James Boyd Kennedy

“ 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. ”

“ 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. ”

“ 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. ”

“ 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 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. ”

“ 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. ”

“ 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 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 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”