. From January 1, 1897, to September 30, 1904,
$74,909.66 was paid to beneficiaries, making a total paid since
organization of about $150,000.

The National Association of Letter Carriers of the United States of
America was organized at Milwaukee, Wisconsin, in 1889. In 1891 the
Association was incorporated under the laws of the State of New Jersey,
and on February 26, 1892, was reincorporated under the laws of the State
of Tennessee. The aim of this organization is "to unite fraternally all
the letter carriers in the United States so as (_a_) to secure their
rights as Government employees and to promote the welfare of every
member, and (_b_) to found the United States Letter Carriers' Mutual
Benefit Association."[33] The first annual session appointed a committee
to draw up a plan for an insurance system. The report was published in
January, 1891, and was considered by the National Association at its
second annual session in August, 1891,[34] and the Mutual Benefit
Association was instituted.[35] The insurance has always been voluntary
and consequently the membership of the Benefit Association has been only
a small part of that of the National Association. On July 1, 1905, there
were 5318 members carrying insurance to the amount of $13,866,000, while
there were 19,000 members of the National Association.

[Footnote 33: Constitution, 1904 (Washington, 1904), p. 3.]

[Footnote 34: The Postal Record, Vol. 4, pp. 8, 118, 119.]

[Footnote 35: _Ibid._, Vol. 5, p. 528.]

All the railway organizations described above make a distinction between
death and disability insurance, and sick and accident insurance. The
local unions have been prohibited either specifically or by implication
from maintaining any association or society for paying death and
disability benefits. This rule was first established by the Conductors.
During the early years of the Conductors' national organization,
1868-1880, many subordinate divisions maintained mutual benefit
associations for the payment of death and disability insurance. The
growth of the national benefit department was thus retarded, and at the
tenth annual session in October, 1877, subordinate divisions were
prohibited from maintaining "mutual benefit societies."[36] The national
organizations, on the other hand, do not furnish accident insurance, but
leave this function to the local bodies. In the formation of this
policy, also, the Conductors took the initiative by providing in their
first national constitution in December, 1868, that the order should
never become a weekly benefit association.[37] The Engineers had a
similar provision as early as September, 1869; but national regulations
governing the payment of weekly benefits were nevertheless formulated.
The other unions have followed this policy, and their constitutions
provide that the weekly benefits shall be levied, collected, and
distributed according to national rules.

[Footnote 36: Proceedings of the Order of Railway Conductors of America,
1868-1885 (Cedar Rapids, 1888), p. 207.]

[Footnote 37: _Ibid_., p. 21.]

The most striking characteristic of the insurance features of these
organizations has been the combination of disability and death
insurance. The fact that railway employees are specially exposed to the
risks of disabling accidents has been the chief influence in this
direction. The large number of claims paid for disability in the
Conductors', the Firemen's, and the Trainmen's beneficiary departments
during recent years shows the high importance of disability insurance to
the men engaged in the more hazardous occupations. The disability claims
paid among the Firemen for the eleven years from 1894 to 1904 were 24.5
per cent. of the total number of claims paid, or about one third of the
number of death claims paid. Among the Conductors the disability
claims, paid during the same period, amounted to one seventh of the
death claims paid. The disability claims paid by the Trainmen during
twenty years, 1884-1904, were 32.5 per cent. of all claims paid.

The proportion of disability to death claims has decreased in each of
these organizations in recent years. The disability claims paid by the
Conductors in 1894 were 15.6 per cent. of the total number, and at the
close of 1904, 11.8 per cent.; while among the Firemen the percentages
for the biennial terms 1894-1896 and 1902-1904 were 32.9 per cent. and
21.4 per cent., respectively. The claim statistics of the Trainmen show
the same tendency although there are great variations from year to year.
In 1890, 1895 and 1897 the percentage of disability claims rose to 40,
41 and 40, respectively, while in 1888, 1900 and 1903 the percentage
fell to 28, 29 and 27, respectively.

                      DEATH AND DISABILITY CLAIMS.
=====================================================================
            |          |    Claims Paid.  | Per Cent. of| Disability
Name of     |  Term.   |------------------|   Disability| Claims per
Organization|          | Death.|Disability|    Claims.  |   1000 of
            |          |       |          |             |    Total
            |          |       |          |             | Membership.
------------|----------|-------|----------|-------------|------------
Conductors  |1893-1894 |   265 |    49    |      15.6   |      3.8
            |1895-1896 |   274 |    46    |      14.3   |      3.1
            |1897-1898 |   363 |    63    |      14.8   |      3.6
            |1899-1900 |   440 |    55    |      11.1   |      2.6
            |1901-1902 |   523 |    81    |      13.4   |      3.2
            |1903-1904 |   688 |    92    |      11.8   |      3
            |          |       |          |             |
            |          |       |          |             |
Firemen     |1894-1896 |   295 |   145    |      32.9   |      6
            |1896-1898 |   349 |   118    |      25.3   |      4.3
            |1898-1900 |   488 |   174    |      26.3   |      4.7
            |1900-1002 |   655 |   186    |      22.1   |      3.9
            |1902-1904 |   857 |   234    |      21.4   |      4.3
            |          |       |          |             |
            |          |       |          |             |
Trainmen[38]|  1886    |    75 |    37    |      33     |      4.6
            |  1887    |    77 |    42    |      35     |      4.8
            |  1888    |   145 |    59    |      28     |      5.2
            |  1889    |   152 |    69    |      31     |      5.1
            |  1890    |   175 |   116    |      40     |      8.6
            |  1891    |   264 |   123    |      32     |      6.6
            |  1892    |   270 |   145    |      34     |      6.1
            |  1893    |   372 |   201    |      35     |      7.1
            |  1894    |   304 |   138    |      31     |      6.1
            |  1895    |   212 |   147    |      41     |      7.8
            |  1896    |   254 |   159    |      38     |      7.2
            |  1897    |   240 |   160    |      40     |      6.3
            |  1898    |   358 |   165    |      31     |      5.8
            |  1899    |   403 |   211    |      34     |      5.7
            |  1900    |   498 |   205    |      29     |      4.9
            |  1901    |   507 |   231    |      31     |      5.1
            |  1902    |   570 |   249    |      30     |      4.7
            |  1903    |   788 |   305    |      27     |      4.6
            |  1904    |   849 |   374    |      31     |      5.2
---------------------------------------------------------------------

[Footnote 38: Proceedings of the Seventh Biennial Convention, 1905
(Cleveland, n.d.); Report of Secretary-Treasurer, p. 124.]

The decrease in the ratio of disability to death claims paid is due
primarily to a stricter definition of disability and to better
administration. The number of disability claims paid per 1000 of
membership shows also, however, a slight decrease.

The records of the Trainmen which separate claims resulting from
accidents still farther emphasize the need for disability insurance.

DEATH AND DISABILITY CLAIMS IN BROTHERHOOD
   OF TRAINMEN (1886-1904).
======================================================================
Kind of    |Number |Number from|Percentage of|Percentage of|Percentage
Claims     |from   | Accidental| Claims from | Claims from | of Claims
           |Natural| Causes    | Natural     | Accidental  |  from all
           |Causes |           |  Causes     |  Causes.    |   Causes.
-----------+-------+-----------+-------------+-------------+----------
Disability.|   526 | 2,610     |  16.77      |    83.23    |   32-1/3
Death      | 2,033 | 4,522     |  31.        |    69.      |   67-2/3
-----------+-------+-----------+-------------+-------------+----------
Total      | 2,559 | 7,322     |  26-1/3     |    73-2/3   |    100
-----------+-------+-----------+-------------+-------------+----------

The data show the place disability insurance has occupied among the
Railway Trainmen during twenty years. For this period disability claims
for all causes were 32-1/3 per cent. of all claims paid. The percentage
of claims from accidental causes--including both disability and
death--was 73-2/3 of the whole number of claims paid, while the
percentage from natural causes was only 26-1/2. In other words, these
statistics show that the Trainmen's accidental disability and death
claims, as compared with those due to natural causes, have averaged
almost three claims paid as the result of accidental causes to one as
the result of natural causes.[39]

[Footnote 39: Proceedings of the Seventh Biennial Convention, 1905
(Cleveland, n.d.), pp. 65-66.]

The old-line companies do not offer the form of disability insurance
required by railway employees. These companies issue accident policies
against death and total or partial disability from accident while on
duty; but there are two defects in the form of this insurance. In the
first place, the definition of total disability adopted by the companies
is much stricter than that of the insurance departments of the railway
brotherhoods. A typical insurance company's definition of total
disability is incapacity for "prosecuting any and every kind of business
pertaining to a regular occupation from the loss of both eyes, both
hands, both feet, or one hand and one foot;" while partial disability is
"the loss of one hand or one foot or any injury preventing the
performance of one or more important daily duties pertaining to a
regular occupation." In other words, to secure the indemnity for total
disability, the insured must be disabled from performing any regular
labor whatever. In the railway organizations total disability is so
defined as to cover inability of the insured to continue in his
position. Secondly, the disability insurance offered by the regular
insurance companies is joined with accident insurance affording a weekly
indemnity during the period of illness due to accident. The railway
employee, if he insures against totally disabling accidents, must also
insure against temporarily disabling accidents, since the companies do
not separate the two forms of insurance. The inclusion of all accidents
in one policy necessitates a heavy premium. For example, to secure
accident insurance including, besides a weekly indemnity of $20,
provision for the payment of $1000 in case of death or total disability
resulting from accidents, an engineer must pay an annual premium of
$50.40 or $56 according to the section of the country over which he
runs, or the system by which he is employed. The combination of life
with disability insurance meets the need of the ordinary railway
employee better than any other combination.

The formative period of the two older organizations furnished
opportunities for a study of the disability benefit and showed its
usefulness in strengthening the national unions. These organizations,
however, experienced grave difficulties in their attempts to administer
disability insurance. The Engineers included "totally disabled members"
among the beneficiaries of the fund provided for in 1866.[40] The
by-laws of the insurance association founded by the Brotherhood on
December 3, 1867, provided for assessments of 50 cents per member for
the benefit of each totally disabled member--one half the amount
assessed in case of death.[41] The history of this benefit was tersely
summed up by General Secretary-Treasurer Abbott in his address to the
Engineers' Association, December 3, 1871: "The Baltimore convention,
1869, adopted a disability clause, the Nashville, Tenn., convention
amended it, and the Toronto, Canada, convention, 1871, repealed it." At
St. Louis, 1872, the Brotherhood formed a separate association, known as
the "Total Disability Insurance Association," for furnishing insurance
against disability to members. An entrance fee of $2 was required and
the assessment was fixed at $1.[42] In 1876 the convention dissolved the
Total Disability Insurance Association, and the Engineers did not
succeed in establishing a satisfactory system of disability insurance
until 1884, when the prosperous condition of the association enabled the
convention to carry out its long-cherished plan and to make provision
for the payment of the same benefit in case of total disability as at
death.[43] In the call of the Conductors for a convention to effect a
permanent organization issued in November, 1868, the purpose of the
proposed Order was stated to be the protection of "the members and their
families in case of sickness, accident or death."[44] The mutual
insurance association instituted by the first convention paid a
disability benefit equal to the death benefit. The law under which the
association operated was repealed at the second convention in October,
1869; but when the third convention in October, 1870, adopted a new
insurance plan, provision was made that disability insurance should be
paid in an amount equal to that paid in case of death. Not until 1881,
however, did the Conductors satisfactorily solve the problem.

[Footnote 40: Locomotive Engineers' Journal, Vol. 1, p. 9.]

[Footnote 41: Constitution, 1869, in Locomotive Engineers' Journal, Vol.
4, p. 31.]

[Footnote 42: Locomotive Engineers' Journal, Vol. 5, p. 11; Vol. 7, pp.
28, 60.]

[Footnote 43: _Ibid_., Vol. 7, pp. 28-60; Vol. 11, p. 78; Constitution,
1884 (Cleveland, 1884).]

[Footnote 44: Proceedings of the Order of Railway Conductors of America,
1868-1885 (Cedar Rapids, 1888), p. 19.]

The difficulties experienced by the Engineers and the Conductors in
establishing disability insurance, without doubt, served to deter the
Firemen from adopting a similar system until their fifth convention in
1878. During the period 1868-1880 the disability benefit was in process
of evolution. By 1880 the three older organizations had demonstrated the
possibility of maintaining the benefit, and since that time it has been
regarded as an essential element in railway insurance systems. Hence the
Trainmen in 1883, the Telegraphers in 1887, and the Switchmen in 1886,
in their first constitutions, and the Trackmen in 1893, made the
disability insurance equal to that paid in case of death. All of the
railway organizations, except the Telegraphers, follow this policy at
the present time. The Telegraphers have not paid a disability benefit
since 1897. They provide, however, that should a member become totally
or permanently disabled the insurance committee may order his
assessments paid and shall deduct the amount of these assessments when
the benefit is finally paid.[45] The failure of the Telegraphers to pay
a disability benefit is largely due to the fact that their occupation is
less dangerous than other forms of railway service.

[Footnote 45: Constitution, 1903 (St. Louis, ii. d.), p. 106.]

The Letter Carriers also have not the same urgent need for the payment
of a disability benefit and until the Denver convention, 1902, paid
insurance against death without direct provision for disability. At this
convention, however, the National Association organized a Retirement
Association for the payment of superannuation benefits to the aged and
disabled members.[46] The Association had in view in founding this
department the growing necessity of making some provision for the large
number of carriers whom old age prevented from doing the regular amount
of work.[47] Under the original plan, which went into effect January 1,
1903, the Association issued retirement certificates to members in the
sums of $500, $400, $300 and $200 at monthly premiums of $6.70, $5.35,
$4.00 and $2.70, respectively. On retirement, after having paid thirty
annual premiums, or their equivalent, the beneficiary was entitled to
receive annually the amount of his certificate. The retirement might
also take place after thirty years' service, or after thirty years'
membership in the Association, or after the age of sixty-five had been
reached, provided ten annual premiums had been made.[48] This "ten
annual premium" concession was for the special benefit of old men whose
circumstances would not allow them to pay the sum of thirty years'
premiums. The concession was allowed only for a period of ten years.[49]

[Footnote 46: The Postal Record, Vol. 15, pp. 235, 254-257.]

[Footnote 47: The Postal Record, Vol. 15, p. 301.]

[Footnote 48: _Ibid_., Vol. 17, p. 6.]

[Footnote 49: _Ibid_., Vol. 15, p. 302.]

The scheme also included provision for disability. After January 1,
1906, any member of the Retirement Association who became permanently
incapacitated, mentally or physically, for any kind of remunerative
labor before thirty years' service or before attaining the age of
sixty-five years, was to receive annually from the retirement fund a
certain per cent. of the face value of his retirement certificate. The
amount was proportionate to the years of service. For five years'
membership such a member received fifteen per cent.; for ten years',
thirty per cent.; for fifteen years', forty-five per cent.; for twenty
years', sixty per cent.; for twenty-five years', seventy-five per cent.
Any member of not less than five years' standing might, after ninety
days' notice to the chief clerk, withdraw from the Association; and in
such event he became entitled to receive seventy-five per cent. of the
annual premiums paid to the Association. Also in case of death within
two years of his retirement and prior to the payment of not more than
twenty-four monthly installments of pension, the Association agreed to
pay to the widow, the children, or legal heirs the annuity provided in
the deceased member's certificate until the amount paid should aggregate
seventy-five per cent. of all premiums received by the Association.[50]

[Footnote 50: The Postal Record, Vol. 17, p. 6.]

This plan was a failure. In it business principles had been sacrificed
for fraternity. Relief had been provided for the old man particularly,
but very few took advantage of the opportunity. The young men refused to
enter because the favorable rates to old men placed a heavy burden upon
the younger members.[51] The report of the chief clerk to the Syracuse
convention, in 1903, showed that up to September 1, 1903, only eighteen
retirement certificates had been issued, of which thirteen were for
$500, two for $300, and three for $200. The average age at entrance was
fifty-three and the average length of service, twenty-two years. The
total receipts of the retirement fund were only $390.90.[52] On
September 1, 1905, the total number of certificates issued had reached
twenty-five, with only nineteen outstanding, while the retirement fund
had increased to $2839.88.[53] The originators of the Retirement
Association were forced to abandon their experimental fraternity scheme
and to formulate a plan based more upon business principles.
Consequently, at the Portland convention in September, 1905, Chairman
Goodwin and Chief Clerk Wilson of the retirement committee proposed a
new plan.[54]

[Footnote 51: _Ibid_., Vol. 19, p. 7.]

[Footnote 52: _Ibid_., Vol. 16, p. 237.]

[Footnote 53: _Ibid_., Vol. 18, p. 215.]

[Footnote 54: _Ibid_., Vol. 18, pp. 214-215.]

Under the new law, which became operative January 1, 1906, the
Retirement Association was authorized to offer insurance against
disability and old age. The members are, therefore, divided into two
classes, annuity members and disability members, but those duly
qualified may hold both annuity and disability certificates. Any member
of the National Association of Letter Carriers may become an "annuity
member;" but only those under sixty-five years of age and in good
physical condition may become "disability members." A member retiring
from the carriers' service ceases to be entitled to disability relief;
on the other hand, however, retirement from the carrier service does not
affect the right of a member to an annuity.[55]

[Footnote 55: Constitution of Retirement Association, 1905, Art. 7;
Postal Record, Vol. 19, pp. 2-6.]

The plan provides for annuities of one, two, three, four or five hundred
dollars. The annuities can begin in five, or any multiple of five years
after the policy is issued and the rate varies according to the
deferment of the annuity. A member may withdraw at any time prior to
reaching the annuity, and in that event all payments are to be returned,
with interest. Members may receive loans to the amount of ninety-five
per cent. of the sum accredited to them in the retirement fund, provided
this aggregates two hundred dollars or over, and they surrender their
certificates as collateral, so that members credited with one hundred
dollars or more may receive a loan of fifty dollars as an emergency loan
for three months during any one year.[56]

[Footnote 56: The Postal Record, Vol. 19, p. 2.]

The following table shows the cost of the annuity per $100 for various
ages according to the age at which the annuity begins:

    MONTHLY COST OF $100 ANNUITY IN THE LETTER CARRIERS.[57]
======================================================================
 Age  |                Age at which Annuity Begins.
  at  |---------------------------------------------------------------
 Entry|  30  |  35  |  40  |  45  |  50  |  55  |  60  |  65  |  70
----------------------------------------------------------------------
  20  |$13.47|$ 7.66|$ 4.83|$ 3.19|$ 2.16|$ 1.47| $ .99| $ .66| $ .45
  30  |      | 28.31| 11.97|  6.63|  4.05|  2.59|  1.68|  1.08|   .72
  40  |      |      |      | 24.50| 10.06|  5.37|  3.16|  1.91|  1.21
  50  |      |      |      |      |      |19.83 |  7.79|  3.98|  2.27
  60  |      |      |      |      |      |      |      | 14.62|  5.62
  65  |      |      |      |      |      |      |      |      | 12.46
----------------------------------------------------------------------

[Footnote 57: _Ibid_., Vol. 17, p. 11.]

The new system differs in two important respects from the old. In the
first place, the rates are graded according to age, and secondly, the
new system provides that a member may retire five years after entrance,
or thereafter at any successive period of five years up to seventy, and
that his premiums shall be fixed according to the time of retirement and
the period of his expectancy.

The disability certificates provide for an indemnity of eight dollars
per week for loss of time resulting from disability caused by accident
or sickness, a maximum of twenty weeks' disability during any one
year.[58] However, should a member, after entrance into the association,
become disabled permanently by "tuberculosis, paralysis, locomotor
ataxia, dropsy, cancer, diabetes, sciatica, chronic rheumatism, chronic
kidney or mental disease, or any other chronic disease," not especially
named in the constitution, that may, in the judgment of the board of
directors, cause permanent drain upon the funds of the Association, the
said member shall receive the disability allowance for twenty weeks,
after which all payments shall cease and his certificate shall be
cancelled.[59] The disability insurance is thus really sick insurance.

[Footnote 58: The Postal Record, Vol. 17, p. 6.]

[Footnote 59: Constitution 1905, Art. 12, in The Postal Record, Vol. 19,
pp. 2-6.]

To aid members who are too old to take advantage of the plan offered for
securing annuities by their own financial efforts, the Association, in
convention at Portland, September, 1905, endorsed an "extended leave of
absence retirement plan."[60] The Post Office Department of the United
States was requested to grant an extended leave of absence to
"superannuated or permanently impaired" carriers on condition that they
accept 40 per cent. of their regular salary, while retired, and that
they pay the remaining 60 per cent. to the senior substitute in their
office. Under the conditions of this plan, the applicant for retirement
must submit himself to the board of examiners, who shall, after a
physical examination by the physician of the board, determine his
eligibility. The results of this plan would be two-fold: first, to
relieve the detrimental effect of superannuation upon the efficiency of
the service, and, secondly, to remove the fear of those who look for
more drastic measures of relief. Aside from a regular pension grant by
the Government this plan is considered the most efficient method of
securing adequate protection for the superannuated who are too old to
avail themselves of the opportunities offered under the system of
annuities.[61]

[Footnote 60: The Postal Record, Vol. 18, pp. 220-222.]

[Footnote 61: The Postal Record, Vol. 19, p. 6.]

The principal obstacle to the successful operation of disability insurance
has been the difficulty experienced in its administration--largely on
account of the impracticability of closely defining permanent or total
disability. With almost every revision of the constitutions changes were
made in the definition of the term "disability." Strict construction of
the law by the executive officials led to dissatisfaction and often to
appeals from their decisions to the insurance committees, or to the boards
of trustees.[62] During the early years disability claims were often
presented through subordinate officials, who were either unable to
interpret the laws aright, or were unwilling to assume the responsibility
of pronouncing the claims illegal. The Engineers, after a period of
thirty-two years, in 1898 adopted a satisfactory definition of total
disability: "Any member of this Association losing by amputation a hand at
or above the wrist joint; a foot at or above the ankle joint; or
sustaining the total and permanent loss of sight in one eye or both eyes,
shall receive the full amount of his insurance."[63] Similar definitions
of disability have been worked out by the other railway organizations. The
Conductors add to this "total loss of the sense of hearing." The Switchmen
include "the loss of four fingers of one hand, at or above the second
joint." Disability, as defined by the Letter Carriers, means inability,
because of sickness or accident, to perform the regular duties of a letter
carrier.[64]

[Footnote 62: Proceedings of the Nineteenth Annual Session of the Order
of Railway Conductors of America, 1887 (n.p., n.d.), p. 69.]

[Footnote 63: Constitution, 1899 (Cleveland, 1898), Art. 28.]

