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FACING 
 OLD AGE 
 
SOME RECENT BORZOI BOOKS 
 
 IN DAYS TO COME 
 By Walter Rathenau 
 
 EARLY CIVILIZATION: 
 
 AN INTRODUCTION TO ANTHROPOLOGY 
 
 By Alexander A. Goldenvieiser 
 
 HUMAN NATURE IN POLITICS 
 By Graham IVallas 
 
 HOW ENGLAND IS GOVERNED 
 By Rt. Hon. C. F. G. Masterman 
 
 PRINCIPLES OF SOCIAL PSYCHOLOGY 
 By James Mickel Williams 
 
 THE HISTORY OF SOCIAL DEVELOPMENT 
 By Dr. F. Muller-Lyer 
 
 THE FOUNDATIONS OF SOCIAL SCIENCE 
 By James Mickel Williams 
 
 For sale at all bookshops 
 
 For further particulars address 
 
 ALFRED A. KNOPF, Publisher NEW^ YORK 
 
FACING OLD AGE 
 
 A STUDY OF OLD AGE DEPENDENCY IN THE 
 UNITED STATES AND OLD AGE PENSIONS 
 
 BY 
 
 ABRAHAM EPSTEIN 
 
 Formerly Director Pennsylvania Commission to Investigate 
 Old Age Pensions 
 
 NEW YORK ALFRED • A • KNOPF 
 
 MCMXXII 
 
COPYRIGHT, 1922, BY 
 AliFEED A. KNOPF, Inc. 
 
 Published, March, 19n 
 
 
 -A^^ 
 
 K-^^i^so 
 
 Bot up and printed by the Vail-Ballou Co., Binphamton, N. Y. 
 Paper furnished Tjv W. F. titherinjbm £. Co., Nc\o Vorh, N 1. 
 Bound by the H. Wolff Estate, New York, N. Y. 
 
 MANHTAOTrBED IN THE UNITED STATES OF AMEBIOA 
 
 (K- 
 
"The days of our years are three score years and ten; and if 
 by reason of strength they be four score years, yet is their 
 strength labour and sorrow; for it is soon cut ofiF and we fly 
 away." — 90th Psalm. 
 
CONTENTS 
 INTRODUCTION by John B. Andrews, xiii 
 
 PART I 
 ACTUAL CONDITION OF THE AGED 
 
 CHAPTER 1.— AFTER SIXTY— WHAT? 1 (o\ 
 
 CHAPTER 2.— THE INDUSTRIAL SCRAP-HEAP, 8 
 
 CHAPTER 3.— PASSING BEYOND THE HALF-CENTURY 
 
 MARK, 22 
 
 CHAPTER 4.— THE COST OF FOLLOWING THE OS- 
 TRICH POLICY, 46 
 
 a — The Cost to the Taxpayer, 46 
 
 b — The Cost to the Institutional Inmates 
 
 OR Recipients of Charity, 51 
 c — The Cost to Industry, 58 
 d — The Cost to the Younger Generation 
 
 AND Society in General, 59 
 
 PART II 
 CAUSES OF OLD AGE DEPENDENCY 
 
 CHAPTER 5.— INDIVIDUAL CAUSES, 67 
 a — Superannuation, 68 
 b — Waning Earning-Power, 69 
 c — Lack of Family Connections, 71 
 d — Industrial Accidents and Sickness, 71 
 
 CHAPTER 6.- 
 
 CHAPTER 7.- 
 
 -THE CHASM BETWEEN THE COST OF 
 LIVING AND WAGES, 85 
 
 -SOCIO-ECONOMIC AND MORAL CAUSES, 
 124 
 a — Unemployment, 124 
 b — Strikes, 130 
 c — General Misfortune, 133 
 d — The Part Played by Moral Character, 
 135 
 
 vii 
 
viii CONTENTS 
 
 PART III 
 EXISTING METHODS OF RELIEF 
 
 CHAPTER 8.— INDIVIDUAL SAVINGS AND INDUS- 
 TRIAL PENSIONS, 141 
 a — Individual Savings, 141 
 b — Individual Pensions, 147 
 c — Railroad Pensions, 158 
 
 CHAPTER 9.— FEDERAL, STATE & MUNICIPAL EM- 
 PLOYES' PENSIONS, 162 
 a — Introduction 
 
 b — Federal Employes' Pensions, 167 
 c — Military Pensions, 172 
 d — Pensions for State Employes, 176 
 e — Municipal Employes' Pensions, 178 
 f — Teachers' Retirement Funds, 183 
 
 CHAPTER 10.— OLD AGE BENEFITS OF FRATERNAL 
 
 AND TRADE UNION ORGANIZA- 
 TIONS, 190 
 
 a — Fraternal Society Benefits, 190 
 b — Trade Union Superannuation Bene- 
 fits, 193 
 
 PART IV 
 
 OLD AGE PENSIONS ; WHAT THEY ARE AND THEIR 
 OUTLOOK FOR THE U. S. 
 
 CHAPTER 11.— THE PURPOSE AND NATURE OF PEN- 
 SIONS, 213 
 a — Introduction 
 b — Voluntary Insurance, 216 
 c — Compulsory-Contributory Insurance, 
 
 218 
 d — Straight or Non-Contributory Pen- 
 sions, 223 
 e — Arguments Against Non-Contributory 
 Pensions, 228 
 
 CHAPTER 12.— THE PENSION MOVEMENT IN THE 
 
 UNITED STATES, 244 
 
CONTENTS ix 
 
 PART V 
 
 PENSION SYSTEMS OF FOREIGN COUNTRIES AND 
 VARIOUS STATES 
 
 CHAPTER 13.— VOLUNTARY & SUBSIDED SYSTEMS OF 
 
 OLD AGE INSURANCE, 265 
 a — Introduction 
 b — Belgium, 266 
 c — Canada, 269 
 d — Japan, 271 
 e — Switzerland, 272 
 f — Massachusetts, 275 
 g — Wisconsin, 278 
 
 CHAPTER 14.— COMPULSORY-CONTRIBUTORY OLD AGE 
 
 INSURANCE, 280 
 a — Austria, 280 
 b — Czecho-Slovakia, 282 
 c — Chile, 283 
 d — France, 284 
 e — Germany, 288 
 
 f — Greece, 295 
 g — Iceland, 295 
 h — Italy, 296 
 
 i — Luxemburg, 300 
 j — Netherlands, 302 
 k — Norway, 304 
 
 1 — Portugal, 306 
 m — RouMANiA, 308 
 n — Russia, 308 
 
 o — Spain, 309 
 
 p — Sweden, 312 
 
 q — Switzerland, 315 
 
 CHAPTER 15.— NON-CONTRIBUTORY OR STRAIGHT 
 
 OLD AGE PENSIONS SYSTEMS, 318 
 a — Alaska, 318 
 b — Arizona, 319 
 c — Australia, 320 
 d — Denmark, 322 
 e — Great Britain. 324 
 f — New Zealand, 332 
 g — Uruguay, 335 
 
X CONTENTS 
 
 PART VI 
 
 APPENDIX 
 
 A — Bill Introduced by Senator McNary^ 339 
 B — Bill Presented by the Commission to the 1921 
 Pennsylvania State Legislature, 342 
 a — Administration, 343 
 b — Allowance, 344 
 c — Qualifications op Claimants, 345 
 d — Property Qualifications, 345 
 e — Calculations op Income, 346 
 f — How Administered, 346 
 g — Fines, Punishment and Criminal Pro- 
 cedure, 349 
 h — Funds and Expenses, S51 
 i — Annual Report Hearings Etc., 351 
 
FOREWORD 
 
 This book is, frankly, an appeal for social action. It 
 attempts to set forth the need for a constructive policy with 
 regard to the aged. Wlule the tide in social legislation seems 
 to have turned during the past few years, so that in many states 
 attempts are being made to repeal long sought for protective 
 measures, there is on the other hand evidence of an awakening 
 of many to the realization that the problem faced by the aged 
 cannot be ignored or postponed much longer. There is a 
 growing consciousness that social action is as inevitable for 
 the United States as it was in most countries abroad. Suffice 
 it to mention the many state commissions investigating the 
 problem recently, the great number of industrial concerns 
 grappling with it, and the numerous resolutions adopted by 
 many church bodies, fraternal orders and trade union organi- 
 zations endorsing government legislation with regard to the 
 aged. The fact that twenty-six foreign countries have already 
 adopted some form of social action for the relief of the aged is 
 indicative further that the problem is a matter for social rather 
 than for individual solution. 
 
 The writer did not approach the question of insurance with 
 any preconceived notions. Three years of first hand study 
 of the problems of the aged in one of our leading industrial 
 states — ^Pennsylvania — convinces him, however, that no other 
 way out is feasible. Our present methods, in dealing with the 
 aged are antiquated, inefficient, ineffective, costly and de- 
 moralizing. Some constructive social policy must be inaugur- 
 ated. In discussing the plans suggested for adoption, an 
 earnest eflFort has been made to present the merits and demerits 
 of each proposed scheme of legislation impartially. The 
 
 xi 
 
xii FOREWORD 
 
 writer may be accused, however, of a certain bias in connection 
 with this presentation, to which he pleads guilty. Absolute 
 impartiality in matters of social policy is only possible when 
 convictions and interests are slight. After everything has been 
 said and done it remains for the individual to determine what 
 he understands by "right" and "truth," and he can only be 
 guided by his own conscience and convictions. 
 
 In describing the pension systems of foreign governments, 
 an attempt has been made to bring the facts up to date. This 
 was only partly successful. Since the beginning of the war, 
 European documents which were readily obtainable under nor- 
 mal conditions, have been very meagre and limited, and some 
 reports have not been brought up to date. 
 
 The subj ect matter in the book beginning with Chapter Eight 
 has been drawn liberally from the report of the Pennsylvania 
 Commission on Old Age Pensions which was written by the 
 author in 1919. Everywhere, however, an attempt has been 
 made to collect and present the latest available data. 
 
 The writer wishes to record his debt of gratitude to the 
 Pennsylvania Commission on Old Age Pensions, which has so 
 generously extended to him the time and the office facilities 
 which were necessary in the preparation of this volume. The 
 keen interest of members in the problem has been a constant 
 encouragement and source of inspiration. He also wishes to 
 acknowledge his indebtedness for helpful suggestions in pre- 
 paring the manuscript to Professor Henry R. Seager of Col- 
 umbia University, Mr. George M. P. Baird, formerly of the 
 University of Pittsburgh, Miss Mary Bogue of the Mothers' 
 Assistance Fund of Pennsylvania, Miss Theresa Wolfson of the 
 Consumers' League of New York State, and Mrs. Helen Glenn 
 Tyson, of the University of Pittsburgh. 
 
 A. E. 
 
 New Yoek City 
 July 5, im 
 
INTRODUCTION 
 
 During the past dozen years, America has made her greatest 
 progress in manifesting pubHc concern for her large numbers 
 of bread-winners who are annually rendered incapable of self- 
 support by accident, sickness, unemployment and old age. 
 These four great contingencies in the life of the wage-earner — 
 long recognized as social problems of pressing importance in 
 countries of earlier industrial development — ^now claim our in- 
 creasing attention. 
 
 The free access to tillable land, which long offered "another 
 chance" to the dissatisfied industrial employee, has become to 
 millions of American city dwellers nothing more than a dream. 
 Meanwhile, as our country has become increasingly industrial- 
 ized we have invited to our shores millions upon millions of im- 
 migrants whose course of thinking has not been influenced by 
 American social and economic opportunities of the past. We 
 have a diverse population that yearly becomes more and more 
 like the populations of those older countries, and still less akin 
 to our earlier sturdy sons of immigrants who half a century 
 ago could and did sing "Uncle Sam is rich enough to give us all 
 a farm!" 
 
 With the ever-increasing demand for essential workers in our 
 industries has come a condition where matter-of-fact statisti- 
 cians report 3,000,000 disabling accidents yearly causing 
 50,000,000 days lost time ; and 250,000,000 days lost annually 
 on account of sickness ; while "four times in a single generation 
 the numbers of the unemployed in the United States have been 
 counted by millions and the idle capital of the country has been 
 
 viii 
 
xiv INTRODUCTION 
 
 counted by the billions of dollars." All of this has its effect 
 upon savings for old age. 
 
 ( The United States^ jtetrngelynatifliu-aa d with trad itions 
 of individualism based on earlier opportunities, has been slower 
 
 to face these mdusTriai problems, but recently there have been 
 signs of an awakening sense of responsibility.^ Voluntary 
 efforts of trade unions and humanitarian experirnents of the 
 more thoughtful employers have blazed the way towards social 
 action. Half-a-hundred official investigating commissions 
 have collected, classified and disseminated information — re- 
 sulting in most instances in recommendations for American 
 legislation/ 
 
 The industrial accident problem has been attacked in Amer- 
 ica by an intelligent method of social insurance, and although 
 fully adequate benefits are not yet offered, within twelve years 
 no less than forty-seven workmen's compensation laws have been 
 adopted. Naturally enough, the equally important problem 
 of wage earners' sickness is now under constant investigation 
 and the public is learning to look upon it as a subject which will 
 in future claim far more sweeping legislative attention. Un- 
 employment, the most complex of all industrial questions, 
 periodically forces its way to the front pages of our news- 
 papers, and in 1921 the Senate Judiciary Committee in one 
 state legislature, by unanimous vote, recommended the adoption 
 of compulsory unemployment compensation. The rapid spread 
 of American social legislation, when once initiated, is strikingly 
 illustrated by the adoption of Mothers' Pension Laws in forty- 
 one states and territories during the nine years 1911 to 1919. 
 
 Old age dependency has been less talked about, partly no 
 doubt because this evil presents itself less dramatically — its 
 saddest victims usually being hidden from the public eye — 
 partly also, because fewer people realize its connection with our 
 modern industrial methods, t Men have always grown old, it is 
 true, but now when they must seek work in a system whose 
 
INTRODUCTION xv 
 
 demands for intense application or speed are often merciless, 
 they are rejected as unemployable and find themselves without 
 means of suport at an earlier age.) In excptionally fatiguing 
 or dangerous trades the "human scrap heap" age is distressingly 
 low. A system which in the past has paid wages far too low 
 to permit the average workmen to prepare for old age by sav- 
 ing, is annually refusing jobs to thousands who are "too old" 
 to do its work. 
 
 The haphazard attempts to meet this problem through public 
 or private charity, employers' pension systems and trade union 
 or fraternal society benefits, have proved to be not only inade- 
 quate and inhumane, but also both costly and wasteful. Re- 
 cently great progress has been made toward scientific handling 
 of the problem as it affects public employees, especially 
 teachers. 
 
 The United States Government and many states and cities 
 have organized successful pension systems for their public 
 servants. A valuable record of a large scale American experi- 
 ment is furnished in the report of the first year's experience of 
 the federal government with its pension plan covering nearly 
 one-third of a million civilian employees in the classified service. 
 But the problem of old age dependency for private employ- 
 ments, has not been adequately met in any part of the United 
 States. ((Fortunately, signs of intelligent interest are becoming 
 more and more evident. Half a dozen states have appointed 
 commissions to study the subject, valuable material has been 
 gathered, and bills drafted. Unofficial but equally interesting 
 investigations have been carried on by labor organizations and 
 fraternal orders. Americans are recognizing the urgency of 
 this problem and are seeking authoritative inf ormation.\ ' 
 
 Not since the publication in 1912 of Mr. Squier's "Old Age 
 Dependency in the United States," have we had a new and com- 
 prehensive book treating this problem. Appearing now when 
 there is both need and demand for such information, Mr. Ep- 
 
xvi INTRODUCTION 
 
 stein's volume is especially timely and valuable. His experience 
 as Director of the Pennsylvania Commission on Old Age Pen- 
 sions has given him an exceptional opportunity for intensive 
 study of the field, and/lhe book contains a wealth of modern, 
 weU-organized material presented from the modem American 
 point of view.) It is decidedly the most convenient compilation 
 of up-to-date information on this very important subject. 
 
 John B. Andeews. 
 24 Gramercy Park, New York City. 
 January, 1922. 
 
PART I 
 
 ACTUAL CONDITIONS 
 OF THE AGED 
 
CHAPTER I 
 AFTER SIXTY— WHAT? 
 
 I The progress of a nation may be marked by the care which 
 it provides for its aged. ) The nineteenth-century doctrine of 
 laissez-faire, as applied to aged and superannuated wage- 
 earners, has been practically discarded by most civilized na- 
 tions, including every English-speaking country in the world 
 except the United States. Instead, a definite policy of social 
 legislation has superseded the chaotic and degrading practices 
 of alms-giving and poor relief. \The enemies of social legislation 
 in this country, however, still contend that the millions of 
 workers in our industries "are working for themselves ; that they 
 have unrestricted control over the expenditures of their incomes, 
 and that they have their future fate in their own hands." y 
 As a nation, we are still frightened at the thought of becoming 
 "our brother's keeper." In spite of superior wealth and ac- 
 cumulation of goods, our national conscience is not in the 
 least disturbed when the former creators of our wealth are 
 forced to drag out their final days, physically exhausted, 
 friendless and destitute, in the wretched confines of a poor- 
 house, or to receive some other degrading and humiliating form 
 of pauper relief. 
 
 (To protect the wage-earners in their old age is merely to 
 recognize the changes wrought in our industrial system) Old 
 age was not universally dreaded before the industrial revolution 
 or the advent of the modern factory system. On the contrary, 
 it was even looked forward to with a certain feeling of satisfac- 
 tion and accomplishment. In the patriarchal state, old age 
 
 1 (F. L. Hoffman, "American Statistical Association Publications," 
 Marcli 1909, pp 368-9). 
 
2 FACING OLD AGE 
 
 was revered and the aged person in tribal economy was con^ 
 sidered the embodiment of wisdom and authority.^ In an ear- 
 lier system where the tribe or clan was a unit, the old remained 
 supreme and their^>tfp«>iadt^L,coiitinued beyondtheir produc- 
 tive years. Under the feudal system THelord was obliged to 
 take care of his workers in case of sickness, accident, and old 
 age. The artisan or labourer in mediaeval times ordinarily con- 
 tinued to work as long as he could produce something. In the 
 early state of the factory system also the economic relations 
 between men were more inter-dependent and of a more per- 
 manent character. The labour contract was usually lifelong, 
 and the employer took a personal interest in the welfare of his 
 workers. Again, in an agricultural society men and women 
 are still useful in their old age, and their activities' rarely cease 
 before actual s^niliiy has set in. Under these conditions, men 
 and women did not look with dread upon approaching economic 
 old age, and there was little necessity for individual provision 
 against it. 
 
 Our modern wage system presents an entirely different spec- 
 tacle. Today, most men and women are dependent upon their 
 daily toil for their daily bread. The pace of the present in- 
 dustrial system tends to wear workmen out rapidly. Fatigue 
 produced by over speeding as well as the hazards character- 
 istic of modem industry have shortened the period of eflFective 
 
 1 The reverence shown aged persons is clearly illustrated from the 
 following incident given by Dewey & Tufts in their "Ethics" (pp 17-18) : 
 
 "A Chinese aided by his wife flogged his mother. The imperial order 
 not only commanded tiiat the criminals should be put to death; it further 
 directed that the head of the clan should be put to death, that the 
 immediate neighbours each receive eighty blows and be sent into exile; 
 that the head or representatives of the graduates of the first degree (or 
 B. A.) among whom the male offender ranked should be flogged and exiled; 
 that the granduncle, the uncle, and two elder brothers should be put to 
 death; that the prefect and the rulers should for a time be deprived of 
 their rank; that on the face of the mother of the female offender four 
 Chinese characters expressive of neglect of duty toward her daughter 
 should be tattooed, and that she be exiled to a distant province; that the 
 father of the female offender, a bachelor of arts, should not be allowed 
 to take any higher literary degrees, and that he be flogged and exiled; that 
 the son of the offenders should receive another name, and that the lands of 
 ihe offenders for a time remain fallow." 
 
AFTER SIXTY — WHAT? 3 
 
 production of industrial workers. Increased industrial effi- 
 ciency, "scientific management," the "bonus system" and spe- 
 cialized and standardized production are forces which are in- 
 creasingly using up human energy at greater speed and in a 
 briefer period of Ufe. Often, at the age when the worker in 
 agricultural pursuits is considered to be in his prime, the indus- 
 trial worker is found to have become worn out and old. And, 
 in industry, once the approach of old age becomes apparent, the 
 worker is thrown upon his own resources. 
 
 Unlike the gradual physical decline in old age character- 
 istic of agricultural and less developed industrial countries, 
 economic superannuation, which takes place abruptly and 
 earlier in life, stands like a spectre before industrial workers. 
 Few industrial wage-earners may expect to continue at their 
 accustomed work until the end of their days. Because of the 
 developed eflSciency standards, so essential to successful busi- 
 ness, the wage-earner finds the problem of old age principally 
 one either of increasing inability to find employment or at best 
 of employment at low compensation. After a certain age has 
 been attained, although the worker may still be able to do fair 
 work, if he is no longer able to maintain his former speed, he is 
 likely to be eliminated from industry. The old man finds it diffi- 
 cult to secure work even at low wages. Rowntree and Lasker, in 
 a study of unemployment in Great Britain, foundl old age the 
 primary causal factor in 23.3 per cent, of the cases studied. 
 These investigators assert that: "It is unfortunately indis- 
 putable that when a skilled worker gets past 40, he finds it 
 very difficult to meet with an employer who is willing to give him 
 regular work." ^ What is true in England in this respect is 
 equally true in the United States. 
 
 Contrary to the conditions existing in the professions, in 
 business, or in politics, where men often do their best work at 
 about the age of 60, and where experience and long standing 
 
 1 Eowntree, B. S. and B. Lasker. Unemployment, Macmillan 1910, p 53. 
 
4 FACING- OLDAGE 
 
 count a great deal, the industrial worker finds himself not in- 
 frequently eliminated from productive industry after passing 
 his fiftieth birthday. With the continuous introduction of new 
 machinery and newer processes of work, age and experience are 
 of little value. The labor contract in the factory system is 
 made only for a temporary period, and the employer ordinarily 
 does not feel under obligation to support his workers during 
 their declining years of inactivity. Thus it is not uncommon 
 today to find aged and decrepit workers relegated to the in- 
 dustrial scrap-heap as useless and of no economic value. Says 
 Prof. E. T. Devine: 
 
 "It is notorious that the insatiable factory wears out its workers 
 with great rapidity. As it scraps machinery so it scraps human 
 beings. The young, the vigorous, the adaptable, the supple of 
 limb, the alert of mind, are in demand. In business and in the 
 professions maturity of judgment and ripened experience offset, to 
 some extent, the disadvantage of old age; but in the factory and on 
 the railway, with spade and pick, at the spindle, at the steel conver- 
 ters there are no offsets. Middle age is old age, and the womout 
 worker, if he has no children and if he has no savings, becomes an 
 item in the aggregate of the unemployed. The veteran of industry 
 who is crowded out by changes in processes and the use of new 
 machinery is obviously an instance of maladjustment."^ 
 
 J It will become evident in the discussions that follow, that the 
 problem facing the aged today is largely the creation of the 
 modern machine industry with its components of specialization, 
 speed, and strain^ It is a result of the elimination of large 
 numbers of workers as soon as they are unable to keep up fully 
 with the demands of modern methods of production. The in- 
 troduction of new inventions and more specialized! machinery, 
 inevitable in the evolutionary process, while resulting in an 
 ultimate good, always involves the replacing of men, which in 
 the case of the aged, has an absolutely harmful effect, as it 
 lE. T. Devine, Misery and its Causes, p. 125. 
 
AFTER SIXTY — WHAT? 6 
 
 leaves them destitute. For, in addition to preventing their con- 
 tinuity in their regular work, it precludes also their adapta- 
 bility to newer processes of work. The lot of the aged and 
 superannuated worker is thus adversely affected by practically 
 every step of industrial progress; and little or no benefit is 
 derived by old wage-earners from industrial improvements. 
 
 Not infrequently when the difficulties facing the aged wage- 
 earners are set forth, the smug and c ompla< iP"t fiit''^'^" ^a^ipg : 
 "As one makes his bed, so he lies." I Poverty in old age, it is 
 asserted, is chiefly the result of improvidence, intemperance, 
 extravagance, thriftlessness, or similar vices) As a result of 
 this convenient philosophy, we have made practically no attempt 
 at the amelioration of the adverse conditions facing old age. 
 More and more, however, it is coming to be recognized by all 
 students of social and economic conditions th»t"Tritl i. thp /t?Ost 
 of living soaring con tinuousbuthe greaL masses of wag£:£aj;ners 
 cannot lay asicle fro m current wages sufficient to provide for 
 po ssi61e emergencies. This has become especiiilly patent as 
 careful data on wages and incomes have been gathered by such 
 students and responsible organizations as, Chapin, Ryan, 
 Streightoff, Nearing, the United States Census, the Bureau of 
 Labor Statistics in the United States Department of Labor, 
 the National Industrial Conference Board, and many of the 
 state bureaus. This entire problem wiU be discussed at length 
 in Chapter VI. It is sufficient to state here, that under present 
 economic conditions and those of the past decade, the average 
 wage-earning family must indeed be possessed of great resource- 
 fulness even to make both ends meet, to say nothing of being 
 able to save. In this connection it must also be pointed out 
 that saving for old age is especially difficult because the need is 
 remote and current demands press. The dangers of poverty in 
 old age hardly impress the minds of the young. Most peop le 
 have a worki ng belief that things wiU be differmt^ thirij i-a^- 
 fortY'Yea rs'Tience, a time which, indeed, seems unreal and dis- 
 tant. As Professor Seager aptly points out : 
 
6 FACING OLD AGE 
 
 "The conditions of modern industry have failed to supply motives 
 for saving sufficiently strong to take the place of those that are gone. 
 It is true that saving is still necessary to provide for the rainy day^, 
 for loss of earning power due to illness or accident or old age, but 
 against these needs is the insistent demand of the present for better 
 food, for better living conditions, for educational opportunities for 
 children. This demand is not fixed and stationary. It is always 
 expanding. . . . One consequence of our living together in cities and 
 daily observing the habits of those better ofi" than we are is that we 
 are under constant pressure to advance our standards. This pres- 
 sure affects the wage-earner quite as much as it does the college 
 professor. Both, when confronted with the problem of supporting 
 a family in a modern city, find the cost of living as Mark Twain 
 has said "a little more than you've got."^ 
 
 The problem to be faced in, old age by wage-earners may thus 
 be summarized as being two-fold in character. /First, the wage- 
 earner is confronted with the fact of being compelled to discon- 
 tinue work much earlier in life than shouldi be necessary, not 
 because he is completely worn out, but because he is unable 
 to maintain the pace necessary in modern production; and 
 se condly, he faces the inability to provide individual savings to 
 support himself in old ag^ 
 
 In addition, the above conditions of impotence in old age 
 are augmented' still further by the break-up of the family unit 
 in modem society. With increasing rapidity home-ties and 
 family solidarity are being weakened and broken by the mobil- 
 ity so essential to modern industrial development. This is 
 especially true in the United States and among wage-earners. 
 The migratory and immigrant labourers move from lumber- 
 camps to harvesting fields, railway construction, and public 
 works as the change of employment offers. Thousands of 
 aged workers find themselves in a strange country without 
 friends or relatives. Many of these have never had children, or 
 if they are parents, their children are unable to assist them. 
 
 - H. R. Seager "Social Insurance," pp 10-11. 
 
AFTER SIXTY — WHAT? 7 
 
 Ordinarily, the children are either unattached migrants 
 or are married andi have children of their own who must 
 be supported and educated. No one contends that it is 
 good social policy to have children undernourished and set to 
 work early in Ufe in order that they may help support the 
 passing generation. And as a result one finds that the only 
 source which secured sustenance and bare comfort to old age, 
 in an earlier society, has disappeared for a great many. We, 
 therefore, send these unfortunates, in our laissez-faire fashion, 
 to the unfriendly poorhouses to secure the care and comforts 
 available. Do they secure it .'' Says Professor Devine : 
 
 "Suicide, friendless old age, unemployment under ordinary in- 
 dustrial conditions, some forms of insanity and other disabling 
 disease, immorality and crime, owe a part of their prevalence and 
 their virulence to the absence of the capacity or opportunity for 
 personal friendship, to the absence of those social props and safe- 
 guards which our friends naturally supply. The almshouse is the 
 final apotheosis of friendlessness."^ 
 
 Indeed, once the difficvdties faced in old age by the great 
 majority of workers are realized, one cannot but wonder 
 whether the fact that the aged population in the United States 
 has increased from 3.5 per cent, for those 65 years of age and 
 upward in 1880 to 4.3 per cent, in 1910, and that the expec- 
 tation of life has improved, has been a desirable thing and is 
 to be considered much of a blessing by the aged poor. Faced 
 with conditions such as described above, and with the alms- 
 house as the final destination of a life of destitution and drudg- 
 ery, do they not look upon modern industrial development, 
 as well as the advances made in medical progress and health as 
 the creations of an evil spirit, which have, on the one hand, 
 curtailed their period of production, and, on the other hand, 
 prolonged their years of misery by the increased duration of 
 life? 
 
 1 E. T. Devine, Misery and its Causes, pp. 169-60. 
 
CHAPTER II 
 
 THE INDUSTRIAL SCRAP HEAP 
 
 Qihe prospects of living to old age are becoming increas- 
 ingly better as methods of sanitation and public health are 
 improved.) According to the United States Life Tables, the 
 American vital statistics in 1910 showed that out of every 
 100 persons at the age of 20, 64 will reach the age of 60; 
 54, the age of 65; and 42, the age of 70. Of 100 persons 
 alive at the age of 30, 53 will reach the age of 65, and 48 
 will not die before 70. In other words, of all men alive 
 at the age of 30, more than one-half will reach 65. A 
 person who has reached the age of 65 may still expect to live 
 11 more years, and the person who has reached the age of 70 
 may still hope to have nine more years of life. In 1880, 
 according to the U. S. Census, the number of persons 65 years 
 of age and over in the entire population constituted 3.5 per 
 cent. This aged population increased to 3.9 per cent, in 1890, 
 to 4.2 per cent, in 1900, and to 4.3 per cent, in 1910. Of males 
 15 years of age and over, the number of those 65 and over 
 increased from 54 per thousand in 1880 to 60 in 1890 and 63 
 in 1910. It is thus clear that the proportion of older persons 
 in the United States has been constantly increasing. 
 
 In 1900 there were in the United States 3,083,995 persons 
 65 years of age and^ over, constituting 4.2 per cent, of the 
 total population. In 1910 this number increased to 3,949,524 
 and constituted 4.3 per cent, of the population. Of the nearly 
 four million persons 65 and over in 1910, 1,679,503, or 42.5 
 per cent., were between the ages of 65 and 69. The magnitude 
 of the old age problem is more easily appreciated when one 
 
THE INDUSTRIAL SCRAP HEAP 9 
 
 reflects that this aged group outnumbers the entire population 
 of the United States during the time of the Revolution — ^the 
 first Census of 1790 giving the total population of the United 
 States as 3,929,214. No State in the Union, save the States 
 of New York, Pennsylvania, Illmois, and Ohio, has a greater 
 population ; and the aged population in 1910 was greater than 
 the combined populations of the states of Arizona, Delaware, 
 Idaho, Montana, Nevada, New Hampshire, New Mexico, North 
 Dakota, Utah, Vermont, Wyoming, the District of Columbia, 
 and Alaska. 
 
 According to the United States Census of 1910 there were in 
 the United States at that time 38,167,336 persons 10 years of 
 age and over engaged in gainful occupations. These con- 
 stituted 53.5 per cent, of the entire population of that age, an 
 increase of 3.1 per cent, over those reported gainfully employed 
 for the same ages in 1900, and an increase of 6 per cent, in 
 the population of the same age as compared with the proportion 
 gainfully employed in 1880. In the case of the male popula- 
 tion 10 years of age and over, 81.3 per cent, were recorded as 
 gainfully employed in the United States in 1910 as compared 
 with 80.0 per cent, reported in 1900, and 78.7 in 1880. Of 
 the female population 23.4 per cent, of those 10 years of age 
 and over were reported gainfully employed in 1910 as compared 
 -with 18.8 per cent, employed in 1900, and 14.7 per cent, in 
 1880. 
 
 That few wage-earners are able to continue at work until 
 the end of their lives is known to all. While the percentage of 
 the entire population which must secure its livelihood through 
 gainful work has steadily increased in the United States, it 
 is significant to note that the samefcensus figures show that 
 after middle age the percentages of those engaged in industry 
 and trades have been continuously diminishing^ Out of every 
 100 males in gainful occupations in the United States in 1890, 
 thirteen and one-half were between the ages of 45 and 54 ; eight 
 between the ages of 56 and 64, and five and three-tenths were 
 
FACING OLD AGE 
 
 06 years of age and over. In the same year, ninety-six and 
 six-tenths out of every 100 males between the ages of 45 and 54 
 were found gainfully employed. Of those between the ages of 
 55 to 64, 92.9 per cent, were still found occupied, while of 
 those 65 years of age and over, 73.8 were still recorded as 
 engaged in gainful occupations. Ten years later, in 1900, 
 the percentage of males employed between the ages of 45 and 
 54 was 95.5; of those between 55 and 64, 90 per cent., and the 
 percentage of those over 65 who were still occupied dropped to 
 68.4, a decrease of 5.4 per cent, in 10 years. The 1900 Census 
 figures also show that of all the males 55 years of age and over, 
 85 per cent, were found gainfully employed in 1890, but only 
 
 80.7 of the same were employed in 1900, a decline of 4.3 per 
 cent, in 10 years. 
 
 The 1910 Census gives no age classification over 45. The 
 information available shows, however, that while in 1900, 87.9 
 per cent, of all males over 45 were gainfully employed, the per- 
 centage declined to 85.9 in 1910. Assuming that the same rate 
 of decrease of the gainfully employed males 55 years of age 
 and over held true in the period between 1900 and 1910 as 
 that which took place between the decade of 1890 and 1900, 
 there would be only 76.8 per cent, of males 55 and over, in the 
 United States employed^ in 1910, as compared with 80.7 in 
 1900, and 85 in 1890. Similarly, in regard to those 65 and 
 over, 63 per cent, of the males in the United States would have 
 been employed in 1910 as compared with 68.4 in 1900 and 
 
 73.8 in 1890. Thus it may be assumed that of the 4,660,379 
 males 55 years of age and over in 1910, 1,081,208 were already 
 eliminated from the gainfully employed class. 
 
 DECLINE OF GAINFULLY OCCUPIED MIDDLE- 
 AGED MALES 
 Percentage of Gainfully Occupied 
 Ages 1890 1900 1910 
 
 45-54 96.6 95.5 
 
 55-64 92.9 90.0 
 
 65 and over 73.8 , 68.4 63 (estimate) 
 
 55 and over 85.0 80.7 76.8 (estimate) 
 
 45 and over 87.9 85.9 
 
THE INDUSTRIAL SCRAP^ HEAP 11 
 
 The steady reduction in the percentages of those gainfully 
 employed in the later years of life, as shown by the United 
 States Census reports, is largely due to the decrease in the 
 population of those ages engaged in industrial and manufac- 
 turing pursuits rather than agricultural and professions. This 
 is obvious from the following: Of the total 38,167,336 gain- 
 fully employed persons in the United States in 1910, 12,567,- 
 925, or 32.8 per cent., were engaged in agricultural pursuits ; 
 10,807,521, or 28.4 per cent., were engaged in manufacturing 
 and mechanical occupations; 7,605,730, or 20 per cent., in 
 trade and transportation; 5,361,033, or 14* per cent., were 
 found employed in domestic and personal services, and 1,8125,- 
 127, or 4.8 per cent., were engaged in various professional 
 vocations. The tremendous expansion in the manufacturing 
 and mechanical pursuits is apparent from the fact that the 
 population engaged in these occupations in 1900 was only 
 7,085,309. There was an increase of more than three and 
 one-half millions in 10 years. On the other hand, of the 
 1,065,000 men 65 years of age and over reported gainfully 
 employed in 1900, approximately 50 per cent, were engaged 
 in agriculture, a considerable number were engaged in the pro- 
 fessions and business, and only about one-third of the number 
 were employed as wage-earners. In 1900 the persons 55 years 
 of age and over constituted 12.3 per cent, in all occupations. 
 When this group is classified in accordance with the nature 
 of its work, it is found that 15.1 per cent, of this group were 
 engaged in agricultural pursuits; 15 per cent, in professional 
 vocations ; 10.5 per cent, in domestic and personal services ; 
 10.5 per cent, in manufacturing and mechanical pursuits, and 
 9.5 per cent, in trade and transportation. Thus while the 
 aged group of 55 and over constituted 12.3 per cent, in all 
 occupations it is much higher than this average in the case of 
 agricultural and professional pursuits, but is much below the 
 average in the case of manufacturing and transportation 
 occupations. This is practically the reverse of the proportions 
 
12 FACING OLD AGE 
 
 found among those gainfully employed in the various indus- 
 tries in the earlier age groups. 
 
 Further light upon this phase may he gleaned from the 
 Twelfth Census. According to the 1900 Census enumeration, 
 the percentage of the total number of workers in all occupations 
 between the ages of 45 and 64 formed 25.8 per cent, of workers 
 of all ages employed in all occupations. The percentage of 
 those employed between 65 and 64 was 12.3, and that of those 
 64 and over, 4.4 per cent. These figures were obtained after 
 the elimination of certain occupations which have a large pro- 
 portion of boys as well as those in which the majority of 
 workers were women, A comparison of the percentages for all 
 occupations with the percentages of those engaged in the in- 
 dustries given in the table below reveals the fact that, while 
 in the outdoor industries the percentage of those employed 
 between 45 arid 54 holds approximately true, it is considerably 
 below in the case of the heavier industries, and much below the 
 general proportion after the 65th birthday has been reached. 
 
 NUMBER AND PER CENT OF EMPLOYEES 45 AND OVER IN 
 
 SELECTED INDUSTRIES IN THE UNITED STATES, 1900 i 
 
 45 to 54 55 to 64 66 and over 
 Occupation No. Percent No. Percent No. Percent 
 
 AU Occupations 6,187,927 26.8 2,925,122 12.2 1,065,275 4.4 
 
 Marble & Stone Cutters. . . 14,339 26.3 5,264 9.6 1,498 2.7 
 Painters, Glaziers, Varnish- 
 
 ers 69,681 26.2 28,406 9.9 7,759 2.8 
 
 Brewers and Malsters 5,204 26.1 1,686 8.1 419 2.0 
 
 Steam Boilermakers 5,938 17.0 2,103 6.3 527 1.6 
 
 Iron and Steel Workers... 47,042 16.3 15,789 5.4 3,783 1.3 
 
 Brass Workers 3,822 14.7 7,394 6.3 360 1.3 
 
 Potters 1,950 14.7 691 6.2 208 1.5 
 
 Glass Makers 6,575 11.7 1,737 3.6 392 0.8 
 
 The Thirteenth Census does not give the age classifications 
 which would make a similar comparison possible. However, 
 the Massachusetts Commission on Old Age Pensions, Annuities, 
 and Insurance, found in 1910, in a study of 870 aged persons, 
 that the average age at which the wage-earning power was com- 
 pletely lost was 68 years. The average age at which the 
 1 Report of Ohio Health and Old Age Insurance Commission, p. 209. 
 