[Footnote 64: Constitution of the Letter Carriers of the United States,
1905, Art. 13, in The Postal Record, Vol. 19, No. 1, p. 3.]

The most important development in the insurance systems of the railway
unions has been the change in the amount paid from an uncertain to a
fixed amount. This evolution is best illustrated in the history of the
older organizations. In the period from 1868 to 1884 the amount paid was
the sum collected by levying upon each member a certain assessment for
each death or disability. The amount of the benefit therefore varied
with the number of members. In the first stage, the Engineers paid one
dollar per member upon each death and fifty cents in each case of
disability, the Conductors paid one dollar per member upon each death or
case of disability, while the Firemen paid fifty cents upon each death
or case of disability.[65] The membership was small and the assessments
were largely regarded as benevolent contributions. This phase is well
illustrated by the early history of the benefit among the Conductors.
The first benefit, paid in December, 1871, amounted to $48. During the
first thirteen years of the department's activity 19 claims were paid.
The last was $70, and the average amount paid was $88.[66] This system
continued until 1881-1884, when a general revision of constitutions in
these three brotherhoods limited the amount of insurance paid, and laid
the foundation for issuing insurance certificates in fixed sums. In the
second period, from 1883 to 1890, the number of assessments remained
undetermined; but the amount of the benefit was limited to a fixed sum
and all surpluses were placed in reserve. The Conductors and the Firemen
took the initiative in this change and in the constitution of 1881 fixed
the maximum amount for death or disability at $2000 and $1000,
respectively; the Engineers, in the constitution of 1884, placed this
maximum at $3000.

[Footnote 65: Constitution of the Locomotive Engineers, 1869, in
Journal, Vol. 4, p. 31; Proceedings of the Railway Conductors, 1868-1885
(Cedar Rapids, 1888), p. 119; Locomotive Firemen's Magazine, Vol. 21, p.
181.]

[Footnote 66: Proceedings of the Eighteenth Convention, 1885 (Cedar
Rapids, 1888), p. 754; The Railway Conductor, Vol. 4, p. 188.]

The Brotherhood of Railroad Trainmen, the Order of Railroad
Telegraphers, the Switchmen's Union, and the Maintenance-of-Way
Employees did not pass through the first period of development, but were
organized during the second stage when the amount of insurance was
limited. The Trainmen, the Telegraphers, and the Switchmen, in their
first constitutions of 1883, 1887 and 1886, respectively, and the
Trackmen (Maintenance-of-Way Employees) in 1892 fixed the amount paid at
the definite sums of $300, $1000, $500 and $1000, respectively.[67] The
Letter Carriers, although organized after the railway unions had fixed
at a definite sum the amount of insurance to be paid, for several years
paid only a sum equivalent to one assessment, at the regular rates, upon
all the certificates in force at the time of the death of the
insured.[68] The amounts paid on the second death, March 22, 1892, and
on the third death, July 28, 1893, were $599.16 and $596.12,
respectively.[69] Finally, in the third period, from 1890 to the
present, the number of assessments was also fixed.

[Footnote 67: Constitutions for the several years. Reference is made to
the Trackmen's Constitution, 1893 (n.p. n.d.); Proceedings of the Second
Annual Convention, 1893, in Advance Advocate, Vol. 2.]

[Footnote 68: The Postal Record, Vol. 5, p. 185.]

[Footnote 69: _Ibid_., Vol. 5, p. 138.]

Another important change in the method of conducting these insurance
systems was made in the decade from 1890 to 1900. The organizations with
two exceptions have not adopted the policy of the insurance companies in
varying the charge with the age of the insured. The device they have
commonly used is the differentiation in the amount of insurance which
may be taken in such a way that the older members may insure themselves
only for a smaller amount. As early as 1886 the Firemen provided that
only members under forty-five years of age might take insurance,[70] and
in 1887 the Telegraphers adopted an age limit of fifty years.[71] The
Conductors, under the constitution of 1890, provided that any member
between the ages of fifteen and fifty might take $2500 of insurance
against death or disability, and any member between the ages of fifty
and sixty might take $1000 against death and $500 against
disability.[72] In 1892 the Engineers introduced an age limit of fifty,
and in 1894 further differentiated applicants so that those under forty
years of age might secure $4500, those under forty-five years of age
might obtain $3000, and all over forty-five and under fifty years of
age, $1500.[73] Even now the Switchmen and the Trainmen offer equal
amounts to members of all ages at the same rate.

[Footnote 70: Constitution, 1886 (Terre Haute, n.d.), sec. 71.]

[Footnote 71: Constitution, 1887, Arts. 12-13, in the Railroad
Telegrapher, Vol. 2.]

[Footnote 72: Constitution, 1888, second edition (Rochester, 1890), p.
38.]

[Footnote 73: Constitution, 1894 (Peoria, 1895).]

The Maintenance-of-Way Employees and the Letter Carriers not only limit
the age of the insured but also grade the charge per $1000 according to
age. In the case of the former, members from eighteen to thirty-five
years of age pay $1 monthly per $1000 of insurance; those from
thirty-five to forty, $1.25; from forty to fifty, $1.50. Insurance rates
in the Letter Carriers' Mutual Benefit Department have, with the
exception of the first year of operation, been graded according to age.
The minimum and maximum age limits are twenty-one and fifty-five years.
The monthly rates vary according to age from 77 cents per $1000 of
insurance at twenty-one years to $2.06 at fifty years.

The following table shows the regulations as to the amount and rate of
insurance issued according to ages:

                                              Amount of Insurance
Organization.           Age Classes.               Issued.

Engineers ............. Under 40 years.          $4500
                        40 and under 45.          3000
                        45 and under 50.          1500

Conductors ............ Under 35 years.           3000
                        35 and under 45.          2000
                        45 to 50.                 1000

Firemen ............... Under 45 years.           3000
                        45 and over.              1500

Trainmen .............. No age restriction.       1350

Telegraphers .......... 18 and under 45.          1000
                        45 and under 50.           500
                        50 and under 60.           300

Switchmen ............. No age restriction.       1200

Maintenance-of-Way
  Employees ........... 18 and under 45 at
                            graded rates.         1000

Letter Carriers ....... 21 to 55 at graded rates. 1000 to 3000



The necessity for a reduction in the amount of insurance issued to the
older men was more urgent among the Engineers and the Conductors than
among the other railway organizations, since the latter form the school
of apprenticeship from which the engineers and the conductors are drawn.
In the Trainmen's and the Switchmen's organizations the young men
contribute materially to the cost of insuring the old men. This charge
is not so heavy as might appear at first sight, since in both
organizations many members withdraw when they are promoted to higher
positions in the service. In grading the amount of insurance offered
according to age, the brotherhoods have made a compromise between an
assessment on each individual according to the liability incurred, and a
system in which the welfare of the individual is regarded as entirely at
one with the welfare of the membership. The principle of solidarity is
still recognized, but under limitations.

Originally these unions collected assessments to meet death or
disability claims after the occurrence of the death or disability.
Considerable delay was thus entailed in the final settlement. All of
them, with the exception of the Engineers, now hold reserve funds for
the payment of claims. The Conductors took the initiative by providing
in the constitution of 1881 that the grand secretary-treasurer, on
paying a claim, should levy the regular assessment upon each member to
be held in reserve to pay the next claim.[74] This was followed in 1885
by a regulation of the Trainmen which required all members to pay in
advance one death assessment. This was repealed by the convention of
1886; but the convention of 1888 re-enacted the law. The Firemen
provided in 1888[75] that the subordinate lodges should collect all dues
quarterly in advance.

[Footnote 74: Constitution, 1903 (Pittsburg, 1903), pp. 80, 86.]

[Footnote 75: Constitution, 1888 (Terre Haute, 1888), secs. 50, 52, 53.]

In determining the amount of insurance offered, the organizations have
had necessarily to consider what their members can afford to pay. Only a
certain per cent. of earnings can be set aside for insurance purposes,
and that amount has been determined only by the long experience of the
organizations. Again, the insurance must be in an amount which accords
with the idea of the workmen of what constitutes a satisfactory
provision against death or disability. The amount offered must for this
reason be comparable with that offered by insurance companies.

The following table shows the minimum and the maximum amounts paid by
the several brotherhoods:

                                       Minimum  Maximum
Brotherhoods.                          Amount.  Amount.

Brotherhood of Locomotive Engineers ... $1500    $4500
Order of Railway Conductors ...........  1000     3000
Brotherhood of Locomotive Firemen .....  1500     3000
Brotherhood of Railroad Trainmen ......   500     1350
Order of Railroad Telegraphers ........   300     1000
Switchmen's Union .....................   600     1200
Maintenance-of-Way Employees ..........   500     1000
Letter Carriers' Association[76] ......  1000     3000

[Footnote 76: Under a unique system, known as the "Post Mortem
Deduction" scheme, the actual value of a certificate of the Letter
Carriers' Association at date of issue is fifteen per cent. less than
its face value plus the amount of one assessment, and the value of the
certificate does not become equal to its face value until the member has
paid assessments equal to fifteen per cent. of the face amount
(Constitution, 1904, pp. 67-68).]

Originally, except in the case of the Letter Carriers, the maximum
amounts paid were much lower than at present. As the membership
increased, a greater benefit was paid. In 1887 the Conductors' maximum
insurance was $2500, and in 1888 the Firemen's, the Trainmen's, and the
Switchmen's was raised to $1500, $1000 and $800, respectively. Each of
the railway organizations has since raised the maximum; the Engineers to
$4500 in 1892; the Conductors to $5000 in 1893, reduced since 1899 to
$3000; the Firemen to $3000 in 1903; the Trainmen to $1350 in 1903; and
the Switchmen to $1200 in 1901. While the Engineers, the Conductors, and
the Firemen offer insurance in relatively large amounts, only a small
per cent. of the membership take out certificates for the larger sums.
On June 30, 1904, of the 54,434 Firemen, 43,228 carried $1500
certificates, while only 717 carried $2000 certificates, and 824, $3000
certificates.[77] On November 1, 1904, of the 41,124 Engineers, 24,187
carried $1500, and 10,337 and 1602 carried $3000 and $4500,
respectively.[78] In each of these organizations the $1500 certificates
are thus in greatest demand. The rule restricting the amount that
members over forty-five years of age may take lessens the number of
policies for larger sums, but it is evident that the great majority of
members in these unions do not care to insure for more than $1500. The
Letter Carriers are an exception to this rule. The report of the Chief
Collector for December 1, 1905, shows that out of 5284 insurance
certificates in force there were 473 $1000 certificates, 386 $1500
certificates, 541 $2000 certificates, and 3884 $3000 certificates.[79]

[Footnote 77: Report of W.S. Carter, Grand Secretary-Treasurer, June
30,1904.]

[Footnote 78: Locomotive Engineers' Journal, Vol. 38, p. 966.]

[Footnote 79: Postal Record, Vol. 19, p. 10.]

The advantage of insurance as a means of securing identity of interest
within the organization was not fully recognized in the early
development of the insurance systems, consequently entrance into the
insurance departments of these organizations was originally optional.
The Brotherhood of Locomotive Firemen first adopted compulsory insurance
at the fourth annual convention, 1878.[80] The Brotherhood of Railway
Trainmen next adopted a similar feature in 1888. Although the Engineers
and the Conductors did not enforce compulsory insurance until 1890 and
1891, respectively, during the twenty years preceding its adoption
frequent proposals were made by subordinate divisions of both these
organizations for the adoption of such an arrangement. On different
occasions the national conventions considered the wisdom of such
proposals, weighing in turn the advisability of such a measure and the
ability of the organization to enforce it. The thorough discussion of
the subject among the Engineers and the Conductors undoubtedly prepared
the younger organizations for the settlement of this question at an
earlier stage in their development. The Trainmen adopted compulsory
insurance in 1888, while the two older organizations were in the midst
of the struggle.

[Footnote 80: Locomotive Firemen's Magazine, Vol. 21, p. 181.]

The Switchmen adopted it in 1892, and, after reorganization, again on
October 1, 1901, and the Telegraphers on January 1, 1898. The Letter
Carriers alone retain the system of optional insurance.

Only in the Switchmen's Union and in the Brotherhood of
Maintenance-of-Way Employees has the operation of the compulsory system
met with interruption. The compulsory rule of the Maintenance-of-Way
Employees during the early nineties was frequently repealed and
readopted. The opposition to it was due in a large measure to
uncertainty as to the number of yearly assessments necessary and also to
the fact that many of the members carried insurance in old-line
companies.[81] The Switchmen's insurance department suffered a
suspension from 1894 to 1897, and although the Union had compulsory
insurance before its suspension, on reorganization a voluntary system
was adopted, and not until October 1, 1901, did the Union succeed in
reëstablishing a compulsory system.

[Footnote 81: Advance Advocate, Vol. 5, p. 485.]

In all the organizations there is a class of members, called
non-beneficiary, who are not eligible to the insurance departments
because of partial disability or because of having passed the age limit.
The Brotherhood of Locomotive Firemen provides that the non-beneficiary
member shall be entitled to all the privileges of the subordinate lodge,
but shall not take part in the national convention or in any way
participate in the benefits and privileges of the beneficiary
department.[82] Similar rules are found in the other brotherhoods. The
Trainmen and the Switchmen issue to non-beneficiary members insurance
certificates only against death in the sums of $500 and $600,
respectively.

[Footnote 82: Constitution, amended 1902 (Peoria, n.d.), sec. 163.]

The efficiency of compulsory insurance rules in securing and retaining
members in the brotherhoods is generally acknowledged among the railway
employees. After the member has carried insurance for several years, his
financial interests are bound up with the interests of the organization,
and his loyalty to the union is increased. From this loyalty flows
greater interest in every phase of the brotherhood's work. The operation
of compulsory insurance appears to have caused an increase in the
membership of the brotherhoods. On January 1, 1890, the date on which
compulsory insurance became operative, the membership of the Brotherhood
of Locomotive Engineers numbered 7408; on January 1, 1897, it had
increased to 18,739; and in May, 1904, to 46,400.[83] On January 1,
1891, the date on which compulsory insurance was inaugurated, the
membership of the Order of Railway Conductors numbered 3933; on January
1, 1898, it had increased to 15,807, and again on January 1, 1904, to
31,288. It is noteworthy that during the depression, 1893-1897, those
organizations having systems of voluntary insurance suffered far more
severely than those enforcing compulsory insurance. Thus, the
Telegraphers were almost annihilated, while the Firemen and the
Conductors practically maintained their position.

[Footnote 83: Locomotive Engineers' Journal, Vol. 37, p. 446; Vol. 18,
p. 654.]

The cost of insurance per $1000 varies greatly in the different
organizations, as may be seen by the following table:[84]

                                            Cost of Insurance per
 Organizations.       Fiscal Year Ending.      $1000 a Year.
 Engineers ........... December 31, 1903         $17.80
 Conductors .......... December 31, 1903          16.00
 Firemen ............. June 30, 1904              12.00
 Trainmen ............ December 31, 1903          18.00
 Telegraphers ........ December 31, 1903           7.20
 Switchmen ........... December 31, 1903          20.00
 Maintenance-of-Way                               12.00\
   Employees ......... December 31, 1903          15.00 | according
                                                  18.00/    to age
 Letter Carriers...... December 31, 1906           9.24\ according
                                                  21.96/  to age

[Footnote 84: These amounts have been furnished by the grand
secretary-treasurers of the several organizations, except those of the
Telegraphers and the Maintenance-of-Way Employees, which have been taken
from the 1903 constitutions and represent the amount of the regular
monthly assessment.]

The differences in the cost of insurance are the result of several
factors. The slight degree of risk in the occupation is largely
responsible for the relative cheapness of the Telegraphers' and the
Letter Carriers' insurance. More important differences are due to the
age grouping of the membership. Thus the Firemen, whom old-line
companies, for the most part, classify as extra-hazardous, furnish
insurance against death and disability at $12 per $1000. The principal
reason for this low rate is the rapid change in membership, the old men
withdrawing and being replaced by young men. Near the close of the
nineties the cry of "Something must be done to keep the old members in
the Brotherhood of Locomotive Firemen" was raised; but it was clearly
shown that "the greatest favor a member of the Brotherhood could show
the insurance department was to pay his assessment for ten years and
then withdraw, permitting a man ten years his junior to take his place."
The grand secretary-treasurer states that the membership practically
changes every seven years, due to promotions to the position of engineer
and to withdrawals of older men for various reasons. The withdrawal of
old men conduces to a more favorable age grouping, to a decrease in the
death rate, and to a consequent decrease in the cost of insurance. The
Switchmen's Union presents an interesting contrast. The Union prescribes
no age limit, and higher positions in the service are not so frequently
open to the advancement of its members. The result is that the number of
older members is relatively greater, and insurance is maintained at a
considerably higher cost.

The cheapness of the insurance offered by these organizations is better
appreciated when compared with that offered by old-line companies. The
following table shows the cost of insurance per $1000 in a typical life
insurance company for different classes of railway employees and letter
carriers at thirty-five years of age:

Class of Employees.                     Rate per $1000.[85]

Engineers .................................... $27.23
Conductors ...................................  22.23
Firemen ......................................  27.23
Trainmen .....................................  27.23
Telegraphers .................................  22.23
Switchmen ....................................  27.23
Maintenance-of-Way Employees .................  27.23
Letter Carriers ..............................  27.30

[Footnote 85: The letter carriers' rate is that of the New England
Mutual Life Insurance Company, the rates of the other classes of
employees are those of the Aetna Life Insurance Company.]

Assuming that the average age at admission of the members of unions is
thirty-five, the cost of insurance in the regular companies is far
higher than the cost for an equal amount in the unions. The conductors
pay their union twenty-five per cent. less than they would have to pay
to an insurance company and the locomotive firemen pay considerably less
than one half of company rates. These rates, moreover, are for insurance
against death only, while the insurance offered by the brotherhoods also
provides against total disability.

The compulsory insurance has not been in operation long enough in any of
the organizations for its full effect to be seen. It is certain that as
the unions grow older they must materially raise the rates at which they
issue insurance. The rapid growth in membership has brought into all the
unions in this class in recent years a proportionately large number of
young men. The limitation on the age of the insured has contributed to
this result. As these members grow older, the death rate will increase.
As has been noted above, however, it has not been primarily the
cheapness of the insurance but the combination of death and disability
insurance which has been the advantage possessed by the union systems.

The primary purpose of the insurance features of these organizations is
to obtain for the members and their families a higher degree of economic
security. The two great economic contingencies against which the railway
organizations provide insurance are, first, the loss to a family in
consequence of the death of the income-earning member, and second, the
economic hardship involved in shifting from one industry to another made
necessary by certain severe physical accidents. Insurance paid to the
totally disabled employee, or to the family of a deceased member, is
frequently the means of maintaining the standard of living of the
unfortunate family. The risks to which the railway employee is exposed
are due to the nature of the trade, the negligence of a fellow workman,
or the negligence of the employers. Compensation for only the last class
is given by the law. Against the other two kinds of accident the railway
employee must himself make provision, and this provision is amplest and
surest when made by insurance. The organizations, as we have seen, have
never entirely subordinated the idea of benevolence to the principles of
business. In the early years of its history, each grand convention set
aside large sums for charitable payments. Before the adoption and
satisfactory operation of the Engineers' insurance system, it is
estimated that eight tenths of the husbands and fathers of those who
applied for charity were uninsured.[86] Purely charitable relief was
found inadequate and the present systems represent a compromise between
charity and business.

[Footnote 86: Locomotive Engineers' Journal, Vol. 22, p. 33.]

The insurance features have further been the means of securing and
retaining members and thus building up these trade organizations as
factors in collective bargaining. The power of the brotherhoods to
secure satisfactory agreements with their employers is largely measured
by the strength of the organizations, and that strength is usually in
direct proportion to the development of their insurance systems. Thus
not only is insurance a prime support in the collective bargaining of
the unions, but it insures control in the exercise of that function. The
infrequency of railroad strikes may be attributed largely to the almost
perfect control of the head officials of the brotherhoods over their
membership.




CHAPTER II.


DEATH BENEFITS.

The most needed trade-union benefits are those against death and these
were the first to be established. At the present time about one half of
American national trade unions maintain death benefit systems. In 1904,
out of a total of one hundred and seventeen national unions affiliated
with the American Federation of Labor, fifty-three were paying death
benefits.[87] Of those unions not affiliated with the American
Federation of Labor, ten were also paying such benefits.

[Footnote 87: Proceedings of the Twenty-fourth Annual Convention of the
American Federation of Labor, 1904, p. 46.]

The development of death benefits in American trade unions resembles
closely the growth of the insurance systems described in the preceding
chapter. The first unions to adopt death benefits, for example, paid for
a time a sum fluctuating in amount. The benefit was in each case the sum
raised by per capita assessments, and the yield varied according to the
membership. Thus, the Iron Molders paid a fluctuating benefit from 1870
to 1879.[88] Upon the death of a member, an assessment of forty cents
and later of forty-five per capita was levied. At Detroit in 1873 the
Cigar Makers inaugurated an endowment plan which provided for the
payment of a death benefit, the amount of which was to be the sum raised
by an assessment of ten cents on each member. Similarly, the Glass
Bottle Blowers, introducing the benefit as late as 1891, made provision
for paying the amount secured by an assessment of twenty-five cents per
capita.[89]

[Footnote 88: Iron Molders' Journal, Vol. 25, June, 1889; Constitution,
1878 (Cincinnati, 1878), Art. 17.]

[Footnote 89: Proceedings of the Twenty-fifth Annual Convention,
Milwaukee, 1901; Report of Secretary Launer (Milwaukee, 1901).]

When the fluctuating benefits were inaugurated the unions were without
experience in the exercise of beneficiary functions. They could not
calculate with any exactness the amount of the assessment necessary to
provide benefits in fixed sum. They preferred, therefore, not to
guarantee the payment of any amount. The character of the first death
benefit in the Granite Cutters' Union illustrates the reluctance of the
Union in assuming the responsibility of guaranteeing fixed benefits. In
1877 they adopted a benefit of fifty dollars, but also provided for an
additional voluntary benefit to be raised by an assessment of fifty
cents. After a few years the entire system was replaced by provision for
the payment of a fixed funeral benefit.

The fluctuating benefit was very unsatisfactory, inasmuch as the insured
member could not be certain as to what amount he would receive, and this
uncertainty was aggravated by the voluntary character of the
association. Even where participation was compulsory the fluctuations in
the number of members were much greater than at present.

As soon as the unions became sufficiently strong, financially and
numerically, and had acquired experience in the management of the
benefit, they, with few exceptions, guaranteed to their members a
benefit of fixed amount. A fixed payment of one hundred dollars was
guaranteed by the Iron Molders in 1879 on the death of a member, and in
1882 the voluntary organization known as the Beneficial Association,
which had maintained the system of special assessments, was
disbanded.[90] The advantage of paying a benefit of fixed amount, as
demonstrated by the experience of Local Union No. 87 of Brooklyn, led to
the adoption of this system by the Cigar Makers' International Union, in
September, 1880.[91]

[Footnote 90: Constitution, 1878 (Cincinnati, 1878); Iron Molders'
Journal, Vol. 26, May, 1890, p. 2.]

[Footnote 91: Constitution, 1880 (New York, 1880), Art. 13.]

The majority of American trade unions have inaugurated their death
benefits since 1880,[92] and hence have escaped the experimental period
of benefits based upon the fluctuating principle. Learning from the
experience of the older unions, they have in most cases paid from the
beginning death benefits of fixed amount. The benefit is a definite sum
in all the unions except the Watch Case Engravers' Association and the
Saw Smiths' Union, which in their constitutions of 1901 and 1902
respectively provide for the payment of a benefit upon a fluctuating
basis.[93] This must be attributed to the fact that the unions are not
sufficiently strong to guarantee the payment of a definite amount.

[Footnote 92: See page 12.]

[Footnote 93: Constitution of the Watch Case Engravers' International
Association of America, 1901 (New York, n.d.), p. 21; Constitution of
the Saw Smiths' Union of North America, 1902 (Indianapolis, n.d.), p.
8.]

Under the fluctuating system the sum paid was often larger than the
amount at which the benefit was later fixed. When, in 1880, the Cigar
Makers adopted a death benefit of twenty-five dollars, their membership
had increased to 4400, making possible, by a per capita assessment of
ten cents, the payment of four hundred and forty-four dollars upon the
death of each member. The assessment of twenty-five cents levied by the
Glass Bottle Blowers for each death benefit upon a membership of 2423 in
1891 yielded a greater sum than the definite amount adopted one year
later. The amount paid under the fluctuating system in the Iron Molders
was also larger than the fixed amount later guaranteed by the
International Union.

In another respect the early death benefits and insurance systems were
alike. Participation in the more important and successful death systems
was voluntary. Membership in the Iron Molders' Beneficial Association,
created to pay death benefits, was, for example, entirely optional.[94]
The first constitution of the Granite Cutters provided for an additional
voluntary benefit.[95] In both of the above named unions the voluntary
idea was short-lived. In January, 1879, the Iron Molders provided for
the payment of a death benefit for all members of the craft.[96] By 1884
the Granite Cutters had abolished the voluntary death benefit and paid
it to all members.[97]

[Footnote 94: Iron Molders' Journal, March, 1871.]

[Footnote 95: Constitution, 1877 (Rockland, 1877), Arts. 1-2.]

[Footnote 96: Iron Molders' Journal, Vol. 26, May, 1890, p. 2.]

[Footnote 97: Constitution, 1884 (Quincy, n.d.), p. 11 ff.]

Thus, both the death benefit and the insurance systems in American trade
unions had their origin in the movement for mutual insurance which was
so widespread in the United States immediately after the Civil War. Only
in the railway brotherhoods did the plan result in any considerable
increase in membership. In the other unions the insurance systems were
replaced by the establishment of benefits, and these were usually
smaller in amount than the insurance systems had contemplated.[98]

[Footnote 98: The death benefits established by the Cigar Makers and
Iron Molders in 1870 and 1879 were for $40 and $100. The ordinary death
benefit in American trade unions is still a sum assumed to be sufficient
to inter decently the deceased.]

The tendency in those unions which have longest maintained the death
benefit has been to increase the amount of the benefit and to grade the
amount according to the length of membership. The policy of the unions
in these respects has, however, varied considerably. In some cases there
has been an increase in the minimum amount paid, together with provision
for the payment of larger sums to members who have been longer in good
standing. In other unions, such as the Iron Molders and the Pattern
Makers, the regular benefit remains as originally established, but a
larger sum is paid to older members. Only a few of the older
organizations retain the uniform benefit. The most notable of these are
the Typographical Union, the Glass Bottle Blowers, and the Hatters.

The grading of the death benefit serves two purposes. In the first
place, the funds are protected. If the benefit were uniform and large,
persons in bad health would be tempted to join the union in order to
secure protection for their families. The grading of the benefit is
accordingly a crude but fairly effective device against a danger which
presents itself as soon as the amount becomes large enough to be
attractive to "bad risks." A more important reason, perhaps, for the
grading of the benefit is the desire to make it a more effective agency
in attracting and holding members. If continuous membership carries with
it constantly increasing insurance, the lapses in membership lessen.

The maximum death benefits paid by the Cigar Makers and the Glass Bottle
Blowers are $550 and $500, respectively. The Iron Molders pay a maximum
benefit of $200; the Carpenters of $200; the Pattern Makers of $400; the
Germania Typographia of $200. In all these cases except that of the
Glass Bottle Blowers the benefit is graded according to the period of
membership. The maximum benefit is paid in the Cigar Makers and in the
Pattern Makers to members of fifteen years' standing.

Only a few unions have decreased the amount of the benefit from that
first established. Among these are the Brotherhood of Carpenters, the
Brotherhood of Leather Workers on Horse Goods, the Tailors' Union, and
the Metal Polishers' Union. In the case of the Carpenters the death
benefit which was originally established at $250 in 1882 was $100 in
1905. Changes of this kind have naturally followed the too liberal
policy of inexperienced unions.

The following table, giving the amount of the death benefit as
originally established and as paid at present in certain of the more
important unions which have adopted the graded death benefit,
illustrates the variety of forms which the systems take:

                   AMOUNT OF DEATH BENEFIT.
==========================================================================
           |        |  Date of  |                     |
           |Date of |Introducing|Amount of Death      |Amount of Death
Name of    | Organi-|   Death   | Benefit Paid        |Benefit Paid in
 Union     | zation |  Benefits |   Originally        |      1905.
--------------------------------------------------------------------------
Boot and   | 1895   |   1898    | $50 for six months' |$50 for six months'
Shoe       |        |           |  membership.        | membership.
Workers    |        |           | $100 for two years' |$100 for two years'
           |        |           |  membership.        | membership.
           |        |           |                     |
Carpenters,| 1881   |   1882    | $250 for six months'|$100 for six
Brotherhood|        |           |  membership.        |months' membership.
of         |        |           |                     |$200 for one year's
           |        |           |                     |membership.
           |        |           |                     |
Cigar      | 1864   |   1867    |  Yield of a 10      |$50 for two years'
Makers     |        |           |  cent per capita    |  membership.
           |        |           |  assessment.        |$200 for five
           |        |           |                     | years' membership.
           |        |           |                     |$350 for ten years'
           |        |           |                     |  membership.
           |        |           |                     |$550 for fifteen
           |        |           |                     |years' membership.
           |        |           |                     |
Granite    | 1877   |   1877    | $50...........      |$50.
Cutters    |        |           |                     |$75 for six months'
           |        |           |                     | membership.
           |        |           |                     |$100 for one year's
           |        |           |                     | membership.
           |        |           |                     |$150 for five
           |        |           |                     | years' membership.
           |        |           |                     |$200 for ten years'
           |        |           |                     | membership.
           |        |           |                     |
Iron       | 1859   |   1870    | Yield of a 40       |$100 for one year's
Molders    |        |           | cent per capita     | membership.
           |        |           | assessment.          $150 for five
           |        |           |                     | years' membership.
           |        |           |                     |$175 for ten years'
           |        |           |                     | membership.
           |        |           |                     |$200 for fifteen
           |        |           |                     |years' membership.
           |        |           |                     |
Leather    | 1896   |   1896    | $40 for one         |
Workers    |        |           |  year's             |
on Horse   |        |           | membership.         |
           |        |           | $60 for two         |$40 for one
           |        |           |  years'             |year's
           |        |           | membership.         |membership.
           |        |           | $100 for four       |$75 for three
           |        |           | years'              |years'
           |        |           | membership.         |membership.
           |        |           | $200 for five       |$100 for four
           |        |           | years'              | years'
           |        |           | membership.         |membership.
           |        |           | $300 for eight      |
           |        |           | years'              |
           |        |           | membership.         |
           |        |           |                     |
Metal      | 1890   |   1890    | $100 for six        |$50 for one year's
Polishers  |        |           |  months'            | membership.
           |        |           | membership.         |$100 for two years'
           |        |           |                     | membership.
           |        |           |                     |
Machinists | 1890   |   1890    | $50 for six         |$50 for six months'
           |        |           | months'             | membership.
           |        |           | membership.         |$75 for one year's
           |        |           |                     | membership.
           |        |           |                     |$100 for two years'
           |        |           |                     | membership.
           |        |           |                     |$150 for three
           |        |           |                     |years' membership.
           |        |           |                     |$200 for four
           |        |           |                     |years' membership.
           |        |           |                     |
Painters   | 1887   |   1887    | $100............... |$50 for one year's
           |        |           |                     | membership
           |        |           |                     |$100 for two years'
           |        |           |                     | membership
           |        |           |                     |$150 for three
           |        |           |                     | years' membership
           |        |           |                     |$200 for four years'
           |        |           |                     | membership
           |        |           |                     |
Pattern    | 1887   |   1898    | $50                 |$50 for one year's
Makers     |        |           |                     | membership
           |        |           |                     |$75 for two years'
           |        |           |                     | membership
           |        |           |                     |$100 for three
           |        |           |                     | years' membership
           |        |           |                     |$150 for five
           |        |           |                     | years' membership
           |        |           |                     |$200 for seven
           |        |           |                     | years' membership
           |        |           |                     |$250 for nine
           |        |           |                     | years' membership
           |        |           |                     |$300 for eleven
           |        |           |                     | years' membership
           |        |           |                     |$350 for thirteen
           |        |           |                     | years' membership
           |        |           |                     |$400 for fifteen
           |        |           |                     | years' membership
           |        |           |                     |
Piano and  | 1898   |   1898    | $50 for six         |$50 for one year's
 Organ     |        |           | months'             | membership
 Workers   |        |           | membership          |$100 for five
           |        |           |                     | years' membership
           |        |           |                     |$200 for ten years'
           |        |           |                     | membership
           |        |           |                     |
Tailors    | 1884   |   1890    |$75 for three months'|$25 for six months'
           |        |           |  membership         | membership
           |        |           |$100 for one years'  |$40 for one year's
           |        |           |  membership         | membership
           |        |           |                     |$50 for two years'
           |        |           |                     | membership
           |        |           |                     |$75 for three years'
           |        |           |                     | membership
           |        |           |                     |$100 for four years'
           |        |           |                     | membership
---------------------------------------------------------------------------

A few of the unions require only that the deceased member shall have
been in good standing. These unions ordinarily pay a small benefit,
although the Glass Bottle Blowers pay five hundred dollars without
requiring a preliminary period of membership. The term of necessary
membership varies from thirty days in the case of the Barbers to two
years in the Cigar Makers. The usual requirement is that the member
shall have been in good standing for six months.

A few of the unions restrict the benefit to members under a certain age
at the time of admission. Where such an age limit is imposed it is
ordinarily fifty years, but in a few unions it is sixty years.

The following table shows the conditions imposed upon the payment of the
death benefit in the more important unions:

                                                 Preliminary Term of
Name of Organization.             Age Limit.   Good Standing Required

Bakers ........................... 50 years         3 months
Barbers .......................... 50 years        30 days
Boot and Shoe Workers ............                  6 months
Glass Bottle Blowers .............                  None
Carpenters ....................... 50 years         6 months
Cigar Makers ..................... 50 years         2 years
Granite Cutters ..................                  6 months
Iron Molders .....................                 12 months
Iron, Steel and Tin Workers ......                  3 months
Leather Workers on Horse Goods  ...                  1 year
Lithographers ....................                 30 days
Machinists .......................                  6 months
Metal Polishers ..................                  1 year
Metal Workers ....................                 12 months
Painters ......................... 50 years         1 year
Pattern Makers ................... 50 years        52 weeks
Piano and Organ Workers ..........                  1 year
Plumbers .........................                  6 months
Stone Cutters ....................                  6 months
Tailors ..........................                  6 months
Tobacco Workers .................. 60 years         1 year
Typographical Union ..............                  None
Weavers, Elastic Goring ..........                  6 months
Wood Workers ..................... 60 years         6 months

Only a few unions make good physical condition a requisite for admission
to the death benefit. In a small number provision is made that if death
result from disease incurred prior to admission the union shall not pay
the benefit. In the majority of the unions every member admitted to the
union is covered by the death benefit. Some of the unions, such as the
Brotherhood of Carpenters, the Boot and Shoe Workers' Union, the
Brotherhood of Painters, and the Pattern Makers' League, provide a
smaller benefit for those not eligible at time of initiation. In the
Brotherhood of Carpenters any apprentice under twenty-one years of age,
or any candidate for membership over fifty years of age, in ill health
and not qualified for full benefit when admitted to the union, is
limited to a funeral allowance of fifty dollars.[99] The Boot and Shoe
Workers' Union provides that members of sixty years of age, or those
afflicted with chronic diseases at time of initiation, shall be eligible
to half benefit only.[100] In the Brotherhood of Painters members of
sound health and over fifty years of age when admitted are eligible to a
semi-beneficial benefit of fifty dollars and to a funeral benefit of
twenty-five dollars in case of death of wife.[101]

[Footnote 99: Constitution, 1903 (Indianapolis, n.d.), secs. 65 and 98.]

[Footnote 100: Constitution, 1904 (Boston, n.d.), sec. 68.]

[Footnote 101: Constitution, 1904 (La Fayette, n.d.), sec. 133.]

The requirement of a preliminary period of membership serves to protect
the union against the entrance of persons who wish to join because they
are in ill health and are anxious to secure insurance which they could
not otherwise get. None of the unions provide, however, for any
deliberate selection of risks, and the mortality is higher than it would
be if the applicants were examined.

The death benefit is thus regarded by the unions not as a pure matter of
business. It is paid partly on charitable grounds, and the small
increase in the cost of the benefit occasioned by the lack of strict
physical requirements is regarded as more than compensated by the
increase in the solidarity of the organization thus attained.

In several important unions the death benefit has been made the basis
for a disability benefit. Thus a member receiving the disability benefit
loses his right to the death benefit. So closely are the two benefits
associated in these organizations that they are practically a single
benefit. This combination of death and disability benefits is found
chiefly in those trades in which the workmen are exposed to great danger
of being disabled by accident.[102] The principal unions maintaining the
disability benefit are the Iron Molders, the Brotherhood of Carpenters
and Joiners, the Cigar Makers, the Painters, the Wood Workers, the Metal
Workers, the Glass Workers, and the Boot and Shoe Workers.[103]

[Footnote 102: Those unions that pay a death benefit and make no
provision for total or permanent disability are: Bakers' and
Confectioners' Union, Barbers' International Union, Cigar Makers,
Elastic Goring Weavers' Association, United Garment Workers, Glass
Bottle Blowers' Association, Granite Cutters' Association, United
Hatters, Hotel and Restaurant Employees, Iron, Steel and Tin Workers'
Association, Jewelry Workers' Union, Brotherhood of Leather Workers on
Horse Goods, Lithographers' Association, Metal Polishers' Union, Pattern
Makers' League, Piano and Organ Workers' Union, Plumbers' Association,
Printing Pressmen's Union, Retail Clerks' Association, Saw Smiths'
Union, Stone Cutters' Association, Stove Mounters' Union, Street Railway
Employees' Association, Tailors' Union, Tobacco Workers' Union,
Typographical Union, Deutsch-Amerikanischen Typographia, Watch Case
Engravers' Association, Wood, Wire and Metal Lathers' Union.]

[Footnote 103: Originally, the Granite Cutters paid a disability benefit
of five hundred dollars. By 1878 the amount of the disability benefit
had been made variable, being raised by an assessment of fifty cents on
each member of the Union. About 1884 the disability benefit was
abandoned.]

Nearly all the unions thus combining death and disability benefits grade
the disability benefit. They usually also differentiate the two benefits
either in the amount paid or in the period of membership required for
eligibility to the benefit. The Iron Molders, the Cigar Makers and the
Painters pay the same sums in case of disability as of death.[104] The
other unions, with one exception, provide for a greater maximum benefit
in case of disability. The period of good standing required to draw a
particular sum is usually greater in the case of the disability benefit
than in the case of the death benefit. The provisions of the Brotherhood
of Carpenters are fairly typical.[105] After six months' good standing
members become eligible to a death benefit of one hundred dollars, but
they are not eligible to a disability benefit until they have been in
membership twelve months. The maximum death benefit is two hundred
dollars, while the maximum disability benefit is four hundred dollars.
The maximum death benefit is paid on the death of members in good
standing for one year, while to be eligible to the maximum disability
benefit requires a membership of five years.[106]

[Footnote 104: The Cigar Makers retain fifty dollars until the death of
the member.]

[Footnote 105: The Carpenter, Vol. 2, No. 8, p. 5; Vol. 4, August,
1884.]

[Footnote 106: Constitution of the United Brotherhood of Carpenters and
Joiners of America, 1888 (n.p., n.d.), p. 10; Constitution, 1905
(Milwaukee, n.d.), p. 18.]

The following table shows the amounts of the death and disability
benefits in the more important unions, as originally established and as
paid in 1905:


    AMOUNT OF DEATH AND DISABILITY BENEFIT.
===========================================================================
              |Amount Paid   Originally.   |    Amount Paid in 1905.
Name of Union.|------------------------------------------------------------
              |Death.       |Disability.   |  Death.       |Disability.
---------------------------------------------------------------------------
Iron Molders. |Yield of a   | Yield of a   |$100 for 1 yr. |$100 for 1 yr.
              |40c. per     | 40c. per     | 150 for 5 yrs.| 150 for 5 yrs.
              |capita       | capita       | 175 for 10 yrs| 175 for 10 yrs.
              |assessment.  |assessment.   | 200 for 15 yrs| 200 for 15 yrs.
              |             |              |               |
Carpenters,   |$250 for 6   |$100 for 6 mo.|$100 for 6 mo. |$100 for 1 yr.
Brotherhood   |mo.          | mo.          | 200 for 1 yr. | 200 for 2 yrs.
of.           |             |              |               | 300 for 3 yrs.
              |             |              |               | 400 for 5 yrs
              |             |              |               |
Painters      |$50 for 6 mo.| $50 for 6    |$100 for 1 yr. |$100 for 1 yr.
              |mo.          | mo.          |               |
              |100 for 1 yr.|$100 for 1 yr.| 150 for 2 yrs.| 150 for 2 yrs.
              |             |              |               |
Wood Workers. |$60 for 1 yr.|$100 for 1    |$ 50 for 6 mo. |$150 for 1 yr.
              |             |yr.           |  75 for 18 mo.| 200 for 2 yrs.
              |             |              | 100 for 3 yrs.| 250 for 3 yrs.
              |             |              |               |
Metal Workers.|$75 for 1 yr.|$500 for 5    |$75 for 1 yr.  |$500 for 5 yrs.
              |             |yrs.          |               |
              |             |              |               |
Glass Workers.|$50 for 6 mo.|$150 for 1 yr.|$150 for 1 yr. |$ 75 for 1 yr.
              |100 for 1 yr.|              | 175 for 2 yrs.| 100 for 2 yrs.
              |             |              |               |
Boot and Shoe |$50 for 6 mo.|              | $50 for 6 mo. |$100 for 2 yrs.
Workers.      |100 for 2 yrs|              | 100 for 2 yrs.|
---------------------------------------------------------------------------

The ratio of disability benefits paid to death benefits paid varies in
the different unions according to the definition of disability adopted.
The Iron Molders' Union, which took the initiative in adopting a
national disability benefit, undertook to pay benefits to all disabled
members, with two exceptions. First, the disability must not have been
caused by dissipation, and secondly, the member must not have been
disabled before joining the Association.[107] The Granite Cutters'
Union, however, when establishing their voluntary insurance association
in 1877, limited the benefit to members disabled for life by any real
accident suffered while following employment as a granite cutter.[108]
The two benefits were unlike in that the Iron Molders paid the benefit
no matter how the disability had been incurred, while the Granite
Cutters paid only when the disability resulted from a trade accident.

[Footnote 107: Constitution of the Iron Molders' Union of North America,
1878 (Cincinnati, 1878), p. 51.]

[Footnote 108: Constitution of the Granite Cutters' International
Association of America, 1877 (Rockland, 1877), p. 27.]

Some of the unions now paying the disability benefit, as for example the
Boot and Shoe Workers, have followed the policy of the Iron Molders in
paying the benefit in all cases of disability; while others, for example
the Brotherhood of Carpenters, pay only where the disability is incurred
"while working at the trade." Under this system, in the case of the Iron
Molders, the claims for disability were so numerous that in 1882 the
term "permanent disability" was defined to mean "total blindness, the
loss of an arm or leg, or both," and since 1890 also paralysis.[109]
Similarly in 1880 the Granite Cutters defined more exactly what
constituted total disability.[110]

[Footnote 109: Constitution, 1882 (Cincinnati, 1882), Art. 17; Iron
Molders' Journal, Vol. 16, June and August, 1880; Constitution, 1890
(Cincinnati, 1890); Constitution, 1902 (Cincinnati, 1902), p. 40.]

[Footnote 110: Constitution, 1880 (Maplewood, 1880), p. 18.]

The younger unions have usually adopted the later revised definition of
the term "permanent or total disability," with such modifications as are
made necessary by the peculiar nature of the trade. The system of the
Brotherhood of Carpenters and Joiners, adopted in 1886, and still in
force, defines permanent disability as "total blindness, the loss of an
arm or leg, or both, the total disability of a limb, the loss of four
fingers on one hand, or being afflicted with any physical disability
resulting from sudden accident."[111] The Amalgamated Glass Workers as
late as 1900 had made no attempt to give definite limits to the term
"total disability," but in 1903 they adopted the definition of the
Carpenters and extended it to include disability resulting from
paralysis.[112] The Amalgamated Wood Workers, however, still provide
simply that to receive the benefit members shall be disabled from
following the trade.[113]

[Footnote 111: Constitution, 1886 (n.p., n.d.), p. 11; Constitution,
1905 (Milwaukee, n.d.), p. 19.]

[Footnote 112: Constitution, 1900 (Chicago, n.d.), p. 23; Constitution,
1903, p. 11.]

[Footnote 113: Constitution of the Amalgamated Wood-Workers'
International Union of America, 1905 (Chicago, n.d.), p. 42.]