THE INDUSTRIAL SCRAP HEAP 13 
 
 earning power was partially impaired, in a study of 872 par- 
 tially incapacitated persons, was 64. In 1918, the Ohio Com- 
 mission on Health Insurance and Old Age Pensions found in 
 six foundries employing 500 moulders only three men over 50 
 years of age engaged in heavy floor moulding. Ten men over 
 60 were engaged in light bench moulding. 
 
 The table below shows succinctly that the strain of modern 
 machine industry permits only a few wage-earners to remain 
 at work after they have passed three score and five. It is 
 further proof of the above figures pointing to the constant re- 
 duction of those 65 years of age and over engaged in mechan- 
 ical and manufacturing pursuits. An examination of the 
 table compiled in 1920, regarding the ages when actually 
 pensioned as compared with the ages required by these large 
 concerns for obtaining a pension, reveals the fact that in spite 
 of the strict regulations provided, a number of these have 
 actually been pensioned before the specified age. Thus more 
 than one-half of those on the pension list of the United States 
 Steel and Carnegie Pension Fund have retired before the age of 
 65, although the age for voluntary retirement is set at 65. 
 In the case of the pensioners of the Pennsylvania Rail- 
 road Company, while the compulsory age of retirement is set at 
 70, 44 per cent, had been placed on the pension list before they 
 had reached the compulsory retirement age. Similar propor- 
 tions are found in the case of most of the other industrial 
 pensioners. 
 
 The extent of disability of wage-earners as they are aff'ected 
 by both age and occupations has been brought out in a compre- 
 hensive manner by Dr. Boris Emmet from studies recently made 
 of the Workmen's Sick and Death Benefit Fund of the United 
 States, for the United States Bureau of Labour Statistics. ' 
 These investigations show conclusively that age and occupation 
 
 1 Labour Review, November 1919; Ibid, March 1920 and Modern 
 Medicine, September, 1919. 
 
14 
 
 FACING OLD AGE 
 
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THE INDUSTRIAL SCRAP HEAP 16 
 
 are the two most important factors in determining the duration 
 and extent of disability. The average number of days of dis- 
 ability per member was found to be 6.6 per annum. An exam- 
 ination of the age groups shows that up to the age of 45 the 
 disabilities' duration is below the average, but from that age 
 on, it increases steadily until it averages 15.2 in the case of 
 those who are 70 years of age and over. By the different age 
 groups the percentages above ( + ) or below ( — ) the average 
 are as follows: 
 
 Average No. of Per Cent of Deviation 
 Age Group Disability Days from Average 
 
 Under 20 years 6.2 —21.2 
 
 22 to 24, years 4.8 —27.3 
 
 25 to 29 years 5.0 —24.2 
 
 30 to 34 years 4.9 —25.8 
 
 35 to 39 years 5.6 — 16.1 
 
 40 to 44 years 6.4 — 3.0 
 
 45 to 49 years Same as average 
 
 50 to 54 years 7.4 + 12.1 
 
 55 to 59 years 9.0 + 3^.4 
 
 60 to 64 years 12.0 + 81.8 
 
 65 to 69 years 13.8 +109.1 
 
 70 years and over 16.2 -j- 1^0.3 
 
 All age groups 6.6 None 
 
 The occupational hazards of certain of our large industries 
 are presented so clearly in the table below that no comment at 
 length is necessary. While in the professions the average num- 
 ber of days of disability per year is 2.6, it progresses contin- 
 uously until in the case of miners it reaches 9.7, almost four 
 times as great. 
 
 ANNUAL DISABILITY DAYS FOR EACH OCCUPATION 
 
 Average Annual 
 Occupation Disability Dats 
 
 PER Yeae 
 
 Professional 2.6 
 
 Tpw^clcrs ,,,.,,,.....•-.■•••■••••••••••••••••■•• o.o 
 
 Clothing Mfr. Employees 4.4 
 
 Textile Mfr. Employees 4.5 
 
 Trade and Clerical 4.7 
 
 Electrical "Workers 4.8 
 
 Other Manufacturing Employees S.l 
 
 Farmers, Gardeners, and Florists 5-3 
 
 Sheet Metal Workers S.b 
 
16 FACINGOLDAGE 
 
 Occupation Average Annual 
 
 Disability Days 
 per Year 
 
 Plumbers 5.6 
 
 Plasterers \\ 6.6 
 
 Unspeciaed Occupations '. 5.7 
 
 Holders 6.8 
 
 Leather Workers '..'..'.'.'.'.. 6.8 
 
 Tanners .' 5.8 
 
 Auto, Carriage and Wagon Mfg. emp 6.9 
 
 Barbers 6.9 
 
 Engineers and Firemen 6.0 
 
 Bartenders 6.0 
 
 Woodworkers 6.1 
 
 Printers and Engravers 6.1 
 
 Machinists 6.1 
 
 Food Employees 6.2 
 
 Cooks and Waiters 6.2 
 
 Dyers 6.4 
 
 Painters 6.4 
 
 Clay Products Mfg. emp 6.6 
 
 Other Building Construction emp 6.0 
 
 Carpenters 6.7 
 
 Tobacco and Cigars 6.8 
 
 Slaughtering and Meat Packing emp 6.9 
 
 Blacksmiths 6.9 
 
 Labourers, not specified 6.9 
 
 Glass Workers 7.1 
 
 Bricklayers 7.1 
 
 Stone and Granite 7.6 
 
 Liquor Manufacturing emp 7.9 
 
 Railway Employees 8.4 
 
 Drivers 8.6 
 
 Freight Handlers 9.6 
 
 Miners 9.7 
 
 Average of all Occupations 6.4 
 
 A valuable investigation in regard to this phase of the 
 problem was made by the Pennsylvania Commission on Old 
 Age Pensions, during 1918-19. This Commission interviewed 
 over ■i,500 people, 50 years of age and over in a house-to-house 
 canvass in the cities of Philadelphia, Pittsburgh, and Reading. 
 It also made a study of the ages of partial and total impair- 
 ment of workers in several industries. A case of partial impair- 
 ment was assimied when the individual sustained a reduction in 
 wages, either because of displacement or change in job as a 
 result of sickness or old age. The Commission states that 
 its studies revealed the following : ^ 
 
 1 Report Pennsylvania Commission on Old Age Pensions, March, 1919, 
 p. 10. 
 
THE INDUSTRIAL SCRAP, HEAP 17 
 
 (a) The earning power of many workers in Pennsylvania is im- 
 paired before they reach the age of 40. The percentages of par- 
 tial impairment at the age of 40 were fomid to vary from 2.6 per 
 cent, among indoor and sedentary trades^, to 16.4 in the steel indus- 
 tryj and 57 per cent, in the case of railroad workers. Only in the 
 steel industry^ however, were there many who were totally incapaci- 
 tated before the age of 50. In the building trades, 12.6 per cent, 
 were partially impaired before the age of 50; while 6.3 per cent, 
 were totally incapacitated before reaching the same age. On reach- 
 ing the above age it was found that 55.3 per cent, were partially 
 and 14.1 per cent, were totally impaired in the case of steel workers. 
 Of those engaged in casual occupations 26.7 per cent, have had 
 their earning power partly, and 8.4 per cent, wholly reduced before 
 attaining 50 years of age. Of indoor and sedentary trades the 
 percentage of partially impaired workers before the 50th birthday 
 was 15.2, while 8.3 were wholly disqualified for service at that age. 
 Nearly 27 per cent, among glass blowers had had their earning 
 power reduced before reaching 50 years of age, and 20 per cent, 
 were permanently incapacitated at the same age. Of skilled work- 
 men in the various trades, 29 per cent, were impaired partially and 
 less than three per cent, entirely, before attaining their 50th birth- 
 day. Among railroad workers, those whose incomes were afi'ected 
 before the age of 50, the percentages were 64.3 to a partial extent, 
 and 6.2 entirely. 
 
 (b) At the age of 60, the proportion of workers, whose earning 
 power had not yet been aiFected, according to the various trades, 
 were as follows: In the building trades, 55.1 per cent, suffered 
 no loss of income before reaching the age of 60. In the steel in- 
 dustry only 13.2 per cent, were earning the same amounts as in 
 their earlier days at the above age. Thirty-six per cent, of workers, 
 at 60 years of age, were still found to be engaged in casual occupa- 
 tions. Among workers in indoor and sedentary trades, 46.4 per 
 cent, were found without reduction in their earning power at the 
 age of 60. Only 26.9 per cent, of glass blowers were in their 
 full capacity at the age of 70. The percentage of skilled mechanics - 
 found in good health at 60 was 25.5, while 28.2 per cent, of rail- 
 road workers were found to be in unimpaired health at the age of 60. 
 
 The Commission concludes: "An examination of the total num- 
 
18 FACINGOLDAGE 
 
 ber of aged persons in all the three cities from whom the previous 
 and present occupations were ascertained, shows that men past a 
 certain age must quit even the skilled trades in which they have 
 been engaged the greater part of their lives. Modern industry, 
 apparently, has little use for the superannuated worker. A few 
 men can continue working at the same occupation after they have 
 reached a certain age. While 36 per cent, stated that they were 
 skilled or semi-skiUed mechanics in their earlier days, only 23.8 
 per cent, of men past 50 years of age were still engaged in the 
 same occupation. The percentage of those doing unskilled or com- 
 mon labour or clerical labour, on the other hand, remained stable. 
 It is also to be noticed that in their earlier days less than two per 
 cent, were not working because of incapacity, but 26.6 per cent. 
 were found not to be working among those 50 years of age and over. 
 The fluctuations of the minor occupations are inconsiderable." ^ 
 
 Similar studies of several hundred bituminous miners scat- 
 tered through a dozen mining districts in Pennsylvania and 
 of about two hundred steel workers were recently completed 
 by the writer for the above Commission. The investigations 
 disclose that of 368 miners, 50 years of age and over, 177 
 were stiU in fair or good health, while 191 or somewhat more 
 than 50 per cent, of those investigated, were found to be either 
 partially or totally incapacitated. Of the 112 reported as 
 partially incapacitated, 79, or 70.5 per cent., became so before 
 the age of 60 ; of the 79 reported as totally incapacitated 
 38, or 50 per cent., were thus disabled before the same age. 
 While most of those reported as partially incapacitated 
 were still engaged in some form of work or other, this was 
 irregular and uncertain, as most of these persons were suffer- 
 ing either from chronic sickness or the consequences of serious 
 accident. 
 
 In the case of 146 steel workers, 50 years of age and over, 
 investigated in Homestead and Steelton, 90, or 62 per cent., 
 were found to be either in part or completely impaired in re- 
 
 1 Ibid p. 101. 
 
THE INDUSTRIAL SCRAP HEAP 19 
 
 spect to their health and earning power, the great majority of 
 these becoming incapacitated before the age of 60. The causes 
 of impairment assigned in more than three-fourths of the cases 
 of both classes of labour were either sickness or accident. Old 
 age, as such, was given only in a few instances as a direct 
 cause of incapacity. 
 
 AGES OF INCAPACITY OF MINERS AND STEEL WORKERS 
 
 MiNEHS Steel Woekees 
 Ages of Incapacity Partial Total Partial Total 
 
 Under 50 29 15 8 4 
 
 60 to 60 50 23 25 5 
 
 60 to 65 18 15 11 6 
 
 65 to TO 14 20 4 5 
 
 70 and over 1 6 12 10 
 
 Total Incapacitated... 112 79 60 30 
 
 The reports of the different State Industrial Accident Com- 
 missions and Compensation Bureaus corroborate further the 
 evidence at hand that there are fewer persons past middle age 
 engaged in industry than the proportion of the same group 
 in the entire population. The Industrial Commission of Wis- 
 consin reported in 1915 that of all persons injured at work 
 in that state, 63 per cent, were under 30 years of age ; 67 per 
 cent, were under 40; 5 per cent, between 50 to 55, and only 5 
 per cent, more above that age. For the population 15 
 years of age and over as a whdle, 7 per cent, were 50 to 55, 
 and 16 per cent, were 55 and over.^ The California Indus- 
 trial Accident Commission reports that in 1918, of 2,100 per- 
 manent injury cases, 1,729, or 82.3 per cent., were under the 
 age of 50; 257 were between 60 and 60, and 114 above that 
 age.^ Of 2,569 fatal accident cases which occurred in Penn- 
 sylvania in 1919, 1,932 or 75.2 per cent., were under 50 years 
 of age; 262, or 10.2 per cent., were between the ages of 50 
 and 60, and only 136, or 5.2 per cent., were above that age. 
 The ages of the rest were not ascertained. 
 
 1 Report on Old Age ReUef, Industrial Commission of Wisconsin, 
 p 8, 1915. 
 
 2 Report of Industrial Accident Commission of California, 1919 p. 90. 
 
\ FACING OLD AGE 
 
 iCven more significant in this respect are the disclosures of 
 an investigation of several trade union locals recently made 
 by the writer. Printers are known to work much longer in 
 life than do workers in many other crajfts. In spite of this 
 fact, it was found that of a membership of approximately 1,500, 
 the Philadelphia Typographical Union No. 2 had on its lists 
 only 145 persons, approximately 10 per cent., who were 60 
 years of age and over; and 47 of these were already on the 
 pension roll of the International Typographical Union. Local 
 No. 98, Philadelphia, of the International Brotherhood of 
 Electrical Workers had no one 60 years of age or over on its 
 membership roll of approximately 1,250. Workers in the 
 building trades, it is frequently asserted, work until very 
 late in life. An examination of the ages of 450 members of 
 Carpenters' Local No. 287 in Harrisburg showed only 25 
 persons 60 years of age and over. Bricklayers' Local No. 
 71, in the same city, had only 14 members between the ages 
 of 50 to 60 and a similar number 60 and over among 152 
 members. Carpenters' Local No. 1073, Philadelphia, has been 
 in existence since 1902 and has a membership of over 1,400. 
 There were in this local only 60 men who were 50 years of age 
 and over, and only seven of these were above 60. A canvass 
 of over 600 miners' locals with a membership of over 120,000 
 persons, made a few years ago by a Committee of the United 
 Mine Workers of America, showed that there were in these 
 locals a total of 6,283 persons 60 years of age and over, of 
 whom only 2,084 were 65 years and upwards. 
 
 From the foregoing evidence it seems obvious that modern 
 industry finds little use for the worn-out workers. It replaces 
 and discards these aged wage-earners as it is in the habit of 
 replacing and discarding the worn-out and inefficient machin- 
 ery. Once economic old age has set in, the road to dependence 
 is short. Says Mr. L. W. Squier: "After the age of sixty 
 has been reached, the transition from non-dependence to de- 
 pendence is an easy stage — property gone, friends passed away 
 
THE INDUSTRIAL SCRAP HEAP 21 
 
 or removed, relatives become few, ambition collapsed, only a few 
 short years left to live, with death a final and welcome end 
 to it all — such conclusions inevitably sweep the wage-earners 
 from the class of hopeful independent citizens into that of the 
 helpless poor."^ 
 
 iL. W. Squier, Old Age Dependency in the United States, pp 28-29. 
 
CHAPTER III 
 
 PASSING BEYOND THE HALF 
 CENTURY MARK 
 
 The aged, for the purposes of our discussion, may be classi- 
 fied into three distinct groups. First, the small group of 
 wealthy and independent persons whose economic and social 
 security is assured. This group presents no problem such as 
 those which are discussed in the pages that follow, and may 
 be dismissed. Secondly, the great mass of the aged wage- 
 earners who are presumably non-dependent because, in order 
 to avoid the stigma of pauperism, they do not, as a rule, seek 
 aid from charitable and philanthropic sources. These will 
 prefer to make all sorts of sacrifices rather than seek asylum for 
 their last days in either county poorhouse or benevolent home. 
 Many of this group, therefore, while nominally non-dependent, 
 may nevertheless be below the poverty line, and very often, 
 although they find themselves in want through no fault of 
 their own, will prefer to endure hardship rather than accept 
 charity. From any point of view this group, which represents 
 the great majority of wage-earners, has the greatest claim to 
 protection andi relief in old age. Their problems must not 
 merely attract attention but must be studied thoroughly and 
 met squarely with a constructive social policy. The third 
 group, which is considerably smaller, is composed of the insti- 
 tutional and pauper classes and includes the inmates of the State, 
 county and private charitable institutions, as well as the 
 recipients of public or private relief from local poor boards, 
 philanthropic organizations, churches and similar institutions. 
 Knowledge of the actual conditions which compelled this unfor- 
 
 22 
 
BEYOND THE HALF CENTURY 23 
 
 tunate group to seek relief; an examination of the effects and 
 consequences of our present methods of relief distribution; 
 and a revaluation of these methods in terms of social justice, 
 are essential in a study of this aged pauper group. 
 
 The proportion of the presumably "non-dependent" aged 
 persons in the United States who are actually living in want 
 and are in need of systematic relief is difBcult to estimate accu- 
 rately. The Census reports supply very meagre data for the 
 determination of the extent of old-age dependency in the United 
 States; especially is this true with regard to the non-institu- 
 tional aged. However, a number of studies have been made 
 recently which may be considered fairly indicative of the mag- 
 nitude of the problem. The first study of dependency of the 
 aged was made in 1908-9 by the Massachusetts Commission 
 on Old Age Pensions, Annuities and Insurance. This Com- 
 mission estimated the number of persons 65 years of age and 
 over in Massachusetts to be 177,000 in 1910. Of this number 
 41,212, or 24; per cent., were found either to be residing in cor- 
 rectional institutions and public or private pauper and benev- 
 olent homes, or were the recipients of public or private out- 
 door relief, or United States pensions. One hundred and 
 thirty-five thousand, seven hundred and eighty-eight, or 76 
 per cent., of these aged in Massachusetts were "non-de- 
 pendent," as far as could be ascertained. Basing his calcula- 
 tions upon the Massachusetts figures, L. W. Squier estimated 
 that approximately 1,250,000 of those 65 years of age and 
 over in the United States are dependent upon pubHc and pri- 
 vate charity. 
 
 This estimate was admittedly conservative, as Mr. Squier's 
 calculations were based upon cases of rehef granted by the or- 
 ganized charitable agencies ; and even the recipients of this form 
 of relief could not have been, in the nature of such studies, 
 completely gathered by the Massachusetts Commission. No 
 account was taken of the unofficial and less known relief agen- 
 cies, and it goes without saying that neither the Massachusetts 
 
24 FACINGOLDAGE 
 
 Commission nor Mr. Squier could determine the amount of 
 private charity extended. That Mr. Squier has under-esti- 
 mated rather than over-estimated the total number of aged de- 
 pendents, is shown by the 1915 decennial census of Massachu- 
 setts. In this state-wide enumeration there were found 189,04<7 
 persons 65 years of age and over, of whom 34,4«96, or 18.2 
 per cent, of the total population of that age, were receiving 
 aid from one source or another. However, this number did 
 not include those aged who were receiving pensions from the 
 United States government. The number of this group was 
 estimated at 29,150, or 14.8 per cent. The aggregate number 
 of dependents thus constituted 33 per cent. While many of the 
 latter did not need such assistance, their number doubtless 
 increased the total dependents, and if used as a basis for the 
 entire United States would have increased Mr. Squier's estimate 
 considerably. 
 
 Statistics dealing with those aged persons in the United States 
 who are definitely dependent upon public or private relief are 
 scanty and incomplete. The various groups of dependents 
 are classified according to age in only a few instances by the 
 United States Census. The 1910 Census reports that of a 
 total of 84,198 paupers in almshouses in the United States, 
 35,943 or 42.7 per cent, were 65 years of age and over. In 
 the same year there were 187,791 known insane and feeble- 
 minded persons in the United States, 21,881 or 11.8 per cent, 
 of whom were 65 and over. Of a total of 19,153 deaf and 
 dumb persons in 1910, only 797, or 4.1 per cent., were 65 
 and over. The number of prisoners 65 and over is not given 
 by the Census, but of the number committed to penal institu- 
 tions during the year 1910, only 1.6 per cent, were 65 years 
 of age and over. There were in 1910 also 98,846 adult inmates 
 over 21 years of age in benevolent institutions, the large major- 
 ity of whom were obviously of advanced age. Of the total 
 57,272 blind persons in the United States, 23,746 or 41.4 per 
 cent, were past threescore and five years. There were in ad- 
 
BEYOND THE HALF CENTURY 25 
 
 dition in that year 72,948 dependent adult inmates in hospitals 
 and sanitoriums. No data are available to show the niimber 
 of aged persons in receipt of either public or private relief. 
 The recipients of this form of charity, however, generally 
 constitute the large majority of dependents, and as shown by 
 the different State Commissions, exceed the aggregate number 
 of dependents of all other classes. Neither do the classes 
 enumerated above include the great number who are in receipt 
 of State and Federal pensions, as well as those receiving pen- 
 sions from industrial establishments. It is, of course, impos- 
 sible even to estimate the number of those receiving partial or 
 entire support from individuals. 
 
 The Census figures seem to indicate also either a steady 
 increase in aged dependency in the case of most pauper classes, 
 or an increase in the longevity of most aged dependents. Thus, 
 the blind 60 years of age and over increased from 36 per cent, 
 of the total blind population in 1860, to 4.1.4 in 1910. The 
 deaf and dumb of the same age group constituted 4.9 in 1860 
 and increased to 6.7 per cent, in 1910. In the case of alms- 
 house paupers the percentage of the aged increased from 25.6 
 in 1880 to 42.7 in 1910. 
 
 Recently a number of special State Commissions on Old 
 Age Pensions have added further light upon the extent of 
 dependency in old age. The Wisconsin Industrial Commission 
 in its report on old-age relief in 1915, states: 
 
 "The number of persons 60 years of age and upwards in Wis- 
 consin may be estimated at 185,000. Of this number, probably 
 two per cent, are recipients of public or private relief. Even in- 
 cluding United States pensioners, the proportion scarcely exceeds 
 12 per cent. But that very much unrelieved distress exists no one 
 can doubt who is familiar with the statistics of other countries. 
 The inauguration of systematic old age relief invariably brings to 
 light a vast mass of unsuspected poverty among the aged. Thou- 
 sands of old people contrive to escape the clutches of the poor laws 
 who nevertheless endure a pitiful struggle for existence. They 
 
26 FACINGOLDAGE 
 
 work beyond their strength^ they deny themselves proper food and 
 clothing, they are aided by friends and neighbours, or they are 
 supported by their children, too often at the expense of growing 
 families." ^ 
 
 The Ohio Commission on Health Insurance and Old Age 
 Pensions states : 
 
 "The number of aged persons aided by private families or by 
 relatives and friends is unknown and cannot be estimated. The 
 Hamilton and Cincinnati surveys indicate that 15 to 25 per cent, 
 of people over 50 were dependent upon relatives or friends. Nor 
 can the number who are living an independent but precarious 
 existence be accurately estimated." ^ 
 
 The Pennsylvania Commission concludes that: 
 
 "Aside from the aged dependents found in almshouses, benev- 
 olent or fraternal homes, and those receiving public or private relief, 
 there is a considerable proportion (43 per cent.) of the aged popula- 
 tion, 50 years of age and over in the State, who, when reaching 
 old age have no other means of support, except their own earn- 
 ings." ^ 
 
 As the studies made by the Pennsylvania Commission in 
 regard to this phase of the problem of the aged, go into greater 
 detail than those of the other State Commissions, its conclu- 
 sions may perhaps be considered as fairly indicative of the extent 
 of destitution in old age among the industrial population of 
 this country. Based on the percentage found in Pennsyl- 
 vania, it may be said that in 1910 there were approximately 
 1,700,000 persons in the United States who had passed beyond 
 the half century mark and who had had no other means of 
 support in their old age except what they could earn them- 
 selves. While it may be conceded that this proportion may 
 
 1 Report on Old Age Relief, pp 11-12. 
 
 2 Report of the Ohio Commission on Health Insurance and Old Age 
 Pensions, 1919, p 260. 
 
 3 Report of the Pennsylvania Commission on Old Age Pensions, 1919, p 11. 
 
BEYOND THE HALF CENTURY 27 
 
 be smaller in the less industrial States, the above estimate may 
 nevertheless be fairly accurate for the entire United States, 
 as the districts studied by the Pennsylvania Commission were 
 largely inhabited by better paid American-bom workers as 
 contrasted with the more thickly populated foreign sections. 
 Of course, it must not be presumed that all of these will apply 
 for relief, either public or private, but it is obvious that the 
 great majority of these will have to face a pitiful struggle for 
 subsistence. Ultimately the majority of this nmnber will be- 
 come dependent, if not upon public charity, then upon children 
 or relatives at the expense of self-respect, and in many cases 
 also to the great detriment of the growing generation. 
 
 In the discussions that follow, the individual and social 
 forces, as well as the moral factor that go to make for depend- 
 ency and pauperism will be dwelt upon at length. At this 
 juncture it is important first to examine and endeavour to 
 understand sympathetically the immediate conditions confront- 
 ing multitudes of superannuated workers which compel many to 
 become paupers in their old age. Indeed, a comparison of the 
 circumstances of the dependent aged, as disclosed by the diifer- 
 ent State Commissions' reports, with those of the so-called 
 non-dependent, discussed in the preceding pages, sheds much 
 light upon the frequently repeated question: "Why is it that 
 some workers succeed in remaining away from the pauper 
 homes, while others, apparently of the same class, become de- 
 pendent upon public charity.'"' 
 
 AGE 
 
 The age relativity among the different classes is significant. 
 In the total population of 1910 the group between 65 and over 
 constituted 4.3 per cent, of the population, and contained 4.2 
 per cent, of the males and 4.4 of the females of all ages. This 
 percentage held true for the native whites of native parentage. 
 Among the native whites of foreign or mixed parentage the 
 aged constituted only 1.4 per cent., while of the foreign-born 
 
28 FACING OLD AGE 
 
 whites, the same age group contained 8.9 per cent., and among 
 Negroes 3.0 per cent. The proportion of the aged varies also 
 considerably in the different sections. According to the 1910 
 Census, the percentage of those 65 and over to the total popu- 
 lation was highest in the New England States, with 5.9 per 
 cent., and lowest in the West South Central States with 2.8 
 per cent. The Middle Atlantic States gave 4».4! per cent. ; East 
 North Central, 5.1 per cent. ; West Central, 4.6 ; South Atlantic, 
 3.6 ; East South Central, 3.5 ; Mountain, 3.0, and Pacific, 4.5 
 per cent. 
 
 The dependent classes, as is to be expected, are largely made 
 up of those of advanced ages. The relation of dependence to 
 old age is so clearly indicated in the following reports that no 
 additional comment is necessary. The Massachusetts Com- 
 mission in 1910 found that: 
 
 "Less than one per cent, of those for whom the age at entrance 
 was stated in the returns became inmates before the age of 40; 
 only eight per cent, entered before the age of 60; thus 92 per cent, 
 had passed the sixtieth year before they took up residence in the 
 almshouse." ^ 
 
 Commenting on this, the Commission adds : 
 
 "The strikingly high proportion of persons entering pauper in- 
 stitutions late in life points to the close connections between old 
 age and institutional pauperism. It is clear that such pauperism 
 is in most cases the result of the infirmity of advancing years, 
 rather than of the misfortunes of earlier years." ^ 
 
 The Wisconsin Commission reports regarding the almshouse 
 population of that State, as follows : 
 
 "A very large proportion are of advanced age — only 17 per 
 cent, are under 65, 40 per cent, are 75 and over and nearly 25 per 
 cent, are 80 or above. In the population of the state at large, one- 
 third of all persons over 59 fall in the age group 60 to 65 and 
 
 1 Report of Massachusetts Commission 1910, p 27. 
 
 2 Ibid. 
 
BEYOND THE HALF CENTURY 29 
 
 only one-fourth are above 74. This fact, taken in connection with 
 the great proportion of the entire almshouse population who are 
 60 and over, indicates a close co-relation between destitution and 
 old age." ^ 
 
 The Ohio Commission states : 
 
 "In regard to age distribution, the records of the Ohio Board 
 of State Charities show that 4>,772, or 60 per cent of the regular in- 
 firmary inmates were over 60 years of age, 2,926 or 37. 1 per 
 cent, between 16 and 60 and 219, or 2.78 per cent, under 16 years 
 of age." ^ 
 
 The Pennsylvania Commission concludes that: 
 
 "It appears that only about 13 per cent, were admitted under 
 50 years of age; 24.87 per cent, were admitted between the ages 
 of 50 and 60; 31.9 per cent, between 60 and 70, while over 
 24.78 per cent, were admitted after they had reached their seven- 
 tieth year. A comparison between our figures and those obtained 
 by the Massachusetts Commission on Old Age Pensions in 1908 is of 
 interest. In the New England State only eight per cent, of those 
 investigated entered the almshouses before the age of 60, and 92 
 per cent, had passed their sixtieth year before they took up residence 
 in the almshouse. The higher rate of those entering almshouses 
 below the sixtieth year in Pennsylvania may be explained by the 
 highly developed industries peculiar to this Commonwealth, which, 
 requiring greater physical strain, wear out and incapacitate men 
 at an earlier age. For those admitted during the year 1910 to 
 the almshouses of the entire country, the percentages were 17.7 
 between 50 to 59; 18 from 60 to 69 and 15.3 per cent, over 70 
 years. 
 
 "It is obvious, that the great majority of the aged inmates enter 
 the institution late in life. This would indicate a close relationship 
 between institutional pauperism and old age. The combination of 
 advanced years and infirmity, when coupled with the fact, that 
 in most cases these people have no one to depend or fall back 
 upon is — as will be seen later — the chief cause compelling an 
 
 1 Wisconsin Report, p 25, 
 
 2 Ohio Report, p 242. 
 
30 FACING OLD AGE 
 
 aged person to go to the poorliouse. Most men will Stay out 
 of an almshouse as long as they can. When they are compelled to 
 take up residence there^ it is usually not due to personal or other 
 misfortunes in earlier years, but in most cases, is the result of 
 feebleness and lack of assistance from other sources." ^ 
 
 PERCENTAGE OF PERSONS IN STATE PAUPER INSTITUTIONS 
 WHO ARE 65 YEARS OF AGE AND OVER. 
 
 Maesac/ius setts 
 
 
 9Z%\ 
 
 Y/'(5Con3)n 
 
 
 87% \ 
 
 Pennsylvania 
 
 6Z%\ 
 
 
 Ohio 
 
 60%\ 
 
 
 SEX 
 
 Of the 3,949,524 persons 65 years of age and over in 1910, 
 1,986,976, or 50.5 per cent., were males, and 1,963,548, or 49-5 
 per cent., were females. This group was, in addition, divided 
 as follows in 1910: 1,693,010, or 42.8 per cent., urban, and 
 2,256,415, or 57.2 per cent, rural, while 1,183,349, or 29.9 
 per cent, were of foreign birth. 
 
 The 1910 Massachusetts Commission found the proportion 
 of males and females in the almshouses of that State to be 
 61.4 per cent, and 38.6 per cent, respectively. In this respect, 
 the Commission declares : 
 
 "The figures for the aged poor present a contrast to those for 
 the general population of the State, which is divided between the 
 sexes very evenly, with 48.7 per cent, males and 51.3 per cent, 
 females. The lack of any uniformity in the division between the 
 sexes in the case of the various classes is also striking. In the 
 classes of almshouse inmates, recipients of State and military 
 aid and non-dependent poor, the males preponderate; in the classes 
 of inmates of benevolent homes and recipients of public and pri- 
 vate outdoor relief, the males are greatly outnumbered. It appears 
 that relief in charitable institutions and in the homes through 
 1 Pjennsylvanla Commission's Report, pp 17-18. 
 
BEYOND THE HALF CENTURY 31 
 
 public or private agencies is given more largely to women than 
 to men." ^ 
 
 In Wisconsin, the proportion of women in almshouses, the 
 Commission finds, 
 
 "Is very small — only 20 per cent, as against 47 per cent, of 
 the State's population of 60 and over. This showing is the more 
 remarkable because the Commission's sample census indicates 
 (what is true in other countries) that the number of aged widows 
 and single women exceeds the number of aged widowers and single 
 men. The explanation is that an elderly woman is better able 
 than an old man to maintain a home of her own or to fill a use- 
 ful niche in the household of a relative.^ 
 
 The Pennsylvania Commission found the almshouse pop- 
 ulation to be composed of 62.7 per cent, males and 37.3 females. 
 It comments as follows : 
 
 "It is interesting to remark that the above percentages found 
 by the Commission are in exact agreement with the percentages 
 found by the Massachusetts Commission on Old Age Pensions 
 in its study in 1908. The comparative difference between the 
 sexes in the almshouses and that prevailing in the entire State 
 population is significant. According to the Thirteenth United 
 States Census, the percentage of males in the entire State popula- 
 tion was 51.4 per cent, and that of females 48.6 per cent. The 
 reasons for the disproportionate number of male paupers in insti- 
 tutions over female paupers may be explained in several ways. 
 Children or relatives wiU make greater sacrifices in order to keep 
 an old mother at home and prevent her going to a poorhouse, than 
 they would for an aged father or other male relative. Aside from 
 the sentimental reasons involved, the presence of an old woman 
 around the home — unless she is absolutely invalided — entails little 
 burden, as she can be made useful in numerous ways. This, how- 
 ever, is not the case with an aged man. Aged women are also 
 more generously provided for by private charity than are aged 
 men. The percentages of aged men and women who are inmates 
 
 1 Massachusetts Report p 52. 
 
 2 Wisconsin Report p 25. 
 
32 FACING OLD AGE 
 
 of benevolent and private Homes for the Agedj are 23.54< and 
 76.46 per cent, respectively. The relationship here is thus rad- 
 ically reversed from that of the almshouse population." ^ 
 
 FAMILY CONNECTIONS 
 
 PERCENTAGE OF MALES IN ENTIRE U. S. POPULATION, AND 
 IN PAUPER INSTITUTIONS. 
 
 '/> afma/es m Lf.3 . ftopa/afi'-o/} = S'0. 5" '/i 
 iV/scortS/n SO 7' 
 Pennsy/van/a 6!l.-'7% 
 MassaCtfittssefts i/.^% 
 
 The number of old persons applying for charity in no way 
 indicates the degree of destitution in old age. Much of this 
 suffering is kept concealed from the public eye by timid and 
 sensitive children or relatives. This is borne out by the available 
 data on the family connections of aged persons. Indeed, the 
 investigations seem to disclose that pauperism among the aged 
 is in inverse ratio to the number of family relations and is largely 
 a result of the lack of family connections. The data below in- 
 dicate that, in most instances, children or relatives will en- 
 deavour to support their aged dependents, regardless of the 
 sacrifices thereby required of themselves or of their children. 
 
 The Thirteenth United States Census gives the marital rela- 
 tionship of the aged as follows : — males, 6.2 per cent, single, 
 65.6 per cent, married, 27.1 per cent, widowed, and 0.7 per cent, 
 divorced; females, 6-3 per cent, single, 35 per cent, married, 
 58.1 per cent, widowed, and 0.4 per cent, divorced. The Mas- 
 sachusetts Commission found that 6-2 per cent, of the aged 
 persons investigated were single; 53.8 married; and 39.7 wid- 
 owed. In Wisconsin, in 1915, in a sample census of 1,395 
 persons, 60 years of age and over, there were 35, or 2.5 per 
 cent, single; 885, or 63.4 per cent, married; and 456, or 32.5 
 per cent, widowed. Of these, 76, or 5 per cent., lived alone ; 885, 
 
 1 Report of Pennsylvania Commission p 20 
 
BEYOND THE HALF CENTURY 33 
 
 or 63.4 per cent, lived with a spouse; 168, or 11 per cent, had 
 unmarried children ; and 206, or 14 per cent., had married chil- 
 dren. The Wisconsin Commission concludes : 
 
 It ■will be seen that substantially one-half of the women enumer- 
 ated are widowed, divorced, separated or single, whereas nearly 
 80 per cent, of the men are married. The explanation is partly that 
 women on the average live longer than men and partly that hus- 
 bands very generally are older than their wives. The result is 
 that a vast number of aged women are left without homes of their 
 own." 1 
 
 MARITAL RELATIONS OF PERSONS 65 YEARS OF AGE AND 
 
 OVER IN THE ENTIRE POPULATION IN THE CENSUS OF 
 
 PAUPERS AND IN PAUPER INSTITUTIONS. 
 
 SIIHOLE MARRIED WIDOWED 
 
 \ OS. tfcr ^I'.fr i.ZX 
 
 U,s. paupers J\}.Z yi 
 
 O/jfo p^'^perj ^ZS ^\ 
 
 Pa. paupers ^HXO^ 
 Mais. /?7.\ 
 
 MARRIED 
 
 
 t/.S. t^ M- over 
 
 6S.6 -^ 1 
 
 1 U.S. paupers 
 
 13.7 y. 
 
 0/„0 p^^ptrs 37iex\ 
 
 
 Mass. Z^^.r /!\ 
 
 
 P^. /<4«| 
 
 
 US.tT<irtivrZT.l!S 
 
 l/.S./»'>p<rs33^X\ , 
 
 MtS9. p^'f^eirs' ■jT^J'X- I 
 
 Pa. p^up^s 59.1 'A 
 
 M,\> \ /O.I % 
 
 The preponderately greater number of elderly widows is 
 also shown in a study of 100 aged persons in Greenwich Village, 
 made by Miss Nassau in 1915.^ Of 65 women investigated, 
 Miss Nassau found 54 widowed, nine single, and two separated, 
 while of the 35 men interviewed, 21 were still married, three 
 were single, and two separated or divorced. 
 
 The Ohio Commission, in discussing this subject, states: 
 
 "In old age, marital condition, especially as regards women, 
 is very important. The woman who becomes a widow after 50 is 
 ill prepared to make her own living. She must, therefore, depend 
 on her children or on the property left her by her husband. If 
 her husband was a wage-earner, the most she can expect to inherit 
 is a little home. One hundred and sixty-six or 50.8 per cent, of 
 the 329 widows in the Hamilton survey owned their own homes. 
 While the children remain unmarried, they contribute to the main- 
 
 1 Wisconsin Report p 27. 
 
 2 M. L. Nassau, Old Age Poverty in Greenwich Village, 1915. 
 
34 FACINGOLDAGE 
 
 tenance of their mother, but after marriage she can no longer de- 
 pend upon them with any feeling of security. The single woman 
 who has had to make her own living is also insecure in her old 
 age. After 50 she finds it difficult to obtain steady employment 
 and her wages, as a rule, have not been such as to permit much 
 saving for old age. Only 37 of the 114 single women over 50 had 
 any savings." ^ 
 
 "When aged persons who have been unable to save lose their 
 economic usefulness, they must depend on their children or rela- 
 tives or on public charity. Three hundred and lifty-four, old, or 
 invalided persons in Hamilton were dependent on children or rela- 
 tives. One hundred and fifty of these were dependent on married 
 children, all with families of their own; 144, on unmarried chil- 
 dren, and the remaining 60, on relatives. Forty-eight of the 
 416 aged persons studied in Cincinnati were dependent on their 
 children and 13 on other persons." ^ 
 
 The Pennsylvania Commission found the marital conditions 
 of 3,477 non^dependent persons 50 years of age and over, as 
 follows : ,5.4 per cent, single ; 55.5 married ; and 38.3 widowed. 
 It also found 37.8 per cent, who have no one depending upon 
 them; 31.5 having their wives to support, while the rest had one 
 or more children in addition to support. It concludes that: 
 
 "It is evident that the possession of children in old age is a 
 great protection against dependency. Thirty-one per cent, had one 
 or two children living; forty-five per cent, had from three to six 
 children living; while 12.7 per cent, had more than six children 
 living. Of those children, only 3.3 per cent, were still under 16 
 years of age; 16 per cent, of the adult children were married, while 
 80.7 per cent, were still single." ^ 
 
 The marital condition of paupers is given by the 1910 
 Census as follows : 50.2 per cent, single ; 32.5 per cent, widowed, 
 and 13.7 per cent, married. The 1915 Massachusetts Decennial 
 Census found the percentages of the marital dependents to be: 
 
 1 Ohio Report p 218. 
 
 2 Ibid p 226. 
 
 3 Pennsylvania Report p 95. 
 
BEYOND THE HALF CENTURY 85 
 single 19.0; married 24.7; widowed 54.4. In Ohio, 47.5 were 
 single; 37.8 married, and 10.9 widowed. In Pennsylvania 40 
 per cent, were single; 16.9 married; and 39.14 widowed. The 
 report of the last-named Commission goes on to point out that 
 the single and widowed in the almshouses of the State constitute 
 nearly eighty per cent, of the total number of inmates. How- 
 ever, the marital conditions of people over forty-five years 
 of age in the entire State, as given in the United States Census 
 for 1910, was : for males, single, 9.1 per cent. ; married, 77.7 
 per cent., and widowed, 12.6 per cent. ; and for women the 
 percentage for those over 45 years of age was, single, 10 per 
 cent. ; married, 60.3 per cent., and widowed, 29.2 per cent. 
 
 The Commission adds : 
 
 "Some light may be shed on the problem of aged pauperism by 
 comparing the preceding figures with those obtained from the 
 house-to-house studies conducted by the Commission. In the latter 
 group the respective percentages are: Single 5.4 per cent.; mar- 
 ried 55.5 per cent., and widowed, 38.3 per cent. These figures 
 would seem to indicate that the prime reason why the aged poor 
 cannot remain in their own homes, or in those of their parents or 
 close relatives is because, as a rule, most of these institutional 
 paupers have no one to fall back upon in their declining days. 
 Having no children of their own, their parents dead, and in many 
 cases, with few relatives, to be relied upon, these paupers seek 
 the institution as the last resort for shelter and nourishment. The 
 wide difference between the populations of single people in the 
 almshouses and those living at home, doubtless, explains why the 
 former are inmates of pauper institutions and the latter are classed 
 as non-dependent'." ^ 
 
 In Massachusetts in 1910, the proportion of inmates of 
 almshouses and of benevolent homes who had adult children 
 living at the time of entrance, was' found to be nearly the same, 
 being 43.7 per cent, for the former and 39.4 per cent, for the 
 latter. On the other hand, the percentage of non-institutional 
 
 1 Pennsylvania Report p 20. 
 
36 FACINGOLDAGE 
 
 poor, both public and private, who had adult children living: 
 at that time, was higher, standing at approximately 60. 
 
 The Commission further states in its report: 
 
 "The number of almshouse and benevolent home inmates hav- 
 ing adult children or near relatives who are able to aid them at 
 present is, as one would infer, very small, namely, 7.7 per cent, 
 for the almshouse class and 13.2 per cent, for the benevolent 
 homes. Here the percentages are much higher for the non-insti- 
 tutional poor, being 46.4 for the recipients of public relief, and 
 57-5 for recipients of private relief." ■'■ 
 
 In 1918 in Ohio, Dr. John O'Grady states in the report of 
 
 the Ohio Commission: 
 
 "A study of the domestic relations of 2,260 infirmary patients 
 showed that 1,023 or 45.6 per cent, were never married. Those, 
 as a rule had no one on whom they could depend. Their parents 
 were dead, and brothers and sisters, even when in good circum- 
 stances, cannot be relied upon to maintain a disabled brother or 
 sister. Of the 822 inmates who had been married, 605, or more 
 than half, had one or more children living; of these 232 had chil- 
 dren able to support them. The children of the remaining 373 
 were generally ordinary unskilled working-men with large families 
 of their own. These could scarcely maintain their parents with- 
 out depriving themselves or their children of some of the neces- 
 saries of life. 
 
 "About seven per cent, of the inmates studied were in the infirm- 
 aries because their children, although in fairly good circumstances, 
 were unwilling to maintain them. In comparison with the total 
 infirmary population, this number may seem very small, but of 
 232 inmates with children able to support them only 88, or 37.9 
 per cent, had children able and willing to support them." ^ 
 
 Also, in Pennsylvania, the Commission found further sub- 
 stantiation of the isolation of the majority of the inmates who 
 
 1 Massachusetts Report p S3. 
 
 2 Ohio Report pp 242-43. 
 
BEYOND THE HALF CENTURY 37 
 
 must avail themselves of the comforts of the almshouse. 
 
 "Sixty-three and fifty-one himdredths per cent, of those investi- 
 gated have no children living; 13.5 per cent, have but one child 
 living, while only 23 per cent, have two or more children living. 
 A comparison at this point with the same aged group studied in 
 the house-to-house canvasses is significant. In the latter group, 
 only 10.63 per cent, had no children living; 15.8 per cent, had 
 only one child, while nearly 70 per cent, had two or more chil- 
 dren alive. 
 
 "The data obtained with regard to the ages of the children 
 living shows that more than 13 per cent, of them are adult, indicat- 
 ing that this aged group has few dependents. On the other hand, 
 89.93 per cent, of these children are reported as unable to support 
 their parents. The majority of these children are burdened with 
 large families of their own. Most of them also belong to the ranks 
 of the unskilled workers and earn wages which are hardly suffi- 
 cient to maintain their own families in comfort. Only a very small 
 percentage, namely 4.15, have children believed to be fully able 
 to support their parents, while an additional 6.86 per cent, are 
 able to help support the parents if ready to make the required 
 sacrifices. 
 
 "Nearly 95 per cent, of the aged inmates investigated, have no 
 other relatives able to help support them." ^ 
 
 PHYSICAL CONDITION 
 
 The degree of physical welfare and the capacity of main- 
 taining one's grip upon life in old age, under our present indus- 
 trial conditions, may be gleaned from the following: Of the 
 non-dependent persons, just above the poverty line, 65 years 
 of age and over, investigated by the Massachusetts Commission 
 in 1910, 40.3 per cent, were found physically defective. In 
 Wisconsin in 1915, out of a total of 1,395 persons 60 years 
 of age and over, 489, or 35 per cent., were "able to follow gain- 
 ful occupation"; 493 others could do light work; 245 were 
 "able to take care of their own person ;" and 42 required attend- 
 
 1 Pennsylvania Report pp 22-23. 
 
38 FACING OLD AGE 
 
 ance. In Pennsylvania, in 1918, 36 per cent, of the aged 50 
 and over in the cities investigated were found to be physically 
 defective. Sixty-four per cent, of these were found to be still 
 in fair or sound health. 
 
 Quite a different tale is told by the investigations of the 
 dependent groups. Of the 57,049 paupers without age classi- 
 fication, enumerated on January 1, 1900, in the United States, 
 15.4 per cent, were able-bodied, 40.5 were able to do light work, 
 and 44.1 per cent, were incapacitated. The Massachusetts 
 Commission found among almshouse inmates 93.8 per cent, 
 defective; the next highest percentage of defectives was 86.0 
 for recipients of State and militarj^ aid, and 82.7 for those 
 who received public outdoor relief. On the other hand, the 
 defectives among the non-dependent poor, as found by the same 
 Commission, was only 40.3 per cent. 
 
 The proportion suffering from chronic ailments among the 
 aged inmates studied in Wisconsin was also found to be very 
 high. Only one-third were found to be reasonably sound in 
 mind and body, and only 14 per cent, were able to work reg- 
 ularly, while 12 per cent, required attendance. 
 
 A study made by the Ohio Commission from the reports to 
 the State Board of Charities, reveals, the Commission states: 
 
 "Nearly half, or 47.6 per cent, of the regular inmates of 
 county and city infirmaries are old and infirm and 24.5 per cent, 
 are sick and diseased or persons who have become disabled 
 through loss of members. More than 75 per cent, of the inmates 
 of county infirmaries in Ohio are, therefore, old and infirm, or 
 persons disabled by sickness, disease or accident. The remain- 
 ing 27.7 per cent, is made up of miscellaneous groups of persons 
 with various defects." ^ 
 
 A study of 2,260 persons representing the total population 
 of 22 typical infirmaries in Ohio made by Dr. John O'Grady 
 showed results somewhat different from the foregoing. Of the 
 
 1 Ohio Report p 239. 
 
BEYOND THE HALF CENTURY 39 
 
 2,260 cases, 830 or 36.46 per cent, were old and infirm ; 305 or 
 13.4 per cent were defective mentally; and 1,106 or 49.77 per 
 cent, suffered from disease or physical defects. 
 
 The Pennsylvania Commission reports in regard to the alms- 
 house inmates: 
 
 "Of the 3,405 cases investigated, only 12.80 per cent, are re- 
 ported as being in good or fair health. Of those reported in 
 bad or poor physical condition 28.92 per cent, were in a general 
 state of poor health; 13.21 were crippled, maimed or deformed; 
 9.04 per cent, were feeble-minded; 9.3 per cent, were defective 
 in sight or hearing; 7.25 per cent, were rheumatic; quite a number 
 were epileptics and a number were suffering from various dis- 
 eases. Of the total number investigated only five per cent, were 
 reported as able bodied; 40' per cent, were partially disabled, while 
 55 per cent, were totally incapacitated. For the same group in 
 the house-to-house studies, 64.3 per cent, are reported in good or 
 fair health, and only 35 per cent, are in poor health. In the 
 total pauper population of the United States in 1910, the per- 
 centage of able-bodied was 20.64 per cent." ^ 
 
 The Commission concludes: 
 
 "Regarding the aged paupers and the non-dependent aged 
 classes, the outstanding differences lie, it would appear, in the 
 respective family connections and physical conditions." ^ 
 
 CLASSES FROM WHICH RECBUITED 
 
 Of the 57,888 male paupers admitted to the different county 
 almshouses in the United States in 1910, 37.5 per cent, gave 
 their occupations as common and agricultural labourers. The 
 other occupations gave very small percentages each. The 
 Massachusetts investigation in the same year disclosed that 
 33.7 per cent, of the almshouse paupers were previously en- 
 gaged in manufacturing and mechanical pursuits, followed by 
 22.6 per cent, engaged in housekeeping and domestic service, 
 
 1 Pennsylvania Report p 27. 
 
 2 Ibid p 12. 
 
40 FACINGOLDAGE 
 
 PERCENTAGE OF INCAPACITATED AGED PERSONS IN 
 GENERAL AND PAUPER POPULATIONS. 
 
 PERCENTAGE 
 DISABLED IN 
 GENERAL 
 
 OF 
 
 PERCENTAGE OF 
 DISABLED IN 
 PAUPER POPULATION 
 
 PC 
 
 )PI 
 
 JLATION 
 
 
 1 — 
 
 — 
 
 
 
 
 
 
 
 
 >? 
 
 ! 
 
 
 
 
 n\^ 
 
 
 1 
 
 >! 
 
 >? 
 
 oNi 
 
 CO 
 
 vo 
 
 
 >r> 
 
 VQ 
 
 0) 
 
 ^ 
 
 0^ 
 
 
 N 
 
 00 
 
 OD 
 
 ^ 
 
 <J0 
 
 ^<. 
 
 
 
 
 
 
 
 o 
 
 
 
 
 
 
 <0 
 
 ^ 
 
 1 
 
 ^ 
 ^ 
 
 ^ 
 
 1^ 
 
 ^ 
 
 
 
 
 
 
 
 and 14.5 per cent, who were recorded as common labourers. In 
 Pennsylvania, of 1,939 paupers stating their last occupation, 
 47.6 per cent, were classified as common and unskilled workers ; 
 29 per cent, as engaged previously in housekeeping and domestic 
 service, and less than 18 per cent were engaged in occupations 
 of skilled or semi-skilled character. 
 
 HOME OWNEESHIP, PROPERTY, AND INCOMES 
 
 Complete and exact information regarding the economic con- 
 ditions of the aged in the United States and the extent of in- 
 comes outside of their earnings is not available. However, even 
 an examination of the meagre data available, discloses a dis- 
 tinct insufficiency of incomes, outside immediate earnings, in 
 old age for the majority of wage-earners. According to the 
 Twelfth U. S. Census, only 847,069, or 27.4 per cent., of the 
 3,083,995 persons 65 years and over in the United States 
 owned their homes free, while 196,407, or 6.4 per cent., owned 
 them mortgaged. The 1910 Census does not give the home 
 ownership by ages. The latter enumeration does classify the 
 
BEYOND THE HALF CENTURY 41 
 
 owners of farm homes, however, by age groups. Thus, in 
 1900 the percentage of those 65 and over in the United States 
 who owned their own farm homes, to the total population of 
 that age, was about 16.3. But only about 15.1 per cent, of the 
 same age group owned their farm homes in 1910, and these 
 included both free and encumbered. At the same time, the per- 
 centage of the rural population of the same advanced age con- 
 stituted 57.2 per cent, in 1910. 
 
 HOME OWNERSHIP OF PERSONS 65 YEARS AND OVER— 1900 
 
 Hom{ 
 
 1 o o y^ 
 
 Home ovyfned fi-ee Z7.^ % 
 Home wortg'agecl G,H' '/> 
 
 The precarious economic status of the aged wage-earners and 
 the extent of their ability to support themselves in old age 
 becomes further manifested from the following disclosures: 
 
 The Massachusetts Commission's investigations revealed the 
 economic conditions of the non-dependent aged poor in 1910 
 as follows: 
 
 WEEKLY INCOMES AND EXPENSES OF NON-DEPENDENT 
 
 AGED POOR 
 
 Peecentage op Those 
 Receiyino Income from 
 Av. Income At. Expend!- Speciai. Soueces 
 
 from All tureforAll From From From 
 
 Sources Purposes Savings Relatives Pensions 
 
 Individual males $7.32 $6.26 36.1 36.1 15.5 
 
 Individual females 4.50 4.28 44.0 57.0 9.4 
 
 Couples 11.70 9.32 55.3 29.0 19.6 
 
 Families 12.24 12.00 58.7 12.4 32.3 
 
 Commenting on these figures, Mr. Squier points out: 
 
 "From the above table, it will be seen that the many thousands 
 of comparatively weU-to-do aged people may, by the slightest slip 
 of luck or fortune, become absolutely dependent on charity. 
 With the average weekly income of $7.82 for males and $4.50 for 
 
42 FACINGOLDAGE 
 
 femaleSj an average expenditure respectively of $6.26 and $4.28 and 
 with such a large proportion of the incomes from sources other 
 than that of weekly wages, one can readily appreciate that it is 
 but a step from poverty to pauperism after the sixty-fifth birth- 
 day is passed." ^ 
 
 In Wisconsin the economic possessions of the aged, as found 
 by the Industrial Commission of that State, were found to be 
 as follows : 
 
 "Of the married couples 65 per cent, and of others 56 per cent, 
 owned homes mortgage free; of all home owners 65 per cent, have 
 property (including homestead) of more than $2,000; of non- 
 home owners 12 per cent, have property to the value of more than 
 $500; of married couples 60 per cent, have incomes from labour 
 or property over $300, and of others 40 per cent, have incomes 
 over $200 per annum." ^ 
 
 Even more complete data is given by the Ohio Commission : 
 
 "Of the 1,4S2 persons studied in Hamilton, 525 or 36.6 per 
 cent, owned their homes free from encumbrance and 138 or 9.6 
 per cent, owned them mortgaged. Of the 416 persons studied 
 in Cincinnati, 98, or 23.6 per cent., owned their homes. ^ 
 
 "Of the 663 homes owned by the persons studied in Hamilton, 
 435 were owned by wage-earners or widows of former wage-earners 
 and 228 by business or professional men or their widows. One 
 hundred and ninety-six of the wage-earners owning their homes 
 were relatively skilled or semi-skilled wage-earners and 31.6 per 
 cent, of the total unskilled wage-earners owned their homes." * 
 
 The commission further reveals that: 
 
 "Home owning was noticeably more common among immigrants 
 than among the native-bom. Approximately two-thirds of the 
 Germans owned their own homes and among other foreign-born 
 the proportion was almost as high. Among the natives of Ohio 
 every other person visited was a home owner, but among the 
 
 1 Old Age Dependency in the United States pp 12-13. 
 
 2 Wisconsin Report p 27. 
 
 3 Ohio Report p 22S. 
 
 4 Ibid p 236. 
 
BEYOND THE HALF CENTURY 43 
 
 natives of other states home ownmg was rare. The small number 
 of persons from other states owning their home is due to the 
 predominance of certain groups, already referred to, from the 
 backward districts of the south, whose members have not yet 
 acquired the art of saving." ^ 
 
 The Ohio Commission's investigations disclosed' that one home 
 in every four of those studied at random was heavily encum- 
 bered ; 65.2 per cent, of the latter were mortgaged for one-third 
 of their value, and 20 per cent, for at least two-thirds of their 
 value. Of the 663 home owners in Hamilton, 198 had in ad- 
 dition property or some other means of income; out of the 769 
 non-home owners in the same city, 119 had property or other 
 means. Nearly 42 per cent, of the former and 67.2 per cent, 
 of the latter class had property or other source of income 
 valued at less than $500. 
 
 The Pennsylvania Commission in its studies of the aged in 
 the cities of Philadelphia, Pittsburgh, and Reading, found 38 
 per cent, having property possessions of one kind or another. 
 It also found 43.6 per cent, of the population 50 years of age 
 and over, who claimed to have had no other source of income 
 outside that of their own earnings. Of those that did have out- 
 side means, 35 per cent, had incomes amounting to less than $10 
 per week. The incomes in 24.2 per cent, of these cases had come 
 from their own children, over seventy per cent, of whom were 
 wage-earners themselves. Of the people investigated the Com- 
 mission states: "The earnings of these aged workers in the 
 high wage period of 1918 were as follows : 14 per cent, earned 
 less than $12 per week ; 29 per cent, more, from $12 to $20 ; 
 and 37 per cent, did not earn anjrthing." 
 
 The property possessions and earnings of the definitely 
 dependent classes are even less. The Massachusetts Commis- 
 sion found the percentage of those having property above debt 
 at any time to be 37.8 for all classes of dependents.^ The 
 
 1 Ibid p 226. 
 
 2 Massachusetts Report p 57. 
 
44. PACINGOLDAGE 
 
 Wisconsin Report gives the home ownership of aged persons 
 who received outdoor rehef during the fiscal year 1913-1914 
 as follows : Of 107 married couples only five had a home clear ; 
 one had it mortgaged and 101 had neither; of 460 individuals 
 of both sexes 47 had their homes clear ; 26 had them mortgaged, 
 while 387 had none at all. Only two of the married couples and 
 10 of the 460 other individuals had property exclusive of 
 homestead valued at $500 to $4,000. 
 
 The Ohio Commission in discussing the same subject con- 
 cludes : 
 
 "Among the inmates of county infirmaries are to be found some 
 who were once prosperous; of the 1,608 persons studied 113 had 
 had property valued at more than $2,000, while 39 had had 
 property valued at more than $10,000." ^ 
 
 The Pennsylvania Commission found similar conditions: 
 
 "Of more than 2,000 inmates questioned, as to their property 
 holdings, 191 or 9.5 per cent, claimed to have had property above 
 debts. More than 90 per cent, never possessed any property 
 of their own. At the time of investigation less than one per cent, 
 were receiving incomes from property holdings or savings." ^ 
 
 The significance of these disclosures in terms of old-age 
 destitution, stand out so clearly that they need hardly be 
 commented upon further. The preceding data leave no doubt 
 as to the consequences of our present policy of aloofness. In 
 the face of actual destitution in old age, which now confronts 
 almost half of our industrial population, it seems hardly con- 
 sistent to continue to advocate and pride ourselves upon the 
 blessings of laissez-faire and individual thrift. The fore- 
 going would seem to indicate emphatically that the problems 
 facing the old are as real and difficult of solution by individual 
 effort in the United States as they have been found to be in 
 other countries. It is obvious that old-age dependency, whether 
 
 1 Ohio Rjeport p 3. 
 
 2 Pennsylvania Report p 31. 
 
BEYOND THE HALF CENTURY 45 
 
 of one form or another, is with us, and that the introduction 
 of a constnictive social policy cannot be delayed much longer. 
 The investigations of the aged seem to show clearly that for 
 the wage-earner who has passed beyond the half-century mark 
 the all-important decision whether he is to escape the poorhouse 
 in old age and a pauper's grave at the end, does not altogether 
 depend upon his own desires and ambitions. This decision will 
 be made largely by the social forces which lie outside his own 
 control, namely, the extent and economic standing of his family 
 and his own physical vigour. 
 
CHAPTER IV 
 
 THE COST OF FOLLOWING THE 
 OSTRICH POLICY 
 
 No social order can for long remain indifferent toward the 
 problems and difficulties confronting some of its members, with- 
 out directly or indirectly paying the price for its unconcern. 
 The cost of this apathy is difficult of estimation, as it is fre- 
 quently indirect and indistinct. A brief examination of the 
 facts, however, shows that the price paid by society for its in- 
 difference is prodigious. For what is to many more distressing 
 and nerve-racking than actual suffering is the fear and dread of 
 such misery and privation. As Thomas Carlyle expressed it : 
 "It is not to die or even to die of hunger, that makes a man 
 wretched ; many men have died ; all men must die. But it is to 
 live miserably, we know not why ; to work sore, yet gain nothing ; 
 to be heart-worn, weary, yet isolated, unrelated, girt in with 
 a cold, universal laissez-faire." It is a patent fact that public 
 pauperism in old age is the dread and agony of thousands of 
 workingmen and women. Many lives are embittered by the 
 fear of dependency in old age. Who can measure the extent of 
 depression of spirits, and the amount of physical drain ac- 
 companying such depression and its loss to society in 
 terms of efficiency and progress.'' A brief examination of the 
 obvious costs is of supreme value. 
 
 (a) THE COST TO THE TAX-PAYER 
 
 The total cost of the dependent aged in the United States is, 
 of course, impossible to obtain. Not only are the records of 
 charitable institutions incomplete, but it is common knowledge 
 
 46 
 
FOLLOWING OSTRICH POLICY 4,7 
 
 also that millions of dollars are being given in one form of relief 
 or another by individuals, as well as by private organizations, 
 the extent of whose benefactions can never be ascertained. 
 Basing his estimate upon the average cost per dependent per- 
 son given by the Massachusetts Commission in 1910, Mr. L. 
 W. Squier calculated the total annual cost of the dependent 
 population 65 years of age and over, exclusive of those in 
 correctional institutions and insane asylums, to have been $178,- 
 899,968.41 in 1910. "In round numbers," Mr. Squier esti- 
 mated, "it is costing this country $220,000,000 a year for the 
 support of this great host of worn-out toilers." 
 
 The Massachusetts 1915 Decennial Census summarized the 
 per capita expenditures on the dependent aged 65 and over 
 in that State as follows : 
 
 "Exclusive of United States pensioners, the aggregate number 
 of dependent persons in Massachusetts 65 years of age and over 
 who received aid from all sources (both public and private) dur- 
 ing the fiscal year ending March 31, 1915, was 34,496 and the 
 aggregate amount of aid received by this number was $3,233,- 
 948.74. Corresponding data for public relief were 26,403 per- 
 sons aided to the amount of $2,250,685.91 and for private relief 
 9,862 persons aided to the amount of $983,262.83. The per capita 
 expenditure on account of persons receiving aid from all sources 
 (both public and private) was $93.75 ; for persons receiving aid 
 from public sources, $85.24; and for persons receiving aid from 
 private sources $99.70. For males the per capita expenditure 
 (public and private) was $98.64 and for females $90.26." ^ 
 
 In Wisconsin in 1914 the average cost per person of 
 almshouse maintenance, including interest on invested capital, 
 was $3.58 per week or $186 per year. The amount of outdoor 
 relief averaged $50 per person per year. The Ohio Commission 
 found that: 
 
 "Independent of the value of the farm products consumed in 
 
 1 Report of Special Inquiry, Aged & Dependent persons in Mas- 
 sachusetts 1915, pp 15-16. 
 
48 FACING OLD AGE 
 
 these institutions, the cost of maintaining the city and county 
 infirmaries in Ohio in 1915, was $1,455,944 and the average per 
 capita cost was $169.88. Of the 80 infirmaries reporting, 13 had 
 a per capita cost of less than $100; 27 between $100 and $149; 
 20 between $150 and $200; 15 between $200 and $250; four be- 
 tween $250 and $300; and one over $300.^ 
 
 "The total expenditure for poor relief by cities, counties and 
 townships was $1,966,352 in 1916. Other state institutions cared 
 for 37,139 different persons in the year ending June 30, 1917. 
 Nearly half of these persons were over 60 years of age. During 
 the same year expenditure on these institutions was $5,247,327. 
 
 "In addition 46 private, church and society homes were caring 
 for 2,628 aged persons in June, 1917. 
 
 "The state has an investment of over $25,000,000 in its state 
 institutions. The cities and counties have an investment of 
 $10,000,000 in the county and city infirmaries alone. Altogether, 
 this public investment calls for an interest charge of nearly two 
 millions annually, to say nothing of depreciation. 
 
 "Roughly speaking, then, nearly $10,000,000 is expended 
 annually by local and state public charities and a large part of 
 this, probably about half, is for the care of the aged. The 
 amount expended by private organized charities for the care of 
 the aged and for all relief and social work amounts to several 
 million dollars annually." ^ 
 
 Exceedingly interesting related data is presented by the 
 Pennsylvania Commission. It finds that in 1917 : 
 
 "The average cost per week for all almshouses, was $5.87 or 
 $25.14 per month. In 1916, according to the report of the State 
 Board of Public Charities, the average per capita cost, when com- 
 puted in a similar way, was $5.09 per week or $21.81 per month. 
 It must be noted that the expenditures made during the year on 
 buildings and improvements, and the interest on permanent invest- 
 ments, are not included, in most cases. It is impossible to ascer- 
 tain the value of the different institutions at the present time. It 
 is a well known fact, however, that many of the larger institutions 
 
 1 Ohio Report p 244. 
 
 2 Ibid p 260. 
 
FOLLOWING OSTRICH POLICY 49 
 
 are worth millions of dollars. It is not unusual to find many 
 county almshouses occupying farms of several hundred acres and 
 building properties worth several hundred thousand dollars. In 
 the few institutions where big expenditures were made on build- 
 ings and improvements during the year 1917, five per cent, added 
 for interest and depreciation increases considerably the per capita 
 cost." ^ 
 
 It also found that : 
 
 "One county home with eleven inmates spends $6,655.60 or 
 $605.05 per year per inmate; while another County Home with 
 three inmates spends a grand total of $2,570.55 or $856.85 per in- 
 mate per year. One almshouse is maintained solely for one inmate 
 and while the direct cost of him to the county was $110.26 there 
 was spent $240.25 or $2.17 per dollar, to deliver this money to the 
 inmate. 
 
 "In 1916, $4,4.49,108.20 was spent for maintaining 16,754 in- 
 mates. This total increased to $5,114,307.15 which was spent in 
 1917 on 16,716 inmates. 
 
 "The average yearly per capita cost for 1917 was $301.68." ^ 
 
 In the Benevolent Homes for the aged the Pennsylvania 
 Commission found that in 1917 a total of $485,4'41.78 was 
 being spent on 1,545 inmates, or a per capita cost of $6.03 
 per week or $25.83 per month. It also found "one institu- 
 tion in which the weekly per capita cost amounted to $19.88, 
 while in another it amounted to $33.81." The above averages 
 the Commission states do not include the interest on permanent 
 investment or depreciation. When these were added the Com- 
 mission found the average cost per inmate in these Benevolent 
 Homes to be $33.99 per month in 1917. There are practically 
 no figures available showing the money spent on the aged poor 
 by private charity organizations. However, a study of the 
 Philadelphia iSociety for Organizing Charity made by the same 
 Commission, disclosed that during the most prosperous 12 
 
 1 Pennsylvania Report, p. 57. 
 = Ibid pp 58-69. 
 
50 FACINGOLDAGE 
 
 months — between October 1917 and October 1918 — the Phila- 
 delphia Society alone spent $33,291.57 on 162 aged people, or 
 an average of over $200 per beneficiary. The extent of con- 
 tributions, given in a confidential manner, by private persons 
 as well as by churches and fraternal societies throughout the 
 country is, of course, impossible to ascertain. 
 
 It is obvious that the millions of dollars spent annually on 
 the care of the aged, whether through public or private agen- 
 cies, ultimately come out of the pockets of the tax-payers. 
 And the Pennsylvania Commission's indictment of the admin- 
 istration of these funds is applicable to many States. The 
 latter Commission states that its investigations: 
 
 "Disclose an exceedingly confusing and bewildering system of 
 management of our county poorhouses. Not only do many of the 
 officials connected with these institutions have little knowledge 
 of the problems involved in the care of the aged, but there is 
 obviously a laxity in the management of these institutions and 
 the distribution of the county funds. The state supervision of 
 these aged homes is insufficient, loose and hardly competent. Care- 
 ful records are kept in only a few institutions. There are no uni- 
 form methods of accounting. Computations of costs are made in 
 almost as many forms and methods as the men making them. 
 Many of the per capita costs of almshouses given in the reports 
 of the Board of Public Charities do not represent the actual cost. 
 The latter do not include the interest upon the permanent invest- 
 ment and, in many cases, do not include the value of farm pro- 
 ducts." ^ 
 
 In his private business the citizen is continually making 
 further inquiries in regard to newer and more efficient methods 
 of management by means of which he may reduce his cost, 
 and increase his returns. To suggest, however, that the same 
 principle should be applied to national or State business is, un- 
 fortunately, still considered by many to be the rankest of 
 radicalism. Yet what could be greater folly than to continue 
 1 Pennsylvania Report pp 12-13. 
 
FOLLOWING OSTRICH POLICY 51 
 
 to spend these many millions of dollars without either an ac- 
 curate account of the expenditures or of the returns secured? 
 
 (b) THE COST TO THE INSTITUTIONAL 
 INMATES OR EECIPIENTS OP CHAEITY 
 
 Of greater social importance than the mere expenditures of 
 the enormous sums of money cited in the preceding pages is 
 the degree of effectiveness and the adequacy of these methods 
 of aged relief in meeting the purposes desired. These methods 
 must be judged in terms of the quality of the services rendered 
 to those who are forced to seek assistance in return for the 
 funds expended. Even the present chaotic means of caring 
 for the aged, if they are at all to be effective, must not only 
 seek to relieve the immediate needs of the aged but must aim 
 also to prevent dependency and thus ultimately reduce the cost 
 of pauperism. Measured by these standards it may safely be 
 stated that the existing means of aged relief are ineffective, 
 inadequate and undesirable. The present methods of relief 
 are looked upon as degrading and are of a repugnant nature, 
 invariably resulting in the loss of self respect in the individual 
 recipient and increased pauperism in the group. The stigma 
 of public charity is inseparable from the almshouse and public 
 outdoor relief as commonly administered, because of long cus- 
 tom and deeply ingrained public opinion. 
 
 Francis Herbert Stead, who was connected with the English 
 workhouses for years, says in his book, "How Old Age Pensions 
 Began to Be" : 
 
 "I saw men who trembled for very age hawking trifles in the 
 streets, and tottering on through mud and sleet and icy wind. I 
 saw men slowly wither up, body and soul, under the blighting 
 sense that they were wanted nowhere, and a burden everywhere. 
 
 When he is forsaken, 
 Withered and shaken, 
 What can an old man do hut die? 
 
52 FACINGOLDAGE 
 
 "Only those who have seen it can conceive the misery of the 
 poor old fellow who finds that society has no longer any use for 
 him, who feels he is done with and done for. Many old men 
 come to me, with tears running down their cheek, imploring me 
 as if I were Almighty Grod to have pity on them and get them 
 work. — 'Anything, oh, anything, no matter what it is, to keep me 
 from the workhouse.' " 
 
 Another Englishman — John Metcalfe — declared : 
 
 "One of the sights which make life unbearable to me is that 
 of old men and women, who in a worse plight than the sturdy 
 beggar (who has the spirit to beg) are trying to get a scanty 
 living by doing any kind of little odd jobs. They know that life 
 must soon end for them, and they have one ambition left, the 
 ambition not to die in the workhouse." 
 
 These conditions do not exist in England alone. In this 
 country too it has often been asserted by competent author- 
 ities that inseinity and suicide of middle-aged persons is 
 due in a large measure to the dread of old age. Even in the 
 United States there are, apparently, workers who would rather 
 enter the valley of the shadow of death than the loathed con- 
 fines of a poorhouse. In a brief period of two months the 
 writer's morning newspaper reported the following two stories, 
 which need no further comment : 
 
 "aged man dies as he faces almshouse 
 
 "Camden, N. J., Feb. 28 — Heartbroken because he had to go to 
 the almshouse, Jacob ... 78 years old, of this place, was taken 
 ill and died yesterday afternoon. 
 
 "Jacob, and his brother, George, 76 years old, lived and worked 
 together all their lives. They have spent their last declining years 
 alone together, with no relatives, at their home here. As age 
 crept upon them they found themselves unable to obtain work, but 
 they eked out their slender savings until the final penny was gone. 
 Arrangements were made to have them sent to the almshouse at 
 Blackwood, and the news was too much for the elder of the 
 brothers and he became ill. His brother went to the almshouse 
 alone." 
 
FOLLOWING OSTRICH POLICY 53 
 
 "fearing old age he jumps from high bridge 
 
 "Cleveland, May 7- — Fear of losing his position because of his 
 age is said by friends to have been the reason for a suicide leap 
 today by Joseph H. . . . , 60 who hurled himself to death from 
 the high level bridge to the street pavement 125 feet below." 
 
 The almshouse, like most charitable institutions, leaves inuch 
 to be desired as a home for the aged. Even if the majority of 
 almshouses and charitable homes in the United States afforded 
 a fair degree of physical comfort, sanitation, good food and 
 humane treatment, it would still seem hardly fair to herd to- 
 gether indiscriminately the worn-out honest workers, the in- 
 sane, the feeble-minded, the confirmed inebriates and the petty 
 ciTminals, as is done in most public poorhouses at present. The 
 actual conditions of the great majority of county and semi- 
 private institutions are far from ideal. The recent investi- 
 gations of the several State Commissions, as well as personal 
 observations, reveal that life in public almshouses is far from 
 inviting, not merely on account of the opprobrium of public 
 opinion, but because in addition life in these institutions' is 
 exceedingly dull, depressing and restricted. 
 
 In practically all States the superintendents of the county 
 almshouses are as a rule political appointees. "The great 
 majority of these," says the Pennsylvania Commission, "have 
 had no experience of this nature, previous to their appoint- 
 ments. Many of the men connected with the management of 
 the almshouses are prejudiced and often without the rudiments 
 of an education. Where the superintendents are highly edu- 
 cated men and trained — of these there are only a few — ^they 
 are as a rule powerless, and have no authority to make im- 
 provements without the consent of the Poor Board or the 
 County Commissioners." 
 
 Similar conclusions are reached by the Ohio Commission. 
 Regarding the actual conditions of the County Almshouse the 
 Ohio Commission says : 
 
 "The care of the various inmates in the county and city infirm- 
 
54 FACINGOLDAGE 
 
 aries in Ohio is a rather difficult problem, but it is one which is 
 not taken very seriously, as is evident from the conditions prevail- 
 ing in the 45 infirmaries visited in the course of this study. Thir- 
 teen were in very bad condition, 19 others would not come up to 
 any reasonable standard, and the remaining 13 were in fairly 
 good condition. 
 
 "In three infirmaries among those in bad condition, new build- 
 ings are absolutely essential for any improvement in the situation, 
 the old buildings being entirely uninhabitable. Persons employed 
 to keep the premises clean seemed more lavish in the use of dis- 
 infectant than of soap and water. The inside of the buildings 
 was unclean and slovenly; the walls had not been painted in a 
 generation and no attempt had been made to repair cracks or other 
 defacements. 
 
 "Many old persons suffer from foul smelling disorders and 
 when a number of them congregate in small groups, the resulting 
 bad odor is very noticeable to a person unaccustomed to it. Lack 
 of attention regarding personal cleanliness, poor ventilation and 
 over-heating tend to accentuate the odor. In many of the build- 
 ings inspected, sections occupied by the inmates were so foul smell- 
 ing that they were almost unbearable. The inmates frequently 
 were unclean, the beds dirty, the bed covers old and worn and 
 ventilation poor. Those who were unable to care for their physical 
 needs and demanded constant attention, had to depend on other 
 inmates for the most urgent wants. Often these improvised at- 
 tendants were feeble-minded or at least ignorant and inattentive. 
 In the entire group there was virtually no medical supervision." ^ 
 
 Somewhat better conditions are described by the inves- 
 tigators of the Pennsylvania Commission as having been found 
 in the larger institutions in the State ; but even in these insti- 
 tutions the Commission declares: 
 
 "There was no genuine homelike spirit. Most of the inmates 
 looked sullen and wore depressed and downcast mien. Practically 
 all were eager to get out of the place. Even in the best equipped 
 institutions there were no recreational facilities provided for these 
 
 1 Ohio Report pp 244-45. 
 
FOLLOWING OSTRICH POLICY 55 
 
 inmates. Except for a pack of cards, a game of checkers and a 
 few old magazines, there was nothing these aged could do to 
 keep their minds occupied and to prevent their nursing of griev- 
 ances and discontent. This feeling of depression is augmented 
 by the fact that in most Homes no attempt is made to segregate 
 the old people, — who have been compelled to go to the almshouse 
 through no fault of their own, — from the feeble-minded, and in 
 some cases even the partially insane. In many places they are 
 compelled to eat at the same tables and sleep in the same dormi- 
 tories with the latter groups. The inmates in most almshouses 
 are a very heterogeneous collection. They comprise insane, 
 feeble-minded persons and epileptics, blind and deaf mutes ; 
 sufferers from chronic diseases, persons with criminal records ; 
 prostitutes; mothers of illegitimate children, orphans and deserted 
 children." ^ 
 
 Miss Nassau, after visiting the Homes for the Aged oh 
 Blackwell's Island declared : 
 
 "Perhaps the most striking thing of all is the horror of the 
 huge dormitories with the beds nearer together than in the usual 
 hospital wards. That people can sleep in such huge dormitories 
 so close together seems incomprehensible — for although the very 
 poor have never been used to the luxury of real privacy there is 
 a difference between sharing a room with two to four relatives — 
 and a room with a hundred or so strangers. ... In spite of long 
 years of tenement visiting I could stand no longer the sight of 
 such depressed, hopeless, sad, vacant, wretched faces. All seemed 
 to live such a hopelessly monotonous life with no individuality or 
 scope for personal effort. ... Of course people do get desper- 
 ate and commit suicide or try to do so. One of the nurses at 
 Blackwell's Island said, 'I don't think I can stand it here much 
 longer, it is awful. I don't wonder some of the old people wander 
 down to the river and get in boats and — well, sometimes nothing 
 more is heard of them ! ' " 
 
 While commenting favourably upon the regulations for clean- 
 liness and general hygiene, Miss Nassau states : 
 
 1 Pennsylvania Report p 43. 
 
50 FACINGOLDAGE 
 
 "My last comment is on the lack of provision at both places for 
 the keeping of personal effects, which is a most serious defect. 
 