The definitions adopted by the unions are intended as guides for and
restrictions upon the administrative officials, but in all cases the
latter are given considerable latitude. The cost of the benefit,
therefore, depends largely upon the strictness with which the officials
construe the rules. In those unions where the injuries entitling to a
benefit are not specifically defined, the officers have great
discretionary power. Indeed, even if they have the best intention, it is
in many trades often impossible to obtain positive evidence as to the
totality or permanency of the disability. For example, the Brotherhood
of Painters find it almost impossible to pass intelligently upon claims
for disability resulting from lead poisoning.

The table on page 63 shows the sums paid for death and disability claims
in certain unions for which statistics are procurable.

The addition of a disability benefit to the death benefit as appears
from the table does not add greatly to the cost of maintaining the
benefit. In general, the amount paid for disability ranges from five to
ten per cent. of the total paid for both benefits. The cost of the
benefits is somewhat increased also by the loss of dues from the time of
the disability to the death of the insured.

      SUMS PAID FOR DEATH AND DISABILITY BENEFITS.
=====================================================================
            |         |Sum of Benefits Paid.  |Percentage of Benefits
            |         |                       |        Paid.
            |         |----------------------------------------------
Union.      |   Year. |  Death.   |Disability.|  Death.  |Disability
---------------------------------------------------------------------
Brotherhood |         |           |           |          |
of          |1894-1896|$ 58,527.10|$10,500.00 |   85     |    15
Carpenters  |1896-1898|  59,108.44| 11,100.00 |   85     |    15
            |1900-1902| 159,249.98|  7,900.00 |   95.3   |     4.7
            |1902-1904| 243,218.25| 16,700.00 |   93.6   |     6.4
            |1904-1906| 306,295.44| 28,250.00 |   91.6   |     8.4
            |         |           |           |          |
Painters    |1889-1890|   2,894.00|    250.00 |   92.1   |     7.9
            |1890-1892|   6,900.00|    750.00 |   90.2   |     9.8
            |1892-1894|  10,548.00|  1,475.00 |   87.8   |    12.2
            |1898-1899|   7,150.00|    600.00 |   92.2   |     7.8
            |1902-1003|  30,307.00|  3,050.00 |   90.9   |     9.1
            |1903-1904|  37,711.25|  1,850.00 |   95.4   |     4.6
            |1904-1905|  43,855.50|  4,250.00 |   91.2   |     8.8
            |         |           |           |          |
Wood        |1900     |   2,850.00|    250.00 |   92     |     8
Workers.    |1901     |   4,200.00|    250.00 |   94.4   |     5.6
            |1903     |   5,775.00|    500.00 |   90.6   |     9.4
            |1904     |   7,574.00|    750.00 |   91.1   |     8.9
            |         |           |           |          |
Iron        |1890-1895|  56,172.00|  2,400.00 |   96     |     4
Molders.    |1895-1899|  36,899.00|  3,600.00 |   91.2   |     8.8
            |1899-1902|  67,414.38|  2,600.00 |   96.3   |     3.7
            |1902-1907| 259,554.86| 19,600.00 |   93     |     7
---------------------------------------------------------------------

An increasing number of unions pay a wife's death benefit as well as the
regular death benefit. This form is of comparatively recent adoption
and its success has not yet been thoroughly demonstrated. Nine American
unions were reported to be paying this benefit in September, 1903, and
eleven in September, 1904.[114] The following is a list of the unions
reported as paying the benefit in 1904: Bakers and Confectioners,
Brotherhood of Carpenters and Joiners, Cigar Makers, Compressed Air
Workers, Lace Curtain Operatives, Freight Handlers, Painters, Paving
Cutters, Photo-Engravers, Cotton Mule Spinners, Tailors.

[Footnote 114: Proceedings of the Twenty-third Convention, American
Federation of Labor, 1903 (Washington, 1903), p. 41; Proceedings of the
Twenty-fourth Convention, American Federation of Labor, 1904
(Washington, 1904), p. 46.]

The Deutsch-Amerikanischen Typographia took the initiative in the
adoption of this benefit at the New York Convention in May, 1884,[115]
and was immediately followed in the same year by the Brotherhood of
Carpenters and Joiners[116] and in 1887 by the Painters[117] and the
Cigar Makers.[118] For the year ending September 30, 1904, the
Carpenters, the Painters, and the Cigar Makers paid more than 92 per
cent. of the whole sum expended by the eleven unions that have adopted
this benefit.

[Footnote 115: American Federationist, Vol. 2, No. 4, p. 61.]

[Footnote 116: The Carpenter, Vol. 4, August, 1884.]

[Footnote 117: The Painter, Vol. 1, April, 1887; Vol. 17, p. 529.]

[Footnote 118: Constitution of the Cigar Makers' International Union of
America, 1887 (Buffalo, 1888), Art. 10.]

The wife's death benefit is designed to defray the cost of burial. It
is, therefore, small in amount, not exceeding fifty dollars in any of
the unions in which it is important. The following table gives the
minimum amounts of the wife's funeral benefit paid under the original
and under the present rules in the five unions in which the benefit is
of importance. The term of membership required for participation in the
benefit is also shown.

        MINIMUM AMOUNT OF WIFE'S DEATH BENEFIT.
=====================================================================
              |     Originally.          |     In 1905.
              |------------------------------------------------------
Name of Union.|Amount.|Required Period of| Amount.|Required Period of
              |       |    Membership.   |        |  Membership.
---------------------------------------------------------------------
Bakers........|  $50  |      6 mo.       |   $50  |      6 mo.
Carpenters....|   50  |      6 mo.       |    25  |      6 mo.
Cigar Makers..|   40  |      2 yr.       |    40  |      2 yr.
Painters......|   25  |      6 mo.       |    50  |      1 yr.
Typographia...|   25  |      1 yr.       |    50  |      none
---------------------------------------------------------------------

The wife's death benefit is not graded except in the case of the
Carpenters, where the minimum benefit is twenty-five dollars for six
months' and fifty dollars for one year's membership. The minimum given
in the above table is in all other cases also the maximum.

The success of the wife's death or funeral benefit is not beyond
controversy. The Tailors, who began to pay the benefit in 1889,
abandoned it in 1898. The benefit was at first seventy-five dollars
after three months' membership, but it was remodelled until in 1896 it
became a graded benefit ranging from twenty-five dollars to fifty
dollars according to the length of membership. The chief objection to
the benefit was that unmarried members were taxed to support the benefit
although they did not participate in the advantages. In 1898 Secretary
Lennon declared that the benefit "was based on real injustice, giving
one member more benefits for the same dues paid than to another."[119]
In other unions which maintain the benefit this objection has been met
to some extent, as in the Cigar Makers, by paying the benefit on the
death of the widowed mother of an unmarried member provided she was
solely dependent upon him for support. Provision is usually made that no
member shall receive the wife's funeral benefit more than once. This
rule is intended partly to prevent fraud but chiefly to meet the
complaint that the benefit confers unequal advantages.

[Footnote 119: The Tailor, Vol. 8, No. 1, p. 16.]

The unions which have adopted the benefit have all experienced
difficulty in safeguarding it against fraudulent claims. They usually
require, for eligibility to the benefit, that the wife be not in ill
health at the time the member is admitted to the union. In the unions
which have had the benefit longest in operation it has been found
possible materially to lessen the number of claims for the wife's
benefit after some experience in its operation.

The following table shows the percentage of claims paid by the Painters
for wife's and member's death benefits for a series of biennial periods:

====================================
          | Percentage | Percentage
          | of Wife's  | of Member's
  Year.   | Death      | Death
          | Benefits.  | Benefits.
------------------------------------
1889-1890 | 49.1       | 50.9
1890-1892 | 43.5       | 56.5
1892-1894 | 45         | 55
1894-1896 | 37.5       | 62.5
1896-1900 | 35.3       | 64.7
1900-1902 | 32.5       | 67.5
1902-1904 | 32.6       | 67.4
------------------------------------

It will be observed that the ratio of the number of wife's funeral
benefits to the number of member's funeral benefits has steadily fallen
for a considerable number of years. The experience of the Painters is
probably typical, although the number of claims of each kind is not
ascertainable in the other unions.

The combination of the wife's funeral benefit with the death benefit
causes a material addition in the cost of the death benefit. This
increase is greatest in those unions in which the wife's benefit is
relatively large in amount. The following table shows the sums paid for
member's and wife's death benefits in three of the more important
unions:

SUMS PAID FOR WIFE'S AND MEMBER'S DEATH BENEFITS.
======================================================================
              |         |Wife's Death Benefit.|Member's Death Benefit.
              |         |---------------------------------------------
              |         |          |Percentage|           |Percentage
  Union.      |  Year.  |          |of Whole  |           |of Whole
              |         |Expended. |Sum       | Expended. |Sum
              |         |          |Expended  |           |Expended
              |         |          |for Death |           |for Death
              |         |          |Benefits. |           |Benefits.
----------------------------------------------------------------------
Painters      |1888-1889|$   650.00|          |           |
              |1889-1890|  1,075.00|   26.8   |$  2,894.00|  73.2
              |1890-1892|  2,075.00|   23.1   |   6,000.00|  76.9
              |1892-1894|  3,912.00|   27.7   |  10,548.00|  72.3
              |1894-1896|    550.00|   19.1   |   2,319.00|  80.9
              |1896-1900|  2,025.00|   18.3   |   8,996.25|  81.7
              |1902-1903|  6,050.00|   16.3   |  30,307.00|  83.7
              |1903-1904|  9,700.00|   20.4   |  37,711.25|  79.6
              |1904-1905| 10,025.00|   18.6   |  43,855.50|  81.4
Brotherhood   |         |          |          |           |
of Carpenters |1890-1892| 23,650.00|   20.1   |  93,696.00|  79.9
              |1892-1894| 17,750.00|   14.2   | 106,906.95|  85.8
              |1894-1896| 13,525.00|   18.7   |  58,527.10|  81.3
              |1896-1898|  6,725.00|   10.2   |  59,108.44|  89.8
              |1900-1902| 29,545.00|   15.6   | 159,249.98|  84.4
              |1902-1904| 46,892.60|   16.1   | 243,218.25|  83.9
              |1904-1906| 45,525.00|   12.9   | 306,294.44|  87.1
              |         |          |          |           |
Tailors       |1890-1893| 17,075.00|   32.2   |  35,880.00|  67.8
              |  1894   |  3,600.00|   29.5   |   8,591.00|  70.5
              |  1895   |  2,435.00|   23.6   |   7,853.50|  76.4
              |  1896   |  1,674.70|   25.9   |   4,774.95|  74.1
----------------------------------------------------------------------

From this table it appears that the expenditures on account of the
wife's funeral benefit in these unions range from twelve to twenty-five
per cent. of the total sum spent for death benefits. In the Cigar
Makers' Union and the Typographia it is probably still less.

The cost of the wife's funeral benefit to each member cannot be
determined for all the organizations. In some, even of the older unions,
as the Typographia and the Cigar Makers, separate reports of the cost of
the wife's funeral benefit are not made, and the reports only of the
Carpenters and the Tailors are capable of analysis.

  TOTAL AND PER CAPITA COST OF THE WIFE'S FUNERAL BENEFIT.
================================================================
              |              |       | Total       | Annual Cost
              |              |Member-| Expenditure | per Member
  Union.      |  Year.       |ship   | for Wife's  |  of Wife's
              |              |       | Funeral     |   Funeral
              |              |       | Benefit.    |   Benefit.
----------------------------------------------------------------
Brotherhood   |1894-1896     | 29,500|   $13,525.00|  $ .23
of Carpenters |1896-1898     | 30,600|     6,725.00|    .11
              |1898-1900     | 50,000|             |
              |1900-1902     |106,800|    29,540.00|    .13
              |1902-1904     |141,800|    46,892.60|    .16
              |1904-1906     |165,700|    45,525.00|    .13
              |              |       |             |
              |Jan. 1-July 1,|       |             |
Tailors       | 1890-1891    |  3,760|     4,925.00|    .86-2/3
              |July 1-Jan. 1,|       |             |
              | 1891-1894    |  7,560|    12,150.00|    .64
              |   1894       |  8,200|     3,600.00|    .44
              |   1895       |  8,600|     2,435.00|    .28
              |   1896       |  9,600|     1,674.70|    .17
              |To July 1,    |       |             |
              |   1897       | 10,500|       499.00|    .10
----------------------------------------------------------------

In both unions the per capita cost of the benefit was relatively high at
the outset, chiefly on account of the larger size of the benefit, but
partly on account of the laxity of the rules governing its
administration. In the Carpenters the wife's funeral benefit of
twenty-five dollars and fifty dollars to members in good standing for
six months and one year, respectively, costs each member about fifteen
cents annually. The cost of the seventy-five dollar wife's funeral
benefit in the Tailors' Union ran in the first year as high as
eighty-six and two thirds cents. At the time the benefit was abolished
the amount paid was practically the same as that now paid by the
Carpenters and the per capita cost had fallen to about seventeen cents
in 1896. It may fairly be concluded that a wife's funeral benefit of
twenty-five dollars will cost each member of the union about fifteen
cents annually.

The consideration of the cost of the death benefit has been deferred
until an examination of the cost of the disability benefit and of the
wife's funeral benefit had been made, since the member's death benefit,
the disability benefit and the wife's funeral benefit are regarded in
the unions with the most highly developed systems as parts of a single
benefit. In only a few unions are the payments for these several
purposes separated. The unions thus differ so widely in the character of
the death benefit paid that it is impossible to institute any comparison
as to the relative expense of maintaining the benefit. Some of the
systems combine death and disability benefits, some group the death and
disability benefits, some pay a wife's funeral benefit while others do
not. It will be possible to describe certain typical systems and to
indicate the cost of the benefit in the particular system and certain
general differences.

The death benefit of the International Typographical Union may be
regarded as the simplest type. The greater number of the death benefit
systems found in American trade unions are of this general character.
The union pays a benefit on the death of any member in good standing. It
pays no wife's funeral benefit nor any disability benefit. The benefit,
when established in 1892, was fixed at sixty dollars, and has since been
raised to seventy dollars in 1906. The annual per capita cost of the
benefit has never exceeded eighty-four and has averaged less than eighty
cents. This extremely low rate has been due to the large number of
lapses. The beneficiary system of the union has not been highly
developed and members of the union quitting the trade drop their
membership. There is no sort of provision whereby members may retain
their beneficiary rights on the payment of less than full dues. Only a
small part of the dues are devoted to beneficiary purposes. The net
result in such systems is that the members of the union get insurance at
a low rate at the expense of those leaving the trade.

A second type is that of the Brotherhood of Carpenters. In their system,
death and disability benefits are combined and a benefit is paid on the
death of a member's wife. The benefits are graded but the maximum
amounts are not large. The following table shows the system as a whole:

BENEFICIARY SYSTEM OF THE BROTHERHOOD OF CARPENTERS.
=====================================================
Member's Death   | Wife's Death    |Disability
Benefit.         |  Benefit.       |Benefit.
-----------------------------------------------------
$100 on 6 months'| $25 on 6 months'| $100 on 1 year's
 membership.     |  membership.    |  membership.
                 |                 |
$200 on 1 year's | $50 on 1 year's | $200 on 2 years'
membership.      |  membership.    |  membership.
                 |                 |
                 |                 | $300 on 3 years'
                 |                 |  membership.
                 |                 |
                 |                 | $400 on 4 years'
                 |                 |  membership.
-----------------------------------------------------

The per capita cost of maintaining this system, adopted in 1882, has
varied greatly from year to year. In 1895 it was as high as $2.46, while
in 1900 it was as low as eighty-one cents. The explanation of this
variation lies in the changes in the number of members and consequent
changes in the age grouping. When the membership was at its lowest point
in 1895 those who retained their connection with the organization were
to a considerable extent the older members who were desirous of keeping
their insurance. The number of claims (death, wife's death and
disability) in 1895 was sixteen per one thousand of membership. In 1900
when the membership had doubled the number of claims per one thousand of
membership was thirteen and in 1906 it was nine. The average amount of a
claim in 1895 was $133, while in 1900 it was $105. In 1906 the average
amount of a claim was $125.

Two deductions may be made from these statistics. The Carpenters have
heretofore been unable to retain their membership in dull times. The
result has been that the death rate has been lower and the average
amount of the claims less than it otherwise would have been. The
increase in membership in prosperous times results also in decreasing
the average amount of the claims, since in such periods the mass of the
members have not been long enough in membership to entitle them to more
than the minimum benefits. The benefits furnished by the Carpenters and
other unions with similar systems of benefits are provided at less than
the cost would be in organizations with stable membership. The per
capita cost of $1.23 in 1906 is far below the actuarial cost.

The Typographia and the Cigar Makers are typical unions of the third and
final class. In these organizations there are highly developed
beneficiary systems. The members receive not only death benefits but
out-of-work and sick benefits. In both unions the membership is stable.
In the Typographia periods of depression and prosperity do not affect
the number of members. In the Cigar Makers the increase in members is
checked in hard times but no decrease is suffered. In such unions the
per capita cost of the death benefit is not lowered by lapses to any
appreciable extent.

The death benefit in the Typographia includes a member's death benefit
graded from sixty-five dollars to two hundred dollars, a wife's funeral
benefit of fifty dollars and a disability benefit varying according to
the age of the member. This combination of benefits costs to maintain on
the average about three dollars. The cost varies considerably from year
to year on account of the small number of members, and the consequent
lack of regularity in the death rate, but taking five-year periods, the
cost is stable.

In the Cigar Makers the cost of the death benefit is increasing. The
full effect of the grading of the benefit has not as yet shown itself in
the cost, since the influx of members recently has caused the rate to be
somewhat lower than it would have been. If the Cigar Makers hold their
membership and the increase slackens, it may be expected that by 1912
the cost of the benefit will be much higher than at present. In 1905, a
normal year, the death benefit, including a member's death benefit
graded from $200 to $550 (two to fifteen years), a wife's funeral
benefit of forty dollars and a disability benefit equal to the death
benefit cost the union the per capita rate of $3.56 to maintain. The
following table shows the per capita cost of the death benefit system in
several of the more important and typical systems:

       PER CAPITA COST OF THE DEATH BENEFIT.
=========================================================================
Year.|Cigar  |Typogra-|Carpen-|  Typo-  |Iron |Leather |Granite |Glass
     |Makers.| phia.  |ters.  |graphical|Mold-|Workers |Cutters.|Bottle
     |       |        |       | Union.  |ers. |on Horse|        |Blowers.
     |       |        |       |         |     |Goods   |        |
-------------------------------------------------------------------------
1882 | $0.15 |        |       |         |     |        |        |
1883 |   .20 |        |       |         |     |        |        |
1884 |   .33 |        |       |         |     |        |        |
1885 |   .35 | $2.11  |       |         |     |        |        |
1886 |   .20 |  1.05  |$0.69  |         |     |        |        |
1887 |   .43 |  1.94  |  .66  |         |     |        |        |
1888 |  1.23 |  2.58  |  .66  |         |     |        |        |
1889 |  1.06 |  1.85  |  .90  |         |     |        |        |
1890 |  1.03 |  1.94  |  .90  |         |     |        |        |
1891 |  1.51 |  2.23  |  .99  |         |     |        | $0.92  |
1892 |  1.60 |  1.60  | 1.38  |         |     |        |  1.02  |
1893 |  1.74 |  2.20  | 1.38  |$0.73    |     |        |  1.37  |
1894 |  2.12 |  4.36  | 1.62  |  .81    |     |        |  1.28  |
1895 |  2.27 |  3.51  | 2.46  |  .78    |$0.44|        |        |
1896 |  2.69 |  2.36  | 1.62  |  .78    |  .44|        |        |
1897 |  2.44 |  4.23  | 1.77  |  .84    |  .44|        |        |
1898 |  3.30 |  2.63  | 1.80  |  .80    |  .44|        |        |$4.66
1899 |  3.13 |  1.27  |  .99  |  .83    |     | $0.31  |        |
1900 |  2.64 |  3.13  |  .81  |  .78    |  .42|   .11  |        |
1901 |  3.67 |  4.09  |  .90  |  .72    |  .54|   .28  |  1.18  |
1902 |  3.11 |  3.58  | 1.10  |  .80    |  .57|   .39  |  1.21  |
1903 |  3.14 |  3.25  |  .92  |  .72    |  .60|   .34  |  1.16  |
1904 |  3.24 |  2.26  | 1.18  |  .84    |  .64|   .55  |  1.11  |
1905 |  3.56 |  4.09  | 1.30  |  .84    |  .72|   .38  |  1.53  | 5.93
1906 |  4.08 |  2.71  | 1.23  |  .79    |     |        |        |
------------------------------------------------------------------------




CHAPTER III.


SICK BENEFITS.

Second in importance among the systems of benevolent relief maintained
by American trade unions is the sick benefit paid to members who are
prevented by illness from working. Historically, the sick benefit was
probably the earliest beneficiary feature inaugurated by local trade
unions, but, for several reasons, its adoption by the national unions
was delayed. At the present time two systems of sick benefits can be
found among American trade unions. In some unions this benefit is paid
from the funds of the local union but is subject to the general
supervision of the national organizations. In other unions it is
disbursed from the national treasury and is immediately controlled by
the national officials.

Of the one hundred and seventeen unions allied with the American
Federation of Labor in 1904, twenty-eight reported payment of sick
benefits.[120] They were as follows: Bakers and Confectioners, Barbers,
Bill Posters, Boot and Shoe Workers, Brotherhood of Carpenters and
Joiners, Amalgamated Carpenters,[121] Cigar Makers, Compressed Air
Workers, Foundry Employees, Freight Handlers, Fur Workers, Glass
Snappers, Hotel and Restaurant Employees, Jewelry Workers, Leather
Workers on Horse Goods, Machine Printers and Color Mixers, Machinists,
Mattress, Spring and Bed Workers, Iron Molders, Oil and Gas Well
Workers, Piano and Organ Workers, Plumbers, Print Cutters, Street and
Electric Railway Employees, Tile Layers, Tobacco Workers, Travellers'
Goods and Leather Novelty Workers, Wire Weavers. All of these, with a
few exceptions, such as the Machinists and the American Wire Weavers,
pay sick benefits from the national treasury.

[Footnote 120: Proceedings of the Twenty-fourth Annual Convention
(Washington, 1904), p. 46.]

[Footnote 121: An English union with branches in the United States, with
a voting strength of fifty in the American Federation of Labor,
representing about four thousand members.]