 "At Staten Island, in the dormitories the women had chairs by 
 their bedsides, so they practically owned a chair as well as a bed, 
 and the clothes on their backs. Think of the tragedy of owning 
 nothing more, when every human being has inherently a love of 
 acquisition of property, as is proved also in asylums for children, 
 where it is found that children pine away if acquisition of personal 
 belongings is denied themi! I asked one of the heads at Staten 
 Island if the inmates could not have a locked tin box for personal 
 belongings, but he insisted that that would be a menace to the 
 general hygiene. I said, 'But the boxes could be inspected regu- 
 larly.' To which he objected irritably, 'There is no one here to 
 do such work. I am short of help as it is ; besides the people here 
 are riff-raff, anyway.' This statement I could not agree with at 
 all, for many of the inmates seemed very decent, respectable people, 
 and in the cottages where they were given liberty (entrance to the 
 cottages is rather by 'pull,' and perhaps to same especially deserv- 
 ing ones) they looked very neat and nice." ^ 
 
 In practically all States outdoor relief is given by the differ- 
 ent Poor Boards to persons either whose physical condition 
 does not permit their removal to the County Homes, or to 
 women with dependent children, temporarily in need, who are 
 physically able to care for themselves. Outdoor relief may 
 be given also to those who have some one to care for them 
 in their own homes, or it is given to those who while physically 
 able are in temporary need of relief. This form of relief is 
 usually dispensed through the County Poor Directors them- 
 selves or through a clerk appointed by them. Cash is given 
 only in rare cases. Generally an order for groceries or mer- 
 chandise is given to merchants extending credit to the Poor 
 Directors. Of the constituency of these Boards, the Pennsyl- 
 vania Commission states: 
 
 "It is seldom that the county poor directors, county commissioners 
 1 Old Age Poverty in Greenwich Village pp 83-84-86. 
 
FOLLOWING OSTRICH POLICY 57 
 
 or other poor authorities have any definite knowledge or under- 
 standing of the problems of poor relief. These bodies are gener- 
 ally elected or appointed because of their political leadership in 
 their respective communities. The policies of rendering relief to 
 the poor are very often shaped in accordance with the political 
 fluctuations and whims of the particular localities. Few make 
 provisions for careful investigation as to the extent and need of 
 assistance or for supervision of those who receive relief. The 
 clerk of one County Poor Board, who dispensed more than $10,000 
 worth of goods in one year, frankly admitted that he had no 
 experience in this work. He was a machinist by trade and con- 
 fessed he knew nothing of the problem. He said that he rarely 
 investigated a case but that he knew he was supposed to 'relieve 
 the needs of the poor,' and furthermore, that there ought to be 
 a better method of conducting this poor relief system, but that 
 he held his job because of his political influence and that 'it was 
 much worse with the Democratic clerk who preceded him in this 
 ofiice.' " ^ 
 
 What are the actual returns made tO' institutional inmates 
 for the enormous expenditures cited above.'' The Pennsyl- 
 vania Commission has made a careful analysis of the quality 
 and quantity of food consumed in one typical county alms- 
 house of that state on the respective tables for inmates and 
 stewards. The general methods of caring for the aged may 
 be seen from the following: The almshouse studied had a 
 farm of 514< acres valued at $200,000, while the buildings were 
 valued at $250,000 more. The analysis showed that during the 
 year 1917 the inmates' table consisted on the average of 313 
 persons, while the stewards' table consisted of 32 persons. The 
 following differences in table fare were found: The amount 
 of butter consumed during that year averaged 7% lbs. per 
 inmate and 30% lbs. per steward. The inmates averaged 28 
 eggs per year, while the stewards averaged 200 per year. 
 Sugar was consumed on the average of 22% lbs. per inmate 
 and 32% P^J" steward. The average amount of milk consumed 
 1 Pemisylvania Report p 60. 
 
58 PACINGOLDAGE 
 
 by the inmates during that year was 23 qts., while the stewards 
 averaged 101 qts. The average amount of chicken consumed 
 by the inmates was a little over one ounce per year, while the 
 stewards averaged ten pounds. The same proportion held true 
 of other foodstuffs. The Commission comments: 
 
 "The above is illuminating from the standpoint of the quality 
 and quantity of the foods consumed at the respective tables of 
 inmates and stewards. It is shown throughout that the coarser 
 foods are consumed by the inmates, while the better kinds, are 
 used by the stewards. This is significant when it is remembered 
 that many of the aged folks are continuously sick and need more 
 of the better foodstuffs." ^ 
 
 (c) THE COST TO INDUSTRY 
 
 Much has been heard lately of the importance of increasing 
 production. The necessity for higher standards of workman- 
 ship, newer devices, and more scientific methods of manage- 
 ment in order to increase the efficiency of the workers is now 
 dwelt upon by all industrial leaders. Innumerable devices 
 which would tend to stimulate a greater out-put by their 
 workers are suggested by business men. It is patent, however, 
 that a high degree of efficiency can be obtained only when one 
 is possessed of a mind that is cheery, hopeful, and more or less 
 contented. The reactions of mind upon body, in terms of 
 industrial efficiency, can hardly be over-emphasized. But as 
 long as the worker is left to grope with the problems of old 
 age individually, the wage-earner — especially the middle-aged 
 worker — can hardly be expected to maintain a happy state 
 of mind. 
 
 To many millions' of workers in the United States today, 
 the future is a dark, imfathomable abyss in which hope, inde- 
 pendence and comfort have no place. Advancing age is looked 
 upon with great apprehension and dread even by many who are 
 engaged in the skilled trades. What with the unemployment 
 of old age, the high cost of living, and the numerous other 
 1 Pennsylvania Report p. 64. 
 
FOLLOWING OSTRICH POLICY 59 
 
 vicissitudes of modern life, their meagre savings are soon ex- 
 hausted. Slowly, as the years advance, the thought of what he 
 is to face during the days when he is no longer capable of 
 working, robs the mind of the middle-aged worker of every form 
 of contentment and enjoyment of the present. The thought 
 of helplessness in the future gradually fills the life of a worker, 
 especially if he is already advanced in age, with a fear and a 
 feeling of fatalism which has a deadening influence upon every- 
 thing he does. The prospect of the poorhouse with its stigma 
 of pauperism, so detestable to the honest wage-earner, haunts 
 him like a dark shadow and saps every bit of his vitality. The 
 dreadful thought that after a lifetime of valuable service, he 
 will be compelled to give up long-cherished home ties and life 
 associations, to lose sight of the old home, to hear no longer 
 the sound of his loved ones' voices, is constantly before him and 
 fills his life with bitterness. He knows that life must soon 
 end for him, yet he has one ambition left — not to die in a 
 poorhouse. And these reflections inevitably result, especially 
 to the sensitive and thoughtful worker, who cannot help dwell- 
 ing with horror on the dreary period of old-age imprisonment 
 which awaits him, in physical deterioration and the reduction 
 of physical vigour, which in turn increasingly aff^ect adversely 
 his interest, efficiency, and contentment. Under these circum- 
 stances, what opportunities are there for the conservation of 
 energy and the increase of production? 
 
 (d) THE COST TO THE YOUNGER 
 GENERATIONS AND TO SOCIETY 
 
 The present system of aged relief stands indicted not merely 
 because it is inadequate, incompetently administered, and de- 
 structive of industrial efficiency. It must be called to account 
 chiefly because of the detrimental effect it has upon the future. 
 The present methods of caring for the aged necessitate a re- 
 consideration and a readjustment because of their evil results 
 upon the coming generation and upon society as a whole. For 
 
60 FACING OLD AGE 
 
 of greater social significance and more far-reaching importance 
 than either the money spent on the decrepit, or the treatment 
 received by those whose lives have been spent and whose hopes 
 of rehabilitation or restoration to society are slight, more 
 sinister than even the industrial inefficiency it creates, are the 
 effects the present methods of aged relief have upon great num- 
 bers of the younger and especially middle-aged wage-earners. 
 
 It is now generally recognized that society ultimately pays 
 the price for all its apathy and resultant maladjustments. 
 From the first impression it would appear that while this truth 
 may be admitted, the price in the case of the neglected aged 
 would be reduced to a minimum. For the great majority of 
 the aged are rarely restored to active social participation, and 
 their effect upon society, whether for good or evil, would seem 
 to be nil. However, a closer observation reveals an intimate 
 relationship between the superannuated workers and the 
 younger generation with its children. 
 
 The data given in a preceding chapter show that, while aged 
 dependency is widespread in this country, most persons, de- 
 spite their poverty, succeed in avoiding either public or private 
 charity. Obviously, these do not all commit suicide upon reach- 
 ing old age, nor are many found actually starving on the 
 streets. Most of these aged folk, as shown in the preceding 
 chapters, are taken care of by their children or relatives. In- 
 deed, this is given by the Pennsylvania Commission as the chief 
 difference between those who remain "non-dependent" and 
 those who must seek the poorhouse as their sheltering place. 
 The studies of the different State Commissions show conclusively 
 that few children able to do so are unwilling to aid their 
 parents. On the other hand, it was found that in many in- 
 stances children were supporting their aged parents, against 
 great odds, either because of deep attachment to them or be- 
 cause of pride, which would rather suffer in silence than accept 
 charity. While this may seem a very meritorious act, to those 
 who consider it an obligation for children to support their 
 
FOLLOWING OSTRICH POLICY 61 
 
 parents, or who take it as indication of the much-prized family 
 solidarity, it can hardly be accepted as a desirable basis of 
 society, under present conditions, that the older generation 
 must be supported by the younger. 
 
 The younger generation must be considered in any discussion 
 of the aged problem, especially if it is to be accepted that the 
 aged are to be supported by their children. The proverbial 
 "mother-in-law" is undoubtedly blamed for many more things 
 than she is actually guilty of. Nevertheless, there are few 
 persons who could not reflect upon one or more of their ac- 
 quaintances whose young lives have been made pitiably wretched, 
 and in some instances totally ruined, by the constant "pester- 
 ing" of an old father-in-law or mother-in-law. Such conflicts 
 are almost inevitable. 
 
 Romain Holland's characteristic Frenchman, Colas Breug- 
 non, faced with such a situation after a fire, bewails his mis- 
 fortune thus: 
 
 "I have lost everything in the world." thought I. "My home, 
 — the house was full of dear memories, — and the hope of ever 
 having another' of my own; all my savings, which it took me 
 years to get together, bit by bit, and which were so much the more 
 valtiable to me, and worst of all, my independence is gone; for 
 now, of course, I shall have to live with one of my children, and 
 I don't know which of us will hate it the most. It is the one 
 thing I have always been resolved against, as the worst that could 
 happen. There is no use telling me that I love them, and they 
 love me, — I know all that, but young people and old interfere with 
 each other, and it is natural and proper for a bird to sit on its 
 own nest, and hatch out its own eggs in its own way. Eespect 
 for the old is all very well, or rather it makes a difficulty, for you 
 are not on an equality with people when you are obliged to show 
 them respect. I have tried to behave so that my five children 
 should not have too much respect for me, and I think I have suc- 
 ceeded pretty well, but there must always be a distance between 
 us. Parents come and go in their children's lives, like strangers 
 from a far country; there can never be perfect understanding 
 
62 FACINGOLDAGE 
 
 from one generation to another, and too often there is, on the 
 contrary, interference and irritation." 
 
 As a rule the old persons hate to feel dependent upon their 
 children. They suffer greatly from not being "able to make 
 their own dollar," instead of accepting it from their children. 
 On the one hand, the old who for years have been accustomed 
 to be looked up to as the superiors and masters of the house- 
 hold can hardly adjust themselves to a position of "added 
 burdens," when they become dependent upon their children. 
 They find it difficult to give up their authority. On the 
 other hand, even loyal children begin to lose their respect for 
 parents who have become feeble, irritable, and burdensome. As 
 a result there is frequently great suffering on the part of both 
 the old and young generations, which sometimes ends disas- 
 trously for the children. 
 
 In addition to the evil effects upon the second generation de- 
 scribed above, there is also the third generation to be considered. 
 It seems cruel to force any father or mother in this twentieth 
 century to decide between supporting old parents and con- 
 tenting themselves with a little less food, less room, less clothing, 
 and the curtailment of their children's education ; or sending 
 parents to the poorhouse or charitable agencies, accepting the 
 stigma of pauperism, and thus assuring themselves of more 
 food, more room, and more clothing, and a better education for 
 their children which would help them to become somewhat more 
 proficient workers. This is a difficult alternative, yet it is 
 certain that thousands of parents in the United States are an- 
 nually compelled to make such decisions. 
 
 Unfortunately for the children, the hateful odium of charity 
 and pauperism is so repugnant to self-respecting labouring men 
 and women that the decision, in the majority of such cases, is 
 made in favour of the passing generation. Thus the lack of 
 provisions for the old is often responsible for the stunted and 
 thwarted growth of the children. Because of the necessity 
 of supporting the aged, the children are frequently doomed to 
 
FOLLOWING OSTRICH POLICY 63 
 
 under-nourishment ; and to a life in the midst of crowded and 
 unsanitary quarters. The children are compelled to leave 
 school early in life and j oin the ranks of the unskilled ; to add 
 further to the already over-crowded industries and thus lower 
 the wages of their own fathers and other such workers. They 
 are doomed to physical deterioration early in life, and in turn 
 to aged dependency, in order that they may keep up the vicious 
 cycle. And this slaughter of the innocent brought upon the 
 altar of ignorance to the ostrich continues, because the major- 
 ity of the people in the United States still are afraid to lift 
 their heads from the sand. They dread to face and meet the 
 facts — as every other civilized country has already done — 
 with a constructive social policy, for fear that in doing so they 
 may be accused of "paternalism," or "socialism," or perhaps 
 "Bolshevism" ! 
 
PART TWO 
 CAUSES OP OLD AGE BEPENDENCY 
 
CHAPTER V 
 
 INDIVIDUAL CAUSES OF OLD-AGE 
 DEPENDENCY 
 
 The causes that make for dependency in old age, like those 
 which make for poverty in general, are many and varied. The 
 forces which underlie the brutal sweeping aside of thousands of 
 wage-earners as decrepit and dependent, are ordinarily too 
 complex and of too heterogeneous a nature to permit of enumer- 
 ation. . Some are due, doubtless, to congenital or hereditary 
 biological influences, some to physical environment and social 
 heredity, while others may be the result of the existing social, 
 economic, political, and perhaps even moral conditions. No 
 completely accurate classification can be made of the factors 
 and influences which go to make up human Kfe, and which result 
 in the fortune or misfortune of the individual. What may seem 
 the eff^ect of one particular cause may be so only in part. The 
 main cause may overlap and encroach upon one or more related 
 causes. It is especially difficult to classify the causes which 
 make for old-age dependency, as even first-hand information 
 cannot be taken at its face value in this instance ; for frequently, 
 where the mental grip of the aged upon life is loosening, many 
 things are complained of which may have little or no actual 
 basis for complaint. The division of individual and socio-eco- 
 nomic causes of old-age dependency made in the following 
 chapters must not, therefore, be taken to mean that they are 
 mutually exclusive. The classification is made largely for con- 
 venience and on the ground that certain influences are more 
 closely related, and are aff^ected by the individual, while others 
 lie largely outside of the individual and are more intimately 
 allied with and dependent upon the current social and economic 
 
 forces. 
 
 67 
 
68 FACING OLD AGE 
 
 SUPERANNUATION AS A CAUSE OF 
 OLD-AGE DEPENDENCY 
 
 In any discussion of the causes of old-age dependency it is 
 important to state first the part played by feebleness and in- 
 efficiency, naturally resulting from old age. The studies made 
 by the several State Commissions, as well as by many other 
 competent authorities reveal that old age as such is a com- 
 paratively minor cause of dependency in later life. As was 
 pointed out before, the present problem of old age is due largely, 
 not to the total incapacity or feebleness on the part of the aged, 
 but rather to their inability to cope with the conditions under 
 the highly developed modern machine industry which finds less 
 need for expertness and experience and greater use for speed 
 and rapid production. As a result, the younger generation, 
 though less experienced, is continuously crowding out the older 
 and less efficient workers. 
 
 The small part old age, as such, plays in dependency may 
 be seen from the following: The Thirteenth U. S. Census' 
 pauper enumeration gives the percentage of aged and infirm 
 in almshouses as 32.1. The Massachusetts Commission in 1910 
 found the percentage of physical defect, due to old age, 
 among the aged poor 65 years and over, ranging from 17.2 in 
 the case of those receiving State and Military aid, to 35.7 in the 
 case of those receiving private outdoor relief. Of 133 cases 
 studied in Hamilton, Ohio, as to the cause of their retirement, 
 only 25 attributed it directly to old age. Among the alms- 
 house inmates in Ohio, of 1,608 cases investigated, only 90 or 
 5.6 per cent, attributed it to the same cause. In Pennsyl- 
 vania also only 38.9 per cent, among almshouse paupers, 47.6 
 per cent, among inmates of benevolent homes, and 25 per cent, 
 among the non-dependent aged 50 years of age and over were de- 
 fective because of old age. In a study of 5,000 dependent fam- 
 ilies who came under the care of the New York Charity Organ- 
 ization Society during the years 1907-1908, Professor Devine 
 
OLD AGE DEPENDENCY 69 
 
 found only 11.98 per cent, who were dependent because the head 
 of the family was 60 years old or more.-^ 
 
 DEPENDENCY DUE TO WANING EAJLNING POWER 
 
 Closely associated with superannuation as a factor in depend- 
 ency is the decreasing earning power of those who have passed 
 their prime in life. It is commonly known that in many of the 
 larger industries the age of employment is set below the age of 
 40 and in some cases not above 35. As a result many workers, 
 who for one reason or another are compelled to leave the 
 occupations in which they were engaged for many years, can- 
 not be re-employed in the trades in which they have acquired 
 expertness and experience. These are compelled to seek new 
 employment more suited to their age, which invariably means 
 decreased wages. As a factor in dependency this is of utmost 
 significance, for it must be remembered that in spite of the re- 
 duction in wages the expenditures of these persons for food and 
 rent, even under normal conditions of living costs, remain the 
 same, while the expenditures for medicines are increasing with 
 age. 
 
 The extent of the changes in occupation, with the resulting 
 decrease in wages among workers who have passed their prime, 
 may be judged from the following. The Ohio Commission 
 found in its studies of wage-earners in Hamilton, that many 
 men of weak physique who enter occupations like moulding, 
 blacksmithing and boiler-making, make the discovery that they 
 are not equal to the strain, after it is too late. These are 
 forced to seek new and lighter employments. Its intensive 
 analysis of the Census reports regarding ages and occupations 
 indicates : 
 
 "That there are certain unskilled occupations which old men 
 enter after they have been compelled to give up work in their 
 principal occupations. There is a striking preponderance of old 
 men in such occupations as those of janitor, city labourer, watch- 
 man for cities, and boarding and lodging house keepers. Nearly 
 
 X E. T. Devine, Misery and its Causes, p. 204. 
 
70 FACINGOLDAGE 
 
 21.8 per cent, of the boarding and lodging house keepers (male), 
 in the United States in 1900 were between 45 and 54; 21.8 per 
 cent, were between 55 and 61 and 15.2 per cent, were 65 and over. 
 Of the watchmen, policemen and firemen 21.9 per cent, were be- 
 tween 45 and 54; 14.0 per cent, were between 55 and 65 and 5.4 
 per cent, were 65 and over. Of the janitors and sextons 21.8 
 per cent, were between 45 and 54; about 17-9 per cent, were be- 
 tween 55 and 64 and 9.7 per cent, were 65 and over. In 1910, 
 52.0 per cent, of the janitors, 63.4 per cent, of the sextons, 41.3 
 per cent, of the city labourers, 65.7 per cent, of the city watch- 
 men, and 55.0 per cent, of the boarding and lodging house keepers 
 were 45 and over." 
 
 The foregoing, concludes' the Commission, shows that: 
 
 "Many workingmen are compelled between 50 and 60 to leave 
 trades which impose a severe physical strain." ^ 
 
 Comparisons of wages earned, in old age with those earned at 
 lesser ages bear out the relationship of old age to decreased 
 earnings even more clearly. According to the findings of the 
 Massachusetts Commission in 1910, of all aged classes investi- 
 gated, the earnings at the time of investigation varied consider- 
 ably from their earnings in the last occupations. While 31.3 
 per cent, were found earning above $10 per week, at the time of 
 investigation, 49.9 per cent, were in this wage-earning group 
 during their last occupations The percentage of those who re- 
 ceived below $10 a week was 50.1 during their previous earnings ; 
 while 68.7 per cent earned below this sum at time of inves- 
 tigation, or just prior to their admission to the various insti- 
 tutions. 
 
 Valuable information regarding the wages earned by paupers 
 in old age, just prior to their admission to an institution, and 
 in their earlier days is also supplied by the Pennsylvania Com- 
 mission. It comments: 
 
 "While 32.30 per cent, of the almshouse inmates earned less 
 lO'hio Report pp 211-212. 
 
OLD AGE DEPENDENCY 71 
 
 than $8 per week in their earlier years, a greater number, or 44.12 
 per cent, were earning the same sum prior to their admission. On 
 the other hand, while 61.07 per cent, were earning between $8 and 
 $20 per week in their younger days, only 52.48 per cent, were 
 earning the same amount at the time of admission. This would 
 prove that the earning power of these inmates was gradually 
 declining, due either to old age or similar causes. The small 
 wages earned by the majority of the inmates also seem to show 
 that many of these aged folk could not earn a sufficient sum to 
 maintain themselves in comfort. Of those who reported their 
 last earnings 21.33 per cent, earned between $12 and $20 per 
 week and only 6.4 per cent, were making $20 or more a week. 
 
 1 
 
 LACK OF FAMILY CONNECTIONS 
 
 In the discussions of family connections (Chapter III), 
 it was seen that aged dependency and pauperism are almost in 
 inverse ratio to the number of children or relatives. Indeed, 
 the presence of large numbers of childless persons in our poor- 
 houses indicates clearly the connection between abnormally 
 deficient family relationships andi pauperism. In a total of 
 4!4<,433 female paupers enumerated by the U. S. Census of 
 1910, only 30.9 per cent, had children still living. In Penn- 
 sylvania also, the Commission found, that while 63-5 per cent 
 among the almshouse paupers had no children, in the case of 
 those classified as "non-dependent aged," only 10.6 per cent, 
 had no children living. 
 
 SICKNESS AND INDUSTRIAL ACCIDENTS AS CAUSES OF AGED 
 DEPENDENCY 
 
 Very clos'ely related to, and constantly attendant upon, aged 
 dependency is physical disability resulting from either accident 
 or bad health in general. It is common knowledge among social 
 and charity workers that ill health stands out as the largest 
 factor in all causes of dependency. It is conservatively esti- 
 mated that in at least 50 per cent, of the families who apply 
 
 - Pennsylvania Report p 30. 
 
T2 FACING OLD AGE 
 
 for aid, physical disability, either directly or indirectly, con- 
 stitutes the paramount cause for relief. The problem of old 
 age is largely a problem of sickness and invalidity. This fact 
 is generally recognized in European countries where old age 
 insurance is frequently operated in conjunction with health 
 and invalidity insurance systems. In these countries there are 
 usually more persons receiving invalidity pensions than old age 
 pensions. 
 
 The extent of sickness as a cause of dependency among the 
 aged may be deduced from the following official studies. The 
 U. S. Census enumeration of almshouse paupers in 1910 dis- 
 closes that "Of the 84,198 paupers enumerated in almshouses 
 on January 1, 1910, 53,619, or 63.7 per cent., were reported 
 as having some serious physical or mental defect." The Mas- 
 sachusetts Commission in 1910 found in its almshouse population 
 only 12.5 per cent, able-bodied persons and the general percent- 
 age of physically defective ones for all classes was high (72.2). 
 
 Of the conditions in Ohio, Dr. John O'Grady concludes: 
 
 "These figures, as well as the general observation of the inves- 
 tigators during the course of the study, seem to indicate that sick- 
 ness, disease and accident are important factors in shortening the 
 period of man's economic usefulness. Many of the workers inter- 
 viewed stated that they began to fail after 50. Machinists and pat- 
 tern makers complained of defective eyesight and the molders of 
 rheumatism. As a rule they paid little attention to these disorders 
 until there was a breakdown compelUng them to give up work for 
 two or three months. 
 
 "Illnesses were more important than any other cause in bring- 
 ing about premature superannuation and frequently required the 
 expenditure of all previous savings. 
 
 "There was every indication that for many wage-earners over 50 
 in Hamilton, the problem of sickness was really serious. The mal- 
 adjustments, neglects and excesses of early life were then mak- 
 ing themselves felt. One hundred and fifty-five of the men inter- 
 viewed reported themselves as afflicted with definite disorders of 
 various kinds, such as rheumatism and kidney, bladder and stomach 
 
OLD AGE DEPENDENCY 73 
 
 troubles. These ailments, accentuated by age, frequently com- 
 pelled them to be absent from work for two or three months at 
 a time.'^ 
 
 "Of the 2,260 infirmary inmates of whom a detailed study 
 was made, it was possible to obtain information in regard to 
 the most important cause of poverty in 1,608 cases. Disease, 
 sickness, or accident was given as the most important cause of 
 dependency in 482, or 29.9 per cent, of the total number of 
 cases." ^ 
 
 Sickness was also found to be the leading cause of disability 
 by the Pennsylvania Commission. This cause was given by 34.5 
 per cent, in the case of the almshouse group; 36.2 among Be- 
 nevolent Home inmates and 47 per cent, among the "non-depend- 
 ent" aged. 
 
 The part played by physical disability in old-age depend- 
 ency, however, is not confined to the actual period of senility. 
 Indeed, illness and poverty are all too closely inter-related 
 throughout our social system. It is very often difficult to 
 determine which comes first. The Social Insurance Commission 
 of California found! in a ^udy of 500 families who received 
 public aid, that there were many family heads who had been 
 earning considerably more than the average wage, but who 
 were, nevertheless, compelled to ask for aid because of sick- 
 ness which had consumed the savings of years. 
 
 That sickness encroaches upon the small property posses- 
 sions of the poor and succeeds in ultimately wiping them out, 
 is clearly brought out by the investigations of at least two 
 State Commissions. Of all dependent groups investigated by 
 the Massachusetts Commission, 60.1 per cent, of those who had 
 property in their earlier days attributed its loss to prolonged 
 illness. In Pennsylvania 35.5 per cent, of the almshouse pau- 
 pers and 88.3 per cent, of the "non-dependent" aged claimed 
 to have disposed of their previous property possessions in 
 order to meet emergencies, largely those of sickness. 
 
 lOhio Report p 223. 
 2 Ibid p 241. 
 
74 FACINGOLDAGE 
 
 The relationship of bad health and dependency is indeed of 
 such importance that a summary of some of the data gathered 
 by the most recent State Commissions on Health Insurance 
 is exceedingly valuable in this discussion. 
 
 As early as 1900, the National Conservation Commission in 
 its report on national vitality declared that one rarely finds 
 a person past forty-five years of age who is in perfect health. 
 Since that time this broad statement of ill health has' been cor- 
 roborated by many studies of health conditions as found among 
 diff^erent groups of workers. 
 
 "In an intensive physical examination of garment workers in 
 New York City, made by the United States Public Health Ser- 
 vice in 1914-15, it was found that among 2,086 males examined, 
 there were present 9,541 defects and diseases, or an average of 
 4.57 for each male. The examination of 1,000 females showed 
 3.916 defects and diseases, or 4.33 for each female.^ 
 
 "Our knowledge of morbidity among the general population has 
 been increased during the past few years by the surveys made by 
 the Metropolitan Life Insurance Co. Surveys among the indus- 
 trial policy-holders of this company have been made by the agents 
 and have covered Rochester, N. Y., Boston, Mass., Kansas City, 
 Mo., cities of West Virginia, cities of Pennsylvania, North Caro- 
 lina, Trenton, N. J., and the Chelsea district of New York City. 
 A total of 579,197 white men, women and children were covered 
 and 10,878 were found unable to work, or 18.8 per thousand. 
 A total of 376,673 people over 15 years of age showed 8.636 
 cases of disabling illness or 22.9 per thousand. The average dis- 
 abUng sickness for each of the persons of working age was, there- 
 fore, 8.4 days or 6.9 working days per year. When the data 
 for disabling illness are classified according to sex, they show 
 that white males over 15 have a morbidity rate of 22.8 per thou- 
 sand and white females over 15 have a rate of 23.0 per thousand. 
 These sickness rates represent an average total loss of 8.3 days 
 a year for men and 8.4 days per year for women. If these rates 
 are applied to the population over 15 in Ohio (3,700,000), it gives 
 
 1 Ohio Report p 52. 
 
OLD AGE DEPENDENCY 76 
 
 an annual total of 31,000,000 sick days and a loss of 25,000,000 
 working days per year. 
 
 "The United States Commission on Industrial Relations esti- 
 mated upon the basis of an examination of sickness statistics of 
 more than a million workmen, that each industrial worker loses 
 an average of nine days a year. This estimate is approved by 
 Warren and Sydenstricker in their report on health insurance for 
 the United States Public Health Service. 
 
 "The experience of nine benefit funds, in Ohio, covering 
 663,163 workers and 131,921 cases of disability which lasted 
 eight days and over and which were due to sickness and non-indus- 
 trial accident was examined. The analysis showed that for every 
 100 members, there were 19.7 cases of disability lasting eight 
 days and over. The average number of days' disability per mem- 
 ber per year — based on these cases, exclusive of days of disability 
 beyond 189 days — was 6.0 days. In the Workmen's Sick and 
 Death Benefit Fund which was analyzed separately, it is esti- 
 mated upon the basis of compensated cases of disability lasting 
 more than one day — exclusive of days of disability beyond one 
 year — that each member was compensated on the average of 6.9 
 days of disability a year. Since these figures are for compen- 
 sated cases only and do not include days of disability beyond the 
 specified ranges, they are, therefore, somewhat less than the total 
 sickness among the groups studied. From the mass of data all 
 pointing to the same conclusion, the Commission estimates that 
 for the whole group of employed workers in Ohio the average days 
 of sickness will be about >nine days annually.^ 
 
 "Among the 663,163 workers under observation, there were 
 131,921 cases of disability lasting eight days or over, or 19.7 cases 
 for every 100 members. Of the cases lasting eight days or more, 
 34.7 per cent, lasted from eight to 14 days; 19.5 per cent, lasted 
 from 15 to 21 days; 11.3 per cent, lasted from 22 to 27 days; 
 7.9 per cent, over one month but less than two months ; 6.4 per 
 cent, over two months but less than three months; 7.1 per cent, 
 over three months but less than six months and 3.1 per cent, 
 over six months." ^ 
 
 1 Ohio Report pp SS-56. 
 
 2 Ibid pp 56-57. 
 

 
 Total 
 
 No. of Cases 
 
 
 
 Disability 
 
 per 
 
 Year 
 
 No. of Members 
 
 Cases 
 
 1,000 Members 
 
 1912 
 
 40,294 
 
 10.791 
 
 267.8 
 
 1913 
 
 42,076 
 
 11.529 
 
 274.0 
 
 1914 
 
 42,821 
 
 11.281 
 
 262.2 
 
 1916 
 
 43,300 
 
 11.240 
 
 259.6 
 
 1916 
 
 44,188 
 
 11.870 
 
 268.6 
 
 76 FACINGOLDAGE 
 
 In Dr. Emmet's study of the Workmen's Sick and Benefit 
 Society, ^ already referred to in a previous chapter, the average 
 age of the members of this organization, composed largely of 
 wage-earners, was 42.9' years. The total membership and the 
 total cases of disability due to sickneste and injuries of these 
 were found as follows: 
 
 EXTENT OF DISABILITY AMONG MEMBERS OF THE 
 WORKMEN'S SICK AND BENEFIT SOCIETY 
 
 No. of Disability 
 Days among 
 1,000 Members 
 4,920.6 
 5,076.4 
 6,636.8 
 6,628.4 
 6,628.4 
 
 Thus the total membership during a period of five years was 
 subjected to a disability extent measured by 43,885 sick per- 
 sons, disabled an aggregate of 1,223,324 days or an average 
 of 6.6 days per member and 28.1 days per disabled person. 
 
 The Pennsylvania Health Insurance Commission in its report 
 of 1919 concludes: 
 
 "More than 385,000 persons in the State are constantly suiFer- 
 ing from illness; approximately 140,000 from severe, and 245,000 
 from slighter illnesses. 
 
 "The average loss of working time among employes in the State 
 is at least six days each year because of sickness. In 1916, 3,025,071 
 worldng days were lost because of industrial accidents in the State; 
 sickness causes approximately five to seven times as much loss as 
 industrial accidents. 
 
 "At the nominal rate of $2.00 a day the wage loss to employes 
 of this State every year because of illness is at least $33,000,000.° 
 
 "A study of twelve well organized establishment funds, was made 
 during the summer and fall of 1918 by the Connecticut, Ohio, Illinois, 
 and Pennsylvania Health Insurance Commissions with the help of 
 
 1 Labour Review, November 1919, pp 20-29. 
 
 2 Pennsylvania Health Insurance Com. Report, pp 31-32. 
 
OLD AGE DEPENDENCY 77 
 
 Mr. Boris Emmet of the United States Bureau of Labour Statistics. 
 The results of this study were tabulated by the Ohio Commission 
 in ten groupings. The benefit associations selected for study include 
 employes in the following occupations : railroad transportation, manu- 
 facture of iron and steel products, textiles, steel mill, general foundry 
 work and letter carriers. The most important facts to be gathered 
 from this study relate to the duration of the illnesses for which 
 benefit had been paid. As most of the funds had a seven day 
 'waiting period' only cases of more than eight days' duration were 
 used in the combined experience tables. Because of diiFerences in 
 administration of benefits and hazards of the several occupations 
 represented, the proportions of icases of long and short duration 
 vary widely in the diiFerent funds. For instance, 55.73 per cent, of 
 the sickness in Fund No. 1 lasted less than two weeks, while in 
 Fund No. 10 only 16.1 per cent, was of this duration. In the 'over- 
 six months' ^roup. Fund No. 1 had 1.39 per cent, of its cases, while 
 Fund No. 10 had 5.24 per cent. 
 
 "Taking the combined experience of these funds, however, it 
 was found that 34.56 per cent, of the cases lasted less than two 
 weeks; 34.68 lasted more than a month, and 3.26 per cent, more 
 than six months." '^ 
 
 The Connecticut Report of the Public Welfare Commission 
 in an examination of the disability experiences of 22 factory 
 Mutual Benefit Associations in that State also finds that : 
 
 "The average number of disability days per member per year 
 for the 22 associations taken as a whole is 4.9 days. Making 
 allowance for the fact that in these associations disabilities of 
 shorter duration than the waiting period and disability running 
 beyond the maximum benefit period are not reported, it is found 
 that on the average a workman is disabled approximately six days 
 per year because of non-industrial accidents and sickness. This 
 fi<Ture is the same as was disclosed by the investigation of the 
 Social Insurance Commission of the State of California. 
 
 ilbid 55-56. 
 
78 FACINGOLDAGE 
 
 "The individual experience for one year of a concern which 
 employs approximately 1,200 females showed for this group that 
 the average number of disability days due to non-industrial acci- 
 dents and sickness per female employe per year was 17.2." ^ 
 
 According to the American Labour Legislation Review for 
 December 1920 (p. 232), the United States Department of 
 Labour estimates that 450,000,000 days' time is lost every year 
 by 50,000,000 workers in this country on account of sickness. 
 
 The degree of physical disability in the United States as a 
 whole is told vividly by the military draft rejections for physi- 
 cal defects. Of all the young men examined in the United 
 States by the draft boards 29.11 per cent, were rejected on 
 account of physical defects. 
 
 The responsibility of industrial accidents for a great deal 
 of poverty and dependency is known to all. The exact number 
 of industrial accidents occurring in the United States annually, 
 however, is still impossible to determine. Even the best State 
 compensation laws include neither all classes of workers nor 
 all hazards, and no complete statistics of accidents are there- 
 fore availajble. For the year 1913 the U. S. Bureau of Labour 
 Statistics ^ estimated the probable approximate mmnber of 
 fatal industrial accidents in the United States at 25,000 for 
 both sexes, and the number of injuries involving a disability 
 of more than four weeks at approximately 700,000. This 
 estimate of comparatively prolonged disability was obviously 
 no indication of the total number of minor accidents which 
 occurred during that year. In a study of 10,000 accidents in 
 the iron and steel industry involving dis'ability of one day and 
 over, made by the same Bureau,^ it was found that in 4!l.2 
 per cent, of the cases the disability terminated in the first 
 week ; 69.8 per cent, of the total cases terminated in two weeks, 
 while 77.7 per cent, recovered in four weeks. If the accidents 
 in the iron and steel industry are taken as representative of 
 
 1 Report of Com. on Public Welfare, Hartford 1919, p 50. 
 
 2 Bulletin No. 157, March 1915, p 6. 
 s Ibid p 7. 
 
OLD AGE DEPENDENCY 79 
 
 industry in general, in the United States, in respect to the 
 period of termination, it would mean that the total number of 
 industrial accidents in the United States approximate 4,000,- 
 000 a year. 
 
 Miss Margaret Gadsby in a recent study of industrial acci- 
 dent statistics in the United States ^ points out succinctly the 
 deplorable inadequacy of complete data on this subject: 
 
 "How many industrial accidents occur yearly in the United 
 States? We do not know. To what extent have workmen's com- 
 pensation laws and the safety movement mitigated the accident 
 evil in American industries.'' We are unable to determine with 
 any degree of certainty. What are the causes of industrial acci- 
 dents.'' What is the accident frequency rate in the leading indus- 
 tries; the accident severity rate.' We do not know. Where can 
 preventative measures be most effectively applied.' It has never 
 been adequately determined; there are no adequate comparable 
 data. How many industrially disabled are there in the country 
 who will be affected by the recent legislation extending the pro- 
 visions of the rehabilitation act to the industrial cripple? No 
 authoritative statistics are available. What is the annual loss 
 in productive efficiency through industrial accidents? What is 
 the annual cost in time and money lost through accidents in in- 
 dustry? We do not know; there are no figures available by 
 which it can be determined . . . Even the part of this informa- 
 tion which is the most elementary — the mere number of acci- 
 dents occurring within a given year — ^is unavailable for the country 
 as a whole. Not only is there no uniform method of tabulating 
 statistics of accidents for the entire country, but also few States 
 can be said to have accurate knowledge of the total number of 
 accidents occurring in the industries within their borders. As for 
 an analysis of such accidents as to cause and severity within each 
 industry, only half a dozen States can be said to have approxi- 
 mated a significant analysis." 
 
 From a study of all the available sources of information 
 which, Miss Gadsby states, "can in no case be said to represent 
 1 Labour Review, March 1921, pp 167-176 
 
80 FACINGOLDAGE 
 
 the total number of accidents occurring within the State," 
 she presents' the following industrial accident figures for the 
 years 1917-1918-1919. 
 
 Year Fatal Accidents Non-Fatal Accidents 
 
 1917 11,111 1,398,151 
 
 1918 12,082 1,569,771 
 
 1919 9,963 1,170,384 
 
 The above totals, as was pointed out, are incomplete. From 
 several states no figures whatever were available for the period 
 covered. In four instances, the figures refer to accidents in 
 mines only. In some cases only accidents resulting in more than 
 two weeks' disability are included, and in one case the data 
 refer only to such accidents occurring in establishments where 
 women and children are employed. In addition, the investi- 
 gator contends : "A State that has a seven-day waiting period 
 has no record of approximately 40 per cent, of its tabulatable 
 accidents. Those States having a waiting period of two weeks 
 have no record of from 65 to 70 per cent, of their industrial 
 casualties." 
 
 After a thorough analysis of European and American indus- 
 trial accident rates, Rubinow concludes : 
 
 "That there occur in the United States annually some 30,000 
 fatal industrial accidents, about 200,000 accidents leading to per- 
 manent disability, of which nearly 60,000 are cases of actual loss 
 of part of body, and about 100,000 resulting in disability of under 
 25 per cent, and another 50,000 in disability of 25 to 50 per 
 cent., and the remainder cause disability of over 50 per cent. 
 In addition, some 170,000 accidents are serious in that disability 
 lasts over three months, but eventually they result in complete 
 recovery, especially, if economic conditions favour it." ^ 
 
 A recent pamphlet issued by the Metropolitan Life Insurance 
 Company declares that the United States leads all other coun- 
 trieis "equally advanced industrially and socially" in indus- 
 trial deaths. It is stated that there are "not less than 85,000 
 
 1 1. M. Rubinow, Social Insurance, p 68. 
 
OLD AGE DEPENDENCY 81 
 
 deaths from accidental causes each year in this country. If 
 our accident rate were reduced to that of England and Wales, 
 we should have only 44,000 deaths from accidents." 
 
 iR. W. Little of the Safety Institute of America, referring 
 to the 2,000,000 industrial accidents in the United States every 
 year, points out that each of more than 700,000 industrial 
 workers loses more than four weeks every year as a result of 
 industrial accidents ; that there are at least 22,500 industrial 
 deaths annually in this country, and that our industries turn 
 out each year 15,000 workmen suffering from permanent dis- 
 ability — "battle casualties of peace." ^ 
 
 The above estimates are hardly exaggerated. In the State 
 of Massachusetts alone, whose population was less than three 
 and one-half millions in 1910, there were reported to the Indus- 
 trial Accident Board of that State, the following number of 
 injuries : 
 
 Year Number 
 
 1912-13 90,631 
 
 1913-14 98,729 
 
 1914-16 95,769 
 
 1915-16 137,695 
 
 1916-17 174,372 
 
 1917-18 170,718 2 
 
 The New York Industrial Commission found that from July 
 1, 1914, to Jan. 1, 1916, there were 683 industrial accidents in 
 that State every working day. In other words, there were in 
 that State alone 315,000 industrial accidents in eighteen 
 months. According to the September, 1920, Bulletin of the 
 New York Industrial Commission there were during the year 
 ending June, 1920, 345,672 industrial accidents reported to 
 the above Commission. During the three-year period of 1915 
 to 1917 the total cases compensated in Wisconsin, including 
 both fatal and non-fatal accidents, was 40,980.* During the 
 year ending June 30, 1919, 18,448 cases of injury were reported 
 
 1 Labour Legislation Review, Dec. 1920, p 232. 
 
 2 Labour Review, March 1919, pp 223-24. 
 
 3 Ibid, July 1919, p 185. 
 
82 FACINGOLDAGE 
 
 under the Wisconsin law, while during the year ending June 
 1920, 18,4!4!l additional cases of injury were reported. ^ In 
 California, the Industrial Accident Commission gives the total 
 number of accidents for the calendar year of 1918 in that State 
 as 104,767.^ In 1919 the total increased to 108,947.^ 
 
 In Pennsylvania the Department of Labour and Industry 
 Reports state that in 1916 there were 255,616 accidents of all 
 kinds. In 1917 the number decreased to 227,880. In 
 1918 there were in Penns'ylvania a total of 184,844 indus- 
 trial accidents, 3,403 of which were fatal. In 58,783 or 
 29.1 per cent, of the cases, the injuries resulted in a loss of 
 more than 14 days, while in 127,658 or 69.1 per cent., the dis- 
 ability lasted from two to 14 days. The total number of 
 days lost that year amounted to 2,767,471 and the wages lost 
 amounted to $10,286,872. In 1919 there were a total number 
 of 152,544 industrial accidents of which 2,569 were fatal.* 
 There were lost through accidents during the same year 2,053,- 
 277 work days in Pennsylvania, an average of 13.46 days lost 
 for each accident. The total wage loss through accident dur- 
 ing that year amounted to $8,756,697, or an average wagp 
 loss of $57.47 for each accident.^ 
 
 In 1920 the total number of accidents amounted to 174,979 
 of which 2,514 were fatal. The number of days lost was 2,442, 
 219 and the wage loss amounted to $12,154,829.® 
 
 How staggering is the accident toll exacted by industries 
 may be seen from the following Pennsylvania figures. During 
 the five years — 1916-1920— since the inauguration of the 
 Compensation Bureau of Pennsylvania, there occurred a total 
 of 995,863 industrial accidents', of which 14,108 were fatal. 
 
 1 Biennial Report, 1918-1920 pp 71-75, Industrial Commission of Wis- 
 consin, Madison 1920. 
 
 2 Report of Industrial Accident Com. California July 1, 1918 to June 
 30, 1919, p 43. 
 
 3 Labour Review Jan. 1921 p 176. 
 
 4 BuUetin Penna. Dept. Labour & Industry. Vol. 6 No. 1 Series of 1919. 
 
 5 Ibid. Vol. 7, No. 2 Series of 1920. 
 
 6 Data Suppled by Dept. of Labour and Industry. 
 
OLD AGE DEPENDENCY 83 
 
 The total number of days lost amounted to 14,590,701. The 
 total wage loss amounted to $50,146,055. 
 
 The accident toll exacted by modem industries from the 
 wage earners engaged in them, is also evident from the follow- 
 ing. The accidents in the metal mines in the United States in 
 1916 amounted to 48,237; 46,286 in 1917,^ and 42,915 in 
 1918.^ The number of coal mine fatal accidents were as 
 follows :* 
 
 Year Number 
 
 1916 2,226 
 
 1917 2,696 
 
 1918 2,580 
 
 1919 2,309 
 
 1920 (first 8 months) 1,340 
 
 In the iron and steel industry from 1910 to 1918 the indus- 
 trial casualties were as follows : 
 
 1910 45,283 
 
 1911 38,811 
 
 1912 56,164 
 
 1913 57,182 
 
 1914 38,469 
 
 1915 13,940 
 
 1916 21,537 
 
 1917 58,885 
 
 1918 54,601 1 
 
 The number of casualties on the steam roads in the United 
 States were as follows in 1917: Killed 10,087; injured 194, 
 905.^ In 1918 the total casualties on the steam roads amounted 
 to 9,286 killed and 174,575 injured.^ 
 
 That it is the poorest workers who are largely affected by 
 accidents is evident from the Fifth Annual Report of the In- 
 dustrial Accident Board of Massachusetts. This report ana- 
 lyzes the accident cases' for the year 1916-17 and finds that 65 
 
 1 Labour Review, August 1918, p 216. 
 ■? Ibid June 1920, p 165. 
 
 3 Ibid Jan. 1921, p 159. 
 
 4 Ibid November 1919, p 254. 
 
 5 Ibid April 1919, p 199. 
 
 6 Ibid March 1920, p 160. 
 
84 FACINGOLDAGE 
 
 per cent, of the non-fatal injuries were in the $8.01 to $15.00 
 a week wage-group. What effect this has upon the family is 
 further revealed from an analysis of the dependents left by 460 
 fatal cases in California in 1918, made by the Industrial Acci- 
 dent Commission of that State. The 460 individuals killed left 
 a total of 817 persons who were completely dependent upon 
 them. Of this total 329 were wives whose average age was 37.6 
 years ; 455 were children whose average age was 8.5 years, 
 while 33 others consisted of dependent parents and relatives 
 whose average age .was about 65 years.^ In Pennsylvania also 
 of the 995,863 total industrial accidents which occurred during 
 the period of 1916-1920, 582,609, or almost two-thirds of the 
 cases, were married persons. The total number of dependents 
 of the injured ones amounted to 802,236 during the five-year 
 period. 
 
 It is out of place to dwell here upon the tremendous price 
 which is being paid annually in human and economic values in 
 this country, largely as a sacrifice to greed and greater effi- 
 ciency. That the accident rates are declining in practically 
 all occupations is, of course, encouraging. The relation of 
 the above figures to dependency, however, is obvious. What 
 this annual hecatomb means in terms of destitution and mental 
 and physical sufl^ering to the victims and their dependents per- 
 mits no estimation. 
 
 1 Report of California Commission p 60. 
 
CHAPTER VI 
 
 THE CHASM BETWEEN THE COST 
 OF LIVINIG AND WAGES 
 
 The wages earned by the labouring classtes in the United States 
 are too intimately related to aged dependency and too impor- 
 tant not to require the most thorough and careful consideration. 
 It is all too frequently assumed that the lack of individual 
 savings for old age is an indication of thriftlessness and lack of 
 foresight of the wage earner or his family. The plain 
 fact is that the prevailing standard or daily wage is 
 generally based upon the daily minimum needs, and permits of 
 little or no saving. Rarely is it taken into consideration by 
 either party to the labour contract in modern society that the 
 basis of the daily wage must make provision for such exigencies 
 as sickness, accident, disability and old age. Wage rates to- 
 day depend largely upon demand and supply, and when labour 
 is purchased as a commodity in the open market it is naturally 
 bought at the lowest possible price. Such a bargain obviously 
 takes into consideration only the essential and immediate needs 
 of the wage-earner and his family. Indeed, in determining the 
 wage scale it is as if, in respect to old age, both employer and 
 employe had accepted what has falsely been represented as 
 Dr. Osier's theory, that men 60 and over have no right to 
 live. Under such circumstances it is really surprising to find, 
 as was disclosed in a previous chapter, large numbers of wage- 
 earners who have actually had savings that were swept away 
 by sickness and other misfortunes by the time they reached old 
 age. Indeed, an examination of available wage statistics seems 
 to show that the great mass of wage-earners in this country 
 have at no time received a wage which would enable them to 
 
 85 
 
86 FACINGOLDAGE 
 
 procure the American standard of living set by students and 
 government authorities as necessary to support a family con- 
 sisting of the father, mother and three small children with the 
 absolute necessities of life. 
 
 1890-1900 
 
 Prof. John A. Ryan in his book "A Living Wage" made 
 an exhaustive and careful study of the Census Reports of 1890 
 and 1900, as well as of numerous other statistical reports pre- 
 pared by the Federal and various' State labour bureaus, regard- 
 ing wages and the cost of living during the last decade of the 
 nineteenth century and the beginning of the twentieth cen- 
 tury. His studies of the cost of living during that decade con- 
 vinced him that : 
 
 "The conclusions that seem to be abundantly justified by the 
 facts brought out may, therefore, be stated as follows: first, any- 
 thing less than $600 per year is not a Living Wage in any of the 
 cities of the United States; second, this sum is probably a Living 
 Wage in those cities of the Southern States in which fuel, clothing, 
 food and some other items of expenditures are cheaper than in the 
 North; third, it is possibly a Living Wage in the moderately 
 sized cities of the West, North and East; and fourth, in some 
 of the largest cities of the last named regions, it is certainly not 
 a Living Wage." ^ 
 
 In addition to Professor Ryan's estimate, the United States 
 Bureau of Labour in 1901 studied the incomes and expenditures 
 of 25,440 families whose average size was 4.88 persons. This 
 investigation showed that it cost at least $700 on the average 
 to support each of these families.^ 
 
 After he had established his standard Professor Ryan then 
 made a further study of wage reports and taking his estimate as 
 the minimum basis, presentefd; the following proportion of 
 underpaid workers in the different industries : 
 
 1 John A. Ryan, A Living Wage, p ISO. 
 
 2 Maurice Parmelee, Poverty and Social Progress, p 87. 
 
COST OF LIVING AND WAGES 87 
 
 ^ , No. of Per Cent of 
 
 Employees and Years Adult Males Adult Males 
 
 Represented Represented Under-paid 
 
 In 60 Manufacturing Industries in 1890 757,865 51 
 
 In Iron and Steel, 1891 17,650 81 
 
 In Railway Occupations, 1889 206,604 85 
 
 In 34 Manufacturing Industries, 1890 93,544 66 
 
 In 34 Manufacturing Industries, 1900 142,638 64 
 
 In Railway Occupations, 1900 and 1903 2,125,717 72 
 
 In Manufacturing, Mass., 1890 and 1891 367,311 59 
 
 In Manufacturing, Wis., 1891 70,326 61 
 
 In Manufacturing, Minn., 1899 and 1900 99,872 63 
 
 In Manufacturing, Mass., 1899 and 1900 511,727 64 
 
 In Manufacturing, Wis., 1899, 1900, 1901 217,522 76 
 
 In Manufacturing, N. J., 1899, 1900, 1901 387,903 60 
 
 In Manufacturing, lU., 1900 and 1901 135,890 58 i 
 
 The important feature of the table, summarizes Professor 
 Ryan: 
 
 "Is the percentages, which may be taken as fairly representative 
 of average wage conditions in manufacturing and railway indus- 
 tries. And the general level of remuneration in these two fields 
 is undoubtedly quite as high as the average of the other urban 
 occupations. It is to be noted, moreover, that these percentages 
 reflect the conditions of 1890 and 1900-1903, when wages were 
 about as high as they are at present (1905), fully as high as 
 the average of the last fifteen years, and higher than that of the 
 last twenty-five years." ^ 
 
 During the same period, according to Streightoff,^ the 
 yearly remuneration of the garment makers in 1894 in New 
 York ranged from $249.94 for knee-pants-makers to $402 for 
 cap-makers : and the male machine operators and handworkers 
 of Chicago earned on the average $430 and $325, respectively, 
 the average recompense of all male workers in the cloak-making 
 trades being $830.42. In 1900, in North Dakota, were 2,169 
 men investigated, whose wages averaged $535 ; Minnesota re- 
 corded 66,889 workmen at an average of $492 ; and Wisconsin 
 120,131, at $449. In the same year the average earnings of 
 
 1 "A Living Wage" p 160. 
 
 2 Ibid, p 161. 
 
 3 "The Standard of Living," by F. H. Streiglitoff, pp 60-63. 
 
88 FACINGOLDAGE 
 
 male cotton operators was $405.69 in Massachusetts, $243.34 
 in Georgia, $216.39 in North CaroHna, and $207.58 in South 
 Carolina. 
 
 19 01-19 4. 
 
 In analyzing the labour reports of the States' of New Jersey 
 and Massachusetts for 1901, Streightoff found that 64.75 per 
 cent, of all adult male factory employes in the manufacturing 
 industries of the former State and 62.86 per cent, of the male 
 employes in similar industries' in the latter State earned less 
 than $12 per week, or approximately $600 per year. ^ 
 
 A study of family incomes made by the Massachus'etts Bureau 
 of Statistics of Labour in 1902 revealed that it cost on the 
 average about $800 to support each of these families, whose 
 average size was 4.8 persons.^ In the same year also the New 
 York Bureau of Labour Statistics estimated that an income of 
 $10 a week, or $520 a year, was inadequate for a family hwiag 
 in a city.* 
 
 From the 1902 reports of the Labour Bureaus, StreightofF * 
 found that 62.51 per cent, of the male employes in the manu- 
 facturing industries in New Jersey, and 61.35 per cent, of 
 the male employes in Massachusetts earned less than $12 a week 
 or approximately $600 per year. The Indiana returns for the 
 same year showed the average earnings of pumpmen as $2.20 
 per day, while that of trappers who worked only 215 days in 
 the year was $1.13 per day. Professor Ryan also points out 
 that the Interstate Commerce Commission's Reports for the 
 year 1903 revealed that 72 per cent, of the more than two 
 million railroad employes investigated earned less than $600 
 per year. 
 
 In 1904 Robert Hunter stated that: 
 
 "It was shown by the Massachusetts Bureau of Statistics that 
 
 1 The Standard of Living, Appendices A and B. 
 
 2 Parmelee, Poverty and Social Progress, p 87. 
 
 3 Ibid, p 88. 
 
 * The Standard of Living, Appendices A and B, p 61. 
 
COST OF LIVING AND WAGES 89 
 
 it takes $754 a year for a family of five persons to live on. 
 John Mitchell has said that a minimum wage of $600 a year is 
 necessary in the anthracite district for a worker with a famOy of 
 ordinary size. The New York Bureau of Labour considers that 
 $10 a week or $520 a year is inadequate for city workmen. A 
 prominent oflBcial of one of the largest charities in New York 
 City thinks that $2 a day, or about $624 a year, is necessary for 
 a family of five in that city." ^ 
 
 From these estimates Hunter expressed the opinion that $624 
 was not too much for a family in New York City. "When one 
 gets below these figures," he declared, "every dollar cut off 
 may mean depriving a family of a necessity of life, in times 
 of health even, and unquestionably in times of sickness." But 
 in order to be thoroughly conservative he estimated "more or 
 less arbitrarily, $460 a year as essential to defray the expenses 
 of an average family, — a father, a mother, and three children, 
 — in the cities and industrial communities of the New England 
 States, of New York, Pennsylvania, Indiana, Ohio, and Illinois." 
 "This estimate," he concluded, "would approach very nearly 
 a fair standard for the poverty line; that is to say, if any 
 working-class family should be unable to obtain this wage, they 
 would in all likelihood be unable to obtain the necessaries for 
 maintaining physical efficiency." ^ 
 
 One of the most extensive investigations of wages in the 
 United States was made during 1903-1904 by the United States 
 Census Bureau. This investigation covered 3,297,811 wage- 
 earners of whom 2,619,025 or 79.4 per cent, were men; 688,599 
 or 17.9 per cent, were women and some 90,167 or 2.7 were 
 children. 
 
 The accompanying table indicates that during the period 
 studied, over one quarter of the male workers were earning less 
 than $8 a week, or less than $420 a year ; 46 per cent, earned 
 less than $10 a week, while over 70 per cent, or nearly three- 
 
 1 Robert Hunter, Poverty, pp 51-53. 
 
 2 Ibid pp 51-63. 
 
$ 4 ' 
 
 (( 
 
 $ 5 ' 
 
 t( 
 
 $ 6 ' 
 
 (( 
 
 $ 7 ' 
 
 (C 
 
 $ 8 ' 
 
 « 
 
 $ 9 ' 
 
 i( 
 
 $10 ' 
 
 tt 
 
 $12 ' 
 
 (( 
 
 $15 " " 
 
 $20 " 
 
 $25 an 
 
 d over 
 
 Actual 
 
 Cumulative 
 
 2.2 
 
 2.2 
 
 2.2 
 
 4.4 
 
 3.4 
 
 7.8 
 
 4.0 
 
 11.8 
 
 6.2 
 
 18.0 
 
 7.5 
 
 25.5 
 
 7.9 
 
 33.4 
 
 13.1 
 
 46.5 
 
 15.6 
 
 62.1 
 
 17.2 
 
 70.3 
 
 14.7 
 
 94.0 
 
 4.0 
 
 98.0 
 
 2.0 
 
 100.0 
 
 90 FACINGOLDAGE 
 
 EARNINGS OF MALES, SIXTEEN YEARS AND OVER, ENGAGEP 
 IN MANUFACTURE IN THE UNITED STATES IN 1904 1 
 
 Percentages 
 Weekly Wage Number 
 
 Under $3 56,346 
 
 3 but under $ 4 57,597 
 
 $5 87,739 
 
 $ 6 103,429 
 
 $ 7 161,940 
 
 $8 196,981 
 
 $ 9 207,954 
 
 $10 343,812 
 
 $12 409,483 
 
 $16 450,568 
 
 $20 385,647 
 
 $25 106,046 
 
 51,511 
 
 fourths were earning less than $15 a week, or $780 a year. 
 Ninety-eight per cent, of all wage-earners earned less than $25 
 a week. The average for all classes is $10.06, or approxi- 
 mately $520 per year, the average for men being $11.16, for 
 women $6.17, and for children $3.46. 
 
 In the same year Streightoff made the following estimate of 
 the distribution of income in the United States derived primarily 
 from labour : ^ 
 
 Approximate number of males, 16 years old or over, employed 
 
 in 1904 19,658,000 
 
 Number earning under $600 yearly, or under $12 weekly 12,738,000 
 
 Number earning $600, but under $1,000 yearly, $12 but under 
 
 $20 weekly 5,315,000 
 
 Number earning $1,000 or more yearly, or $20 or more weekly. . 1,605,000 
 
 On the basis of the above data, Streightoff concluded that 
 in 1904 over 60 per cent, of the males, at least 16 years of 
 age, employed in manufacturing, mining, trade, transportation, 
 aJid a few other occupations were earning less than $624 per 
 annum, or less than $12 per week on an average. Summariz- 
 ing the ofBcial reports which he studied, Streightoff also shows ^ 
 that 46.5 per cent, of the Illinois miners earned les's than $500 
 per year. He gives the percentages of adult males, exclusive 
 of officers, clerks and salaried persons, engaged in manufactur- 
 
 1 Report of Manufactures, Census Bureau Part IV. pp 645-8, 1905. 
 
 2 Poverty and Social Progress p 68. 
 
 3 The Standard of Living, pp 60-64. 
 
COST OF LIVING AND WAGES 91 
 
 ing in the same year, whose earnings were less than $12 per 
 week, as 62.35 in Massachusetts; 60.8 in New Jersey; 58.05 
 in Missouri; 31.15 in Illinois, and 67.95 in Wisconsin. 
 
 1905-1907 
 
 From an intensive study of the budgets of 200 wage-earning 
 famihes in New York City during the years 1903 and 1905, 
 Mrs. More concluded as a result of her investigations that "a 
 fair living wage for a workingman's family in New York City 
 should be at least $728 a year or a steady income of $14 a 
 week." ^ 
 
 According to the Cens'us of Manufactures, the 4,2441,538 
 men engaged! in manufacturing in 1905 received an average in- 
 come of $533.95. Of 13,796 railway men in North Carolina, 
 in the same year, 11,295 were found to have averaged less than 
 $1.62 per day or $500 per year. In 30 Maine clothing fac- 
 tories in 1905, 234 men investigated received wages averaging 
 $10.82 per week, while 1078 women earned a mean weekly wage 
 of $6.78. Of the adult males engaged in manufacturing indus- 
 tries during the same year, 58.5 per cent, in New Jersey and 
 57.09 in Massachusetts earned less than $12 per week.^ 
 
 In concluding his estimates of what constitutes a living wage 
 Professor Ryan states: 
 
 "According to careful studies and estimates made by several 
 groups of investigators in 1906, the minimum cost of decent liv- 
 ing for a family of moderate size was: in New York, $950; in 
 Chicago, $900; in Baltimore, $750; while the average for these 
 and several other large cities was $938." 
 
 Professor Ryan, however, declares : 
 
 "The conclusion seems justified that at least sixty per cent, of 
 the adult male workers in the cities of the United States are today 
 (1905) receiving less than $600 annually."^ 
 
 During 1906, the percentages of adult male employes en- 
 
 1 L. B. More — Wage Earner's Budgets, pp 269-70. 
 
 2 The Standard of Living, pp 59-60-62, and Appendices A and B. 
 a A Living Wage pp ISO and 162. 
 
92 FACING OLD AGE 
 
 gaged in manufacturing industries who earned less than $12 
 per week were as follows : ^ In New Jersey, 57.49 ; in Mas- 
 sachusetts, 55.12, while in San Francisco, where wages have 
 always been higher, of all employes, including women and chil- 
 dren, in the same year 63.40 per cent, earned less than $12 per 
 week. In Indiana during the same year the earnings of rail- 
 way workers were found as follows: 1,870 conductors earned 
 an average of $1,084.93; 2,287 engineers averaged $1,284.69; 
 4,408 station men averaged $508.37, and 88,967 track men 
 earned $378.93 each on an average that year.^ The 30,742 
 miners investigated in Illinois in 1906 worked only 189.6 days 
 during that year and earned on an average $480.82.* Of 
 9,679 men at work in cotton factories in New Hampshire during 
 the same year the average wage amounted to $417.31. 
 
 Little improvement occurred the following year. In 1907 
 of the adult male factory employes (exclusive of officers', clerks 
 and salaried men) engaged in manufacturing industries in New 
 Jersey, 54.5 per cent, of the total earned less than $12 per week, 
 while of those engaged in the same industries in Massachusetts, 
 51.64 per cent, earned a similar wage.* 
 
 1908-190 9 
 
 Quite a large number of investigations regarding both mini- 
 mum standards required and wages actually received were car- 
 ried on during 1908. The United States Bureau of Labour es- 
 timated that in Fall River, Mas's., in 1908, the minimum stand- 
 ard of living for an average family could not be less than 
 $484.41 per year. This' standard the Bureau defined as follows : 
 
 "If the family live upon this sum without suiFering, wisdom to 
 properly apportion the income is necessary. There can be no 
 amusements or recreations that involve any expense. No tobacco 
 can be used. No newspapers can be purchased. The children 
 
 1 The Standard of Living p 64. 
 
 2 The Standard of Living p 60. 
 
 3 Ibid p 61. 
 
 1 Ibid Appendices A and B. 
 
COST OF LIVING AND WAGES 93 
 
 cannot go to school because there will be no money to buy their 
 books. Household articles that are worn out or destroyed cannot 
 be replaced. The above sum provides for neither birth nor death 
 nor any illness that demands a doctor's attention or calls for 
 medicine. Even though all these things are eliminated, if the 
 family is not to suffer, the mother must be a woman of rare ability. 
 She must know how to make her own and her children's clothing; 
 she must be physically able to do all the household work, includ- 
 ing the washing. And she must know enough to purchase with 
 her allowance the food that has the proper nutritive value." ^ 
 
 The Bureau estimated that a fairer standard of living for 
 Portuguese, Polish and Italian families required at least 
 $690.95, and $731.99 for English, Irish and Canadian-French 
 families. This higher standard, the Bureau said: 
 
 "Will enable him (the father) to furnish them (his family) 
 good nourishing food and sufficient clothing. He can send his 
 children to school. Unless a prolonged or serious illness befall 
 the family, he can pay for medical attention. If a death should 
 occur, insurance will meet the expense. He can provide some 
 simple recreation for his family, the cost not to be over $15.60 
 for the year. If this cotton-mill father is given employment 300 
 days out of the year, he must earn $2 per day to maintain this 
 standard. As the children grow older and the family increases 
 in size, the cost of living will naturally increase. The father must 
 either earn more himself or be assisted by his younger children. 
 
 "But even this standard is by no means an ideal one. It does 
 not allow savings to meet the contingency of any unusual event, 
 such as lack of employment or accident to the father. It makes 
 provision for old age. It provides for culture wants only in 
 the most limited manner, viz., one paper costing $1 a year. 
 It provides elementary schooling for the children up to their 
 twelfth year only." ^ 
 
 The Massachusetts Bureau of Statistics investigations dur- 
 
 1 Report on Condition of Woman and Child wage-earners in the U. S., 
 filst Cong., 2nd sess., Se^, doc. No 645, Vol. XVI, p 142. 
 
 2 Ibid, p. 162-3, 
 
94 FACINGOLDAGE 
 
 ing the s'ame year showed that the average wage of all cotton- 
 mill employes in Fall River was only $447.40, quite below even 
 the minimum standard set for the same city. ^ The average 
 remuneration of all the 176,377 anthracite miners in Pennsyl- 
 vania in that year was $496.13, just above the lowest standard; 
 that of the bituminous miners averaged only $447 ; while the 
 average for all the employes amounted only to $458.29,^ con- 
 siderably less than the minimum required. Of the male em- 
 ployes engaged in factories, 56.7 per cent, in New Jersey and 
 51.70 in Massachusetts earned less than $12 per week.* 
 
 "In 1908 the railroads of the United States employed 61;215 
 firemen at an average per diem compensation of $2.64; 57,668 
 enginemen at $4.45; 43,322 conductors at $3.81; 114,580 other 
 trainmen at $2.60; 41,419 section foremen at $1.95; 299,448 other 
 trackmen at $1.45; and 46,221 switch tenders and crossing watch- 
 men at $1.78."* 
 
 In the same year the New Jersey roads employed some 42,514 
 men at an average annual wage of $657.22, considerably below 
 the fair standard set for Fall River. 
 
 On the basis of numerous statistical reports of wages in 
 Massachusetts during 1908 furnished by the different State 
 Bureaus, Nearing concluded that: 
 
 "It may be fairly stated that no more than one adult male 
 wage-earner in every twenty employed in the industries of Mas- 
 sachusetts receives, in annual earnings, for a normally prosperous 
 year, more than $1,000. On the other hand, more than one-third 
 of all the adult males are paid wages under $500 ; more than one- 
 half receive wages under $600; while nearly three-quarters receive 
 less than $700 annually.^ 
 
 1 Statistics of Manufacture, Massachusetts, 1908, Boston, 1909, pp. 12-32. 
 
 2 Streightoff, F. H. Standard of Living, p. 61. 
 
 3 Ibid Appendices A and B. 
 
 4 Ibid p 61. 
 
 5 Scott Nearing, Wages in the United States, pp 57-58. 
 
COST OF LIVING AND WAGES 95 
 
 In cotton goods, the leading Massachusetts industry, Near- 
 ing found that wages were very much lower than in the State 
 at large, nearly three-fifths of all the adult male employes hav- 
 ing received less than $459 in 1908. 
 
 From budget studies made by Dr. R. C. Chapin in 1909, 
 the New York State Conference of Charities and Corrections 
 concluded that : 
 
 "It is fairly conservative to estimatt that $825 is sufficient for 
 the average family of five individuals, comprising the father, mother 
 and three children under 14 years of age, to maintain a fairly 
 proper standard of living in the borough of Manhattan." ^ 
 
 In 1909, Nearing made a study of wages in New Jersey sim- 
 ilar to that which he had made the year before of wages in 
 Massachusetts and found that : 
 
 "For the State of New Jersey at large, and for the five indus- 
 tries employing the largest numbers of persons, it appears that 
 after deducting the known unemployment, between one-third and 
 one-half of the adult males received less than $500 in 1909; that 
 from one-half to three-fifths received less than $600; that about 
 three-quarters were paid less than $750; nine-tenths received less 
 than $950; while from one-twentieth to one-tenth received $950 
 or over. The wages of adult females were very much lower. From 
 three-quarters to four-fifths received less than $400; nine-tenths 
 were paid less than $500, while a vanishing small percentage 
 received an annual wage of more than $750." ^ 
 
 A study of wages in the leading industries of Kansas in 
 1909, by the same writer, showed that while the industrial con- 
 ditions in Kansas differ from those in Massachusetts and New 
 Jersey, about one-third of the male employes in the car and 
 shop construction and slaughtering industries received less than 
 $500, one-half less than $600 and three-fourths received less 
 
 1 R. C. Chapin, The Standard of Living Among Workingmen's Fami- 
 lies, in New York City, p 281. 
 
 2 Scott Nearing, Wages in The United States, p 72. 
 
% PACING OLD AGE 
 
 than $760 per year. The proportion of females earning less 
 than $620 was exactly twice that of males. -^ 
 
 Nearing's conclusions are fully borne out by official inves- 
 tigators. The 1910 Census Reports give the average number 
 of wage-earners engaged in manufacturing in 1909 as 6,631, 
 931. The total amount spent in wages in those industries dur- 
 ing that year was $8,434,734,000. When this total is divided 
 by the average number of wage-earners the quotient is $517.91, 
 which was the average wage during that year and which is 
 below $10 per week. 
 
 The U. S. Department of Agriculture also gave the farm 
 wages during the year 1909. Farm labour by the day in the 
 lowest type of work averaged $1.71 in 1909, outdoor farm 
 labour with board averaged $1.43 a day, while the average 
 monthly wage for outdoor farm labour quoted for the year with- 
 out board was $26.46 or $306.52 per year.^ 
 
 1910-1913 
 
 In 1910, after a most exhaustive study of wealth possessions, 
 Dr. Willford I. King estimated that 95 per cent, of the fam- 
 ilies of the United States had incomes of less than $2,000 a 
 year; 82 per cent, had incomes of less than $1,200; while 69 
 per cent, were living on less than $1,000.* 
 
 An elaborate Congressional investigation of the iron and 
 steel industry in the United States, covering 172,706 em- 
 ployes, found the wage rates per year as of May, 1910, as 
 follows : Eight per cent, earned under $600, 60 per cent, under 
 $750, 85 per cent, under $1,000, and 97 per cent, under $1,500. 
 The separate rates of the employes of the Bethlehem Steel Com- 
 pany during January of that year were found to be less than 
 
 1 Ibid, pp 85-87. 
 
 2 United States Dept. of Agriculture, Bureau of Statistics, Bulletin 
 99, 1912. 
 
 8W. I. King, Wealth & Income of The People of the United States 
 pp 214.-230. 
 
COST OF LIVING AND WAGES 97 
 
 $500 per year in one-third of the cases ; less than $625 in two- 
 thirds, while only eight per cent, averaged $1,000 and over.^ 
 
 The Census Reports also show that in 1910 the average num- 
 ber of wage-earners engaged in mining industries was 1,093,286. 
 The total wages earned by them was $606,135,238. The aver- 
 age wage secured when the total sum earned is divided by the 
 total number of workers is $554.42, or $10.66 per week. 
 
 The Federal Immigration Commission's report of 1910 an- 
 nounced that not one of the 12 basic American industries 
 paid the average head of a family within $100 a year of the 
 minimmn for family subsistence, and two-thirds of the 12 indus- 
 tries paid the family head less than $550 a year.^ 
 
 From the exhaustive studies made by StreightofF of incomes 
 and actual expenditures in diiferent parts of the country, he 
 presented for 1911 the following minimum of expenditures neces- 
 sary for a family consisting of a husband, a wife, a boy be- 
 tween 11 and 14, a child between 7 and 10, and a baby under 
 three. These expenditures obviously include only a minimum 
 of the most essential necessities : 
 
 Food $297 
 
 Rent 100 
 
 Clothing 120 
 
 Fuel 40 
 
 Church and Other Organizations 20 
 
 Medical Attendance 12 
 
 Amusement 20 
 
 Miscellaneous 40 
 
 Total $649 
 
 Mr. Streightoff concludes : 
 
 "The above would show that it is conservative to set $650 as 
 the extreme low limit of a Living Wage in cities of the North, 
 East, and West. Probably $600 is high enough for the cities 
 of the South. At this wage there can be no saving and a minimum 
 of pleasure. Yet there are in the United States, at least five 
 million industrial workmen who are earning $600 or less a year." 
 
 1 Scott Nearing, Income p 90. 
 
 aCarleton H. Parker, The Casual Labourer, p 117. 
 
98 FACINGOLDAGE 
 
 Streightoff then calls attention to the fact that : 
 
 "It will be remembered that 1,116,199 men engaged in manu- 
 facturing alone are earning no more than $400 per annum, and 
 2,009,914 are receiving no more than $500. If all industrial 
 occupations are considered probably four million men are not en- 
 joying annual incomes of $600." ^ 
 
 During the period of 1911-12 a number of wage studies were 
 brought out by the United States Department of Labour. In 
 the cigar industry studied in that period, of 3,615 males inves- 
 tigated, three-tenths received a wage of lesS than $750, while 
 half of those studied earned wages under $1,000 per year. 
 Four-fifths of the 7,551 females investigated received a wage 
 of less than $750 per year.^ 
 
 The Tariff Board made extensive investigations during the 
 same period of wage rates in the cotton industry. These 
 studies disclos'ed that in the North five per cent, and in the South 
 22 per cent, of the males 16 years of age and over in the cotton 
 industry received a wage rate of less than $250 per year. Half 
 of the employes in the North and more than four-fifths of 
 those employed in the South were paid at the rate of less than 
 $500 per year. The figures for women range much lower than 
 those for men.' 
 
 For the dyeing and finishing woolens and worsted industry the 
 Tariff Board reports that four-fifths of the male dyers earned 
 less than $500 and nine-tenths less than $700 per year.* 
 
 The wages of employes engaged in woolen, worsted and cot- 
 ton mills of Lawrence, Mass., in 1911 were similar to those 
 found by the Tariff Board. In that city half of the men 
 studied received wages below $500 while seven-eighths earned 
 less than $600. In the ca^e of female employes more than 
 
 iThe Standard of Living, p 162. 
 
 2 Income, p 95. 
 
 3 Report of the Tariif Board on Cotton Manufactures. 62nd Congress, 
 2nd Session, House of Document 643, Government Printing Office, 1912, 
 
 Vol. II, 637-651. 
 
 4 Income pp 91-92. 
 
COST OF LIVING AND WAGES 99 
 
 four-fifths earned less than $500, while 94» per cent, received 
 less than $600. ^ 
 
 The U. S. Labour Department in its investigations in the 
 textile industry brought out similar results. In the cotton 
 industry three-fifths of the males and four-fifths of the females 
 received wages of less than $500 per year, while 99 per cent, of 
 the females and 97 per cent, of the males earned less than $750 
 per year.^ 
 
 In 1911-12 the Oklahoma Department of Labour reported 
 that of 668 male wage-earners in the telephone and telegraph 
 industry 27 per cent, received less than $500 ; 78 per cent, less 
 than $750 and 95 per cent, less than $1,000 per year. Of the 
 1,143 female workers employed in the same industry 17 per 
 cent, were earning under $250, 96 per cent, under $500 and 99 
 per cent, under $750.* 
 
 A typical Chicago slaughter-house in 1912 paid 82 per cent, 
 of its employes les's than 20 cents an hour. This company 
 worked their men on the average of 37% hours in the week, and 
 this gave the 55 per cent, of the men who averaged 17 cents 
 an hour, an income of $6.37 a week.* 
 
 From reports compiled by the different State Bureaus of 
 Labour, Nearing found the following percentages of wages dur- 
 ing the years 1911-12 : 
 
 Per Cent Per Cent 
 
 Earned Less Earned Less 
 State Year Than $500 Than $760 
 
 California 1911 7.7 30 
 
 Iowa 1912-13 12. 61 
 
 Massachusetts 1912 28. 67 
 
 New Jersey 1911 36. 71 
 
 Oklahoma 1911 17. 68 s 
 
 In 1913 Nearing in his book, "Financing The Wage Earner's 
 
 1 Report on The Strike of Textile Workers in Lawrence, Massachusetts, 
 Charles P. Neill, Senate Document 870, 62nd Session, 1912, p 74 
 
 2 Income, p 93. 
 
 3 Annual Report, of the Dept. of Labour, Oklahoma, 1911-12 p 232. 
 
 4 The Casual Labourer, p 116. 
 
 5 Income, p 100. 
 
100 FACINGOLDAGE 
 
 Family" (p. 97), concluded from his examination of numerous 
 reports and wage studies that : 
 
 "The available data indicate that a man, wife and three chil- 
 dren under fourteen cannot maintain a fair standard of living in 
 the industrial towns of Eastern United States on an amount less 
 than $700 a year in the Southern, and $750 in the Northern 
 States. In the large cities where rents are higher, this amount 
 must be increased by at least $100." 
 
 A j oint investigation carried on during that year by the Con- 
 sumers' League of Eastern Pennsylvania and the Department 
 of Labour and Industry of that State, showed that the wages 
 of women in Philadelphia department stores were as follows : 
 16.5 per cent, received less than $5 per week, 63.8 per cent, 
 more earned between $5 and $10 and only 3.2 per cent, received 
 $15 or over per week. 
 
 1914 
 
 The year following Prof. J. H. Hollander, of Johns Hop- 
 kins' University, estimated : 
 
 "That in order to maintain a decent standard of living in the 
 United States for an average family of five, an annual income of 
 $600 to $700 is insufficient; that $700 to $800 requires exceptional 
 management and escape from extraordinary disbursements con- 
 sequent upon illness or death; and that $825 permits the mainten- 
 ance of a fairly proper standard." ^ 
 
 An even higher estimate during the same year (1914) was 
 set by the Bureau of Personal Service of the Board' of Estimate 
 and Apportionment of New York City, which declared $845 as 
 the least minimum of subsistence for families of unskilled labour- 
 ers in that city. The New York Factory Investigating Com- 
 mission declared that $876 was the lowest minimum wage pos- 
 sible for the year 1914. 
 