The following table contains a list of the principal organizations that
pay national sick benefits, arranged in the order of the introduction of
the benefit:

=================================================================
                                |   Year      |Year Sick Benefits
Name of Organization.           | Organized.  |  Introduced.
-----------------------------------------------------------------
Granite Cutters ................|    1877     |     1877
Cigar Makers ...................|    1864     |     1880
Typographia ....................|    1873     |     1884
Barbers ........................|    1887     |     1893
Iron Molders ...................|    1859     |     1896
Tobacco Workers ................|    1895     |     1896
Pattern Makers .................|    1887     |     1898
Leather Workers on Horse Goods..|    1896     |     1898
Piano and Organ Workers ........|    1898     |     1898
Boot and Shoe Workers ..........|    1895     |     1899
Garment Workers ................|    1891     |     1900
Plumbers .......................|    1889     |     1903
-----------------------------------------------------------------

The Granite Cutters' Union was the first national union to inaugurate a
system of national sick benefits. In its first constitution, 1877,
provision was made for the formation of a voluntary association for the
payment of sick benefits. All members of the Union under fifty-five
years of age were eligible to membership.[122] An initiation fee,
varying from two dollars for members under thirty years of age to six
dollars for those fifty years old, was charged. The amount of the
benefit was fixed at six dollars per week during sickness, without any
limitation on the amount granted during any one year. The association
never had a large membership and was dissolved in 1888. The Union from
1888 to 1897 exempted members during illness from all dues except
funeral assessments; since 1897 members in good standing who have been
sick for two months are exempt from half dues.[123]

[Footnote 122: Constitution, 1877 (Rockland, Maine, 1877), p. 30.]

[Footnote 123: Constitution of the Granite Cutters' International
Association of America, 1888, Art. 38 (New York, 1888); Constitution,
1897 (Baltimore, n.d.), p. 32.]

The Cigar Makers' Union was the first American national trade union to
establish a compulsory sick benefit. The system was put into operation
in 1880.[124] For some years previously sick benefits had been paid by
certain of the local unions, particularly those in New York, New Haven
and Brooklyn. In 1877 the Brooklyn local proposed that the sick benefit
should be nationalized, but the convention defeated the plan.[125] At
the convention of 1878 a committee was appointed to consider the
advisability of establishing a national system of relief. This committee
made a favorable report in 1879, and its plan was finally adopted at the
thirteenth annual session, September, 1880.[126] The success of the sick
benefit was immediate, and in 1881 and 1884 the amount of the allowance
was increased.[127] The popularity of the sick benefit grew rapidly, and
it soon took rank as one of the most successful features of the
organization.[128]

[Footnote 124: Cigar Makers' Journal, Vol. 6, Oct., 1880, p. 7.]

[Footnote 125: _Ibid._, Vol. 3, Oct., 1877, p. 3.]

[Footnote 126: _Ibid._, Vol. 5, June, 1879, p. 1; October, 1880, p. 7.]

[Footnote 127: Constitution, 1881 (New York, 1881), Art. 9.]

[Footnote 128: Cigar Makers' Journal, Vol. 14, August, 1889, pp. 10-11.]

In the first national constitution of the Deutsch-Amerikanischen
Typographia, adopted in April, 1873, provision was made for the payment
of sick benefits by the subordinate unions.[129] The system, however,
was unsatisfactory, and in 1879 and 1881 unsuccessful efforts were made
to remedy its deficiencies. The desire for a better system finally led
to the adoption of a national sick benefit at the New York convention in
May, 1884.

[Footnote 129: 25-jährige Geschichte der Deutsch-Amerikanischen
Typographia, p. 6; American Federationist, Vol. 2, No. 4, p. 60.]

The sick-benefit system of the Iron Molders' Union may be regarded as
next in importance to those of the Cigar Makers and the German Printers.
Although organized into a national union in 1859 the Iron Molders have
only within a very recent period turned their attention seriously to the
establishment of beneficiary features. In 1866 President Sylvis urged
the adoption of a funeral and a disability benefit, to which, he said,
sick benefits might be added later.[130] Thirty years later, in 1895,
President Fox advocated a national sick benefit as a necessary part of
the Iron Molders' beneficiary system.[131] But both of these officials
cautioned the National Union against extending the national benefits too
far, lest the protective purpose of the association be sacrificed to the
benevolent. The unsatisfactory operation of the "Beneficial Association"
in the early history of the Union, and later the experience of the Union
with the death and disability benefit, had made the membership reluctant
to sanction the establishment of any new benefit. A further deterrent
influence was the almost total failure of sick benefits operated by the
local unions.

[Footnote 130: Iron Molders' Journal, Vol. 1, p. 309.]

[Footnote 131: Proceedings of the Twentieth Convention, Chicago, 1895
(Cincinnati, 1895).]

President Fox's recommendation was effective, however, in securing the
establishment of the sick benefit. The system became operative on
January 1, 1896, and was essentially the same as that now in
operation.[132] Provision is made for a weekly allowance of five dollars
during a period of not more than thirteen weeks in any one year to sick
members. The beneficiary must have been a member of the organization for
six months, and not in arrears for more than twelve weeks' dues.[133]

[Footnote 132: Iron Molders' Journal, Vol. 31, No. 8, p. 3; Proceedings
of Twentieth Convention, Chicago, 1895 (Cincinnati, 1895), p. 100.]

[Footnote 133: Constitution, 1895 (Cincinnati, 1895), Art. 17.]

Several unions organized in recent years, availing themselves of the
experience of the Cigar Makers and the Typographia, have inaugurated
systems of sick benefits within a few years after their organization.
The Tobacco Workers' Union introduced national sick benefits in 1896,
one year after organization. Similarly, the Boot and Shoe Workers' Union
at their fourth convention in June, 1899, established a national sick
benefit.[134] This system became operative on January 1, 1900, and
provided for members in good standing sick benefits of five dollars per
week for not more than thirteen weeks in any one year.[135]

[Footnote 134: Proceedings of the Second Convention, Boston, 1896 (Lynn,
n.d.), pp. 42-46; Third Convention, Boston, 1897 (Lynn, n.d.); Fourth
Convention, Rochester, 1899 (Lynn, n.d.).]

[Footnote 135: Constitution, 1899, sec. 65.]

Besides the unions thus described, the Barbers, the Bakers, the Leather
Workers on Horse Goods, and the Plumbers each pay five dollars per week,
the last two for thirteen weeks in any one year, the Barbers for twenty
weeks, and the Bakers for twenty-six weeks; the Piano and Organ Workers,
five dollars per week for eight weeks; the Pattern Makers, four dollars
per week for thirteen weeks; the Garment Workers, three dollars per week
to women and four dollars per week to men for eight weeks in any one
year, or twelve weeks in two years, or fifteen weeks in three years, or
eighteen weeks in four years.

In several other important unions the question of establishing a
national system of sick benefits has been much discussed. The following
unions have given the greatest amount of attention to the subject: the
Typographical Union, the Brotherhood of Carpenters and Joiners, the
Painters, the Wood Workers, and the Machinists. In each of these many of
the subordinate unions pay a sick benefit. Among the Carpenters the
payment of sick relief has always been an activity of the subordinate
unions.[136] Although the Brotherhood has up to the present left the
management of the sick benefit to the local unions, the national
officials have recommended on several occasions that the benefit should
be nationalized. In 1890 General Secretary-Treasurer M'Guire pointed out
that under the system of local benefits travelling members were
frequently not entitled to sick benefits.[137] At the ninth and tenth
annual conventions, in 1896 and 1898, the subject of unifying the
system was discussed at length.[138] Many local unions had bankrupted
themselves by paying large sick benefits. The convention of 1898
submitted to the referendum a plan for a national system. The defeat of
this proposal was chiefly due to the feeling that it was inadvisable to
pay the same amount in small towns and cities where wages were low as in
the larger cities.

[Footnote 136: The Society of Carpenters, founded at Halifax, Nova
Scotia, February 18, 1798, provided in its constitution that all members
of twelve months' standing, if sick and confined to bed, should receive
two shillings per week; if able to walk about but unable to work, they
should receive such a sum as the Society thought wise (Constitution,
1798, [MS.]).]

[Footnote 137: Proceedings of the Sixth General Convention, Chicago,
1890 (Philadelphia, 1890).]

[Footnote 138: The Carpenter, Vol. 16, October, 1896; Vol. 18, October,
1898, p. 8.]

The Typographical Union, prior to 1892, had manifested little interest
in the establishment of a national sick benefit. At the national
conventions of 1893, 1894 and 1898 President Prescott urged the adoption
of a national system.[139] In 1898 he succeeded in securing a favorable
report from the Committee on Laws, but the convention defeated the
proposal.[140] Although the Union has not up to the present established
a national sick benefit, the Union Printers' Home maintained by the
Union has among its inmates not only aged printers but a large number of
those afflicted with disabling diseases. The Home also serves as a
sanitarium for tuberculosis patients.[141]

[Footnote 139: Proceedings of the Forty-second Convention, Louisville,
1894, p. 3.]

[Footnote 140: Proceedings of the Forty-fourth Convention, 1898, in
Supplement to The Typographical Journal, November, 1898, p. 99.]

[Footnote 141: See below, p. 104.]

The table on page 78 shows the chief characteristics of the sick benefit
as it has developed in several of the more important unions.

                     SICK BENEFIT.
=========================================================================
                        |      Originally.      |        1905.
                        |------------------------------------------------
Name of Organization    |              |Maximum |               |Maximum
                        | Rate         |No. of  | Rate          |No. of
                        | Per          |Weeks in| Per           |Weeks in
                        | Week         |a Year. | Week.         |a Year.
-------------------------------------------------------------------------
Iron Molders ...........| $5           | 13[143]| $5.25         | 13[143]
Typographia ............|  5           |        |  5            |
Cigar Makers ...........|/ 3    (1st 8)|  16    |  5            | 13
                        |\ 1.50 (2d 8) |        |               |
Boot and Shoe Workers ..|  5           |  13    |  5            | 13
Plumbers ...............|  5           |  13    |  5            | 13
Pattern Makers .........|  6.25        |  13    |  4            | 13
Leather Workers on Horse|              |        |               |
Goods ..................|              |        |  5[144]        | 13
Granite Cutters ........|  6           |  52    |               |
Tobacco Workers ........|              |        |  3            | 13
Piano and Organ Workers.|              |        |  5            |  8
Garment Workers ........|              |        |/ 3 (for women)|  8
                        |              |        |\ 4 (for men)  |  8
Barbers ................|/ 5 (1st 8)   |  16    |  5            | 20
                        |\ 3 (2d 8)    |        |               |
Bakers .................|   5          |  26    |  5            | 26
-------------------------------------------------------------------------

[Footnote 143: See page 80.]

[Footnote 144: Exemption of half dues.]

The sick benefit is intended to support members and their families while
the member is unable, through illness, to work. Such sickness, to
entitle a member to the benefit, must in all the unions be an illness
which prevents him from "attending to his usual vocations."[142]
Practically all the unions provide, however, that if the sickness is
the result of "intemperance, debauchery or other immoral conduct" the
benefit shall not be paid. A few of the unions also specifically provide
that illness "caused by the member's own act" shall not constitute a
claim for the benefit.[145]

[Footnote 142: Iron Molders' Constitution, 1902 (Cincinnati, 1902), p.
37; Cigar Makers' Constitution, 1896, fourteenth edition (Chicago,
n.d.), p. 34; Tobacco Workers' Constitution, 1900, third edition, 1905
(Louisville, n.d.), p. 25; Barbers' Constitution, 1902, p. 10; Garment
Workers' Constitution, 1902, p. 37; Piano and Organ Workers'
Constitution, 1902 (n.p., 1903), p. 18; Boot and Shoe Workers'
Constitution, 1906, p. 31; Pattern Makers' Constitution, 1906, p. 48;
Leather Workers on Horse Goods' Constitution, 1905, p. 21.]

[Footnote 145: The Boot and Shoe Workers, who have a large number of
female members, provide that "female members shall not be entitled to
[sick] benefits while pregnant nor for five weeks after confinement"
(Constitution, 1906, sec. 64).]

In nearly all of the unions a member must have been in continuous good
standing for six months to be entitled to receive the sick benefit. The
Plumbers require that he shall have been a member for a year. Such
requirements afford protection to some extent against persons in ill
health joining the unions in order to receive the benefit. The unions
rely almost entirely upon those provisions to prevent such abuse. In
practically none is an examination regularly required in order to
determine whether the candidate for admission to the union is likely to
be a heavy risk. Certain of them do provide, however, that in case the
candidate at the time of his admission is over a fixed age, or in case
he is afflicted with a chronic disease, he shall be entitled to a
smaller weekly benefit than would otherwise be the case. Thus, in the
Typographia members fifty years of age and those passing unsatisfactory
medical examinations pay five cents less weekly dues than regular
members, but can draw no benefit until after two years' good standing.
At the expiration of this period they may receive three dollars per
week, two dollars less than the regular benefit, for fifty weeks, and
then one dollar and fifty cents, half of the regular benefit, for
another fifty weeks.

The rules of the unions paying sick benefits vary markedly as to the
time at which the payment of the benefit begins. The Cigar Makers and
the Typographia pay benefits for the first week of sickness but not for
a fraction of a week; the benefit begins from the time the sickness is
reported to the local union. The Iron Molders and the Boot and Shoe
Workers begin payment with the beginning of the second week, and in no
case allow benefits for the first week or for a fractional part of a
week. In the Pattern Makers' League, the Brotherhood of Leather Workers
on Horse Goods, and the Piano and Organ Workers no benefit is paid
unless the illness continues two weeks; the benefits are then paid for
the entire period. The Tobacco Workers begin payment with the second
week, but if the illness continues twenty-one days, payment is also
allowed for the first week. The Plumbers do not pay a sick benefit
unless the illness extends two weeks, in which case payment begins with
the second week.

The sick benefit is not intended in any of the unions as a pension for
persons suffering from chronic disability. In all of them the number of
weeks in any one year during which a member may draw the benefit is
limited. The usual provision is that the member may not receive the
relief more than thirteen weeks in any one year.[146] Several unions,
however, set the maximum at eight weeks, while in a very few a member
may draw it for more than thirteen weeks in a single year. The most
liberal provision is found in the Typographia. A member of that
organization may draw a weekly sick benefit of five dollars for fifty
weeks, and may then draw a weekly benefit of three dollars for another
fifty weeks.

[Footnote 146: See table on page 78.]

Several of the unions have found that certain members draw the maximum
number of weeks' benefit yearly. These members are invalids and
practically unable to work at the trade. The benefit is thus to a
certain extent converted into a pension for disability. The Iron Molders
and the Boot and Shoe Workers have made express provision for retiring
such members from the benefit. In 1902 the Iron Molders provided that a
member permanently disabled who had "drawn the full sick benefits for
three years should be compelled to draw disability benefits." In 1907
the Financier reported that since 1902 eighty-nine members had thus been
retired. In 1906 the Boot and Shoe Workers' Union provided that after a
member had drawn the full amount of the sick benefit for two years he
should be paid a disability benefit of one hundred dollars.[147] The
Garment Workers reach much the same end by providing that a member may
not receive more than eight weeks' benefit during one year, nor more
than twelve in two years, fifteen in three years, and eighteen in four
years.[148]

[Footnote 147: Constitution, 1906 (Boston, 1906), pp. 30-32; Proceedings
of the Seventh Convention, 1906, pp. 44-45.]

[Footnote 148: Constitution, 1906 (New York, n.d.), p. 41.]

The rate of the weekly sick benefit is five dollars in all the unions
except the Tobacco Workers and the Pattern Makers. In the former it is
three dollars and in the latter four. The Cigar Makers when they
introduced the benefit paid three dollars per week for the first eight
weeks and one dollar and a half for the second eight weeks.[149] After a
year's experience the amounts were increased to four dollars and two
dollars, respectively; in 1884 to five dollars and three dollars; in
1891 the benefit was set at five dollars per week and the maximum period
during which the benefit could be obtained was fixed at thirteen
weeks.[150] The Typographia, introducing the benefit in 1884, fixed the
amount at five dollars and paid the same rate without regard to the
number of weeks the benefit had been paid. In 1888 the amount was
increased to six dollars.[151] But in July, 1894, because of the drain
on the funds of the union due to the depression of business, the amount
was reduced to five dollars.[152] The Granite Cutters paid for a time
six dollars, but since 1888 have simply allowed total or half exemption
of dues.[153] The only other one of the unions which has reduced the
amount of the benefit is the Pattern Makers. When this union introduced
the sick benefit the amount paid was fixed at six dollars and
twenty-five cents, but since 1900 only four dollars have been paid. The
only union at present differentiating the amount of the benefit
according to the length of the term of sickness is the Typographia.

[Footnote 149: Constitution, 1880, Art. 12.]

[Footnote 150: Constitution, 1881 (New York, 1881), Art. 9; 1884 (New
York, 1884), Art. 9; 1891 (Buffalo, 1892), p. 28.]

[Footnote 151: 25 jährige Geschichte der Deutsch-Amerikanischen
Typographia, p. 35.]

[Footnote 152: American Federationist, Vol. 2, No. 4, p. 62.]

[Footnote 153: Constitution, 1877 (Rockland, 1877), p. 31.]

The total amount which may be drawn in any one year in about one half
the unions is sixty-five dollars; that is, thirteen weeks at five
dollars per week. The largest amounts during any one year are paid by
the Typographia, the Bakers and the Barbers. The Bakers and the Barbers
allow members to draw $130 and $100, respectively, while a member of the
Typographia may receive as much as $265 per year.

The table on page 82 shows the total and per capita cost of the sick
benefit in four of the principal unions maintaining it.

The per capita cost in the four unions, for the last year in which data
are available, ranged from $3.59 in the Cigar Makers to $2.18 in the
Leather Workers on Horse Goods. The chief reason for the higher per
capita cost to the Cigar Makers and the Typographia is the more liberal
provision for the payment of the benefit. In both of these unions the
relief is paid from the time the illness is reported. The Iron Molders
and the Leather Workers do not pay a sick benefit unless the illness
extends over two weeks. In the case of the Iron Molders the benefit
begins with the second week. Just how effective these limitations are in
keeping down the cost per member can only be conjectured since the
statistical records of the unions do not afford data for a thoroughgoing
analysis. The financier of the Iron Molders estimated in 1902 that if
the union had paid for the first week of sickness, the amount paid in
sick benefits would have been increased twenty-three per cent.[154]

[Footnote 154: Iron Molders' Journal, September, 1902, Supplement, p.
648.]

TOTAL AND PER CAPITA COST OF THE SICK BENEFIT.
==============================================================================
Year.|Cigar Makers.     |  Typographia.  |  Iron Molders.   |Leather Workers
     |                  |                |                  |on Horse Goods.
------------------------------------------------------------------------------
     |Total Cost.| Per  |         |Per   |           | Per  |          |Per
     |           |Capita| Total   |Capita|  Total    |Capita| Total    |Capita
     |           | Cost.| Cost    |      |  Cost.    | Cost.| Cost.    |Cost.
------------------------------------------------------------------------------
1881 |$  3,987.73| $ .27|         |      |           |      |          |
1882 |  17,145.29|  1.50|         |      |           |      |          |
1883 |  22,250.56|  1.68|         |      |           |      |          |
1884 |  31,551.50|  2.77|         |      |           |      |          |
1885 |  29,379.89|  2.44|$2,444.85|$4.37 |           |      |          |
1886 |  42,225.59|  1.71| 2,751.35| 2.89 |           |      |          |
1887 |  63,900.88|  3.10| 3,034.60| 2.82 |           |      |          |
1888 |  58,824.19|  3.40| 3,495.90| 3.10 |           |      |          |
1889 |  59,519.94|  3.29| 4,831.50| 4.27 |           |      |          |
1890 |  64,660.47|  2.55| 5,361.36| 4.34 |           |      |          |
1891 |  87,472.97|  3.40| 6,175.88| 4.67 |           |      |          |
1892 |  89,906.30|  3.22| 6,790.60| 4.91 |           |      |          |
1893 | 104,391.83|  3.68| 6,051.65| 4.33 |           |      |          |
1894 | 106,758.37|  3.64| 7,004.07| 5.81 |           |      |          |
1895 | 112,567.06|  3.82| 5,098.98| 4.66 |           |      |          |
1896 | 109,208.62|  3.74| 5,426.65| 4.86 |$ 38,511.00| $1.79|          |
1897 | 112,774.63|  4.00| 4,681.25| 4.32 |  36,720.00|  1.59|          |
1898 | 111,283.60|  3.90| 3,983.85| 3.62 |  37,710.00|  1.50|          |
1899 | 107,785.07|  3.45| 4,506.35| 4.20 |  57,465.00|  1.98|$   855.00|$ .90
1900 | 117,455.84|  3.21| 4,651.65| 4.45 | 102,935.00|  2.49|  2,105.00|  .88
1901 | 134,614.11|  3.65| 4,316.81| 4.22 | 118,515.00|  2.46|  4,870.00| 1.22
1902 | 137,403.45|  3.47| 4,977.98| 4.99 | 134,116.00|  2.47|  8,595.00| 1.81
1903 | 147,054.56|  3.42| 3,767.93| 3.77 | 179,355.00|  2.78| 11,680.00| 1.90
1904 | 163,226.18|  3.59| 2,945.68| 2.96 | 198,214.25|  2.59| 16,940.00| 2.18
1905 | 165,917.00|  3.73| 4,835.45| 4.95 | 174.946.28|      | 14,345.00| 2.13
1906 | 162,905.82|  3.70| 2,945.68| 3.02 | 176,799.00|      |          |
------------------------------------------------------------------------------

Differences in the rate of morbidity in different trades affect the
cost, but these are relatively unimportant in the unions considered. A
more important cause of difference in cost is the extent to which the
unions are able to prevent the sick benefit from becoming a pension to
members incapacitated by old age and disease. The heavy cost in the
Typographia is partly due to the more liberal provision which is made
for such members. In those unions, such as the Iron Molders and the
Leather Workers on Horse Goods, which do not maintain an out-of-work
benefit, the cost of the sick benefit is undoubtedly somewhat higher
than it would be on account of the temptation of the unemployed member
to feign illness.




CHAPTER IV.


OUT-OF-WORK BENEFITS.

The out-of-work benefit, of prime importance among English trade unions,
has made little headway in America either as a national or even as a
local trade-union benefit. In 1905 the amount expended for out-of-work
benefits could not well have exceeded eighty thousand dollars, and of
this sum a considerable part was spent by the Amalgamated Carpenters, a
British trade union with branches in the United States. Certainly less
than one half of one per cent. of the expenditures of American national
unions, and less than one per cent. of their expenditures for
beneficiary purposes, is for out-of-work relief. In the one hundred
principal English trade unions twenty-one per cent. of the total
expenditure in the ten years from 1892 to 1901 was for out-of-work
benefits. Of the sum spent by the same unions for benefits of all kinds
(not including strike pay) about one third was for out-of-work
benefits.[155]

[Footnote 155: Weyl, "Benefit Features of British Trade Unions" in
Bulletin of the Bureau of Labor, No. 64, p. 722.]