 The actual earnings during this period were found by the 
 
 1 J. H. Hollander, The Abolition of Poverty p 9. 
 
COST OF LIVING AND WAGES 101 
 
 Pennsylvania Department of Labour and Industry in a study 
 of over 20,000 industrial establishments to have averaged $720 
 a year or $14.40 a week for all males — quite below the min- 
 imum standard stet. The average annual wage for all females 
 was $335, or slightly over $6 a week. 
 
 The total amount paid in wages in the States of Massachu- 
 setts and Pennsylvania in the year 1914 amounted to $869,262,- 
 517. The number of employes in these two States was 1,531,- 
 176 and the average wage per worker amounted to $568 per 
 year. ^ The New York State Industrial Commission, which 
 in that year began to compile figures of nearly 600,000 factory 
 and office workers, found that the average weekly wage for the 
 last six months of 1914 amounted to $12.48, which would give 
 an annual wage of $648.96 if employed fifty-two weeks in the 
 year. 
 
 In 1915 Lauck and Sydenstricker after a comprehensive 
 study of wages and costs of living stated that four-fifths of the 
 heads of families obtained less than $800 per year, while two- 
 thirds of the female wage-earners were paid less than $400 per 
 year. According to a statement of the Chamber of Commerce 
 of Akron, Ohio, the 30,511 workers engaged in the rubber indus- 
 try in that city received an average annual wage of $628 dur- 
 ing the year of 1915.^ In the same year the Pennsylvania 
 Department of Internal Affairs, which keeps records of the total 
 payroll amounts and the number of workers employed in that 
 State, found that the average weekly wage per wage-earner 
 (exclusive of salaried and office workers) amounted to $581.68. 
 The New York Industrial Commission gave the average weekly 
 wage received in that State during the year 1915 as $12.85, 
 or $668.20 per year. The Final Report of the Commission 
 on Industrial Relations declared that it is certain that at least 
 one-third and possibly one-half of the families of wage-earners 
 employed in manufacturing and mining earn in the course of 
 
 1 David Friday, Profits, Wages and Prices, p 102, 1920. 
 
 2 Ibid p 105. 
 
102 FACINGOLDAGE 
 
 the year, less than enough to support them in anything like a 
 comfortable and decent condition.^ 
 
 The weekly wages received during the year 1915 through- 
 out the United States in the various industries, have been com- 
 piled by the Bureau of Applied Economics from the published 
 surveys of the United States Bureau of Labour Statistics. 
 These were found as follows in the different industries : ^ 
 
 Per Capita Earnings 
 Industry Per Week— 1916 
 
 Boots and Shoes $12.12 
 
 Cotton Finishing 10.54 
 
 Cotton Manufacturing 8.31 
 
 Hosiery and Underwear 7.76 
 
 Iron and Steel 11.76 
 
 Men's Ready-made Clothing 11.92 
 
 Silk Manufacturing 8.99 
 
 Woolen Manufacturing 9.70 
 
 Car Building and Repairing 13.20 
 
 Cigar Manufacturing 9.33 
 
 Automobile Manufacturing 17.23 
 
 Leather Manufacturing 11.76 
 
 Paper Making 13.20 
 
 An analysis of the standard of living in the District of Co- 
 lumbia by Professor Ogburn, for the Bureau of Labour Statis- 
 tics in 1916, led him to conclude that : 
 
 "An average family of man, wife and three children, of ages four, 
 six and eight years, in the District of Columbia in 1916 was in 
 debt if the annual income was less than $1,155." ^ 
 
 During 1915-16 the average daily wage for males in many 
 Petnnsylvania establishments reported by the Department of 
 Labour and Industry as' working on war contracts was found 
 to be only slightly higher in 1916 than in 1914, $2.76 in the 
 latter year as against $2.40 in 1914. For females the rise 
 reported was from $1.11 to $1.30. The average daily wage of 
 males engaged in public service industries, such as street and 
 
 1 Senate Document No 415, 64th Cong. August 23, 1915, p 22. 
 
 2 Wages in Various Industries, 1919, p 60, Bureau of Applied Economics, 
 Wash. 
 
 3 Quarterly Publication of the American Statistical Assn. June 1919, 
 p 51 (v. 16, p 389). 
 
COST OF LIVING AND WAGES 103 
 
 steam railways, etc., was $2.55. ^ The average wage received 
 by all wage-earners in Pennsylvania as given by the Department 
 of Internal AfFairs was $737.96 in the year 1916. Salaried and 
 office workers were not included in this tabulation. In the 
 rubber industry of Akron, Ohio, the average annual wage ac- 
 cording to the Chamber of Commerce of that city amounted to 
 $759 in 1916. The wages for that year as found by the New 
 York State Industrial Commission were very similar. The aver- 
 age weekly wage was $14.43, or, if employed for fifty-two weeks 
 in the year, $750.36 per year. 
 
 WAU CHANGES IN WAGES AND COSTS OF LIVING 
 
 The year 1914 may be considered a landmark for both wages 
 and costs of living. Since then money wages have increased in 
 all industries. Even greater, however, has been the rise in the 
 cost of living. Standards of living in terms of money wages 
 need therefore considerable adjustment, and a revaluation in 
 purchasing power. According to the Pennsylvania Health In- 
 surance Commission, the standard "minimum of subsistence" 
 budgets, estimated in 1914 as $845 by the Bureau of Per- 
 sonal Service of the Board of Estimate and Apportionment of 
 New York City for unskilled labourers' families ; $875, the 
 estimate made by the New York Factory Investigation Commis- 
 sion in 1914, and $900, the estimate by Dr. Chapin for a family 
 of five in 1907, became in June, 1918, $1,320, $1,360 and $1,390 
 respectively. Similar estimates for 1918 were made by the Com- 
 mission of the Interchurch World Movement in its Report on 
 the Steel Strike. 
 
 The Philadelphia Bureau of Municipal Research stated in 
 December, 1917, that the necessary minimum cost of healthful 
 living for a family of two adults and three children was $1,200 
 a year. But in the autumn of 1918 it found $1,636.79 as nec- 
 essary for a similar standard of living. 
 
 In November, 1918, the United States Bureau of Labour Sta- 
 
 1 Pennsylvania Health Insurance Connnission Report, p 91. 
 
104 FACINGOLDAGE 
 
 tistics' estimated that the minimum necessary for subsistence for 
 an average family in a large eastern city was about $1,500. In 
 the same year, the National War Labour Board drew up a "min- 
 imum comfort" budget which amounted to $1,760 per year for 
 a family of five. ^ 
 
 It is interesting to note, that the above estimates regarding 
 the minimum budget necessary for subsistence, although show- 
 ing some variation as would be expected, do not show consider- 
 able differences. However, in 1918 the United States Bureau 
 of Labour Statistics made an investigation of the budgets of 
 working families in a number of cities. The average actual 
 expenditures of these families per year in the different cities 
 investigated follow: 
 
 AVERAGE ACTUAL FAMILY EXPENDITURES IN VARIOUS 
 
 CITIES 
 
 Number of Average Total Average 
 Families Persons Yearly Expense 
 City Investigated in Family Per Family 
 
 Baltimore (white) 196 4.8 $1,260.96 
 
 Boston 407 5.3 1,438.13 
 
 Bridgeport, Conn 143 4.6 1,540.24 
 
 Buffalo 256 4.6 1,460.00 
 
 Chambersburg, Pa 77 4.9 1,241.90 
 
 Dover, N. J 74 5.3 1,608.92 
 
 Fall River, Mass 158 5.4 1,320.84 
 
 Johnstown, N. Y 78 4.5 1,308.51 
 
 Lawrence, Mass 109 5.3 1,504.67 
 
 Manchester, N. H 112 6.2 1,370.83 
 
 Newark 147 4.7 1,445.41 
 
 New York 618 4.9 1,525.66 
 
 Philadelphia and Camden, N. J.. 301 4.9 1,469.40 
 
 Pittsburgh, Pa. (white) 254 5.1 1,412.10 
 
 Portland, Me 97 4.9 1,412.84 
 
 Providence, R. 1 158 5.3 1,303.18 
 
 Rutland, Vt 80 6.1 1,264.29 
 
 Scranton 151 5.2 1,344.99 
 
 Syracuse, N. Y 158 4.9 1,407.03 
 
 Trenton, N. J 100 4.4 1,418.60 
 
 Westfleld, Mass 74 5.2 1,494.84 
 
 Wilmington, Del 98 4.6 1,640.50 
 
 In summarizing the data, the Bureau found that of 12,096 
 1 Ibid p 94. 
 
COST OF LIVING AND WAGES 105 
 
 white families investigated in 92 industrial centres scattered 
 throughout the country comprising 4.9 arerage persons, the 
 average yearly expenses per family was $1,434.36 in 1918. ^ 
 
 In 1918 investigations of the Pennsylvania Commission 
 on Health Insurance the following data are given : 
 
 "In the Philadelphia Survey which covered 1.850 families in 
 seven districts in Philadelphia the average family income was but 
 $21.60 a weekj and almost a third of these families contained over 
 five persons, the normal standard." 
 
 "In the Visiting Nurse Study, 80.6 per cent, of the 438 families 
 had incomes of less than $30.00 a week. In the Sickness and 
 Dependency Study 94.3 per cent, of the families had incomes of 
 less than this amount." 
 
 "Wages for women, proverbially lower than those for men, 
 proved in the Working Women's study to be in 98.1 per cent, of 
 the cases under $25.00 a week; in 92 per cent, of the cases, under 
 $20.00." 
 
 "In the Pittsburgh Factory Investigation, made in August-No- 
 vember, 1918, covering the work places of over 9,000 women, it 
 was found that in 70 per cent, of the operations the wages were 
 between $5.00 and $15.00 per week. In only two processes were 
 the weekly wages over $25.00." 
 
 "In a study made by the Consumers' League in New York in 
 1916-17 among 417 women working in steam laundries, it was 
 found that 78.3 per cent, earned less than $10.00 a week, and 
 almost half earned less than $8.00." 
 
 "The Kensington Survey, which covered the most representative 
 industrial group, showed that more than half — 56.6 per cent, of the 
 608 families had incomes under $30 a week, 42 per cent, were 
 living on less than $25.00 a week." ^ 
 
 From July 1st, 1914, to April 1st, 1918, the wholesale prices 
 of 46 essential commodities given in Bradstreet's showed 
 a rise of 115 per cent. According to the Bureau of 
 Labour Statistics', its study of the increase in the cost of living 
 
 1 Labour Review, August 1919, p 118. 
 
 2 Health Insurance Report pp 91-92. 
 
106 . FACINGOLDAGE 
 
 in shipbuilding centres in 1918, showed that the cost of living 
 for white families had risen 67.17 per cent, in August, 1918, 
 over the cost in December, 1914, in Philadelphia; in New York 
 it was 62.07 per cent, in December, 1918, over December, 1914<. 
 While the cost of living and prices have thus increased from 
 60 to 115 per cent., a study of the rise in wages made by H. 
 S. Hanna and W. J. Lauck, led them to conclude : ^ 
 
 "That the rise in wages between 1914-15 and December, 1917, 
 or January, 1918, was only 18 per cent, for anthracite miners; 
 26 per cent, for machinists in the Philadelphia Navy Yard; 30 
 per cent, for bituminous miners working by hand, and 34, 36 and 
 37 per cent, respectively for shipbuilders, and pipe fitters in the 
 Philadelphia Navy Yard. The rise in the building trades was 
 12 to 20 per cent. The wages in some industries had actually 
 decreased, while some remained stationary." 
 
 The Thirty-third Annual Report of Massachusetts on Sta- 
 tistics of Manufacture states that during the year 1918 the 
 total disbursements in wages paid to labour amounted to $679,- 
 401,273. When compared with the year 1913 the increase in 
 the total wages disbursed amounted to 93.4 per cent. How- 
 ever, the average yearly earnings for all wage-earners without 
 distinction as to age, sex or skill which in 1917 were $758.23 
 per capita, rose only to $944.65 per capita in 1918. Com- 
 pared with 1913, when the per capita wage in manufacturing 
 industries was $569.43, the increase amounts to 65.9 per cent.^ 
 During the year 1918, the average wage in Pennsylvania was 
 $1,213.54. In the rubber industries in Akron, Ohio, it was 
 $1,173 and in New York State $1,058.20— quite far below the 
 actual family expenditures during that year as found by the 
 United! States' Bureau of Labour Statistics in the different cities. 
 
 The Administrative Committee of the National Catholic War 
 Council in its Social Reconstruction Program in 1919 reached 
 
 1 Wages and The War, p 6. 
 
 2 Thirty-Third Annual Report, Statistics of Manufactures, p 11, 1920. 
 
COST OF LIVING AND WAGES 107 
 
 the conclusion that the average rate of pay has not increased 
 as fast as the cost of living. That this conclusion is fully jus- 
 tified and that a considerable number of wage-earners, both men 
 and women, have not been receiving what is generally considered 
 a living wage, even during the time when money wages were 
 at their highest peak, is clearly indicated by the following recent 
 investigations, which throw some additional light upon the con- 
 tinuous chase and struggle between increased prices and 
 increased earning power. 
 
 In 1919, the National Industrial Conference Board, an organ- 
 ization composed of employers of labour, in an investigation of 
 the cost of maintaining a minimum standard of living for a rep- 
 resentative wage-earner's family of five, reached the conclusion 
 that in Lawrence, Massachusetts, in order to maintain the low- 
 est standard, $1,385.79 was required or an average weekly in- 
 come of $26.65 the year around. A more liberal standard, 
 which would make no provision for savings except such as were 
 secured through insurance, was found to require a yearly expen- 
 diture of $1,658.04, or a steady income of $31.88 per week. ^ 
 
 In August, 1919, the United States Bureau of Labour Statis- 
 tics in a study of budgets of government employes' families 
 in Washington, D. C, set the standard necessary for the main- 
 tenance of a family of five in that city at $2,262. 47. 
 
 The extent to which wages have increased during the same 
 period is significant. The National Industrial Conference 
 Board has recently published a report analyzing the wage 
 changes in several important industries from 1914 to 1919. 
 The average weekly earnings of male employes in the specified 
 industries from 1914 to 1919 follow.^ 
 
 The figures in several instances show actual decreases 
 between September, 1918, and March, 1919, and not a single 
 group earned the minimum wage necessary for the support of 
 
 1 War Time Changes in "Wages, Sept, 1914, March 1919, National Indus- 
 trial Conference Board 1919. 
 
 2T^e Cost of Living Among Wage-Earners, Lawrence, Massachusetts, 
 1919; National Industrial Conference Board, Boston. 
 
Sept. 
 
 Sept. 
 
 Sept 
 
 Sept. 
 
 March 
 
 1915 
 
 1916 
 
 1917 
 
 1918 
 
 1919 
 
 $15.33 
 
 $16.50 
 
 $19.36 
 
 $24.04 
 
 $25.90 
 
 13.26 
 
 16.10 
 
 20.50 
 
 26.80 
 
 26.20 
 
 10.05 
 
 11.85 
 
 14.22 
 
 20.60 
 
 17.10 
 
 14.90 
 
 17.22 
 
 20.09 
 
 26.80 
 
 24.75 
 
 12.75 
 
 15.03 
 
 19.03 
 
 22.40 
 
 22.40 
 
 14.95 
 
 18.60 
 
 22.80 
 
 22.60 
 
 29.35 
 
 12.66 
 
 14.10 
 
 15.50 
 
 21.64 
 
 22.69 
 
 11.05 
 
 13.51 
 
 16.97 
 
 23.21 
 
 18.61 
 
 108 FACINGOLDAGE 
 
 Sept. 
 
 Industry 1914 
 
 Boots and Shoes $14.70 
 
 Chemical Mfg 12.85 
 
 Cotton Mfg 10.00 
 
 Metal Mfg 13.18 
 
 Paper Mfg 12.75 
 
 Rubber Mfg 14.00 
 
 Silk Mfg 11.77 
 
 Wool Mfg 11.52 
 
 a family with the most necessary comfort as conservatively 
 estimated by the employers' organization itself. 
 
 Early in 1919 the United States Bureau of Labour Statis- 
 tics conducted extensive wage studies in a number of industries 
 throughout the country. Some of its findings are presented 
 here : ^ 
 
 AVERAGE ACTUAL EARNINGS IN VARIOUS INDUSTRIES 
 
 IN 1919 
 
 Average Actual Average Actual 
 
 Industry and Earnings Per Week Earnings Per Week 
 Occupation for Male Employ^.s for Female Employes 
 
 Paper Box Mfg $19.40 $11.05 
 
 Women's Clothing Mfg.. 35.11 15.95 
 
 Confectionery Mfg 18.45 10.08 
 
 OveraU Mfg 25.02 12.06 
 
 Cigar Industry 20.84 15.54 
 
 Men's Clothing Industry. 24.79 14.75 
 
 Hosiery and Underwear 20.80 12.98 
 
 Silk Mfg 22.79 15.29 
 
 Brick Mfg 20.00 
 
 Chemicals Mfg 20.90 12.35 
 
 Glass Mfg 22.66 19.38 
 
 Leather Mfg 26.03 13.40 
 
 Paper and Pulp 26.47 13.44 
 
 Pottery Mfg 26.60 13.37 
 
 Rubber Mfg 27.04 14.95 
 
 Automobile Mfg 25.87 16.98 
 
 Car Mfg 26.79 
 
 Elect'l Apparatus Mfg. 25.53 15.30 
 
 Foundry Mfg 26.28 12.66 
 
 Machine Mfg 26.95 12.90 
 
 Machine Tool Mfg 26.74 16.62 
 
 Typewriter Mfg 26.77 14.67 
 
 1 Labour Review, April 1920, p 100-104; March 1920, p 33-86; Feb. 
 1920, p 106-113; May 1920, p 92-107; and June 1920, p 82-84. 
 
COST OF LIVING AND WAGES 109 
 
 It is of interest to note that the above figiores show that a 
 living wage was obtained in only one industry — the Women's 
 Clothing industry — which is' now thoroughly organized, and 
 which only a few years ago was one of the most under-paid in- 
 dustries. 
 
 The 1919 Industrial 'Survey made by the United States Bu- 
 reau of Labour Statistics covered 2,365 establishments, 28 in- 
 dustries scattered through 43 States, 780 different occupations, 
 including a total of 404,758 employes. These investigations ^ 
 disclosed that of the 318,946 men workers, 151,725, or 47.5 per 
 cent., earned less than 50 cents an hour. As the average num- 
 ber of hours per day was found to have been 7.6, at least half of 
 the male workers earned less than $22.80 per week. The aver- 
 age weekly wage for all was $25.58. 
 
 In the case of the women workers, of the 85,812 persons in- 
 vestigated, 47,917, or 54.75, earned less than 30 cents per hour. 
 The average number of hours here was 7.5 per day, which means 
 that more than half of the female workers earned less than 
 $13.50 per week. The average weekly wage for all was $13.54. 
 
 The 1919 minimimi wage standards for women workers in the 
 States that have established such were as follows : District of 
 Columbia (mercantile trade) $16.50; California $13.50; Wash- 
 ington $13.20 ; Massachusetts (candy occupations) $12.50 ; and 
 Kansas $11.00. In 1918-1919, the wage investigations of the 
 Massachusetts Minimum Wage Commission showed that from 
 57 to 98 per cent, of the women workers investigated in five in- 
 dustries in that State earned less than $11.00 per week. In 
 New York the minimum weekly budget set for a single working 
 woman in 1919 was $16.13. Studies of 500 working girls 
 chosen at random by the New York State and City Consumers' 
 Leagues early in 1920 showed that 443 or 88 per cent, of the 
 girls investigated received less than $16.00 per week. In spite 
 
 1 Industrial Survey in Selected Industries in the United States in 1919, 
 Bulletin No 265, p 37-38, May 1920. United States Bureau of Labour 
 Statistics. 
 
110 FACINGOLDAGE 
 
 of the increased co.st of living in 1919, 29 per cent, of the 
 women investigated reported no wage increase during the same 
 year.-*- 
 
 In the same year despite the minimum wages established, the 
 United States Bureau of Labour Statistics found the following 
 weekly earnings of women from pay-rolls : ^ 
 
 Average Weekly 
 
 Industry Earnings 
 
 Glass $10.12 
 
 Confectionery 10.25 
 
 Paper Boxes 10.89 
 
 Overalls 12.26 
 
 Hosiery and Underwear 13.04 
 
 That women workers frequently work for less than the 
 amount necessary for their maintenance has recently been 
 revealed from an investigation carried on in 1920 by the Indus- 
 trial Welfare Commission of Texas. The Commission inves- 
 tigated 2,028 women in 40 cities in Texas. The figures were 
 sworn to and represent actual expenditures on maintenance and 
 not estimates. A study was also made of the weekly wages of 
 13,311 employes as furnished by employers in thes'e 40 cities. 
 The results are given as follows :' 
 
 Cost of Living Average Wages 
 Industry Per Week Per Week 
 
 Telephone $14.14 $12.31 
 
 Mercantile 15.44 12.98 
 
 Laundry 13.78 9.39 
 
 Factory 14.65 11.52 
 
 Average $14.78 $11.98 
 
 In December, 1919, the Bureau of Labour Statistics published 
 a complete study of wages and hours of labour in the coal-mining 
 industry as found in the early part of that year. This study 
 included •'551,646 workers throughout the United States. The 
 
 1 Women's Wages Today, Feb. 1920. Consumer's League of N. Y. 
 State & N. Y. City. 
 
 2 Current Facts, Jan. 1921, National Consumers' League, New York. 
 
 3 Labour Review, Dec. 1920, pp 72-73. 
 
COST OF LIVING AND WAGES 111 
 
 actual earnings of these miners in the bituminous fields as 
 studied during one-half-month pay-roll by States' is given as 
 follows : ^ 
 
 AVERAGE ACTUAL EARNINGS IN BITUMINOUS MINES IN 
 ONE-HALF MONTH PAY-ROLL PERIOD BY STATES 
 
 State Hand Miners Machine Miners Loaders 
 
 Alabama $40.41 $46.88 
 
 Colorado 47.42 $73.73 50.65 
 
 Illinois 47.72 61.02 51.03 
 
 Indiana 36.47 55.79 40.02 
 
 Iowa 43.37 52.55 34.17 
 
 Kansas 42.75 .... 
 
 •Kentucky 34.39 58.62 40.42 
 
 Maryland 60.67 
 
 Missouri 36.42 43.27 42.86 
 
 New Mexico 62.12 36.46 50.80 
 
 Ohio 63.S6 86.86 58.40 
 
 Oklahoma 53.82 60.66 48.63 
 
 Pennsylvania 67.49 72.02 66.21 
 
 Tennessee 34.08 26.25 33.36 
 
 Utah 57.66 92.07 67.95 
 
 Virginia 52.66 38.93 
 
 West Virginia 52.58 71.90 47.53 
 
 Wyoming 67.09 46.85 
 
 Total $47.12 $67.58 $50.51 
 
 In the case of the anthracite miners, the average earnings 
 made in one-half month pay-roll period in 1919 are given as 
 follows : Inside occupations averaged $65.17 while those en- 
 gaged in outside occupations averaged $55.37 per two weeks' pay 
 roll.^ The figures presented by the operators to the Coal Com- 
 mission in 1920, and which were greatly disputed by the repre- 
 sentatives of the miners, showed that the average wage of 68,4<16 
 miners examined in 1918 was $1,422, but declined to $1,234.44 
 in 1919. The miners presented figures of much lower averages. 
 
 The Bureau of Labour Statistics also keeps records of the 
 changes in union wage scales. The year 1913 is taken as the 
 basis of the index and set at 100. Accordingly the rates of 
 wages per full-time week are presented as follows : ^ 
 
 1 Labour Review, Dec. 1919, pp 207-229. 
 
 2 Ibid, Dec. 1919, pp 207-229. 
 
 3 Ibid, March 1921, pp 64. 
 
112 FACINGOLDAGE 
 
 1913 100 
 
 1914. 102 
 
 1915 102 
 
 1916 106 
 
 1917 112 
 
 1918 130 
 
 1919 148 
 
 1920 189 
 
 Further compilations of increases in union rates of pay per 
 hour from 1914 to 1919 in the building trades in about 30 cities 
 in the United States were made by the Bureau of Applied Eco- 
 nomics.^ The increases received as given by the interna- 
 tional unions concerned were as follows : 
 
 INCREASE IN UNION RATE OF PAY FOR THE BUILDING 
 
 TRADES 
 
 Percent of Increase 
 Occupation from 1914 to 1919 
 
 Bricklayers 30.9 
 
 Carpenters 63.9 
 
 Cement Workers and Finishers 36.3 
 
 Inside Wiremen 51.4 
 
 Painters 60.8 
 
 Plasterers 32.2 
 
 Plumbers 50.0 
 
 Sheet Metal Workers 66.2 
 
 Steam Fitters 61.6 
 
 Structural Iron Workers 51.7 
 
 In the case of the dress and waist industry the increase in wage 
 rates amounted to 52.8 per cent, from 1916 to 1919,^ while in 
 the case of linotype operators the increase from 1914 to 1919 
 constituted only 24.2 per cent, and for compositors, both news- 
 paper and book and job work, the increase amounted to approx- 
 imately 32 and 33 per cent, respectively.* 
 
 The Interchurch World Movement Report on the Steel 
 Strike concludes that : 
 
 "The annual earnings of over one-third of all productive iron 
 and steel workers were, and had been for years, below the level set 
 
 1 Wages in Various Industries, p 13, 1919, Bureau of Applied Eco- 
 nomics. 
 
 2 Ibid, p 30. 
 
 3 Ibid, pp 47-48. 
 
COST OF LIVING AND WAGES 113 
 
 by government experts as the minimum of subsistence standard for 
 families of five. 
 
 "The annual earnings of 72 per cent, of all workers were, and 
 had been for years, below the level set by government experts as 
 the minimum of comfort level for families of five. 
 
 "This second standard being the lowest which scientists are 
 willing to term an 'American standard of living,' it follows that 
 nearly three-quarters of steel workers could not earn enough for an 
 American standard of living. The bulk of unskilled steel labour 
 earned less than enough for the average family's minimum sub- 
 sistence ; the bulk of semi-skilled labour earned less than enough for 
 the average family's minimum comfort. 
 
 "In 1918 the unskilled worker's annual earnings were more than 
 $121 below the minimum of subsistence level and more than $495 
 below the American standard of living' for families. 
 
 "In 1919 the unskilled worker's annual earnings were more than 
 $109 below the minimum of subsistence level and more than $558 
 below the American standard of living'." ''- 
 
 In January, 1920, Professor Ogbum presented to the Bitu- 
 minous Coal Commission a minimum budget necessary for a 
 miner's family, at $2,118.94« a year. About the same time the 
 United States Bureau of Labour Statistics', at the request of the 
 Bituminous Coal Commission, in a study of a number of mining 
 towns in Pennsylvania, West Virginia, Ohio, Indiana, and Il- 
 linois found, the budget varying from $2,044.39 to $2,162.65. 
 According to the same bureau the index of wholesale prices for 
 all commodities when taken at 100 for January, 1913, had 
 risen to 272 in May, 1920, an increase of almost 200 per 
 cent. 
 
 On the basis of these budgets and increase in prices, Mr. W. 
 Jett Lauck, declared in May, 1920, before the United States 
 Railway Labour Board that "not a penny less than $2,500 a 
 year was the minimum necessary for a family of five to maintain 
 itself, even in decent poverty." 
 
 1 The Steel Strike of 1919, Commission of Inquiry Interchuroh World 
 Movement, pp 12-13, 14. 
 
114. FACING OLD AGE 
 
 The National Industrial Conference Board declared some 
 time ago that the cost of living of American wage-earners has 
 increased 104.5 per cent, between July, 1914, and July, 1920.^ 
 The United States Bureau of Labour Statistics states that its 
 investigations in a number of industrial centres show that the 
 prices of the essential items making up the family budget have 
 increased from December, 1914, to June, 1920, as shown in the 
 following table : ^ 
 
 Baltimore 114.3 
 
 Boston 110.7 
 
 Buffalo 121.5 
 
 Chicago 114.6 
 
 Cleveland 116.8 
 
 Detroit 136.0 
 
 Houston 112.2 
 
 Jacksonville 116.5 
 
 Los Angeles 101.7 
 
 Mobile 107.0 
 
 New York City 119.2 
 
 Norfolk 122.2 
 
 Philadelphia 113.5 
 
 Portland, Maine 107.6 
 
 Portland, Oregon 100.4 
 
 San Francisco and Oakland 96.0 
 
 Savannah 109.4 
 
 Seattle 110.5 
 
 Average of All Cities 112.7 
 
 Thus taking the various estimates into consideration, it 
 would seem most conservative to state that during the first six 
 months of 1920, at which time prices reached their peak, it re- 
 quired at least between $1,800 and $2,000 a year, or approxi- 
 mately between $35 and $40 a week the year round to support 
 a family of five with the necessities of life. 
 
 In view of this it may be of value to examine a few more wage 
 statistics collected during the year 1920. 
 
 In a recent report issued by the New York City Board of Es- 
 timate and Apportionment the comparative rates' of wages paid 
 
 1 Changes in The Cost of Living, National Industrial Conference 
 Board Report No. 30 Sept. 1920, p 26. 
 
 2 Labour Review, September 1920, pp 75-80. 
 
COST OF LIVING AND WAGES 115 
 
 by New York City are given from January 1, 1916, to January 
 1, 1920. Of the 57 trades enumerated only one — the painters 
 — shows an increase of 100 per cent, in four years. In 25 
 more trades the increase amounts to 50 per cent, or over, while 
 in 31 of the trades the increase amounts to less than 50 per 
 cent. 
 
 The Massachusetts Commis'sion on Necessaries of Life found 
 that in July, 1920, the cost of living in Massachusetts when 
 based on corresponding prices in 1913, had increased 102.6 per 
 cent. ^ At the same time a comparison of the hourly rates of 
 wages in 213 trades in Boston at the close of June, 1914, with 
 those at the close of June in 1920, showed that the average 
 hourly rates in these trades had increased only 83.6 per cent, 
 during the sis-year period.^ It must be noted, however, that 
 in many of these trades there was found a reduction in the basic 
 number of hours worked per week, with a consequent reduction 
 in the weekly rates of wages. When these were taken into con- 
 sideration, the Massachusetts Department of Labour and Indus- 
 tries found that the average weekly wages had actually increased 
 only 72.7 per cent, as against 99.7 per cent, increase in the 
 cost of living during the same period. 
 
 The October, 1920, Review published by the United States 
 Bureau of Labour Statistics presents a detailed study of the 
 union scales' of hourly wage rates throughout the country. 
 These cover many industries and the rates of wages paid are 
 given for each year from 1913 to 1920. A comparison of the 
 hourly wage rates paid in May, 1914, and May, 1920, in the 18 
 cities for which the rise in the cost of living has been given on 
 the preceding page is herewith presented.* 
 
 In March, 1920, the respective earnings of anthracite miners, 
 including both inside and outside occupations during one-half 
 month pay-roll were $68.56 and $55.81.* 
 
 1 Report of Special Commission on The Necessaries of Life, July 31, 
 1920, p 6. 
 
 2 Massachusetts Industrial Review, Vol. 1, No. 2, p 4, July 1920. 
 S Monthly Labour Review, Oct. 1920, pp 79-92. 
 
 4 Labour Review, Dec. 1919, pp 207-229. 
 
116 
 
 FACING OLD AGE 
 
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COST OF LIVING AND WAGES 117 
 
 Percent Increase from 
 Occupation May, 1914, to May, 1920 
 
 Blacksmiths 102.2 
 
 Boilermakers 112.2 
 
 Bricklayers 69.0 
 
 Building Labourers 136.2 
 
 Carpenters 94.6 
 
 Cement Finishers 84.8 
 
 Compositors, Book and Job 87.6 
 
 Compositors, Newspapers 67.0 
 
 Electrotypers, Finishers 79.3 
 
 Electrotypers, Molders 78.3 
 
 Granite Cutters 92.0 
 
 Hod Carriers 128.7 
 
 Inside Wiremen 98.3 
 
 Linotype Operators, Book and Job 63.9 
 
 Linotype Operators, Newspapers 54.0 
 
 Machinists 112.4 
 
 Molders, Iron 130.6 
 
 Painters 106.6 
 
 Plasterers 70.2 
 
 Plasterer's Labourers 106.2 
 
 Plumbers 70.5 
 
 Sheet-Metal Workers 96.5 
 
 Stone Cutters 84.7 
 
 Structural Iron Workers 79.0 
 
 Average of All Trades 99.7 
 
 The average monthly wages of male farm labourers in the 
 United States' are given by the United States Bureau of Labour 
 Statistics as follows, for the years from 1913 to 1920 in- 
 clusive : ^ 
 
 Year With Board Without Board 
 
 1913 $21.38 $30.31 
 
 1914 21.05 29.88 
 
 1915 21.26 30.15 
 
 1916 23.26 32.83 
 
 1917 28.87 40.43 
 
 1918 34.92 48.80 
 
 1919 39.82 56.29 
 
 1920 46.89 64.96 
 
 In a recent report published by the United States Labour 
 Board ^ a comparison of the average daily and monthly eam- 
 
 1 Labour Review, March 1921, p 85. 
 
 2 Average daily and monthly Wage Rates of Railroad Employes on 
 Class I Carriers, Wage Series Report I, Aug. 
 
118 FACINGOLDAGE 
 
 ings of all classes of railroad employes is presented: (1) as 
 of December, 1917 (under private control) ; (2) January, 
 1920 (under the United States Railroad Administration) ; 
 and (3) July, 1920 (under the last decision of the United 
 States Labour Board). The number of employes and the 
 actual wages earned are, as follows : 
 
 MONTHLY EARNINGS OF RAILROAD 
 WORKERS, DEC. 1917— JULY 1920. 
 
 No. of Av. Wage, Av. Wage, Av. Wage, 
 
 Employes Dec. 1917 Jan. 1920 July 1920 
 
 Supervisory Forces 12,634 $148.67 $230.21 $259.03 
 
 Clerical and Station Forces. . . 354,400 66.04 98.58 121.89 
 
 Maintenance of Way and Un- 
 skilled Labour Forces 585,625 54.92 84.08 103.53 
 
 Shop Employes 455,776 89.87 128.64 154.78 
 
 Telegraphers, Telephones and 
 
 Agents 77,646 67.57 115.87 135.66 
 
 Engine Service Employes 136,952 124.52 180.98 218.80 
 
 Train Service Employ^ 189,905 108.66 160.07 199.52 
 
 Stationary Engineers and 
 
 Firemen 8,000 55.59 97.00 122.40 
 
 Signal Department Employes. 7,000 84.15 130.27 155.77 
 
 Marine Department Employes. 834 127.65 166.01 194.46 
 
 Grand Total 1,828,772 $77.93 $115.82 $141.28 
 
 The average weekly wage of factory workers in New York 
 State, reported by the New York State Industrial Commission, 
 amounted to $24.41 per week in October, 1919; $27.87 in 
 April, and $28.73 in September, 1920 — nearly $10 per week 
 less than was cons'ervatively considered the minimum neces- 
 sary for the maintenance of an American standard of living. 
 
 Taking the most conservative estimate given for 1919 as 
 that of $1,500, which means $28.85 per week or practically 
 $5 a day every working day in the year as the minimum 
 wage necessary to maintain John Doe, his wife and the three 
 little Does, the "Survey" ^ gives the following analysis of the 
 meaning of this wage, which shows the relationship of insuffi- 
 cient wages' and dependency in the clearest possible manner: 
 
 1 The Survey, March 27, 1920, pp 801-802. 
 
COST OF LIVING AND WAGES 119 
 
 "Suppose John Doe pays $3.50 weekly for rent — certainly not 
 a high rate; at least $13.00 will be required for food — an allow- 
 ance adequate only with the most careful management on the part 
 of Mrs. Doe. For clothing at least $6.75 weekly will be needed; 
 light and fuel with only the kitchen stove will cost at least $1.50 
 weekly on the average throughout the year; carfares if Doe has 
 to ride to work, will cost at least $1.20 weekly; miscellaneous ar- 
 ticles for the household $1.15, a total of $27.10. This leaves a 
 balance of $1.75 for church, newspapers, ice-cream cones, hair-cuts, 
 etc., for five persons; and the list will probably include insurance 
 as well, for most families like the Does will buy industrial in- 
 surance. 
 
 "If everything goes on smoothly, and if Mrs. Doe is a careful 
 planner, it may be possible for the Does to get on with this budget. 
 The allowance for food and clothing is scant, however; the margin 
 for recreation and sundries is painfully small, and there is no pro- 
 vision for accident or sickness. But suppose a small accident oc- 
 curs, or a sudden need arises — the kitchen stove gives out and a 
 new one is necessary; the winter snow comes and several pairs of 
 shoes must be purchased in one week and Doe himself must have 
 an overcoat! The temptation becomes overwhelming to turn to 
 the ever-ready credit companies and mortgage the future for the 
 relief of the present. It is fairly well understood that the credit 
 companies offer goods which, if of good quality, are sold at high 
 prices, and that trading with them is conducive to extravagant 
 purchases; and yet it is hard to see how many families like the 
 Does would manage an extra expenditure of $25.00 or more were 
 it not for some such expedient. As a matter of fact, there are 
 comparatively few of the families coming for the first time to the 
 charities for assistance, who are not involved in some way with 
 credit companies or are not struggling to meet weekly payments on 
 debts. 
 
 "Now suppose a real calamity befalls the Does; for example, 
 little John falls iU, showing signs of tubercular infection. Any 
 margin after such expenses as are noted above wiU not go far in 
 securing the attendance of the private physician, although the family 
 we are considering is one which should be independent; if they 
 
120 FACING OLD AGE 
 
 seek free medical service they make their first appeal to charity — 
 and thenj too, expenses presently increase. Carfares for mother 
 and Johnnie to the dispensary are forty cents a trip, admission to 
 the clinic ten cents more. Suppose they have to go twice weekly, one 
 dollar is gone. Medicines may easily cost another dollar. The 
 doctor prescribes milk and eggs, oranges, green vegetables, warmer 
 coverings, etc. As a result Mr. John must try to cut down 
 somewhere though cutting seems impossible, and father, mother 
 and the well children all suffer that the invalid may have extra 
 nourishment. 
 
 "Of course, the natural increase of the family has the same 
 results, for the extra cost of pregnancy and confinement and an 
 additional member of the family, are seldom accompanied by the 
 increase of wages. Perhaps the Does should realize that they 
 can't afford to have any more children — but somehow they don't 
 realize it; and then there are many reasons why they are not de- 
 terred from adding to their little brood. Indeed, are there not 
 certain prevailing notions abroad that it is a work of good citizen- 
 ship and service to the state for normal people in good health to rear 
 good sized families? Moreover the statistician tells us that 'The 
 average number of children per family which must be born in order 
 that the stock may maintain itself without increase or decrease, is 
 close to four.' 
 