Relief to the unemployed member has assumed in American unions three
forms: (_a_) an out-of-work benefit of a fixed amount per week in money,
(_b_) exemption of unemployed members from weekly or monthly dues, and
(_c_) a loan or benefit sufficient to transport the unemployed member in
search of employment. The first and second of these are ordinarily known
as out-of-work benefits, while the third is known as a travelling
benefit.

The unions that pay a money benefit are the Cigar Makers, the
Typographia, the Coal Hoisting Engineers, and the Jewelry Workers.[156]
The Cigar Makers' Union is still the only American trade union of
considerable membership which maintains a system of out-of-work benefits
under which unemployed members receive a weekly money benefit. On
October 11, 1875, the New York branch of the Cigar Makers' Union formed
an out-of-work benefit and became from that time the steady advocate of
a national system. As early as 1876 the New York Union proposed a plan
to the International Convention, modelled upon the system in operation
in the local union, under which a member was entitled to receive aid for
a term of three weeks, beginning with the second week of
unemployment.[157] This proposal failed of adoption; but the
International Convention agreed that sick members should have their
cards receipted by the out-of-work seal. Proposals for the establishment
of a money out-of-work benefit were made in 1877 and in 1879 at
conventions of the Union. Although International President Hurst
endorsed the idea in 1876 and recommended that it be placed before the
local unions for consideration, the International Convention voted
adversely. A substitute, proposed by Mr. Gompers, was adopted in 1879.
This provided that every subordinate union should establish a labor
bureau for the purpose of securing work for unemployed members.[158] The
compromise was by no means satisfactory, and suggestions continued to be
made for the establishment of a national out-of-work benefit.[159]

[Footnote 156: The Amalgamated Carpenters, an English union which had in
1902 forty-four branches with 3307 members in the United States, also
pay an out-of-work benefit.]

[Footnote 157: Journal, Vol. 1, September, 1876, p. 1.]

[Footnote 158: Cigar Makers' Journal, Vol. 2, April, 1877, p. 2; Vol. 3,
October, 1877, p. 3; Vol. 5, September, 1879, p. 3.]

[Footnote 159: _Ibid_., Vol. 8, September, 1883, p. 9; Vol. 11, October,
1885, p. 6; Vol. 13, July, 1888, p. 7; Vol. 14, December, 1888, p. 3;
Vol. 15, October, 1889, pp. 17-18; Constitution, amended 1889, Art. 8.]

The Cigar Makers' present national system of out-of-work relief was
adopted at the eighteenth session, held in New York City in September,
1889, and became operative in January, 1890. The measure as finally
adopted by the International Convention was framed by Mr. Gompers. It
provided that the unemployed members should receive three dollars per
week and fifty cents for each additional day, that after receiving six
weeks' aid the member should not be entitled to further assistance for
seven weeks, and that no member should be granted more than seventy-two
dollars during any one year. The original system has remained
practically unchanged with the exception that in 1896 the annual
allowance per member was reduced.

From the outset--the first benefit was paid on January 22,
1890[160]--this system has been successful in operation. The report of
the international president to the nineteenth session, September, 1891,
showed that 2286 members out of 24,624, or less than ten per cent. of
the total membership, drew out-of-work benefits during the first year,
to the amount of $22,760.50; while during the first six months of 1891,
the second year of its operation, 1074 out of 24,221, or less than five
per cent., received assistance to the amount of $13,214.50.[161] During
1892 the per capita cost of the benefit was 65-1/2 cents, as compared
with 92 cents and 87 cents in 1890 and 1891, respectively. These years
were immediately preceding the great industrial and financial depression
of 1893-1897, and in consequence during the following years the per
capita amount paid showed considerable increase. In 1894 the unemployed
cost the Union $174,517.25, or $6.27 per capita of membership, and in
1896, $175,767.25, or $6.43 per capita.[162] Since 1897 the yearly
amount paid has gradually decreased with the exception of 1901 and 1904.
During sixteen years of operation, ending January 1, 1906, $1,045,866.11
has been paid to unemployed members.[163]

[Footnote 160: Cigar Makers' Journal, Vol. 15, February, 1890, p. 9.]

[Footnote 161: _Ibid_., Vol. 17, October, 1891, p. 5 (Supplement).]

[Footnote 162: Proceedings of the Twenty-first Session, September, 1896;
in Cigar Makers' Journal, Vol. 22, No. 1.]

[Footnote 163: Cigar Makers' Journal, Vol. 31, April, 1906, p. 13.]

Even before the Cigar Makers, the Deutsch-Amerikanischen Typographia,
the small union of the German American printers, had established an
out-of-work benefit. The Typographia began to pay an out-of-work benefit
in 1884, eleven years after the organization of the national union. The
new preamble adopted at the first national convention in Philadelphia,
1873, declared one of the purposes of the union to be the support of
members "when unable to obtain work."[164] In 1884, when the union
nationalized its system of benefits, the out-of-work benefit was fixed
at five dollars per week. In 1888, owing to the prosperous financial
condition of the Union, it was increased to six dollars per week, but in
July, 1894, because of the strain upon the funds of the organization
caused by the introduction of typesetting machines and the general
business depression, it was reduced to the original sum.[165]

[Footnote 164: American Federationist, Vol. 2, No. 4, p. 61.]

[Footnote 165: _Ibid_.]

The system in operation at present provides that members in good
standing who have been on the unemployed list for eighteen days shall be
entitled to six dollars per week. After drawing twenty-four dollars, no
further benefit is granted until the member is on the unemployed list
again for eighteen days, and no member is entitled to more than
ninety-six dollars in any one fiscal year. Since 1888, with the
exception of the fiscal years ending June 30, 1890, and June 30, 1891,
the amount paid for out-of-work assistance has been the largest single
item in the budget of the Union. During the year ending June 30, 1894,
$17,262.50, or $14.33 per capita, an equivalent of forty-eight per cent.
of the total disbursements for all benevolent purposes, was paid in
out-of-work claims. The total amount paid up to June 30, 1906, was
$145,826.91, and the average yearly per capita cost had been $5.99.[166]

[Footnote 166: See table, page 91.]

Only two other American unions paid out-of-work benefits in 1906. Both
of these are small unions and recently organized. The National
Brotherhood of Coal Hoisting Engineers pay five dollars per week to
members out of employment, after the first thirty days, until work is
secured, or until the expiration of twelve weeks.[167] The Jewelry
Workers provide for the payment of seven dollars per week to married men
and five dollars to unmarried men.[168] Certain other unions, notably
the Pattern Makers,[169] pay a "victimized" benefit to members who are
unable to secure employment because they are members of the union. Such
benefits are directly connected with collective bargaining, and any
discussion thereof lies without the scope of this monograph.

[Footnote 167: Constitution, 1902 (Danville, Ill., n.d.), p. 14.]

[Footnote 168: Constitution, 1902 (New York, n.d.), p. 6.]

[Footnote 169: Constitution, 1906 (New York, n.d.), p. 17.]

The introduction of a national out-of-work benefit has been, however,
much discussed in several important unions. These have been the
International Typographical Union, the Brotherhood of Carpenters and the
Boot and Shoe Workers' Union. The unemployment caused by the depression
of 1892-1897 was responsible for much of the consideration given the
matter.

In none of these unions has the subject been more fully debated than in
the Typographical Union. In October, 1895, the New York local union
adopted an out-of-work benefit, which provided for its unemployed
members an allowance of four dollars per week for a period of eight
weeks in each year.[170] Such activity on the part of the largest local
union added considerable force to the movement for an International
benefit. President Prescott in his report to the forty-second session of
the International Union in 1894 recommended the establishment of an
out-of-work benefit, in preference to a sick benefit. He showed that
during 1894 several of the largest local unions had found it necessary
to levy special assessments for the support of unemployed members. The
amount of unemployment, especially in large cities, had increased
rapidly. A large per cent. of the unemployed consisted of old men who
were unable to compete with younger men in the operation of the
linotype. The neglect of this class of men President Prescott
characterized as criminal.[171] All agitation for the establishment of
an out-of-work benefit has, however, up to the present time failed.[172]

[Footnote 170: Typographical Journal, Vol. 7, No. 5, p. 3.]

[Footnote 171: Proceedings of the Forty-second Annual Session, 1894, p.
3.]

[Footnote 172: Proceedings of the Forty-third Annual Session, 1896, pp.
76, 86.]

In 1894 at the eighth general session and again at the ninth in 1896 the
Carpenters and Joiners considered seriously the question.[173] The Boot
and Shoe Workers at their fifth convention in 1902, although refusing
to adopt a proposed plan for a national system, recommended as a partial
substitute that all local unions raise funds for the payment of dues of
out-of-work members and provide such other relief as they should deem
wise, "to the end that from the experience so gained a national plan for
relief of unemployed members may be developed."[174]

[Footnote 173: The Carpenter, Vol. 14, September, 1894; Vol. 16,
September, 1896.]

[Footnote 174: Proceedings of the Fifth Convention, 1902, p. 28.]

In the unions maintaining out-of-work benefits it is customary to
provide as a precautionary measure that members must have been in good
standing for a lengthy period before being entitled to the benefit. The
Cigar Makers and the Deutsch-Amerikanischen Typographia provide that
only members of the union in good standing for two years shall be
entitled to the benefit.[175]

[Footnote 175: Constitution of the Cigar Makers' International Union of
America, 1896, thirteenth edition (Chicago, n.d.), sec. 117;
Constitution of the Deutsch-Amerikanischen Typographia, 1901.]

Both the Cigar Makers and the Typographia have also stringent
regulations intended to prevent fraud. In the Cigar Makers' Union a
member thrown out of employment must obtain from the collector of the
shop in which he works a certificate stating the cause of his discharge.
If the unemployment is caused by the intoxication of the member, or if
he has "courted his discharge" through bad workmanship or otherwise, he
is not entitled to the benefit for eight weeks. Mere inability to retain
employment does not, however, deprive a member of the relief. If a
member leaves employment of his own volition, he is not entitled to a
benefit until he has obtained work again for at least one week. Having
obtained the certificate of the collector, the unemployed member must
register at the office of the union in a book provided for that purpose.
After having been registered for one week, he begins to draw the
out-of-work benefit. If while receiving out-of-work pay he refuses to
work in a shop where work is offered him, or neglects to apply for work
when directed by an officer of the union, he loses his right to the
benefit and cannot receive out-of-work pay again until he has had
employment for at least one week. Shop collectors are required to report
immediately the name of any member refusing to work.

After having received out-of-work benefit for six weeks, the member is
not entitled to assistance for seven weeks thereafter. From June 1 to
September 23 and from December 16 to January 15 no out-of-work benefits
are paid. During these periods, however, any member out of work can
obtain remission of dues by application to the financial secretary. He
must, however, pay such dues at the rate of ten per cent weekly when he
secures employment. The total out-of-work benefit which may be paid in
any one fiscal year is fifty-four dollars. Moreover, any member who has
received fifty-four dollars in benefits is not entitled to any further
sums until he shall have worked four weeks. But members over fifty years
of age are not required to secure employment for four weeks, but may
continue to draw the fifty-four dollars yearly although not working.

The protective rules of the Typographia are similar to those of the
Cigar Makers. Members thrown out of employment through their own fault
cannot be entered on the lists for thirty-six days. If a member gives up
his situation voluntarily, he is not entitled to a benefit for four
weeks unless his action is approved by the executive committee of the
local Typographia. Unemployed members must report daily to an officer of
the union. If a member neglects to report he loses his benefit for that
day. If a member drawing the benefit refuses to take a situation he
loses his right to the benefit for seven weeks. If he refuses work as a
substitute he loses his right to the benefit for two weeks. If an
unemployed member is unable to fill a situation and so cannot secure
work, he is not entitled longer to a benefit, and it becomes the duty of
the local executive to recommend that he be given a sum of money in lieu
of his rights as a member.

The following table shows the cost of maintaining the out-of-work
benefit in the Cigar Makers and in the Typographia:

           COST OF MAINTAINING THE OUT-OF-WORK BENEFIT.
----------------------------------------------------------------------
            |          Typographia.      |         Cigar Makers.
    Year.   |---------------------------------------------------------
            |               | Per Capita |                | Per Capita
            | Total Cost.   |    Cost.   |   Total Cost.  |   Cost.
----------------------------------------------------------------------
    1885    |  $ 1,118.90   |   $ 2.00   |                |
    1886    |    1,453.08   |     1.52   |                |
    1887    |    1,240.10   |     1.15   |                |
    1888    |    1,315.13   |     1.16   |                |
    1889    |    6,281.50   |     5.55   |                |
    1890    |    4,315.00   |     3.47   |   $ 22,760.50  |  $ .92
    1891    |    6,067.00   |     4.58   |     21,223.50  |    .87
    1892    |    9,359.50   |     6.77   |     17,460.75  |    .65
    1893    |    7,835.00   |     5.67   |     89,402.75  |   3.34
    1894    |   17,262.50   |    14.33   |    174,517.25  |   6.27
    1895    |    9,464.20   |     8.66   |    166,377.25  |   5.99
    1896    |    7,812.00   |     7.00   |    175,767.25  |   6.43
    1897    |    8,485.00   |     7.83   |    117,471.40  |   4.46
    1898    |    8,603.00   |     7.82   |     70,197.70  |   2.65
    1899    |   11,135.00   |    10.39   |     38,037.00  |   1.31
    1900    |    8,703.00   |     8.33   |     23,897.00  |    .70
    1901    |    6,716.00   |     6.56   |     27,083.76  |    .79
    1902    |    7,839.00   |     7.86   |     21,071.00  |    .56
    1903    |    4,846.00   |     4.86   |     15,558.00  |    .39
    1904    |    5,785.00   |     5.82   |     29,872.50  |    .72
    1905    |    5,105.00   |     5.23   |     35,168.50  |    .87
    1906    |    5,086.00   |     5.22   |     23,911.00  |    .60
----------------------------------------------------------------------
Total       | $145,826.91   |            | $1,069,777.11  |
----------------------------------------------------------------------
Average     |    6,638.49   |    $5.99   |     62,928.06  |  $2.20
----------------------------------------------------------------------

From the above table some comparison can be made of the per capita cost
of the out-of-work benefit in the Cigar Makers' Union and in the
Deutsch-Amerikanischen Typographia, respectively. For the twenty-two
years ending with the fiscal year June 30, 1906, the average annual cost
to the German-American Printers has been $5.99 per member, while the
Cigar Makers have disbursed, during the fifteen years in which the
benefit has been paid, a yearly average of $2.20 per member. The higher
average cost to the Typographia has been due chiefly to two causes, (1)
the greater amount paid as a weekly benefit, and (2) the larger annual
sum which may be paid. The Typographia has always paid a greater weekly
benefit. From the adoption of the benefit in 1884 to 1888 this union
granted five dollars per week for a maximum period of twelve weeks.
During 1888-1894 six dollars per week was allowed. For several years
following 1894 five dollars per week for sixteen weeks, or eighty
dollars per year, was granted, while at present six dollars per week, or
ninety-six dollars per year, is paid. On the other hand, the Cigar
Makers' Union, during 1889-1896, paid three dollars per week and fifty
cents for each additional day, with a possible maximum of seventy-two
dollars per year; but since 1896 the maximum allowance has been
fifty-four dollars. Thus, at present the German Printers pay both a
greater weekly benefit and a larger maximum yearly amount.

In the Typographia there appears to be a tendency towards an increased
per capita cost, while in the Cigar Makers' Union the reverse has been
true. This may be attributed in large part to the difference in the age
grouping of the memberships. The membership of the German Printers is
small, of a higher average age, and is gradually decreasing, while that
of the Cigar Makers, with a lower average age, shows a steady increase.
Many of the older men in both organizations are employed only when trade
is very brisk and draw each year the full amount of the benefits. The
variations from year to year are so great, however, as to obscure any
general tendency. During the depression of 1893-1897 the per capita cost
in the Typographia rose from $3.47 in 1890 to $6.77 in 1892, and to
$14.33 in 1894. The per capita cost in the Cigar Makers' Union shows a
very sudden increase from 65 cents in 1892 to $3.34 in 1893, to $6.27 in
1894, and to $6.43 in 1896, after which there followed a gradual
decrease. The cost of the out-of-work benefit is therefore far more
variable than that of any other benefit in either of the unions, and
necessitates on the part of both the maintenance of larger reserves.

       *       *       *       *       *

The systems of so-called out-of-work benefits maintained by the Iron
Molders, Pattern Makers, Tobacco Workers, Granite Cutters, Leather
Workers on Horse Goods, and Locomotive Firemen, as has already been
noted, merely exempt the unemployed member from payment of national
dues. This is a device to retain members in "good standing" during
unemployment.

The system maintained by the Iron Molders is the most important of those
in operation. The history of the introduction of this benefit by the
Iron Molders' Union illustrates the conditions many unions face in
building up a system of relief. As a union develops benefits the dues
required of members are larger. The unemployed member thus finds himself
heavily burdened by the dues he must pay his union at the very time he
needs most the protection afforded by the benefit. The establishment of
the out-of-work benefit in the Iron Molders' Union was the direct result
of the inauguration of a system of sick benefits in 1896. Members in
arrears for dues for a period longer than thirteen weeks were excluded
from sick relief. The limitation aroused serious dissatisfaction. It was
felt that if an unemployed member could not be aided, at least he should
be protected against the loss of his right to benefits. Some local
unions paid the dues of their unemployed members, but in a period of
depression the burden became too great. In October, 1897, two years
after the inauguration of the sick benefit, the national union of the
Iron Molders assumed the responsibility of paying the dues of unemployed
members. All members of six months' standing, who were not in arrears
for more than four weeks' dues, became entitled to relief from the
payment of dues for thirteen weeks during any fiscal year. The
out-of-work benefit does not begin, however, until two weeks after the
member has become idle.[176] The national union issues through the local
unions out-of-work stamps which are received in payment of dues.

[Footnote 176: Constitution, 1902 (Cincinnati, 1902), Art. 19. Until
1899 the unemployed member must not have been in arrears for more than
four weeks' dues, and the benefit did not begin until he had been idle
four weeks. (Constitution, 1898.)]

The fund for paying the dues of unemployed members is supported by a
weekly tax of one cent on each member. For 1898 the income of the
out-of-work relief fund was $6,861.61, while the disbursements were only
$1278, representing 7100 out-of-work stamps. In the whole period
(1897-1907) since the inauguration of the out-of-work benefit, the
revenue has more than sufficed for the disbursements. Although the 1899
convention transferred $10,000 of the surplus to other funds, on June
20, 1907, there remained in the fund the sum of $125,021, nearly twice
as much as had been expended. The Union has not passed through a period
of depression since the system was established, and the officers have
insisted that wise policy requires the maintenance of a large
reserve.[177]

[Footnote 177: Proceedings of Twenty-second Session, p. 646. In
Supplement to Iron Molders' Journal, September, 1902.]

The exemption of unemployed members from the payment of dues takes many
forms. The Tobacco Workers' Union provides that members out of
employment shall be granted twelve weeks in which to pay dues before
they may be suspended from the Union.[178] The Granite Cutters'
Association provides that any member in good standing and out of
employment for two months or more shall be exempt from half of his
dues.[179] The Brotherhood of Leather Workers on Horse Goods grants
exemption from payment of dues for a period of thirteen weeks in any one
year to unemployed members.[180] The Brotherhood of Locomotive Firemen
provides that any member out of employment and unable to pay his dues or
assessments shall not be expelled, and that the local lodge must pay his
dues for one quarter. It is optional with the subordinate lodge as to
whether or not it shall keep the member in good standing for more than
one quarter.[181]

[Footnote 178: Constitution, 1900, third edition, 1905 (Louisville,
n.d.), sec. 43.]

[Footnote 179: Constitution, 1906 (Quincy, n.d.), p. 45.]

[Footnote 180: Constitution, 1904 (Kansas City, n.d.), p. 22.]

[Footnote 181: Constitution, 1905 (Indianapolis, n.d.), sec. 195.]

The regulations enforced by the unions concerning the remission of the
dues of unemployed members are less stringent than the rules governing
the larger money out-of-work benefit. In the first place the period of
good standing required before a member is entitled to assistance is
shorter. A member of the Iron Molders is eligible to the benefit after
six months of good standing. The Granite Cutters require only a two
months' membership.[182] Moreover, the rules as to registration are less
strict. In the Iron Molders' Union an unemployed member must report the
date of the beginning of his idleness at the first regular meeting after
he has been discharged and must report in person at every regular
meeting of his local union; otherwise he cannot claim the benefit. The
Leather Workers have the same provisions. The Tobacco Workers require
idle members claiming indulgence in the payment of dues to report to the
local financial secretary twice each week.[183]

[Footnote 182: Constitution, 1905 (Quincy, n.d.), p. 45.]

[Footnote 183: Constitution of the Leather Workers on Horse Goods, 1905
(Kansas City, n.d.), p. 22; Constitution of the International Tobacco
Workers' Union, 1900, third edition, 1905 (Louisville, n.d.), sec. 43.]

The cost of the exemption of dues in none of the unions is large. The
following table gives the chief facts concerning the benefit in the Iron
Molders' Union for the period 1900-1906:

  OUT-OF-WORK RELIEF IN THE IRON MOLDERS' UNION.
==========================================================
 Year.  |Number of Stamps|  Value of     | Cost per Member
        |Issued Yearly.  |Out-of-work[184]|   per Year.
        |                |   Stamps      |
----------------------------------------------------------
  1900  |   23,436       |  $ 5,859.00   |    $0.12
  1901  |   26,349       |    6,587.25   |      .12
  1902  |   10,389       |    2,597.25   |      .04
  1903  |   26,073       |    6,518.25   |      .04
  1904  |   92,685       |   23,171.25   |      .27
  1905  |   24,906       |    6,226.50   |      .07
  1906  |   16,676       |    4,169.00   |      .04
----------------------------------------------------------
 Average|   31,502       |   $7,875.50   |    $0.10
----------------------------------------------------------

[Footnote 184: Approximate number only. Data furnished by Mr. R.H.
Metcalf, financier of the union.]

The great variations in the number of out-of-work stamps issued is due,
of course, to variations in the amount of unemployment. The annual
amount of unemployment per capita, so far as it is measured by the
number of stamps issued, varied from less than one fourth of a week in
1902, 1903 and 1906 to one and one half weeks in 1904. The per capita
cost of maintaining the benefit varied from four cents in 1902, 1903 and
1906 to twenty-seven cents in 1904.

In the history of certain of the principal unions a system of loans or
travelling benefits has preceded the out-of-work benefit. The travelling
benefit may indeed be termed the first stage of out-of-work relief. The
following unions maintain the travelling benefit either in the form of a
loan or of a gift: the Cement Workers, Chain Makers, Cigar Makers,
Compressed Air Workers, Deutsch-Amerikanischen Typographia, Flour and
Cereal Mill Employees, Fur Workers, Glass Snappers, Hod Carriers, Lace
Curtain Operatives, Leather Workers on Horse Goods, Machine Printers and
Color Mixers, the Mattress and Spring Bed Workers, Shipwrights, Slate
Quarrymen, Tile Layers and Helpers, and the Watch Case Engravers. The
travelling benefit and the out-of-work benefit are complementary in
several of these unions. The systems of travelling benefits maintained
by the Cigar Makers, the Leather Workers on Horse Goods and the
Typographia are the most important.

The history of the travelling benefit in the Cigar Makers' Union begins
almost with the earliest years of the Union. Prior to the Detroit
convention, September, 1873, the Union maintained a system of loans to
travelling craftsmen. Under this system any member, travelling in search
of employment, was entitled to a loan sufficient to transport him to the
nearest union. The local union in which the travelling member secured
employment was required to collect at least twenty per cent. of the
weekly wages of such member.[185] This first attempt was an absolute
failure and in 1878 the system was abolished.[186] In October, 1878,
local union No. 122 proposed an amendment to the international
constitution to provide means of aiding "all travelling craftsmen in
need." The aid was not to be a loan but an absolute gift.[187] This
proposal failed of adoption; but in August, 1879, local union no. 144
proposed a new plan.[188] A member of six months' standing, if
unemployed, was to be loaned a sufficient sum to transport him by the
cheapest route to the nearest union and so to the next. The total of
the loans was not to aggregate more than twenty dollars.[189] The plan
was adopted and became effective May 1, 1880. In 1884 the amount of any
one loan was limited to twelve dollars, and in 1896 it was farther
reduced to eight dollars.[190]

[Footnote 185: Constitution, 1867, Art. 11.]

[Footnote 186: Cigar Makers' Journal, Vol. 1, October 5, 1878, p. 3.]

[Footnote 187: _Ibid._]

[Footnote 188: _Ibid._ Vol. 4, August, 1879, p. 2.]

[Footnote 189: Constitution, 1880 (New York, 1880), Art. 4.]

[Footnote 190: Constitution, 1884 (New York, 1884), Art. 7; 1896,
fourteenth edition, (Chicago, n.d.), p. 27. (Issued in 1906.)]

The Cigar Makers have always required members to return the sum
borrowed. The repayment of such loans, in the case of the Cigar Makers'
Union, must commence with the first week of employment, and must
continue at the rate of ten per cent. of the weekly earnings.[191] The
Brotherhood of Leather Workers on Horse Goods require payment at the
rate of fifteen per cent. of weekly wages.[192] The German-American
Printers, on the other hand, grant travelling loans as an absolute
gift.[193] This is the only important union which follows this policy.

[Footnote 191: Constitution, 1880 (New York, 1880), Art. 4; 1896,
thirteenth edition, (Chicago, n.d.), p. 28.]

[Footnote 192: Constitution, 1904 (Kansas City, n.d.), p. 21.]

[Footnote 193: Report of Industrial Commission, Vol. 17, Introduction,
p. XLII.]

Naturally the rules governing the benefit in the Typographia are more
stringent than in the case of those unions which merely loan travelling
money. The chief regulations are as follows: In order to draw the
benefit a member must have been in good standing for at least six
months. He must have paid in full his dues to the day of his departure.
He may draw two cents per mile for the first two hundred miles and one
cent for every additional mile, but he cannot at any one time receive
more than ten dollars. A member assisted with the travelling benefit
must remain at least three months in a place before he can claim another
travelling benefit. When he has drawn a total of twenty-five dollars he
is not entitled to any further assistance for twelve months. Those
members who lose their places through their own fault are not entitled
to a travelling benefit for three months, and those who give up their
places can receive the benefit only if the executive committee of the
local Typographia approves their action. A travelling member going to a
place where there is a local Typographia must report to it within two
days or he forfeits his right to out-of-work benefits for four weeks. If
a member receives the travelling benefit and does not leave, he must
return the amount received, and is not in good standing until he has
done this.

The total amounts paid yearly in some of the leading unions furnish some
idea of the importance of this benefit. Since the inauguration of the
benefit to January 1, 1906, the Cigar Makers' International Union has
paid a total of $991,777.98 in travelling loans, or an average of
$38,145.31 per year.[194] The Deutsch-Amerikanischen Typographia has
paid from July 1, 1884, to June 30, 1906, $8116.11, or an average of
$368.91.[195] For the year ending September 30, 1904, the Cement Workers
paid $1600, the Flour and Cereal Mill Employees, $2084.95, the Hod
Carriers and Building Laborers, $1500, and the Leather Workers on Horse
Goods, $7703.15.[196]

[Footnote 194: Cigar Makers' Journal, Vol. 31, April 15, 1906.]

[Footnote 195: Hugo Miller, 25-jährige Geschichte der
Deutsch-Amerikanischen Typographia, 1873-1898, p. 58; Jahres-Bericht,
1899-1906.]

[Footnote 196: Report of Proceedings of the Twenty-fourth Annual
Convention, American Federation of Labor, 1904 (Washington, 1904), p.
46.]

The table on page 99 shows the total amounts paid yearly and the average
loan per capita of membership in the Cigar Makers' Union and the average
per capita cost in the Deutsch-Amerikanischen Typographia.

     TOTAL AND PER CAPITA AMOUNTS OF TRAVELLING
              LOANS AND BENEFITS.
=======================================================
        |      Cigar Makers.    |      Typographia.
        |----------------------------------------------
  Year. | Amount of | Loans Per |  Amount of |
        |Travelling | Capita of | Travelling | Cost per
        |  Loans.   |Membership.|  Benefits  | Member.
--------------------------------------------------------
   1880 | $ 2,808.15|   $0.63   |            |
   1881 |  12,747,09|     .87   |            |
   1882 |  20,386.64|    1.78   |            |
   1883 |  37,135.20|    2.81   |            |
   1884 |  39,632.08|    3.48   |            |
   1885 |  26,683.54|    2.22   |  $ 345.50  |   $0.61
   1886 |  31,835.71|    1.29   |    264.10  |     .27
   1887 |  49,281.04|    2.34   |    483.45  |     .44
   1888 |  42,894.75|    2.50   |    669.29  |     .59
   1889 |  43,540.44|    2.71   |    456.17  |     .40
   1890 |  37,914.72|    1.53   |    576.65  |     .46
   1891 |  53,535.73|    2.21   |    622.47  |     .47
   1892 |  47,732.47|    1.78   |    797.19  |     .57
   1893 |  60,475.11|    2.25   |    439.64  |     .31
   1894 |  42,154.17|    1.52   |    680.06  |     .56
   1895 |  41,657.16|    1.50   |    304.46  |     .27
   1896 |  33,076.22|    1.39   |    339.86  |     .30
   1897 |  29,067.04|    1.10   |    279.50  |     .25
   1898 |  25,237.43|     .95   |    390.62  |     .35
   1899 |  24,234.33|     .83   |    320.74  |     .29
   1900 |  33,238.13|     .97   |    178.79  |     .17
   1901 |  44,652.73|    1.31   |    175.05  |     .17
   1902 |  45,314.05|    1.22   |    107.28  |     .11
   1903 |  52,521.41|    1.33   |    159.56  |     .16
   1904 |  58,728.71|    1.41   |    181.85  |     .18
   1905 |  55,293.93|    1.37   |    195.46  |     .20
   1906 |  50,650.21|    1.29   |    147.52  |     .15
---------------------------------------------------------
  Total |$991,177.98|           |  $8116.11  |
---------------------------------------------------------
 Average|  38,145.31|   $1.63   |    368.91  |   $0.33
---------------------------------------------------------

The travelling loan in the Cigar Makers was for some time badly
administered. Until the adoption of the out-of-work benefit, the
financial secretaries, moved by sympathy, frequently granted the benefit
to members who had never left their jurisdiction and who had no
intention of leaving.[197] This practice endangered the entire
system.[198] Since the adoption of the out-of-work benefit the amount of
loans per capita of membership has diminished. At present the cost of
the travelling benefit in the Cigar Makers is not large; the loans are
promptly and efficiently collected. Data for recent years are not
available; but in the period from 1881 to 1901 the sum of $735,266 was
loaned and $660,255 was repaid. The balance outstanding at the close of
1900 was $75,014, and of this a considerable part was collectible. The
net cost of the system for twenty-one years was thus certainly less than
$50,000, an average annual cost of about $2400, or an annual average per
capita cost of ten cents. Even in the Typographia, where the benefit is
a gift, the annual per capita cost to the membership is not large,
varying from eleven to sixty cents, according to the state of
employment.

[Footnote 197: Cigar Makers' Journal, Vol. 6, July, 1881, p. 1.]

[Footnote 198: _Ibid.,_ Vol. 9, July, 1884, p. 3.]




CHAPTER V.


SUPERANNUATION BENEFITS.

In 1901 thirty-eight of the one hundred principal British unions paid a
superannuation benefit. These unions had a membership of 566,765, and
the amount paid in superannuation benefits from 1892 to 1901 was about
one sixth of the total amount expended for all benefits.[199] In the
American trade unions, on the other hand, superannuation benefits are
paid by only a few unions. A considerable number of unions have in
recent years been considering the advisability of introducing this
feature, and it is likely within a brief period to form an important
part of the beneficiary system of the American unions.

[Footnote 199: Weyl, "Benefit Features of British Trade Unions," in
Bulletin of the Bureau of Labor, Vol. 12, p. 722.]

The superannuation benefit may take several forms--a weekly stipend, a
lump sum or a support in a home for the aged. The aim of the benefit in
all three cases is to protect the member in old age. The weekly stipend
is regarded as the preferable form, since in going to a home the member
must leave his family. Ordinarily, too, a weekly payment is deemed wiser
than a lump sum, since the aged member cannot very well manage property,
and the chances are that he will lose his capital. The British trade
unions uniformly pay the benefit in the form of a weekly or monthly
pension.

The earliest attempt made by any American trade union to make provision
for the support of aged members was that of the Typographical Union in
1857. The National Convention of that year appointed a committee to
consider the proposal of the Philadelphia printers for the establishment
of an "Asylum for Superannuated and Indigent Printers." This plan was
defeated at the ninth convention in 1860.[200] The Iron Molders' Union
as early as 1874 provided for the establishment of a "superannuated
fund," from which superannuated members of twenty years' standing were
to receive three hundred dollars and those of twenty-five years' four
hundred, if permanently disabled and unable to earn a living at their
trade. Membership was to date from July 5, 1859, and no benefit was to
be paid until August, 1879.[201] Because of the failure to accumulate
sufficient reserve for its support, the regulations were repealed in
1878 before any benefit fell due.[202] The superannuation benefit
adopted by the Granite Cutters early in their history met a similar
fate.

[Footnote 200: Proceedings of the Seventh Convention, Chicago, 1858 (New
York, 1858), p. 11; Proceedings of the Ninth Convention, Nashville, 1860
(Boston, 1860), pp. 53-54.]

[Footnote 201: Constitution, 1876 (Cincinnati, 1876), Art. 18.]

[Footnote 202: Constitution, 1878 (Cincinnati, 1878), Art. 17; Iron
Molders' Journal, August, 1878, p. 4; October, 1878, p. 30.]

In recent years agitation for the establishment of some form of
superannuation benefit has been carried forward in several of the more
important unions. In 1893 Mr. Gompers proposed the establishment of this
form of beneficiary relief in the Cigar Makers' Union. In June, 1904, a
plan was discussed for the payment of a monthly benefit of six dollars
to members sixty years of age and twenty-five years in good standing.
Larger benefits were to be paid to members older and of longer standing.
Up to the present, however, the Cigar Makers have not adopted any of the
plans for a superannuation benefit. The Brotherhood of Carpenters and
Joiners, at the 1900 convention, provided for the payment to members of
twenty-five years' continuous membership and over sixty years of age
such amount as the National Convention might designate.[203] In 1902 it
was decided that if the members by referendum vote endorsed an increase
of dues, the amount of this benefit should be fixed at $150.[204] But
the increase of dues failed of ratification, and the plan for a
superannuation benefit was abandoned.

[Footnote 203: Proceedings of the Eleventh General Convention of the
Brotherhood of Carpenters and Joiners, Scranton, 1900 (Scranton, 1900).
p. 67.]

[Footnote 204: Proceedings of the Twelfth General Convention, 1902
(Atlanta, 1902), pp. 123, 163; The Carpenter, Vol. 22, November, 1902,
p. 3; Vol. 23, No. 1.]

A few unions have allowed aged members to draw all or a part of their
death benefit. Thus, the Granite Cutters permit members sixty years of
age who have been in continuous good standing for ten years to draw the
sum of $125.[205] The Typographia also pays an indeterminate lump sum to
aged members who wish to retire from the trade.

[Footnote 205: Constitution, 1905 (Boston, n.d.), p. 28.]

More important still, a considerable number of unions have made
provision for the payment of a superannuation benefit in one form or
another at a definite future date. Such unions are the Journeymen
Plumbers, the Pattern Makers, the Machinists and the Jewelry Workers.

In the Plumbers' Association any member of at least twenty years' full
membership and not less than forty-five years of age, who, through old
age or infirmity, is incapacitated from following his employment, is
entitled to the benefit according to a prescribed scale; those of twenty
consecutive years' full membership and not under sixty-five years of age
are to receive three hundred dollars; those of twenty-five years'
membership and not under seventy years of age, four hundred dollars;
those of thirty years' membership and over, five hundred dollars. The
rule providing for the payment of the benefit became effective in
January, 1903, but no benefit is to be paid before January, 1923.[206]
The Pattern Makers' League provides that superannuated members be
divided into two classes: (_a_) members sixty years of age and of
twenty-five years' continuous membership, who receive twelve dollars per
month, and (_b_) those sixty-five years of age and over and of thirty
years' membership, who receive sixteen dollars per month. The provisions
of this rule became operative July 1, 1900, and the first benefit will
be payable on July 1, 1920.[207] The Jewelry Workers have the same
specifications as the Pattern Makers. The rule went into effect January
1, 1902, but no benefit will be paid until January 1, 1922.[208] The
Machinists provide that any member sixty-five years of age and of ten
consecutive years' good standing shall receive five hundred dollars and
those sixty-eight years of age and of twenty years' standing shall
receive one thousand dollars. This benefit became effective June 1,
1903, and no payment can be made before June 1, 1913.

[Footnote 206: Constitution, 1904 (Chicago, n.d.), pp. 52-53.]

[Footnote 207: Constitution, 1906 (New York, n.d.), pp. 15-16.]

[Footnote 208: Constitution, 1902, Art. 11.]

The only two American trade unions which in 1908 are actually paying a
superannuation benefit as distinguished from a mere compounding of the
death benefit are the Granite Cutters and the Typographical Union. In
both the establishment of the benefit is very recent.

In 1905 the Granite Cutters made provision for the payment of a monthly
benefit of ten dollars for "six months each year beginning with
November" to those who had been members for twenty years and who had
reached the age of sixty-two. The applicants must have been in
continuous good standing for the "last ten years previous to arriving at
the age of sixty-two."[209] The first payments under the new rule were
made in December, 1905.

[Footnote 209: Constitution, 1905 (Quincy, n.d.), p. 45.]

The Typographical Union has, however, led all the American trade unions
in the provision which it has made for its aged members. As has been
noted above, as early as 1857 it was proposed to establish a home for
aged printers in Philadelphia, and the project was revived from time to
time. The persistence with which this proposal appeared and reappeared
gave evidence of its popularity. In 1870 a Kansas union proposed the
establishment of a "Home for Disabled Printers." All members of local
unions were to be taxed two dollars each for the purpose of endowing the
Home. The committee of the International Union to whom the plan was
referred reported that they "deemed it impracticable at the present
time." In 1877 a similar proposal was defeated. In 1882 a committee
consisting of the officers of the union was appointed to inquire into
the possibility of establishing and maintaining a "Home for Disabled
Printers." This committee expressed its approval of the project, but
doubted the ability of the union to finance it.

In 1886 Messrs. George W. Childs and A.J. Drexel of Philadelphia
presented to the International Union the sum of ten thousand dollars.
This donation was to be used in any manner the union might see fit. For
some years an active discussion as to the best use to be made of the
fund was carried on, and in the meantime the sum was being increased by
contributions from members of the union.

It ultimately became evident that some plan for applying this fund to
the establishment of a home for aged printers would best satisfy the
membership. In 1887 the Austin, Texas, union announced that the Mayor
and City Council of Austin were willing to present a site for such a
home. In 1889 the Board of Trade of Colorado Springs offered to donate
eighty acres of land for the same purpose, and other offers of land were
received from time to time. The International Union finally decided to
accept the offer of the site at Colorado Springs, and this decision was
approved by a referendum vote.

The Home was opened on May 12, 1892. Applicants for admission were
required to have been members of the union in good standing for five
years. Persons incapacitated either by age or by illness were admitted
to the Home. The number of residents has increased from twenty-two in
1893 to one hundred and forty-three in 1907. A considerable part of the
residents are sufferers from tuberculosis, and the union has made
provision for treating them according to modern methods. A part of the
inmates, however, have always been persons whose incapacity was solely
the result of old age.

About 1904 an agitation began to be carried on in the union for making
more adequate provision for the maintenance of aged members. The
establishment of the Home had made provision only for those
incapacitated members who were willing to leave their families and live
in an institution. It was argued that the Home benefited one class of
the aged, and that another class, equally worthy, was left entirely
dependent upon its own resources. Moreover, certain innovations in the
trade had made the union highly sensible of the helplessness of its aged
members. The introduction of the linotype caused many old members to
lose their employment. The New York local union established an
out-of-work benefit in 1896 which has since been maintained. This
benefit, while nominally an out-of-work benefit, was in many cases
really a superannuation benefit. In 1903 the Chicago local union made
provision for the payment of old-age pensions to its members, and other
local unions rapidly followed the same policy.

In 1903 and 1904 propositions were introduced at the sessions of the
International Union for the establishment of an International old-age
pension system. In 1905 the session of the International authorized the
appointment of a committee to investigate the subject. The eight-hour
strike which taxed for two years the resources of the Union delayed the
consideration of this report. In 1907 the committee reported in favor of
the establishment of old age pensions, and presented a plan which when
submitted to the referendum was ratified by a large majority, and on
August 1, 1908, the International secretary-treasurer began the payment
of pensions. All members sixty years of age who have been in continuous
good standing for twenty years, and who earn less than four dollars per
week, are entitled to a weekly pension of four dollars. The original
plan provided also that in order to receive a pension a member must have
no other means of support. The officers of the Union, however, have
construed this provision liberally, and the pension is paid as of right
and not as a form of charity.

The pension scheme thus adopted by the Typographical Union is the most
ambitious that has been proposed in any American trade union. The sum of
money required to finance the project will be very large, and the Union
has levied for the support of the pension system an assessment of one
half of one per cent. on the wages of all its members. Whether this will
be sufficient adequately to support the benefit is as yet uncertain,
since the number of pensioners cannot be estimated with any accuracy. It
is certain also that the number of pensioners will not reach its maximum
for a considerable period.




CHAPTER VI.


ADMINISTRATION.

No factor has been of more consequence in determining the development
and stability of the relief systems than the character of their
administration. The problems that confront the unions are both
legislative and administrative, but the administrative organs must not
only execute the rules already in force, but must furnish data upon
which additional rules can be based.

When the early voluntary insurance associations were formed under the
auspices of the national unions, their management was usually confided
to a separate set of officials, and the funds of the association were
kept distinct from those of the unions with which they were connected.
In some cases the officers of the unions, for purposes of economy, acted
also as officers of the association. The Iron Molders' Beneficial
Association was thus formed as a separate institution to furnish a
voluntary death and disability benefit to any journeyman molder in good
standing in any local union under the jurisdiction of the national
organization.[210]

[Footnote 210: Iron Molders' Journal, Vol. 7, March, 1871.]

The administration of the beneficiary systems, in all but two of the
unions, is now carried on by the officers who manage the general affairs
of the union. The Brotherhood of Locomotive Engineers and the National
Association of Letter Carriers each maintains a mutual benefit
department administered by separate officers. The official staff of the
Engineers' Insurance Association consists of a president, a
vice-president, a secretary-treasurer and five trustees; while that of
the Letter Carriers consists of the president of the National
Association, a board of trustees, a chief collector and a depositary.
In those unions in which the administration of the beneficiary system is
in the hands of the officials of the union the officials in charge of
the administration of the benefits are usually two, variously known as a
grand chief, grand master or president and a secretary-treasurer. In a
few unions the offices of treasurer and secretary are separated. In the
Cigar Makers the president also performs the duty of secretary. In the
Tailors the general secretary has sole charge of the benefits. In the
Iron Molders' Union the "financier" has charge of the administration of
the sick benefits.

The secretary-treasurer in the majority of the unions is the chief
official concerned in administering the benefits. Such is the case in
the Typographical Union, the Brotherhood of Painters, the United
Association of Plumbers, the Boot and Shoe Workers' Union, the Tobacco
Workers' Union, the Brotherhood of Leather Workers on Horse Goods, and
the Barbers' International Union.[211] In the Iron Molders' Union, the
Brotherhood of Carpenters, the Wood Workers' Union, the Glass Bottle
Blowers' Association, the United Garment Workers' Union, and the Granite
Cutters' Union these duties are divided between the general secretary
and the general treasurer.

[Footnote 211: Typographical Union, Constitution, 1904 (Indianapolis,
n.d.), p. 26; Plumbers' Constitution, 1904 (Chicago, n.d.), pp. 19-21;
Painters' Constitution, 1904 (La Fayette, n.d.), secs. 230-241; Boot and
Shoe Workers' Constitution, 1904 (Boston, n.d.), sec. 7; Tobacco
Workers' Constitution, 1900, third edition, 1905 (Louisville, n.d.), pp.
10-15; Leather Workers on Horse Goods, Constitution, 1904 (Kansas City,
n.d.), p. 7; Barbers' Constitution, 1905 (Indianapolis, n.d.), pp.
13-14.]