 "Those who are not working by the day are apt to overlook 
 certain differences between their lot and that of the lower paid 
 workman on piece work or a daily wage. If the salaried man 
 falls ill or meets with an accident his income as a rule, goes on to a 
 greater or less extent, but with the wage-earner the tendency is 
 otherwise ; he is usually paid only when actually at work. In case 
 of accident or occupational disease, workmen's compensation will, 
 it is true, give him two-thirds of his pay; but he has to wait ten 
 days before compensation begins and another week before the first 
 payment comes, and many families haven't even that margin. 
 Moreover, when full wages barely suffice, how long can the familj' 
 subsist on two-thirds? Sometimes there is a benefit association 
 which assures weekly payments for a time, but often there are no 
 such resources. Relatives are not to be counted on, for the margin, 
 if they have any, is slender. Landlords are less lenient than for- 
 
COST OF LIVING AND WAGES 121 
 
 merly, and grocers are wary of extending credit which tends to be- 
 come a thing of the past. Under stress, therefore, John Doe's 
 family and others like them are forced, though perhaps much 
 against their will, to the first step towards dependency. 
 
 "It should be remembered that the Jolin Does are an average 
 respectable family — a healthy, industrious man without bad habits; 
 a frugal, healthy woman; children in number no more than a couple 
 have ordinarily felt that they should be able to rear; none of 
 them with marked physical weakness. And yet actual experience 
 shows that any one of the accidents to which they are liable often 
 throws such people within a week or two on charity. Moreover, it 
 should be noted that their budget olTers no opportunity for savings 
 and that no provision for old age is feasible; such people face at all 
 times the possibility, even the probability, of becoming a burden on 
 the community when their working days are over. Such are the 
 ordinary hazards in the life of a normal family of five living on 
 daily wages of five dollars." 
 
 The wage investigations discussed in the preceding pages are 
 significant. It is patent that despite the tremendous increase 
 in wages experienced during the last six years, only a few classes 
 of wage-earners have succeeded in keeping pace with the in- 
 creased cost of living. In the case of many workers, espe- 
 cially the skilled ones, the purchasing power of their increased 
 wages for a full-time week in 1920 was considerably less' than it 
 was in the pre-war days. And if the great mass of workers, 
 as was seen in the early part of this chapter, did not receive 
 what is authoritatively considered an American living wage be- 
 fore the present advance in prices had begun, their standards 
 at the present time are necessarily lower. 
 
 As this book is in preparation, the newspapers have for 
 months been filled with announcements of wage reductions from 
 all parts of the country, ranging from 20 to over 40 per cent. 
 No definite estimate of the cost of living at this time (March, 
 1921) is' available. ^ While the Bureau of Labour Statistics 
 
 1 The most recent figures as to what constitutes a minimum "health 
 
122 FACINGOLDAGE 
 
 reports that the index of wholesale prices in the United 
 States which, when taken at 100 for 1913, reached 272 in May, 
 1920 — its high-water mark — declined to 242 in September, 1920, 
 the latest date for which figures are available, it also states 
 that from September, 1919, to September, 1920, only farm prod- 
 ucts and clothing witnessed decreases of seven and nine per 
 cent, respectively. "In all other groups," declares the bureau, 
 "there was an increase between these two dates, food advan- 
 cing approximately five and three-fourths per cent., miscella- 
 neous commodities 10 per cent., metals 20 per cent., chemicals 
 and drugs 28 per cent., building materials 40 per cent., house- 
 furnishing goods 42 per cent, and fuel 57 per cent, in average 
 price. All commodities', considered in the aggregate, increased 
 10 per cent." ^ * 
 
 The significance of the above disclosures needs no further 
 comment. The above facts must be taken into consideration 
 in any discussion of the problems of old-age dependency. 
 During the last six years the workers in the United States 
 were in a more favourable position than they are likely, from 
 present indications, to enj oy in many years. The war years wit- 
 nessed a period of the most intense industrial activity. Great 
 
 and decency budget" for a family of five have just been made public by the 
 Labour Bureau, Inc., New York City. As a result of cost of living sur- 
 veys conducted in 1921 in New York City and Philadelphia, the above 
 bureau estimates the annual minimum standard necessary for a family 
 of five as $2,233.99 in New York City, and $2,338.20 in Philadelphia. 
 
 The bureau's estimate is based on the "quantity budget" used by the 
 United States Bureau of Labour Statistics. They estimate that $698 a 
 year is needed for food, $398 for clothing, $443 for rent, $83 for light 
 and heat, $59 for houseKold equipment and $650 for miscellaneous expenses. 
 
 "The family is allowed no expenditures for books and magazines," 
 says the bureau's statement, "only one daily paper is included. The doc- 
 tor's bill cannot exceed $80 a year for the whole family, and the boy 
 of 12 can get but eight hair-cuts a year. The husband is allowed one-half 
 and the wife one-third of an overcoat each year. The only amusements 
 permitted are an occasional c^eap movie show. No allowance is made 
 for a trip or vacation outside the city." 
 
 1 Labour Review, Nov. 1920, p 49. 
 
 * Even in December, 1920, according to the bureau, the total cost of 
 living was six-tenths of one per cent, higher than in December, 1919, and 
 only 7.4 per cent, less than in June, 1920 — ^the peak of high prices. 
 (Labour Review, Feb. 1921, p 61). 
 
COST OF LIVING AND WAGES 123 
 
 numbers of workers were withdrawn into the military service, 
 and immigration was practically suspended. Everywhere 
 there were more jobs than men to fill them. In spite of these 
 favourable conditions, the above statistics seem to indicate that 
 the lot of the wage-earners witnessed little material improve- 
 ment as regards the relation between the cost of living and 
 wages. The facts available seem to bear out the contention 
 that wages are last to follow the rise in prices and are first to 
 come down when the slump begins. It is clear, therefore, that 
 the problem of old-age poverty, which existed before the war, 
 is as serious to-day as before. The difficulties faced in old 
 age will obviously become even more serious, unless radical rem- 
 edies are to take place in the very near future. 
 
CHAPTER VII 
 
 SOCIO-ECONOMIC AND MORAL 
 
 CAUSES OF AGED DEPENDENCY 
 
 UNEMPLOYMENT 
 
 "One of the misfortunes most feared by the labouring class is 
 that of unemployment. 'Why stand ye here all the day idle? — ' 
 'Because no man hath hired us/ presents a picture in Biblical 
 times which has been reproduced in all ages and countries through- 
 out labour's history. The labourer must have shelter^ food and 
 clothes for his idle days as well as for other days ; but rarely is 
 the rate of wages fixed so as to cover days of enforced rest or ab- 
 solute loss of employment . . . Non-employ menl, or loss of em- 
 ployment, therefore, in nearly every wage-earner's career stands 
 as a spectre of forbidding mien, with gaunt finger pointing the way 
 to charity and old age dependency." ^ 
 
 A brief examination of the extent of unemployment in the 
 United States and to what degree it affects the wage-earner's 
 income is not amiss in this connection. Indeed, unemployment, 
 even though temporary, may seriously impair the average work- 
 ing-man's ability to make provisions for old age. In a study 
 of 5,000 families who applied to the New York Charities for 
 aid. Professor Devine found unemployment as a direct cause 
 of dependency in 69.16 per cent, of the cases. Says Professor 
 Devine : 
 
 "From the point of view of the charitable agencies the impor- 
 tance of this subject is indicated by the fact that in two-thirds of 
 the families who come under the care of the Charity Organization 
 
 iL. W. Squier, Old Age Dependency in the United States, pp 29-30 
 and 36. 
 
 124 
 
SOCIO-ECONOMIC CAUSES 1251 
 
 Society in industrially normal times one or more wage earners are 
 unemployed at the time of their application for aid. This propor- 
 tion, as one might have expected, was higher in 1907-1908, after 
 the financial crisis, than in the preceding year, but the difference 
 is not as great as might naturally have been expected. In 1906- 
 1907, sixty-five per cent of the new families who applied for aid 
 had some wage-earner unemployed, either from personal disabili- 
 ty or industrial conditions, and in 1907-1908, this was true of 
 seventy-two per cent. This increase from sixty-five per- cent to 
 seventy-two per cent, does not represent the full consequences 
 among wage-earners of the changed industrial conditions. No sta- 
 tistics of charitable societies will represent those consequences. 
 It does bring out clearly, however, that even in prosperous times 
 the distress which leads to application for charitable assistance is 
 closely connected with the temporary cutting off of an income 
 which is ordinarily, even if irregularly earned." ^ 
 
 The 12th Census reported that in the year 1900, of 23,753,- 
 836 males 10 years of age and over engaged in gainful occu- 
 pations, 5,277,472, or 22 per cent., were unemployed at some 
 time during the year ; and of 5,319,397 females 10 years of age 
 and over engaged in gainful occupations, 1,241, 492, or 23.3 
 per cent., were unemployed at some time during the year; thus 
 out of a total of 29,073,233 persons 10 years of age and over 
 engaged in gainful occupations 6,468,964, or 22.3 per cent, 
 were unemployed at some time during the year. Over 2,550,- 
 000 men and women were out of work from four to six months, 
 while approximately 736,000 were unemployed from seven to 
 twelve months, according to the s'ame Census. 
 
 According to the investigations of the United States Bureau 
 of Labour in 1901, of the cost of living of 25,440 families, about 
 half — 49.8 per cent., of the heads of the families investigated 
 were idle at some time during the year.^ 
 
 The Geological Survey Reports show that the bituminous 
 miners from 1890 to 1910 lost from 22 to 43 per cent, of their 
 
 1 E. T. Devine, Misery and its Causes, p 117. 
 
 2 18th Annual Report of thiC Commissioner of Labour, p 42, 
 
126 FACINGOLDAGE 
 
 working time annually, while workers in anthracite mines lost 
 from 23.7 to 50 per cent, of their working time. Data on the 
 unemployment of organized workers in New York State have 
 been collected! by the Labour Department of the State for the 
 period 1901-1911. The membership of these unions averaged 
 about 100,000 and the average number unemployed each month 
 was 14,146, or 18.1 per cent. The percentage of unemployed 
 for New York City was even higher. ^ 
 
 The Census of IManufactures of 1910 showed the percentages 
 of the labour forces regularly employed in the different indus- 
 tries as follows : " 
 
 Percent Actually 
 Industries Employed 
 
 Iron and Steel Works and Rolling Mills 75.8 
 
 Foundry and Machine Shop Products 80.7 
 
 Lumber and Timber Products 87.8 
 
 Car Building and Repairs 89.1 
 
 Woolens, Worsted, and Felt Goods and Wool Hats . . 91.0 
 
 Tobacco Manufactures 91.6 
 
 Clothing, Men's, Including Shirts 91.8 
 
 Boots and Shoes 91.8 
 
 Printing and Publishing 93.3 
 
 Cotton Goods 97.6 
 
 The New York State Commission on Employers' Liability 
 and Unemployment after investigating the extent of unemploy- 
 ment in the State of New York in 1910 concluded that from the 
 facts ascertained : 
 
 "We base our statement that at all times of the year in every 
 industrial centre of the State able-bodied men are forced to remain 
 idle though willing to work. On any given day during the year, 
 at least 3 per cent, of our wage-earners are involuntarily idle. Usu- 
 ally there are 10 per cent. These idle men must always be on hand 
 to meet the fluctuating demands of the industries of the State. 
 
 "Summarizing the data at our command, we should say that in 
 ordinary years of business prosperity, taking all industries into 
 
 - Francis A. Kellor, Out of Work, pp 20-23. 
 
 2 Abstract of Statistics of Manufactures of the U. S. 1910, p 22. 
 
SOCIO-ECONOMIC CAUSES 127 
 
 consideration, out of every 100 persons, 60 will be steadily em- 
 ployed, 40 will be working irregularly. Of those who have ir- 
 regular employment 3 will always be out of work. The per- 
 centages vary with the different industries, but the experience is 
 characteristic of every industry. 
 
 "While there is little accurate information available as to the 
 exact number of unemployed at any one time, there is enough to 
 show that about 40 per cent, of our wage-earners suiFer some un- 
 employment every year, that on the average they lose ten weeks 
 each, and that the loss in wages amounts to 20 per cent, of what 
 the earnings would be, were employment steady throughout the 
 year." ^ 
 
 I. M. Rubinow, in commenting upon the significance of the 
 unemployment figures of 1900, declared: 
 
 "Over one-half of these 6,500,000 and possibly three fourths of 
 them suffered from unemployment to a degree which could not 
 fail to cause national distress. The total time lost to the produc- 
 tive industries of the country was enormous. An approximate 
 estimate would indicate that during one year over 1,900,000 years 
 of productive labor were lost; or what amounts to the same thing 
 of 29,000,000 gainfully employed, on an average nearly 2,000,000 
 had been idle throughout the whole year." ^ 
 
 A careful study of unemployment fluctuations was prepared 
 by the Helen S. Trounstine Foundation.^ This survey covers 
 a period of 16 years from 1902 to 1917. The data here were 
 gathered from the United States Censuses of Manufactures, 
 Occupations and Population, the Reports of the United States 
 Geological Survey, the Bureau of Mines', the Interstate Com- 
 merce Commission, the United States Commissioner of Educa- 
 tion, the United States Bureau of Labour Statistics', the Eight 
 
 1 Wm. M. Leiserson, Unemployment in the State of New York 1911, 
 Appendix No. 1. 
 
 2 Rubinow, Social Insurance, p 445. 
 
 3' Fluctuations in Unemployment in Cities of the United States, 1902 
 to 1917, Helen S. Trounstine Foundation Vol. I No. 2, May, 1918, Cincin- 
 nati. 
 
128 FACINGOLDAGE 
 
 Hour Commission, and from many State Departments of Labour 
 and State Industrial Commissions. 
 
 The following table -^ summarizes the findings in regard to un- 
 employment fluctuations in occupations other than agriculture: 
 
 Normal Supply Average No. Un- Percentage of 
 Year in Millions employed in Millions Unemployed 
 
 1902 19.5 2.7 14.1 
 
 1903 20.2 1.9 9.3 
 
 1904 20.9 2.4 11.6 
 
 1905 21.6 2.0 9.3 
 
 1906 22.3 1.2 5.6 
 
 1907 23.4 1.4 6.0 
 
 1908 23.9 3.5 14.8 
 
 1909 24.6 2.1 8.6 
 
 1910 25.6 1.7 6.8 
 
 1911 26.1 2.8 10.8 
 
 1912 26.8 2.6 9.6 
 
 1913 28.0 2.6 9.3 
 
 1914 28.6 4.5 15.8 
 
 1915 29.0 4.6 16.0 
 
 1916 29.5 2.1 7.1 
 
 1917.. 30.2 1.4 4.7 
 
 Average 2.5 9.9 
 
 The investigator concludes from the above table that "the 
 number of unemployed in cities of the -United States (entirely 
 omitting agricultural labour, for which no reliable data are now 
 available) has fluctuated between 1,000,000 and 6,000,000. 
 The least unemployment occurred in 1906-1907 and in 1916- 
 1917, while the most occurred in 1908 and in 1914 and 1915. 
 The average number of unemployed has been two and a half 
 miUion workers, or nearly ten per cent, of the active supply." 
 
 An analysis of the figures by months shows that the average 
 number of unemployed tends to be greatest in the month of 
 January and least in October. 
 
 During the period of the war and immediately following 
 when work was plentiful, the problem of unemployment was not 
 prominent before the public. The past year, however, has wit- 
 nessed an unprecedented shutting down of mills and shops in 
 the automobile, rubber and textile industries, building trades, 
 1 Idem pp 48-49. 
 
SOCIO-ECONOMIC CAUSES 129 
 
 railroad construction, and a number of other industries. In 
 many quarters it is authoritively stated that the depression 
 in employment early in 1921 has been even worse than that 
 experienced in 1907-1908 and just prior to the beginning of 
 the World War. 
 
 Early in December, 1920, the United States Department of 
 Labour began the organization of an industrial employment 
 survey of the United States — a service sadly needed for years. 
 The purpose of this employment survey is to collect and dis- 
 seminate aU available information in regard to employment 
 conditions. The first achievement was an unemployment inves- 
 tigation of 182 principal industrial cities and a comparison 
 of industrial employment between January, 1920, and January, 
 1921. ^ The cities covered; were located in thirty-five States 
 and the District of Columbia. The investigations revealed 
 that there were 3,331,352 fewer persons employed in January, 
 1921, than were employed during January, 1920. Thirty-five 
 and one-half per cent, of the number employed January, 1920, 
 were not employed during the same month the following year. 
 Arranged by industries the percentage of those employed Jan- 
 uary, 1921, as compared with January, 1920, was as follows: 
 
 Industry Percentage Employed 1921 
 
 Metals and Products, Machinery, Electric Goods, 
 
 Foundry Products 69.5 
 
 BuUding Trades 47.6 
 
 Packing and Food Products 81.0 
 
 Textiles and Products, Clothing, Hosiery and 
 
 Underwear 64.5 
 
 Leather, Its Products, Boots and Shoes 65.1 
 
 Automobiles and Accessories 30.8 
 
 Lumber, House Furniture, Boxes & Wood Products 67.8 
 
 Clay, Glass, Cement and Stone Products 80.7 
 
 Total, All Groups 64.5 
 
 The Massachusetts Department of Labour and Industries 
 reported in the October issue of the Industrial Review, pub- 
 
 1 Industrial Employment SurViey Bulletin, No. 1, Jan. 1921, U. S. Em- 
 ployment Service, Washington, D. C. 
 
130 FACINGOLDAGE 
 
 lished by that Department, that a study of 1,103 labor unions 
 in the principal industries and trades' covering a membership of 
 254,836 in that State showed that 49,063 members, or 19.3 
 per cent., were unemployed on September 30, 1920. In June, 
 1920, this percentage was 18.8, while in September, 1919, the 
 percentage of unemployed in these unions constituted only 5.4. 
 
 The New York Industrial Commission found that from 
 March to December, 1920, there was a total decrease of 20 per 
 cent, in the number of employes in the New York State fac- 
 tories. ■*■ The Brooklyn Chamber of Commerce in a statement 
 issued to the press also stated that a survey of conditions in 
 Brooklyn showed that unemployment in the factories and retail 
 establishments of that borough had reached 36 per cent, at 
 the beginning of 1921. 
 
 According to the reports compiled by the Pennsylvania 
 Bureau of Employment there were on April 15, 1921, 243,160 
 persons unemployed in that State.^ 
 
 In July, 1921, the United States Labour Department es- 
 timated the number of unemployed in the country to be 
 6,735,000. 
 
 It is obvious from the preceding that unemployment is 
 always, even in normal industrial conditions, a problem for the 
 wage-earners. Lack of work affects the industrious' and thrifty 
 workers as well as the indolent and careless ones, and very 
 often sweeps away the savings accumulation of many years. 
 That unemployment is a potent factor in old-age dependency 
 is patent. 
 
 STRIKES 
 
 The difficulties encountered in obtaining accurate data upon 
 the exact losses of wage-earners on account of strikes and lock- 
 outs are many. First, there are no complete or official lists of 
 strikes in this country. Secondly, the estimates of the number 
 
 1 Labour Review, February, 1921, p 124. 
 
 2 Information supplied by the Bureau. 
 
SOCIO-ECONOMIC CAUSES 131 
 
 of strikers during any one strike as given by the employers and 
 by the employes are frequently greatly at variance. Then, 
 too, there are times when although a few workers are actually 
 on strike, the number affected is very large. This occurs, 
 for instance, when the strikers are made up of the engineers 
 and firemen of a plant ; when they are workers engaged in cer- 
 tain preliminary processes of production without which it is 
 impossible to run the mills. Complete statistics are also im- 
 possible of collection because many strikers either return to 
 the mill before the strike is officially settled, or secure other 
 employment. Some of the figures obtained by the United 
 States Department of Labour, however, are significant in this 
 connection. 
 
 During the period of twenty-five years, from 1881 to 1905, 
 the Federal Bureau of Labour found that there were 36,767 
 strikes involving 181,407 establishments, or an average of 4.9 
 establishments per strike. There were 6,728,048 strikers, or 
 an average of 183 strikers per strike ; while there were thrown 
 out of work 8,703,824 employed, or an average of 237 per 
 strike. During this same period there took place 1,546 lock- 
 outs involving 18,547 establishments. There were 716,231 
 employes locked out, or an average of 463 per lock- 
 out; while the number of employes who were thrown out of 
 work was 825,510, or an average of 534 per lockout. These 
 figures do not include disturbances of less than one day's du- 
 ration. 
 
 The average duration of strikes per establishment was 25.4 
 days and of lockouts 84.6 days. The strike or lockout does 
 not, of course, always result in the closing of the establishment 
 affected, but in strikes involving 111,343, 61.38 per cent, 
 of all establishments involved were closed for an average of 
 20.1 days. In lockouts 12,658, or 68.25 per cent, of all es- 
 tablishments involved, were closed an average of 40.4 days. 
 The days here referred to are calendar days, including Sundays 
 and holidays. 
 
132 FACINGOLDAGE 
 
 According to the United States Bureau of Labour Statistics, 
 which for the past few years has kept a record of strikes and 
 lockouts that come to it^ attention, there were in 1916 a total 
 of 3,786 strikes and lockouts in the United States. In 2,600 
 strikes and 64 lockouts the number of persons involved was 
 1,546,428 and 53,182 respectively. The total duration of the 
 strikes was 46,264 days and of the lockouts 3,375 days — an 
 average of 22 days and 64 days respectively. 
 
 In 1917 there were 4,359 strikes and lockouts involving 
 1,193,867 and 19,133 respectively in only 2,174 strikes and 46 
 lockouts for which information was obtained. The total du- 
 ration of these Strikes was 24,076 days and of the lockouts 1,904 
 days or an average of 18 and 56 days respectively. 
 
 In 1918 the total number of strikes and lockouts was 3,285, 
 which involved 1,192,418 and 43,041 persons in only 2,027 
 strikes and 70 lockouts, for which information was obtained. 
 The total duration of these strikes was 28,386 days and in the 
 case of the lockouts 1,096 days, the average duration of the 
 former being 18 days and of the latter 31 days. 
 
 Between April 6, 1917, the date of our entrance into the war, 
 and November 11, 1918, the date of the signing of the armis- 
 tice, there occurred in the United States, 6,206 strikes and 
 lockouts.^ 
 
 During the year 1919 there occurred 3,374 strikes and lock- 
 outs. The number of strikers in 2,493 of these totaled 4,112,- 
 507.^ The end of that year witnessed the greatest strikes in 
 the history of this country. More than 300,000 workers in the 
 iron and steel industry were on strike for several months. 
 Shortly afterward nearly 400,000 bituminous miners went on 
 strike for more than a month. The losses in wages on account 
 of these strikes is, as previously pointed out, difficult to esti- 
 mate. In the steel strike alone the number of man-days lost 
 was estimated to amount to many millions, and as at the time of 
 
 1 Monthly Labour Review, June 1919, pp 307-14. 
 
 2 Ibid, September 1920, p 190. 
 
SOCIO-ECONOMIC CAUSES 133 
 
 the strike $4.62 per day was reported to be the lowest wage 
 paid, the wage loss of the workers was claimed by many 
 writers to have amounted to more than $100,000,000. 
 
 The extent of the losses due to industrial warfare is also 
 evident from the following figures of strikes in Pennsylvania. ^ 
 And these do not include the coal and steel strikes — the great- 
 est disturbances during that period. 
 
 RECORD OF STRIKES IN PENNSYLVANIA, 1916-1920 
 
 
 
 
 
 
 Average 
 
 
 
 No. of 
 
 
 
 Length 
 
 Y,ear 
 
 No. of 
 
 Employes 
 
 No. Days 
 
 Wages 
 
 of Strike 
 
 
 Strikes 
 
 Involved 
 
 Lost 
 
 Lost 
 
 in Days 
 
 1916 
 
 316 
 
 138,162 
 
 3,574,860 
 
 $7,184,296 
 
 49 
 
 1917 
 
 . . . . 498 
 
 101,658 
 
 1,431,328 
 
 4,694,769 
 
 26 
 
 1918 
 
 . . . . 317 
 
 90,021 
 
 507,937 
 
 2,212,304 
 
 10 
 
 1919 
 
 484 
 
 171,630 
 
 4,665,118 
 
 13,943,502 
 
 26 
 
 1920 
 
 555 
 
 88,988 
 
 3,128,291 
 
 14,514,195 
 
 38 
 
 Total... 
 
 . ... 2,170 
 
 590.449 
 
 13,307,534 
 
 $42,549,066 
 
 29.9 
 
 The Bureau of Mediation and Arbitration of the New York 
 Industrial Commission also reported that for the year ending 
 June 30, 1919 and 1920 the following industrial disturban- 
 ces had occurred in that State.^ 
 
 1919 1920 
 
 Number of strikes and lockouts 168 240 
 
 Employes involved directly 208,952 334,188 
 
 Employes involved indirectly 2,006 16,403 
 
 Aggregate days of working time lost 11,346,653 10,608,483 
 
 That strikes, like unemployment, sap the little savings that 
 the wage-earner may have accumulated, and thus force him to 
 become dependent in old age is too obvious a fact to necessitate 
 further comment. 
 
 GENERAL MISFOUTUNE 
 
 As was suggested in the beginning of this discussion, it is 
 
 1 Combined from Bulletin of the Department of Labour and Industry 
 Vol. 7, No. 1, Series of 1920, and Vol. 8, No. 3, Series of 1921, Harrisburg. 
 
 2 Labour Review, January 1921, p 222. 
 
FACING OLD AGE 
 
 /ssible to point out every cause that goes to make for de- 
 iiency and helplessness in old age. Individual lives and ex- 
 
 /iences vary in many respects and the conditions that go to 
 make up one's fortune or misfortune vary accordingly. In 
 addition to the definite and obvious causes of dependency dis- 
 cussed in the preceding pages there are, however, many minor 
 influences which make the path to the poorhouse hard to avoid 
 even for many thrifty and independent persons. 
 
 These forces also ordinarily lie outside of the individual's 
 control. Thus in Massachusetts the Commission on Old Age 
 Pensions of that State found that among those who lost their 
 property possessions 25A per cent, attributed it to business 
 failures and bad investments; 6.2 per cent, to intemperance 
 and extravagance; 5.1 to fraud and 3.2 per cent, lost their 
 property in fires. ^ In the case of almshouse paupers, the 
 Ohio Commission attributes the loss of property in 11.63 per 
 cent, to "misfortune," and an equal percentage to "improvi- 
 dence." Of 159 former property owners 70 had lost it 
 by business failure, 61 by poor investment and 17 by bad 
 loans. ^ 
 
 In Pennsylvania among the almshouse pauper group, 14 per 
 cent, claimed that their loss of property was due to business 
 failures and fire losses ; 9' per cent, to fraud and 3 per cent, to 
 bank failures ; while of the "non-dependent" who had lost their 
 property 7.1 per cent, lost it through unwise investment ; 2.3 
 per cent, through business failure, and a like percentage lost it 
 through fraud. ^ In the case of 162 aged applicants for relief 
 to the Philadelphia Society for Organizing Charity, during 
 1917-18, the reasons given were: Unemployment, 25 per cent. ; 
 irregular employment 9 per cent. ; non-support of children 20 
 per cent. ; accident 14 per cent. ; blind and deaf 15 per cent. ; 
 previous supporter incapacitated 14 per cent., and a few others, 
 exhausted savings. The causes of aged dependency are thus 
 
 1 Massachusetts Report, p 58. 
 
 2 Ohio Report, p 241. 
 
 3 Penna. Report, pp 31 and 109. 
 
SOCIO-ECONOMIC CAUSES 135 
 
 so numerous and varied that even many of the well-to-do and 
 prosperous persons cannot be certain that they will remain in- 
 dependent throughout their declining years. 
 
 THE PART PLAYED BY MORAL CHARACTER 
 
 A steward of a county almshouse in a Quaker district in 
 Pennsylvania replied to the Commission of that State : 
 
 "The dependants in almshouses are of such a character that in- 
 quiry as to their past life seems to me a waste of time. Most of 
 them were nothing but parasites in society all their days, not one 
 worthy of an old age pension, if it could be had. They are men- 
 tally and morally degenerates; most of them foreign born, and 
 half of them never naturalized. Tramps in summer and here in 
 winter. The only record that could be had would be unreliable, 
 for there is no way to obtain it but from them. Hence, we go 
 into few details when they are admitted. The average life of an 
 inmate has been a failure largely due to the fact that they never 
 realize what a successful life is." 
 
 On the other hand, Professor Devine, former Secretary of the 
 New York Charities and Director of the New York School for 
 Social Work, states in his book, "Misery and Its Causes": 
 
 "The connection that is assumed between the need of assistance 
 and some form of personal depravity or shortcoming appears, super- 
 ficially at least, to have much justification when we are considering 
 the outcast, the criminal, and the extreme type of parasitic de- 
 pendent. . . . The question which I raise is whether the wretched 
 poor, the poor who suffer in their poverty, are poor because they 
 are shiftless, because they are undisciplined, because they drink, be- 
 cause they steal, because they have superfluous children, because of 
 personal depravity, personal inclination, and natural preference; or 
 whether they are shiftless and undisciplined and drink and steal and 
 are unable to care for their too numerous children because our 
 social institutions and economic arrangements are at fault. I Iiold 
 that personal depravity is as foreign to any sound theory of the 
 hardships of our modern poor as witch-craft or demoniacal posses- 
 
136 FACINGOLDAGE 
 
 sion: that these hardships are economic, social, transitional, measur- 
 able, manageable. Misery, as we say of tuberculosis, is communi- 
 cable, curable, and preventable. It lies not in the unalterable na- 
 ture of things, but in our particular human institutions, our social 
 arrangements, our tenements and streets and subways, our laws and 
 courts and jails, our religion, our education, our philanthropy, our 
 politics, our industry and our business. . . . Evil passions and in- 
 dolence produce misery, but it does not follow that misery, all mis- 
 ery, or most misery is to be attributed to indolence or evil passions. 
 The position which I suggest for your consideration is merely that 
 there is no presumption of wrong-doing in the misery of the poor, 
 that it may not be disciplinary, that it may not be punishment, 
 that it may not be the working out of moral character. It may 
 indeed be any of these things in a given instance, but the burden 
 of proof is upon those who allege it, and no charitable society is 
 justified, no public relief agency or institution is justified in bas- 
 ing its policies upon the assumption that because these men be- 
 fore us are afflicted in mind and body, therefore either they or 
 their parents have sinned." -'- 
 
 The gap between thesfe two view points could hardly be 
 wider. Data on this question however is so meagre that the 
 problem must still remain largely in the realm of theory and 
 generalization. Some illuminating information however is sup- 
 plied by the Pennsylvania Commission in its report of 1919. 
 A questionnaire was addressed to about 200 former employers 
 of almshouse-inmates, who were residents of about 20 almshouses 
 scattered throughout Pennsylvania. The letter requested in- 
 formation with regard to the period of employment; the 
 quality of service rendered ; the general character of the 
 employe, and the reason for leaving employment. 
 
 Twenty per cent, of the answers in regard to the time of 
 employment stated that the men in question had worked less 
 than six months ; 21.5 per cent, were employed from six months 
 to three years ; 29 per cent, served from three to ten years, 
 
 ipp. 8-11-12-13-14 
 
SOCIO-ECONOMIC CAUSES 137 
 
 while 30 per cent, were engaged for ten years or more contin- 
 uously. 
 
 As to the quality of s'ervice rendered, only 4.6 per cent, re- 
 ported bad service ; 80 per cent, reported that the services were 
 either s'atisfactory or good, while 15 per cent, reported excel- 
 lent service. 
 
 As to the general character of the employes, only 5.9 per 
 cent, claimed that these former workers were drunkards or lazy ; 
 nearly 95 per cent, reported them as of good, honest and 
 faithful character. 
 
 The above statements' are further corroborated by the rea- 
 sons assigned by the former employes for leaving their em- 
 ployment. Forty per cent, quit work because of sickness; 
 fifteen per cent, because of old age ; twenty-two per cent, either 
 because the job had been completed or becauste the shop had 
 been shut down; while twenty per cent, gave no reason for 
 leaving service, and only 1.6 per cent, had been discharged for 
 cause. 
 
 The favourable recommendations given these inmates, as 
 cited by the Pennsylvania Commission, are most interesting. 
 The following few are typical ones : 
 
 "He had charge of our tool room and stock rooms and was one 
 of the best men in this position we ever had. (H. B. Underwood 
 & Co.)." 
 
 "We always considered him a good and reliable workman. 
 (Pittsburgh Spring & Steel Co.)." 
 
 "Steady, industrious, reliable workman. (Pressed Steel Car 
 Co.)." 
 
 "Our superintendent reports Mr. W. as of excellent character, 
 honest and did his work most satisfactorily. (Dorhan's Monitor 
 Carpet Mills)." 
 
 "A good steady man and a good mechanic. (Pennsylvania 
 Iron Works)." 
 
 "Faithful employe while working in this colliery. (R. E. C. 
 & L. Co.)." 
 
138 FACING OLD AGE 
 
 "He worked for me off and on as general utility man around the 
 house and I always found him very willing and a good worker." 
 
 "He is a good printer and I never knew a more kind hearted and 
 generous man." 
 
 "As far as we can judge from business connections with him, he 
 is honest and deserving." 
 
 "L. W. was one of the best and most reliable men that worked 
 for me. An A-1 man." 
 
 The following include all the statements given, regarding 
 the opposite type of inmate. 
 
 "He owes my mother five meals |and one night's lodging, to 
 this date." 
 
 "Down and out on account of drink." 
 
 "He would absent himself at times for several weeks while on 
 drinking bouts." 
 
 "His father was foreman in the shop until his death. His 
 son was never dependable on account of drink." 
 
 "Was a good teamster and good to his horses. One thing 
 I am sorry to say, his money was all spent for booze." 
 
 It is evident from the preceding discussions that while per- 
 sonal depravity will produce misery and result in aged depen- 
 dency, in individual cases, the great and significant causes' of 
 old age dependency lie in our institutions, in our present 
 social and economic order. In discussing the causes' of old 
 age dependency the socio-economic forces which are respon- 
 sible for low wages, unemployment, strikes and lockouts', and 
 industrial superannuation are of incomparably greater sig- 
 nificance than indolence or thriftlessness. Indeed, the latter 
 are frequently the efi^ects of the former maladjustments. 
 
PART III 
 EXISTING METHODS OP RELIEF 
 
CHAPTER VIII 
 
 INDIVIDUAL SAVINGS AND 
 INDUSTRIAL PENSIONS 
 
 The obligation of the State to take care of the indigent aged 
 has been partially recognized by the establishment of alms- 
 houses, and county infirmaries, and by the granting of outdoor 
 relief. The Elizabethan Poor Law was instituted for the pur- 
 pose of relieving the tremendous distress and poverty which 
 resulted from the enclosures of great agricultural estates for 
 purposes of sheep grazing, an act which caused great unem- 
 ployment and distress among the labouring classes of Eng- 
 land. The Poor Law System has since continued and assumes 
 to take care of those who have no other alternative than to 
 accept the stigma and disgrace attached to our poorhouses. 
 Such a fate, however, is dreaded and feared by most persons. 
 To avoid such an end ther« have, therefore, been developed 
 a number of methods by means of which some of the more for- 
 tunate among the labouring classes strive to avoid a pauper's 
 grave. These methods range in character from individual sav- 
 ings and insurance, to mutual, industrial, government and 
 fraternal insurance systems. The methods and extent of re- 
 lief in operation today as well as the degree of their efficacy 
 in solving the problem of dependent old age is the task set 
 for presentation in the next three chapters. 
 
 INDIVIDUAL SAVINGS 
 
 To provide for old age is a fundamental desire common to 
 most human beings. The motive of accumulating a sum suffi- 
 cient for old age, or for the protection of their wives and chil- 
 
 141 
 
142 FACINGOLDAGE 
 
 dren after their death prompts most working men as well as 
 business and professional men to work harder and longer dur- 
 ing their productive years. The instinct of protection against 
 dependency is' no less impelling in one class of society than in 
 another, and is as common among the working class as among 
 the middle and employing classes. The problem of saving for 
 old age is most serious not on account of the lack of habits 
 of thrift, but largely because, as has been shown in the earlier 
 chapters', the great mass of wage-earners in this country lead 
 continuously a precarious and hand-to-mouth existence. With 
 a wage that rarely reaches, according to government reports, 
 the minimum standard of subsistence necessary to maintain 
 a family of five, how can a wage-earner save at all, and espe- 
 cially for old age.? "Thrift" as stated by Professor Miller, 
 "is a desirable habit for those who receive a wage that makes 
 saving a possibility, but thrift becomes' a mockery in the homes 
 of the poor and 'saving' an economic falsehood." ■*■ 
 
 The difficulties confronting wage-earners who desire to save 
 have already been alluded to. Even if a workman is fortun- 
 ate enough to receive a fairly high wage, and by economy and 
 self-denial succeeds in setting aside a small part of his earn- 
 ings, it not infrequently happens that serious illness besets the 
 family and the entire savings' are wiped out after the payment 
 of the doctor and the druggist's bills. Even though there may 
 be no sickness, unemployment may deplete the worker's reserve.^ 
 The worker may be even forced to leave town in order to seek 
 
 1 G. R. Miller, Social Insurance in U. S. p 111. 
 
 2 According to the New York Times of April 22, 1921, W. Jett Lauck, 
 economist for the railway labour organizations, declared before the Rail- 
 road Labour Board that "authoritative government reports state that 
 five million worl^ers are idle, at least three million of tliem having been 
 without work throughout the winter. It costs these five miUion workers 
 nearly one billion dollars a month to supply their families with the barest 
 necessities of existence. This situation means acute distress to approx- 
 imately 25,000,000 persons. Thp cost of maintaining these five million 
 families would absorb each month approximately one-fifth of the total 
 savings deposits of the country. The entire savings bank deposits of the 
 country could support them only five months, as they amount to only 
 $5,186,845,000. 
 
INDIVIDUAL SAVINGS 143 
 
 employment. By the time he has transferred his family and 
 settled it in the new place, his accumulations will have van- 
 ished. Usually the first savings of a worker are made for the 
 purchase of a home, and this is the first to go when employ- 
 ment has to be sought in another place. On the other hand, 
 if a worker is free from the above misfortunes, his very anxiety 
 to secure an economic competence, frequently leads him be- 
 causie of inexperience and credulity, into foolish investment ven- 
 tures and get-rich-quick schemes which may sweep away his 
 entire earnings. The recent "Ponzi" episode illustrates this 
 point clearly. 
 
 The aggregate amount of savings by those who actually toil 
 for their daily bread is, of course, impossible to ascertain. 
 The number of depositors and amounts per account in the differ- 
 ent savings banks' varies considerably from time to time and 
 cannot be accurately ascertained. On June 30, 1920, the 
 total savings deposits, or deposits in interest or in saving de- 
 partments in 22,109 State, savings, private banks, and loan 
 and trust companies including Hawaii, Porto Rico, and the 
 Philippines amounted to $7,4j93,015,000. ^ On the same date 
 8,025 national banks reported $10,215,575,000 demand de- 
 posits and $3,484,891,000 time deposits.^ 
 
 A statement issued to the press by the Savings Banks 
 Association of the State of New York showed that the total 
 deposits on December 31, 1920, in 58 of the 59 savings banks 
 in Greater New York amounted to $1,832,132,834.02. The 
 number of depositors was 2,559,840, making an average of 
 $715.68 per depositor. 
 