Ordinarily no particular part of the funds of the union is devoted to
the payment of beneficiary claims. The unions paying insurance, however,
are exceptional in this respect. In such cases the funds of the
insurance departments are separate from the general funds of the
brotherhoods, and the dues for maintaining the insurance departments are
levied as assessments distinct from the general levies. Nearly all the
grand lodges have made provision in their constitutions against
encroachments upon the beneficiary funds by the grand officers for the
benefit of other departments. The Trainmen and the Switchmen provide
that the beneficiary fund shall be used exclusively in paying death and
disability claims.[212] The Telegraphers provide that no part of the
mortuary fund shall be paid out, loaned or diverted for any purpose
except for the payment of approved death claims.[213] The Firemen pay
out of their beneficiary fund "all expenses for the proper conducting of
the beneficiary departments."[214] The position of the Conductors on
this point is not so explicit. The Order, however, holds in reserve a
fund of $300,000, from which the grand officers may draw, in case the
assessments levied for beneficiary purposes are insufficient to pay
legal claims and the surplus in the beneficiary fund is not sufficient
to cover the deficit.[215] The Engineers and the Maintenance-of-Way
Employees have no specific regulation of this kind; but the implication
is that similar protection is furnished their funds. The Letter Carriers
provide that the beneficiary fund shall be used exclusively for paying
insurance claims.

[Footnote 212: Constitution of the Railroad Trainmen, 1903 (Cleveland,
1903), sec. 58; Constitution of the Switchmen's Union of North America.
1903 (Buffalo, n.d.), sec. 57.]

[Footnote 213: Constitution, 1903 (St. Louis, n.d.), Article 23, p.
109.]

[Footnote 214: Constitution, amended, 1902 (Peoria, n.d.), sec. 52.]

[Footnote 215: Constitution, 1903 (Cedar Rapids, n.d.), Article 27, p.
86.]

Only a few of the unions paying benefits as distinguished from insurance
make any such provisions. The Boot and Shoe Workers provide that the
"sick and death benefit fund shall not be drawn upon for any purpose
except for payment of sick and death benefits;" the Painters, that "no
money received for a specific purpose shall be otherwise used;" and the
Tobacco Workers, that "none of the funds shall be transferable one to
another."[216] The Cigar Makers and the unions which follow its methods
go quite to the other extreme.[217] All the moneys of the union are
kept in a single fund and are drawn upon for the payment of benefits,
organizing expenses, or strike pay, as need requires. In the great
majority of unions, however, a nominal allocation of funds is practised.
Thus, the Typographical Union in 1906 apportioned its monthly dues as
follows: five cents to the general fund; five cents to the special
defense fund; seven and one half cents to the defense fund; seven and
one half cents to the burial fund; and ten cents to the endowment fund
of the Union Printers' Home. Similarly, the Iron Molders, the Boot and
Shoe Workers, Painters, Pattern Makers, Barbers and many others
apportion their dues in fixed ratios to specific objects. But such
apportionments are mere book-keeping devices. None of these unions
hesitate in an emergency to transfer money from one fund to another. The
Iron Molders and the Printers, for example, give their executive board
or council power to transfer money from one fund to another whenever
occasion demands.[218] In the other unions there is an implied power. In
1899 the Executive Board of the Iron Molders transferred $10,000 from
the surplus in the out-of-work fund to other funds, as follows: $3000 to
the strike fund; $5000 to the expense fund, and $2000 to the monthly
fund.[219] Similarly, the Typographical Union, from 1897 to 1902,
transferred $24,174.64 from the burial fund to the general fund.[220]
Although the Brotherhood of Carpenters do not make provision for the
transfer of money from one fund to another, it has been found necessary
to borrow from one fund in order to meet claims on another. In 1896 the
Executive Board borrowed seven thousand dollars from the "protective
fund" and twelve thousand from the "organization fund" with which to
pay benefit claims.[221]

[Footnote 216: Constitution of the Boot and Shoe Workers' Union, 1904
(Lynn, 1904), p. 25; Constitution of the Brotherhood of Painters,
Decorators and Paperhangers of America, 1906 (La Fayette, n.d.), p. 39;
Constitution of the Tobacco Workers' Union, 1900, third edition, 1905
(Louisville, n.d.), p. 18.]

[Footnote 217: The following are the more important unions making no
allocation of their funds: Cigar Makers, Typographia, Piano and Organ
Workers, and Plumbers.]

[Footnote 218: Constitution of the Iron Molders' Union of North
America, 1902 (Cincinnati, n. d.), p. 20; Constitution of the
International Typographical Union of North America, 1904 (Indianapolis,
1904) p. 10.]

[Footnote 219: Proceedings of the Twenty-second Session, Toronto, 1902,
p. 646 (Supplement to Iron Molders' Journal, September, 1902).]

[Footnote 220: Proceedings of the Forty-sixth Session, Milwaukee, 1900,
pp. 51, 99 (Supplement to Typographical Journal, September, 1900).]

[Footnote 221: The Carpenter, Vol. 16, October, 1896.]

Efficient financial administration requires in the case of certain
benefits an apportionment of revenue between the national union and its
subordinate unions. The funds for the payment of death and disability
benefits or of old age pensions can be held at national headquarters,
since the administration of such benefits can be centralized and
immediate payment is not essential. In the railway unions and in the
great number of unions, such as the Brotherhood of Carpenters and the
Typographical Union, which have developed only death benefits, the dues
for beneficiary purposes are collected by the local unions and paid over
to the national treasury. In those national unions which have introduced
sick, out-of-work, or travelling benefits, national funds are ordinarily
held by the local unions, for the reason that it is desirable that
payment of claims should be made immediately. The unions which pay such
benefits are divisible into two classes according to the extent to which
they have entrusted the funds of the national union to the local unions.
The Cigar Makers, the Typographia, the Piano and Organ Workers and the
Plumbers intrust to the local unions all the funds of the national
organization. A more numerous class of unions apportion the dues between
the local unions and the national organization. The Iron Molders, for
example, collect twenty-five cents per week from every member. This
amount is applied as follows: ten cents per week per member is
transferred to the International treasurer, of which sixteen per cent.
is placed to the credit of the death and disability fund, twenty-six per
cent. to the monthly fund, and fifty-eight per cent. to the strike fund;
eight cents per week per member is held by the local unions as a credit
to the benefit fund out of which are paid sick and out-of-work benefits;
and the remainder, seven cents per member, is held by the local unions
as a fund for local expenditures.

The adjudication of claims is naturally the most important
administrative task connected with a system of benefits. In all cases
the national officials rely upon the local unions and their officers for
a certain amount of coöperation and aid in preventing fraud, but the
amount of this dependence varies with the character of the benefit. In
death and disability benefits the national union can prevent fraud
almost without any coöperation on the part of the local unions. A
certificate of death or disability, properly signed, is in the great
majority of cases an indisputable evidence of the fact it purports to
attest. A union may in like manner administer an old age pension
directly from its head office. But in the case of sick, travelling and
out-of-work benefits, the local unions become an essential part of the
administrative machinery of the national union. No national union
attempts to determine whether a member of a local union is entitled to
the out-of-work benefit except through the local union. The
administrative systems fall thus into two great classes according as the
benefit administered can be guarded against fraud by means of
certificates and sworn statements, or according as it must be
administered partly by persons in contact with the claimant. In both
cases the national officers administer the benefits; but in the one they
act directly and the mediation of the local union is formal and
dispensable, while in the other the aim of national administration is to
supervise and control the local administration.

The administration of the death benefit or of a system of insurance
against death presents relatively few difficult problems. The local
union reports the death to the national officials and certifies to the
good standing of the deceased member in his local union. If the reports
of national and local unions correspond and the deceased member is clear
on the records of both local and national unions, the claim is approved
by the national officers and payment is made to the designated
beneficiary, or the legal heirs of the deceased. The report of the
subordinate union to the national union, covering the case in point,
contains a certificate validating the claim, sworn to before a notary
public or commissioner by the president and the financial secretary,
together with all documents upon which the local authorities based their
decision or prayer for the payment of the claim. Upon receipt of an
application for a claim the general secretary-treasurer, the general
president, or both, examine it and, if satisfied as to its validity,
order immediate payment; if the claim is questionable it is referred to
the general executive board for final adjustment.[222]

[Footnote 222: Iron Molders' Constitution, 1902 (Cincinnati, 1902), p.
41; Cigar Makers' Constitution, 1896, fourteenth edition (Chicago,
n.d.), sec. 151; Painters' Constitution, 1906 (La Fayette, n.d.), sec.
151.]

The adjudication of disability claims is more difficult than that of
death claims. Of the unions that pay disability insurance or benefits
the Locomotive Engineers, the Railway Conductors, the Locomotive
Firemen, the Railroad Trainmen, the Switchmen, the Maintenance-of-Way
Employees, the Iron Molders, the Brotherhood of Carpenters, the
Painters, and the Glass Workers specify the disabilities that constitute
"total or permanent disability," while the Wood-Workers and Metal
Workers define disability simply by the resultant disqualification for
"following the trade,"[223] In the latter group of unions the
administrative officers have large discretionary power. The lack of more
specific rules in such cases causes unsatisfactory administration and
this in turn gives rise to general complaint.[224]

[Footnote 223: Iron Molders' Constitution, 1902 (Cincinnati, 1902), p.
40; Carpenters' Constitution, 1905 (Milwaukee, n.d.), p. 19; Painters'
Constitution, 1904 (La Fayette, n.d.), p. 29; Glass Workers'
Constitution, 1903 (n.p., n.d.)5 p. 11; Wood Workers' Constitution, 1905
(Chicago, n.d.), sec. 137; Metal Workers' Constitution, 1903 (Joliet,
n.d.), sec. 115.]

[Footnote 224: Proceedings of the Nineteenth Session of the Iron
Molders' Union of North America, 1890, Report of President (Cincinnati,
n.d.); Proceedings of the Seventh General Convention of the United
Brotherhood of Carpenters and Joiners of America, 1892, Report of the
President (Philadelphia, 1892).]

All claims for disability benefits are filed with the local officers of
the disabled members' union for their examination and approval or
rejection. In case of approval the claims are forwarded to the central
office of the national union with all necessary papers concerning its
validity. If the claim is approved, payment is made through the local
union to the legal claimants.[225] The majority of the unions paying
disability benefits, as a precautionary measure specify the time within
which claims for disability must be filed. The Conductors and the
Carpenters require claims to be filed within one year from date of
disability,[226] the Firemen and the Switchmen, within six months,[227]
and the Trainmen "promptly" after injury;[228] while the Engineers and
the Maintenance-of-Way Employees fix no specific time for filing claims.
The Carpenters and the Painters require that notice of a claim for
disability must be given to the general secretary-treasurer within sixty
days after disability occurs.

[Footnote 225: Constitution of the Iron Molders' Union of North America
1902 (Cincinnati, 1902), p. 41; Constitution of the United Brotherhood
of Carpenters and Joiners of America, 1905 (Milwaukee, n.d.), secs.
109-110; Constitution of the Brotherhood of Painters, Decorators and
Paperhangers of America, 1906 (La Fayette, n.d.), secs. 84-87.]

[Footnote 226: Constitution of the Railway Conductors of America, 1903
(Cedar Rapids, n.d.), p. 82; Constitution of the United Brotherhood of
Carpenters and Joiners, 1905 (Milwaukee, n.d.), p. 19.]

[Footnote 227: Constitution of the Brotherhood of Locomotive Firemen,
1905 (Indianapolis, n.d.), p. 30; Constitution of the Switchmen's Union
of North America, 1903 (Buffalo, n.d.), p. 20.]

[Footnote 228: Constitution of the Brotherhood of Railroad Trainmen,
1903 (Cleveland, 1903), p. 35.]

The disability claim must be accompanied, under the rules of practically
all the unions, by the sworn certificates of the attending
physicians.[229] The Firemen provide that the national officials may,
when they consider it necessary, appoint a physician to pass upon the
validity of a claim; the Maintenance-of-Way Employees require
subordinate lodges to appoint a special committee to report on the
nature and cause of the disability. The Engineers exercise special care
in passing upon a claim for loss of sight. In such cases they require a
certificate signed by two experienced oculists; and in case the eyes
have not been removed the claim remains on file for one year, when
additional certificates from two experienced oculists, certifying to
total or permanent blindness, must be furnished.[230]

[Footnote 229: Constitution of the Brotherhood of Railroad Trainmen,
1903 (Cleveland, 1903), p. 35; Constitution of the Switchmen's Union of
North America, 1903 (Buffalo, n.d.), p. 16; Constitution of the United
Brotherhood of Carpenters and Joiners, 1905 (Milwaukee, n.d.), p. 19;
Constitution of the Brotherhood of Painters, Decorators and Paperhangers
of America, 1906 (La Fayette, n.d.), p. 20.]

[Footnote 230: Constitution of the Brotherhood of Locomotive Firemen,
1905 (Indianapolis, n.d.), p. 34; Constitution of the Maintenance-of-Way
Employees, 1903 (St. Louis, n.d.), p. 13; Constitution of the Grand
International Brotherhood of Locomotive Engineers, 1904 (Cleveland,
1904), p. 85.]

A member whose claim for a death or disability benefit has been rejected
may appeal from the decision of the official authorized to pass upon
claims. The provisions of the Trainmen are typical. Every claim rejected
by the secretary-treasurer is referred to the Beneficiary Board,
consisting of the grand master, the assistant grand master and the
secretary-treasurer. If rejected also by the Board the claimant may
appeal to the Grand Lodge "at its next succeeding session, but not
afterward." The appellant must give a written notice to the grand
secretary-treasurer of his intention to appeal.[231]

[Footnote 231: Constitution of the Railroad Trainmen, 1903 (Cleveland,
1903), p. 39.]

The unions paying the sick benefit fall into two classes according as
they administer the benefit directly from the offices of the national
union with the aid of the local union or as they intrust the
administration of the benefit to the local union and leave to the
national officers only a general supervision. The Boot and Shoe Workers,
the Barbers and the Tobacco Workers are in the former class, while in
the latter are the Cigar Makers, Iron Molders, Typographia, Plumbers,
Leather Workers on Horse Goods and the Garment Workers.

The chief means relied upon to guard against fraud are the certificate
of the attending physician and the report of a visiting committee of the
local union. Some of the unions require both the certificate and the
report; the larger part, however, rely on the report of the visiting
committee, although local unions are permitted to require that a
physician's certificate shall be furnished. The duties of the visiting
committee are set forth with great elaboration in all the constitutions.
Thus, the Boot and Shoe Workers require that the claim shall be
investigated by "three Union members of good repute not related to the
sick member, each acting independently of the others and reporting
individually to the local executive board." The Plumbers and Cigar
Makers require that every sick member shall be visited at least once in
each week and that no two members of the committee shall visit him at
the same time.

Notwithstanding these precautions it has not been possible entirely to
prevent the payment of fraudulent claims for sick benefits. The visiting
committees of the local unions are frequently neglectful or careless in
exercising their supervisory functions, and occasionally knowingly
sanction the payment of unwarranted claims. Where the unions do not have
an out-of-work benefit, there is always the chance that unemployed
members will claim the sick benefit and that the local unions, aware
that the money for the payment of the claim comes from the national
union, will not scrutinize with any care the severity of the illness.

Reserving to the national officials the right to pass finally upon
sick-benefit claims is not effective as a precaution against such
frauds. The national officials cannot inform themselves as to the
honesty of the physician who signs the certificate nor as to the good
faith with which the visiting committee has performed its duties. On the
whole, the better policy seems to be to place the responsibility of
passing upon individual claims directly upon the local union, and to
reserve to the national officials an oversight of the administration of
the local unions.

In several of the unions no effective measures appear to have been taken
to keep the local unions up to their duties, but in others a close
scrutiny is maintained. The system in use by the Iron Molders is
probably the most effective of those used by the unions which do not pay
a money out-of-work benefit and in which consequently the need for
supervision is greatest. Every member of the union is catalogued on a
card. When he is reported as having received a benefit payment from any
local union, this fact is entered on his card. Members removing from one
local union to another and drawing more sick benefits than they are
allowed by the rules are thus detected and forced to make restitution.
The "financier" of the union also notes the sick rate in each local
union. When the amount of sickness in any locality appears to be
excessive, he employs for a limited time a reputable physician, who must
sign all claims for sick relief. The result usually is the discovery of
laxity in the local administration and the necessary corrective measures
are applied.[232] The Cigar Makers have a staff of travelling auditors
who from time to time inspect the accounts of local unions and
scrutinize the administration of the benefits.

[Footnote 232: Proceedings of the Twenty-second Convention, 1902, in
Supplement to Iron Molders' Journal, September, 1902; Proceedings of the
Twenty-third Convention, in Supplement to Iron Molders' Journal,
September, 1907.]

The administration of out-of-work relief is similar to that of sick
benefits in that the national union must of necessity rely upon the
local union. The requirement of registration from day to day is the
chief administrative check upon the payment of the benefit to members
not entitled thereto.

The more complete the system of benefits the less is the difficulty in
preventing the payment of fraudulent claims. A union such as the Cigar
Makers or the Typographia has a comparatively small problem in
administration as compared with that of a union like the Iron Molders.
Since the Iron Molders do not maintain an out-of-work benefit unemployed
members are tempted to try to secure sick benefits. Even in the Cigar
Makers the sick benefit and the out-of-work benefit are used as a form
of superannuation relief. The addition of a superannuation benefit would
lower the expense of maintaining the sick and out-of-work benefits.

The administration of trade-union benefits is subject to certain rules
imposed by the statutes of the various states. All the commonwealths of
the United States regulate by law the conduct of insurance business. In
this regulation, distinction has necessarily been made between regular
insurance companies and that class of organizations known as fraternal
or beneficiary societies. The trade organizations described in this
monograph as maintaining insurance or benefit departments fall under the
latter class.

The unions paying insurance, as distinguished from benefits, have
conformed to certain requirements of these laws, either by incorporating
their insurance departments or by modifying the rules of the
organizations in harmony with special state regulations for fraternal
insurance companies.

Prior to 1894--from December, 1867, to 1894--the Brotherhood of
Locomotive Engineers had its headquarters in the state of New York. In
the latter year the State Superintendent of Insurance notified the
Brotherhood that incorporation of the insurance department was necessary
for the continuance of the business. In consequence thereof the central
office of the Brotherhood was transferred to Cleveland, Ohio, and on the
twenty-second of February, 1894, the insurance department was
incorporated under the laws of the state of Ohio as a separate
organization.[233] Similarly, the Conductors were forced to incorporate
by the pressure of the state laws. In December, 1885, the Order moved
its central office from Cedar Rapids to Chicago. In order to strengthen
its power and to broaden its influence, the Order, in 1886, applied for
a certificate of incorporation under the laws of the state of Illinois.
The Secretary of State refused the certificate on the ground that the
insurance regulations of the Order were not in accordance with the state
laws, and requested that these be changed and that the insurance
department be incorporated as a separate organization. The Secretary of
State was willing to incorporate the Order under the Act of 1872,
provided the Order eliminated from the object of organization the
clauses referring to the payment of benefits or indemnity; or he was
willing to issue a charter based on the Act of 1883 which provided that
only such powers could be taken as are specifically granted therein,
namely, "the furnishing of life indemnity or pecuniary benefits to
widows, orphans, heirs, relatives, and devisees of deceased members, or
accident or permanent disability indemnity to members."[234] In other
words, the Order could have been incorporated under the Act of 1872 to
do all business except insurance, while under the Act of 1883 it could
have been incorporated to maintain a system of insurance, but nothing
else. The only alternative was separate organization for the protective
and the benevolent departments. The Order was unwilling to separate the
two departments and consequently transferred its central office to Cedar
Rapids, Iowa. The Board of Directors, on July 12, 1887, ordered the
grand secretary to proceed with incorporation under the laws of the
state of Iowa.[235] The certificate of incorporation, however, was not
issued until the laws of the union were made to conform to the insurance
laws of the state. These changes were only unimportant ones, such as the
change of the name of the Insurance Department to "Mutual Benefit
Department," and in no way affected the intent of any laws of the Order.

[Footnote 233: Locomotive Engineers' Journal, Vol. 28, p. 360.]

[Footnote 234: Proceedings of the Nineteenth Convention of the Order of
Railway Conductors, New Orleans, 1887 (Cedar Rapids, n.d.), pp. 51-52,
63.]

[Footnote 235: Proceedings of the Nineteenth Convention of the Order of
Railway Conductors, New Orleans, 1887 (Cedar Rapids, n.d.), pp.
155-156.]

The other railway brotherhoods have conformed to the insurance laws of
the states in which they do business. The insurance department of the
Switchmen's Union is incorporated under the laws of the state of New
York. The Brotherhood of Locomotive Firemen does business in the state
of Illinois under a law enacted in 1893 whereby all beneficial fraternal
associations are declared to be corporations, the insurance features of
which are subject to state laws.[236] The Brotherhood of Railroad
Trainmen operates its insurance department under a license issued by the
insurance department of the state of Ohio under the Fraternal
Beneficiary Society Act.

[Footnote 236: Hurd, Revised Statutes of Illinois, 1901 (Chicago, 1901),
secs. 258-260, p. 1071.]

The National Association of Letter Carriers, at the time of organizing
the Benefit Association, on August 7, 1891, incorporated the Association
under the laws of the state of New Jersey. But less than one year later,
on February 26, 1892, the Association was reincorporated under the laws
of the state of Tennessee. This change was made, according to Collector
Dunn,[237] in order that both the National Association and the Mutual
Benefit Association might operate under a single charter.

[Footnote 237: Letter to the author, February 14, 1905.]

The unions that pay benefits as distinguished from insurance are less
subject to legal regulation. They do not issue beneficiary certificates
as do the railway unions, the Letter Carriers' Association, and the
large class of fraternal beneficiary societies, and hence are not deemed
to be maintaining insurance departments. With one exception, the
Brotherhood of Painters,[238] the unions of this group have neither
taken out charters of incorporation nor in any way obtained authority to
operate benefit departments within their respective states. These unions
cannot be said to operate their beneficiary systems irrespective of
state laws. In all the states the laws define the scope and functions of
such organizations.

[Footnote 238: Constitution, 1901 (La Fayette, n.d.), p. 1. Chartered
under the laws of the State of Indiana.]

The Brotherhood of Painters, in the incorporation of its organization,
has taken a step beyond the practices of unions of its type. On December
7, 1894, the Secretary of State of Indiana issued a certificate of
incorporation to the Brotherhood under the state law entitled "An act to
authorize the formation of voluntary associations;" and in order to
conform more strictly to the state laws the corporate name was changed,
in December, 1899, to the present name.[239] Incorporation, however, has
not proved satisfactory. For many years the Brotherhood maintained one
general fund from which local unions received assistance in time of
strikes, or in other cases of need. As a chartered institution the
funds were liable at legal action and all payments from them subject to
injunction. This state of affairs led the officials to urge complete
separation of protective and benevolent funds, thereby offering greater
protection to the membership. Consequently in 1904 the Brotherhood
adopted the recommendations of the national officials and apportioned
the national receipts into separate funds to be used only as specified.

[Footnote 239: Constitution of the Brotherhood of Painters, Decorators,
and Paperhangers of America, 1899 (La Fayette, n.d.), pp. 2-5.]