 Savings banks, however, are largely patronized by profes- 
 sional men, small business men and the more prosperous among 
 the working people, and can hardly be termed "workingmen's 
 banks." A more representative workingman's bank may be 
 
 1 Report of the Comptroller of the Currency, vol. 2, p. 807, 1920. 
 
 2 Abstract of Reports of Condition of National Banks No. 125, p 11, 
 Aug. 30. 1920, Treasury Department, Washington. 
 
144. FACINGOLDAGE 
 
 considered the U. S. Postal Savings, in which practically all 
 deposits are those of wage-earners. The number of depositors 
 and amounts deposited in the Postal Savings System may per- 
 haps' be taken as fairly indicative of the extent of savings among 
 the great mass of wage-earners in this country. According to 
 the annual report of the Postmaster-General -^ during the fiscal 
 year ending June 30, 1919, the deposits in the Postal Savings 
 System increased from $148,471,499 to $167,323,260, a gain 
 of $18,851,761, or 12.70 per cent. The number of depositors 
 however decreased during the same year from 612,188 to 
 565,509, a loss' of 46,679, or 7.62 per cent. The average prin- 
 cipal per depositor during the same year increased from 
 $242.53 to $295.88, a gain of $53.35 or 22 per cent. The 
 figures in this report may be taken perhaps as fairly sugges- 
 tive of the entire problem of savings for wage-earners'. As 
 the wages paid during this period were highest, a number who 
 were earning fairly high wages were able to increase their sav- 
 ings, but nearly 50,000 of those who had deposits the year 
 before were apparently compelled by the increas'ed cost of 
 living to withdraw even the meagre savings which they had 
 succeeded in accumulating. The decrease in the number of 
 depositors could not be ascribed to the withdrawal of deposits 
 by many immigrants, as the emigration during that year was 
 not considerable. Of the more than 110,000,000 persons 
 and 40,000,000 wage-earners in the United States thus 
 only 565,509 or approximately one among 80 wage-earners 
 had a savings account in the Postal Savings System — the 
 most representative workingmen's bank. While it is true that 
 many workers had during this period made investments in war 
 bonds, and thrift stamps, the average such investment was 
 inconsiderable. The inadequacy of $295 to take care of old 
 age needs no comment. And this' negligible average sum per 
 deposit or after Congress in July, 1918, had increased the 
 
 1 House Document No. 460, Sixty-sixth Congress 2nd Session. 
 
INDIVIDUAL SAVINGS 145 
 
 amount that a depositor may have at credit from $1,000 to 
 $2,500 ! 
 
 According to the Report on Productive Industries (p. 845) 
 recently published by the Department of Internal Affairs of 
 the Commonwealth of Pennsylvania, the per capita s'avings 
 in that State on January 1, 1920, amounted to $125.10. 
 
 In her study of 100 old persons in Greenwich Village in 
 1915, Miss Nassau states: 
 
 "I neglected to ask twenty-one women and eight men if they 
 had had savings but of the rest five women and five men had 
 savings — that is, ten out of seventy-one had savings. The sav- 
 ings of the five women were partly left to them by someone else, 
 and, except in one case, could not last long. Of the five men, 
 two were bachelors and could thus save fairly easily ; one had 
 savings sufficient for one year only, another's savings were fast 
 diminishing. So that the savings counted for little. The reason 
 I neglected to ask the twenty-nine people if they had savings was, 
 usually, that they so obviously had nothing." ^ 
 
 The lack of savings' or property income among aged per- 
 sons, as found by the different State Old Age Pension Com- 
 missions, has' already been pointed out. Indeed, what are the 
 prospects for s'aving to most of the wage-earners who by 
 skimping and exceptional management could lay aside a little.'' 
 Why should the average worker scrape and deprive himself 
 and his family of the necessities of life in order to s'ave for 
 old age.'' What, are his chances of success in this respect.'' 
 Why Should the worker deny himself the satisfaction of 
 present needs in order to store up something for the remote 
 future, when he sees day by day the little savings of his neigh- 
 bour swept away through illness', unemployment, or in some 
 business venture; why should he save when it seems apparent 
 that the chances of being relieved from beggary and pauper- 
 ism are s'Km? 
 
 1 Mabel Louise Nassau, Old Age Poverty in Greenwich Village, pp 
 16-17. 
 
146 FACINGOLDAGE 
 
 Why saving for old age is especially difficult for working- 
 men and can never be relied upon as an eiFective method of 
 relief for the problem of aged dependency is succinctly sum- 
 marized by Rubinow as follows: 
 
 "1. The amount necessary is evidently greater, for old age 
 is not a brief transitory condition^ such as sickness or unemploy- 
 ment may be. It would require a continuous saving for a great 
 many years. 
 
 "2. The amount necessary is uncertain. There is, after all, 
 the even or more than even chance of early death before old age 
 may be reached. And in addition, the wage-worker has no means at 
 all to know how much he would have to save, nor whether his 
 savings will prove sufficient. 
 
 "3. It is the final emergency, which in the natural course of 
 events must be preceded by all other emergencies of a workingman's 
 existence. Inevitably the fund of savings would have to be used 
 to meet all these emergencies. 
 
 "4. The remoteness of the emergency would prevent neces- 
 sary savings at a time when such savings would be easiest, that 
 is in earliest years. 
 
 "5. To assume that under these conditions all workingmen 
 could save sufficient to provide them against old age, would be to 
 disregard all real conditions of the wage-worker's existence. Even 
 in the most saving of our States, the average amounts held per 
 depositor in the savings banks are ridiculously small as com- 
 pared to the amounts needed for a sufficient income at old age. 
 
 "6. Finally special savings for old age would only be pos- 
 sible through a persistent, systematic, and| obstinate disregard 
 of the needs of the workingman's family, which would make the 
 preaching of such special savings a decidedly immoral force." ^ 
 
 Savings' by means of insurance protection has increased con- 
 siderably during the past few years. The increase however 
 has been largely in industrial insurance. It is estimated that 
 
 1 Rubinow, Social Insurance, p 313. 
 
INDIVIDUAL SAVINGS 147 
 
 there are more than 20,000,000 policies in this country, which 
 consist chiefly of small amounts upon the lives of wage-earners 
 or of members of their immediate families paid for at weekly 
 or frequent interval. The amounts of these policies in the 
 majority of cases are for no more than $100 or $200 which is 
 commonly used for burial expenses. In 1909 the Massachusetts 
 Commission found only 15.9 per cent, of the "non-dependent" 
 aged poor investigated who carried life insurance policies of 
 any kind.-^ In 1918 in Hamilton, Ohio, it was found that: 
 
 "Of the 1,432 cases studied 793 or 55.4 per cent, were carry- 
 ing life insurance in one form or another. In 387 or nearly half 
 of the cases the amount of the policy was less than $200, while 
 only 168 or approximately one person in five carried policies of 
 $100 or more. Two hundred and nine of the 416 persons studied 
 in Cincinnati carried life insurance in some form." ^ 
 
 While old-age insurance may be secured at a reasonable rate 
 if begun early in life, it is hardly to be expected that any con- 
 siderable number of young men at twenty to twenty-five will 
 think of providing for the remote contingency of old age. At 
 an advanced age the insurance is quite high and the great mass 
 of wage-earners cannot afford it. The best illustration of the 
 gross lack of provision of old-age insurance in the United 
 States is the experience of the Massachusetts Savings Bank 
 System where the) State sells old-age annuities at greatly 
 reduced premiums and where, in spite of this, there were at 
 the end of 1919, after practically twelve years' existence of 
 the fund, only about 300 persons who had taken out these 
 annuities. 
 
 PENSION! SYSTEMS OF INDUSTKIALi CONCERNS 
 
 It is frequently asserted that but a small number of workers 
 are discharged by their employers after long service, because 
 it is assumed that "sentiment or appreciation" on the part 
 
 1 Mass. Report, p 58. 
 
 2 Ohio Report, p 288. 
 
148 FACING OLD AGE 
 
 of the employer as a result of long acquaintance inclines him 
 to retain the aged employe on so-called pension jobs long past 
 the period of full efBciency. Ftirthermore, the establishment 
 of a pension system for old employes is acknowledged by all 
 industrial leaders to be "good business policy." It is claimed 
 by many employers that "the pension attaches the employes 
 to the sfervice and thus decreases the liability to strike," re- 
 duces the labour turnover, attracts a superior type of employe, 
 and is generally doing much to reconcile capital and labour. 
 A pension system, furthermore, enables employers to dispense 
 with the less' efficient and elderly workers thus doing much to 
 eliminate waste and demoralization as a result of the continued 
 employment of men who have long out-lived their usefulness. 
 The prospect of a pension also operates as an incentive to holdl 
 men past middle age whose acquired experience and skill often 
 become invaluable to the employers. Generally, the employes 
 accept such a system with favour and it is claimed by some 
 that industrial discontent is greatly reduced, as the expecta- 
 tion of a pension in old age cultivates a feeling of loyalty and 
 a recognition of a mutual interest. ^ 
 
 In view of the above considerations, the number of indus- 
 trial concerns' in the United States that have established such 
 systems for their superannuated employes is amazingly small. 
 A letter addressed by the Pennsylvania Commission on Old 
 Age Pensions, to all concerns in Pennsylvania, outside of rail- 
 roads', employing 600 or more workers in regard to their pen- 
 
 1 A recent inquiry addressed to corporations who have established 
 pension systems is of interest. Of 58 answers to the question "Hav,e 
 your workers shown appreciation of benefits of pension system?" fifty- 
 one answered in the affirmative. To the question whether the pension 
 system has had a material effect in promoting efficiency, "particularly 
 in that it has eliminated their worries concerning their future," 36 out 
 of 59 returns replied in the affirmative. Thirty-three out of 57 replies 
 also answered yes to the question, "Has your pension system increased 
 the average permanency of employment of your employes, i. e. has it 
 reduced labour turnover materially?" In regard to the questions whether 
 industrial pensions have decreased industrial unrest on the part of em- 
 ployes, or prevented strikes, 20 of 44, replies stated that it did to a cer- 
 tain extent, while 23 others declared that it did not. 
 
INDIVIDUAL SAVINGS 149 
 
 sion systems brought nearly 200 replies. Of these, 35 had 
 established regular pension schemes or were associated with 
 one; 48 had no regular system but stated that it was 
 their policy to aid their aged employes by giving them either 
 light work or s'o-called pension jobs, while 101 industrial con- 
 cerns stated that they had no pension system of any kind 
 and had never given the problem consideration. 
 
 A special committee of the Merchants' Association of New 
 York in a report on Industrial Pensions ^ states that there are 
 probably between 150 and 200 private industrial pension 
 systems. The Committee finds that practically without excep- 
 tions these systems have been adopted by very large corpo- 
 rations. Besides railroads, the distribution is as follows: 
 
 (1) Public Utilities 48 
 
 (2) Manufacturing and Commercial Concerns 45 
 
 (3) Banks 24 
 
 (4) Insurance Companies 5 
 
 (5) Miscellaneous 20 
 
 Total 142 
 
 The number of employes actually in the receipt of industrial 
 pensions is small. The pensioners of 20 leading Pennsylvania 
 concerns in 1918, as furnished to the Old Age Pension Com- 
 mission totalled only 2,139. Of the several hundred thousand 
 employes of the U. S. Steel Corporation and subsidiary con- 
 cerns throughout the country, there were on December 31, 1919, 
 only 2,436 pensioners on the active list. Similarly negligible 
 numbers were found in all other concerns. 
 
 The absence of more wide-spread pension plans cannot be 
 
 attributed solely to the cost involved. Of the systems examined, 
 
 the proportion of the total amounts spent on pensions to the 
 
 total annual pay roll was rarely found to exceed one per cenjt. 
 
 and in the majority of cases the amounts spent on pensions 
 
 were less than one half of one per cent, of the total annual 
 
 pay roll. The main reasons for the absence of such plans may 
 
 1 Report on Industrial Pensions, The Merchants' Assodation of New 
 York, New York, 1920. 
 
160 FACINGOLDAGE 
 
 be attributed to the following: (1) The belief of many em- 
 ployers' that it is more advantageous for them to deal with the 
 individual employe as "it gives the opportunity to reward real 
 merit." (2) Pension systems' are frequently not established 
 because of the large labour turnover experienced by many 
 concerns. The number of workers who serve sufficiently long 
 periods with one employer as to be entitled to a pension is very 
 small. (3) Although it has been suggested that any busineste 
 which cannot stand an increase of one per cent, in expenses 
 "is so unstable as to be a menace, not only to its proprietor, 
 but also to society," there are nevertheless a number of concerns 
 who claim that they cannot afford this additional expenditure. 
 The incentives for the inauguration of industrial pensions 
 on the part of employers are many and varied. A few are, 
 doubtless, inspired by humanitarian or philanthropic consid- 
 erations. In the majority of cases, however, the economic 
 motives play the leading part. Definite pension systems are 
 used not only "as a reward for faithful and most efficient 
 service," and "appreciation of the fidelity and honest service 
 of the employe," but also, "as an incentive to further service" 
 on the part of the younger workers, as is explicitly stated in 
 the by-laws of many corporations. And the latter purpose 
 could not be achieved when the old and decrepit are scrapped 
 indiscriminately. It is perhaps not correct to state that one 
 of the cliief purposes, as has been advanced by several students, 
 in establishing a regular pension system, is to lessen the at- 
 tractiveness of labour unions, and make men loyal to their 
 employers rather than to any labour organization. An ex- 
 amination of the industries having established pension systems 
 discloses the fact, however, that very little trade union organi- 
 zation exists in most of them. Again, Miles M. Dawson, a well- 
 known actuary, relates an instance when "A Canadian railway 
 company which had not engaged to pay pensions, except at its 
 pleasure, recalled retired employes to its service upon the occa- 
 sion of a strike, on penalty of forfeiting their pensions. This 
 
INDIVIDUAL SAVINGS 151 
 
 involved depriving an old employe of the reward of a lifetime of 
 service unless ready to dishonour himself by betraying a 
 Brotherhood of which he had been a member for a quarter cen- 
 tury or longer."^ Reverend Father John O'Grady also de- 
 clared : 
 
 "I have known a case recently in which a large organization 
 in this country notified all its old men that if they did not return 
 to work in the event of a strike they would lose their 
 pensions." ^ During the so-called "outlaw" strike of railroad 
 workers early in 1920, many newspapers reported pensioners 
 who were compelled to work in order to break the strike. 
 
 The Special Committee on Industrial Pensions of the New 
 York Merchants' Association frankly states the motives 
 underlying industrial pensions: 
 
 "In addition to the desire to reward faithfulness or to fulfill a 
 duty, there is usually in the mind of the employer the hope of at- 
 taining definite beneficial effects on the efficiency and prosperity 
 of the business. Most prominent among these effects are: increased 
 loyalty of employes and development of their personal interest in 
 the success of the business, which are exceedingly valuable assets 
 to an employer; increased efficiency of individual employes; re- 
 duction of labour turnover ; attraction of a superior type of employe ; 
 decrease — or even elimination — of labour troubles; and increase in 
 thrift of individual employes, — all of which are more or less related 
 effects.' 
 
 The principal features of industrial pension systems may be 
 summarized briefly a^ follow<s: (a) Industrial pensions in 
 this country are of comparatively recent origin, and many of 
 them are still in the experimental stage, (b) With few ex- 
 ceptions, industrial pension systems are straight service pen- 
 sions financed by the employer and without contributions by 
 
 1 Bulletin No. 212 U. S. Bureau of Labour Statistics, 1917, p 736. 
 
 2 Ibid, p 758. 
 
 3 Industrial Pensions, Report of Special Committee, p 13, New York 
 Merchants' Association, 1920. 
 
152 FACINGOLDAGE 
 
 the employes, (c) The employes are given no representation 
 in the administration or management of these funds, (d) Mem- 
 bership is not compulsory and the pension allowance, ordi- 
 narily, applies to all employes. 
 
 AGE OF RETIREMENT 
 
 The general age period for compuls'ory retirement of male 
 employes is set at 70 years of age, although, practically aU 
 provide that employes may retire at 65 at their own request 
 or at the discretion of the company. Sixty years of age is 
 generally the &ge period set for the retirement of female 
 workers, although a number have more liberal provisions and 
 permit the retirement of women workers at 55. Age is rarely 
 required for total disability allowances. These usually depend 
 on length of service. 
 
 YEARS OF SERVICE 
 
 The period of service required for the retirement upon an 
 industrial pension varies' between 10 and 25 years. The length 
 of service required is less uniform than the age requirements. 
 Continuous service is required in considering the period of em- 
 ployment, and leave of absence, s'uspension, or lay-off for a 
 period longer than six months, in the majority of cases, con- 
 stitutes a break in the service, and employes lose all credit for 
 previous employment. 
 
 PENSION AMOUNT 
 
 The amount of the pension is' generally computed upon a 
 certain percentage of the employe's wages, usually by taking 
 one per cent, of the average wages of the employe for the last 
 ten years and multiplying it by the number of years of ser- 
 vice. Some corporations, however, pay a straight sum of about 
 $15, or $20 a month. In granting pensions, concerns are ex- 
 plicit against any inference of vested rights or privileges 
 
INDIVIDUAL SAVINGS 153 
 
 granted employes, and usually reserve the right to discharge an 
 employe or terminate a pension for violation of any of the com- 
 pany laws or gross misconduct, etc. 
 
 The regular rates of pensions are in many cases limited by 
 maximum or minimum yearly pensions or both. The report 
 of the New York Merchants' Ass'ociation, already referred to, 
 states that: 
 
 ''In industrial establishments the maximum limits vary from 
 $500 to $5,000 per year, and the minimum limits vary from $144 
 to $244 per year. In banks the maximum limits vary from 
 $1,800 to $6,000 per year. In some cases the Umit is a maxi- 
 mum salary upon which a pension is computed. In other cases it 
 is a maximum per cent, of highest salary, in which case the figure 
 is usually from 60 to 75 per cent, so that few employers are 
 actually affected by it, because even under a three per cent, rate, 
 more than a 20-year period of service at least is necessary to reach 
 the maximum rate.'^ 
 
 The granting of a pension ordinarily does not debar the 
 pensioner from engaging in any other business. But in a few 
 cases the amount of annuity varies' inversely with the income 
 from other sources. That it would, however, be practically im- 
 possible for any employe to follow the line of work he could do 
 best and to which he was accustomed, is obvious from the pro- 
 vision made by practically all concerns' that he cannot engage 
 in any other business which may be prejudicial to the company's 
 interest. Nor may he be further engaged by the same company. 
 Objections to industrial pensions are based on the following 
 grounds : 
 
 (1) They are generally opposed by organized labour 
 because it is said they are established largely for the 
 purpose of lessening the attractiveness of labour unions and 
 make men more loyal to their employers rather than to one 
 another. 
 1 Ibid, p 24. 
 
164 FACINGOLDAGE 
 
 (2) Industrial pensions, it is also argued, are merely 
 deferred wages, and it is commonly known that wages are fre- 
 quently found to be lower in those industries which have the 
 best pension schemes. The Illinois Pension Laws Commission 
 concluded in its 1916 report that: 
 
 "Whether the contribution to a pension fund be taken wholly 
 from the employe's wages or salary, or be paid wholly by the 
 employer, or be derived in part from each, these contributions are 
 in all three cases to be regarded as in reality a deduction from 
 wages and salary. The existence of a pension system in connec- 
 tion with any position or employment is taken into account by 
 both parties to the contract of employment, and broadly 
 speaking, wages and salaries actually paid are in due course re- 
 duced below what they otherwise would be by the amount of 
 the total contributions from both the employer and employe to a 
 pension fund. The employe will thus pay for his pension by de- 
 ductions from his wages or salary, whether he is conscious of 
 it or not. Indeed it is quite possible that with a sound fund in 
 existence the reduction in wages and salaries may in time materi- 
 ally exceed the amount of the total contributions owing to the 
 advantages of such a fund to the employe under present eco- 
 nomic conditions. This consideration further emphasizes the ad- 
 vantage to the employer of having such a fund established." ^ 
 
 Professor de Rode also declared : ^ 
 
 "In order to get a full understanding of the old-age and service 
 pensions, they should be considered as a part of the real wages of a 
 workman. There is a tendency to speak of these pensions as 
 being paid by the company, or, in cases where the employe con- 
 tributes a portion, as being paid partly by the employer and partly 
 by the employe. In a certain sense, of course, this may be correct, 
 but it leads to confusion. A pension system considered as part of 
 the real wages of an employe is really paid by the employe, 
 not perhaps in money, but in the foregoing of an increase in 
 wages which he might obtain except for the establishment of a 
 
 1 Illinois Pension Laws Commission Report, 1916, p. 282. 
 
 2 American Economic Review, Vol. 3, 1913, pp 287-290-291. 
 
INDIVIDUAL SAVINGS 155 
 
 pension system. ... It seems to me on the whole that most of 
 the pension systems adopted by private employers are merely 
 very shrewd bits of wage bargaining. The absence of any con- 
 tractual right and the lack of assurance that a pension will be 
 paid upon fulfilling the conditions, gives merely the shadow of 
 provision for old age and not the substance." 
 
 (3) Industrial pension s'ystems prevent the mobility of 
 labour, often to the detriment of both the individual and the 
 community, and offer opportunities for arbitrary discrimina- 
 tions against workers. The administration of these funds is 
 in most cases in the hands of the employer. As a result, not- 
 withstanding the definite regulations provided for the granting 
 of a pension, the latter is' always contingent upon the nature 
 and loyalty of services rendered and the opportunities in the 
 hands of the employer for discriminations are evident. For, 
 while the employer is' left free to discharge him, cut down his 
 wages or discriminate against him generally, the worker must 
 remain loyal at all times. He must not, for instance, take 
 part in any movement which the employer may consider detri- 
 mental to his interests, such as' associating himself with his 
 fellow workers, in order to increase their wages or improve 
 their working conditions generally. He not only can do 
 little to better his own conditions and those of his fellow 
 workers, but he cannot even leave his' employment in order 
 to seek more suitable work, as it means losing his pen- 
 sion privileges for which he has laboured many years. That 
 it is undesirable and even socially harmful to tie a man to his 
 job and discourage him from changing from one employer to 
 another is generally recognized and need not be emphasized in 
 this connection. 
 
 (4) Industrial pensions are also objected to becaus'e the age 
 for retirement is generally too high and the pension too low. 
 
 (5) In the case of many concerns there is no guarantee that 
 the pension promised wiU be lasting and permanent, even if 
 all requirements' are lived up to, as practically all concerns re- 
 
156 FACINGOLDAGE 
 
 serve the right to either reduce the pension rate when the de- 
 mands are in excess of the sums fixed, or discontinue the entire 
 fund "without vesting any rights to such a pension to any 
 individual member." 
 
 The Committee of the New York Merchants'' Association, 
 it is worthy to note, points out that pension systems that may 
 at any time be discontinued are immoral. It says : 
 
 "Even if the pensions are apparently the free gift of the 
 corporation, and the economic possibility of this for a consider- 
 able period is doubtful, the employe is entitled to look forward with 
 assurance to the pension promise. A pension promise that is 
 not certain involves an uncertain morality. . . . To provide, as 
 is often done, that the corporation may wind up the pension 
 plan at any time without fulfilling the promises already made, 
 and then to expect employes to look forward with confidence 
 and order their lives upon the strength of these promises, is 
 certainly inconsistent. When the economic aspect of pensions 
 is considered, such retroactive power of revocation can hardly 
 be considered as moral." ^ 
 
 While it is true that the very large industrial concerns are 
 not likely to terminate their pension systems without sufficient 
 notice there are nevertheless many of the smaller concerns which 
 are continuously facing such emergencies. A large industrial 
 concern in Pennsylvania in 1918 wrote to the Old Age Pen- 
 sion Commission of that State: 
 
 "We have for many years paid pensions to a few of our em- 
 ployes who had served long periods with our concern. We have 
 no regular system for this, however, and during the business de- 
 pression prior to the war, which hit us severely, we had to 
 suspend payment of these in some cases." 
 
 That this' situation is fraught with the greatest danger is 
 obvious. Mr. L. W. Squier addressed a letter to a corporation 
 reliably reported as having a pension plan in operation and it 
 
 1 New York Merchants' Association, pp 6-7-8. 
 
INDIVIDUAL SAVINGS 157 
 
 was returned unopened and stamped "Firm Dissolved." He 
 comments 
 
 "The question naturally comes to the mind of the thinking 
 working man: What is the measure of the disappointment of the 
 scores^ perhaps hundreds^ of employes of the corporation who 
 were looking forward to pensions for the support of old age and 
 are now helpless and unprovided for? Such a condition is anal- 
 dgous to that of the crew of a vessel who^ after a long hard 
 voyage over dangerous seas with food exhausted, nerves racked 
 and strength almost gone, have only one hope left, — that of speed- 
 ily making an hospitable harbour; but alas, find themselves ship- 
 wrecked upon a barren island." ^ 
 
 (6) Industrial pensions' are also objected to by some, on the 
 ground that they have a depressing effect upon wages, due to 
 the competition of returned pensioners who accept jobs for less 
 money because added to their pension their needs' are more 
 readily satisfied. This objection, however, has little basis of 
 fact, as it is common knowledge that with most industrial 
 pensioners their life power had been already spent before retir- 
 ing. Indeed of the number retired on pensions by the United 
 States Steel and Carnegie Pension Fund in 1917, 15 per cent, 
 had died in the s'ame year "indicating," as commented on by the 
 manager of the Fund, "that they had given their full measure 
 of loyalty to the service." At any rate, the fact of receiving 
 a pension would hardly make one a more dangerous compet- 
 itor in the labour market. One would certainly display keener 
 competition were he left starving at the age of 60 or 70, and 
 still able to perform some useful labour. 
 
 Other objections to these pensions are as follows: (7) 
 They generally make no provision for cases of total disability 
 when an employe has not s'erved the required time. (8) Only 
 corporations employing wage-earners on a large scale can afford 
 to establish well-defined systems of retirement. (9) Some 
 companies provide that the employes forfeit claim to pensions 
 J U W. Squier, Ibid, pp 107-108. 
 
158 FACINGOLDAGE 
 
 when leaving service, under strike orders. (10) Generally 
 before a pension is granted, one must have lived up to the most 
 stringent requirements and provisions. 
 
 KAILEOAD PENSION SYSTEMS 
 
 The railroads were the first in this country to establish 
 retirement systems for their employes. This is, doubtless, ex- 
 plained by the fact that railroad employes are very often re- 
 quired to be under the most prolonged tension of both mind 
 and body. Men in modern transportation systems' are sub- 
 ject to greater hazards and wear out more rapidly than in 
 many other branches of industry. With the rapid and unpre- 
 cedented' development of the American railroads, the problem 
 of what to do with the superannuated worker loomed up earlier 
 in this industry than in any other. Railroads in this' country 
 thus began to establish private retirement systems about 
 the same time that European governments first engaged in 
 instituting systems of public pensions and insurance. 
 
 The main development in railroad pensions did not begin 
 until the early days' of the present century. The Baltimore 
 and Ohio Railroad has the distinction of introducing the indus- 
 trial private pension system in this country.^ Its pension fund 
 was establis'hed in 1889 — the same year in which the govern- 
 ment pension scheme was adopted by Germany. More than a 
 decade passed before the next railroad — ^the Pennsylvania — 
 saw the necessity of following the example. The great major- 
 ity of the railroads' have established a regular system of pen- 
 sioning since 1900. 
 
 What is true of the pension plans of the industrial concerns 
 is, in a descriptive sens'e, true of all the railroads, namely: the 
 administration of these funds is either by the direct control of 
 the board of directors of the various companies, or by a board 
 appointed by them, or by the president of the railroad. The 
 only exception to this' is the Baltimore and Ohio Fund, which 
 
 1 The American Express Company is said to have established some pro- 
 visions for its aged employes as early as 1875. 
 
INDIVIDUAL SAVINGS 159 
 
 requires four years' membership in the Relief Fund for eligi- 
 bility and which is controlled by the same executive committee 
 as administers the latter department. Such absolute control 
 is readily explained by the fact that excepting the Baltimore 
 and Ohio Fund the employes make no contributions' to any 
 fund. The payments are entirely gratuitous on the part of 
 the company "as a reward for faithful services rendered," and 
 the funds are therefore controlled by them. 
 
 As is the case of the industrial pension plans, a compulsory 
 and voluntary age of retirement is provided also in the trans- 
 portation systems. With very few exceptions the former is 
 set at seventy years. The period of service required] before 
 an employe can retire on a pension differs. It ranges from ten 
 years to thirty years. Where the shorter period of s'ervice is 
 specified, however, it is generally provided that no person is 
 eligible to a pension who enters the service after 40 or 45 
 years of age. In a few cases the age of eligibility to service 
 is as low as 35 years. That the longer period of service is thus 
 necessary before a pension can actually be s'ecured is obvious. 
 
 In the majority of railroad pension establishments, the differ- 
 ence between the age when one is compelled to retire and the 
 period when one may retire voluntarily on account of physical 
 incapacity, amounts only to five years. Seventy being the age 
 of compulsory retirement, it is' usually provided that an em- 
 ploye may retire on account of physical incapacity between the 
 ages of 65 and 69. A few corporations, however, provide for 
 no set age or service but leave it to the discretion of the Board 
 of Directors to decide upon the merits of the individual case. 
 
 The differences in the terms of s'ervice required for the 
 granting of a pension by the industrial concerns and the vari- 
 ous railroads are significant. Twenty-five years of service 
 is the maximum set by the different industrial establishments. 
 Many require twenty or fifteen years of service and a few re- 
 quire only ten years of service. In the case of railroad pen- 
 sions, however, twenty-five and thirty years of service is gen- 
 
160 PACINGOLDAGE 
 
 erally s'pecified: or implied. This difference may be explained 
 by the fact that the labour turnover is much greater in the 
 case of industrial firms and also because railroad lines are 
 more anxious and better adapted to retain employes for 
 longer periods. 
 
 With the exception of the Baltimore and Ohio Railroad, 
 practically all the railroads have an identical method of com- 
 puting the annuities awarded. Most railroads provide for a 
 pension computed upon the basis of one per cent, of the aver- 
 age monthly wages for the ten years next preceding retirement, 
 multiplied by the number of years of service. Incapacity 
 annuities whenever pro-\aded are computed in the same manner. 
 Although a great number of establishments' do not provide for 
 either maximum or minimum pensions, two hundred and fifty 
 dollars per month seems to be the highest limit set, while five 
 dollars per month is generally the lowest. 
 
 Only few railroads make provisions, by means of pensions, 
 for employes who have been injured and have become totally 
 disabled while performing their duties. Thes'e few concerns 
 state that an employe, in case of injury or total disability, may 
 be pensioned regardless of his age or length of service. The 
 majority of companies, however, make no provisions for such 
 employes before they have completed the required period of 
 service. 
 
 The transportation companies, as was indicated in the case 
 of the industrial concerns, generally specify that the granting 
 of a pension does not debar any employe from engaging in any 
 other business, but state that he cannot re-enter the service 
 of the company. The pension funds of the great majority 
 of railroads are fixed at a certain amount. It is also provided 
 by practically all of these concerns' that "when basis of pension 
 allowance shall create demands in excess of the sums fixed, a 
 new basis, ratably reducing the pension allowances may be 
 established." 
 
 Additional characteristics generally typical of these pension 
 
INDIVIDUAL SAVINGS 161 
 
 systems may be summarized as follows: In computing the 
 length of service it is' usually specified that "leave of absence, 
 suspension or dismissal followed by re-instatement within one 
 year or temporary lay-off is not to be considered a break in the 
 continuity of s'ervice." Practically all companies "reserve the 
 right to terminate pensions for gross misconduct" and "reserve 
 the right and privilege to discharge from service at any time any 
 employe without liability to a pension." Some provide that 
 "employes who are dismissed from or voluntarily leave the ser- 
 vice of the company for any cause whatsoever relinquish all 
 claims to consideration or pension allowances." Others specify 
 further that "employes' forfeit claim to pensions when leaving 
 service under strike orders." The objections offered against 
 the pension systems of industrial concerns are of course appli- 
 cable also to railroad pensions. 
 
 The efficiency of railroad pensions in the relief of the problem 
 of aged dependency among railroad employes' may be judged 
 from the following figures which need no further comment. The 
 Pennsylvania Railroad with its nearly 300,000 employes had 
 retired on pensions from January 1, 1900, the time of the in- 
 auguration of the plan, to December 31, 1919, a total of 9,129 
 employes. The Philadelphia and Reading Railway Company 
 pensioned from 1902 to 1920, a total of 976 employes. The 
 New York Central, and all its as'sociated railroads, pensioned 
 2,828 employes during the first ten years' existence of the fund 
 — 1910-1920. From October, 1884, to March, 1920, a period 
 of 36 years, the Baltimore and Ohio Railroad retired on pen- 
 sions only 2,759 of its employes. 
 
CHAPTER IX 
 
 FEDERAL, STATE, MUNICIPAL EM- 
 PLOYES, AND TEACHERS' PENSIONS 
 
 The problem of the aged government employe is' of para- 
 mount importance, especially from the viewpoint of the tax- 
 payer. There can hardly be a greater waste of the tax- 
 payer's money than to retain on the pay rolls of our Federal, 
 State, and Municipal services, men and women who have long 
 outlived their usefulness. Furthermore, the continuation in 
 the employ of our government at full wages of old men and 
 women who are no longer capable of rendering efficient service 
 is not only a waste of money but is' demoralizing to the entire 
 service. The burden of this "dead weight" carried on govern- 
 ment pay rolls becomes especially pernicious as the volume of 
 work continuously increases and as newer methods and higher 
 standards of efficiency are introduced into the administration 
 of our governmental departments. 
 
 The full extent of the government's burden in this respect 
 cannot be definitely determined. That there are few govern- 
 mental departments, however, whether Federal, State, or Mu- 
 nicipal, whose efficiency could not be greatly improved by re- 
 placing the older and less able employes with younger men who* 
 are more adaptable to the newer methods of work, is a fact 
 known to all. In one Federal department it was estimated 
 that 250 people could do the work at present performed by 
 1,000 superannuated employes. "Some of these were s'aid to 
 be working at only 90 per cent., 50 per cent., 25 per cent., and 
 even nearly as low as zero per cent, efficiency." ''- 
 
 1 John B. Andrews, The Surv,ey, May 22, 1920. 
 
 162 
 
PENSIONS 163 
 
 Former Secretary of the Treasury W. G. McAdoo in 1917 
 declared: "The Treasury Department bears upon its rolls a 
 large number of aged employes whose efficiency is' gradually 
 waning." Former Secretary of Commerce Redfield also cor- 
 roborated this by stating: "that the efficiency of the executive 
 civil service is seriously impaired by reason of its superannu- 
 ated employes', is a fact conceded by practically all persons 
 who are at all familiar with the problems of the service." The 
 burden of dead wood carried on the pay rolls of the different 
 States and municipalities, where civil service requirements are 
 less strict than that of the Federal government, or do not 
 exist at all, is doubtles's even greater. The Massachusetts 
 Commission on Old Age Pensions, in co-operation with the 
 Mayor of Boston, made a study in 1908 of the aged employes 
 of that city and the results found, as given in the report of 
 the above Commis'sion, were as follows: 
 
 "The total number of employes over 65 years is 491 ; over 70 
 years, 168. The amount of compensation paid to employes over 
 65 is $419,888.45; over 70, $273,999. The number over 65 
 reported as inefficient is 296. The compensation paid to this group 
 is $200,194.35. 
 
 "The percentage of inefficient employes among the employes 
 over 65 years is strikingly large in many departments. For example, 
 in the cleaning and watering division of the street department 
 35 are employed, of whom all are reported inefficient; in the 
 cemetery department 16 persons over 65 years are employed, of 
 whom all are reported as inefficient; in the park department 27 
 are employed, of whom 24 are inefficient. 
 
 "The period of service is over 30 years in the case of 119 em- 
 ployes over 65, or 25 per cent, of the total. Only five per cent, 
 or 42 persons, have been in the employ of the city less than five 
 years. 
 
 'The leading departments, in respect to number of pensionable 
 employes, rank as follows: (1) paving division of street depart- 
 ment, 109 over 65 years; (2) water department, 65; (3) Sani- 
 tary department, 47; (4) cleaning and watering division, street 
 
164 FACING OLD AGE 
 
 department, 35; (5) park division, 27; (6) ferry division, street 
 department, 26; (7) cemetery department, 16." ^ 
 
 As an employer of labour, however, the government can 
 least afford to set the example of discharging outright and 
 turning adrift, or carting off to the poorhouse those employes 
 who have grown old in the service and who have spent the best 
 years of their lives and have given of the best they possessed 
 to the service of the Nation, the State or the Municipality. 
 It has long been the policy of nations to provide relief in old 
 age to soldiers and sailors who hazard their lives in the defence 
 of the nation in times' of war. Is it not obvious also, that the 
 work done by the armies of the various government employes in 
 maintaining the orderly process of government, so essential to 
 the peace and welfare of the country, as well as to the protec- 
 tion of life and property of their fellow-citizens in time of 
 peace is' no less important and essential a service to the nation, 
 and as such, merits some sort of protection against the days 
 when they are no longer able to render efficient service or to 
 provide for themselves.'' In the case of our municipalities es- 
 pecially, where many thousands of common labourers are 
 employed who in many instances, are paid a lower rate of 
 wages than that paid in local private industries, the problem 
 of retirement seems' most pressing. These men who are known 
 to do the "dirty work" of our cities which is essential to the 
 health and welfare of all residents, are obviously least able to 
 provide for old age. That these men who are responsible for the 
 maintenance of sanitation and of the manifold other comforts 
 furnished by our modem cities, and who loyally and faithfully 
 serve the municipality under all sorts of conditions through 
 the best period of their lives', should not be left helpless in 
 their old age is so manifestly a matter of justice that it would 
 seem superfluous to stress it further. 
 
 1 Report of Massachusetts Commission. Old Age Pensions, Annuities 
 and Insurance, pp 270-271. 
 
PENSIONS 165 
 
 The problem of the stiperannuated government employe must 
 not, however, be considered solely from the viewpoint of justice. 
 Evidently, what is recognized as "a good business policy" for 
 private employers ought to prove of profit also to our national, 
 state and city administrations, in their respective capac- 
 ities' as employers of labour. The advantages of retiring 
 aged workers on pensions are now recognized by all progres- 
 sive employers of labour. This' is witnessed by the rapid 
 development of these systems within recent years as was shown 
 in the preceding chapter. Their s'mall number may be ac- 
 counted for by the fact that only large employers are able 
 to establish regular pension plans. The establishment of such 
 a system for government employes would afford an oppor- 
 tunity not only to raise the standards and enhance the quality 
 of service rendered, but would also act as an incentive to attract 
 better ability to the particular line of work. The heads of the 
 executive departments of the government have long recognized 
 the importance of a retirement provision for civil service em- 
 ployes'. Urging the adoption of such a plan before the U. S. 
 Senate Committee on Civil Service and Retrenchment, ■'■ former 
 Secretary of War Newton D. Baker said: 
 
 The effect of such a law would be to give an assurance of 
 a competent and comfortable old age. It would relieve the em- 
 ployes from the fear of loss of occupation and of livelihood, would 
 further inspire them to loyalty to the Government as an employer, 
 thus improving the general quality of the service rendered by 
 the Government employes, and would permit the replacement of 
 some employes in the various departments who have long and 
 faithfully served the Government and reached venerable but en- 
 feebled years without having had an opportunity to accumulate 
 any competence upon which their retirement can rest." 
 
 Secretary of Commerce Redfield declared: 
 
 1 Report of U. S. Senate Com. Hearings on Civil Service and Retrench- 
 ment 1917, pp 70-72. 
 
166 FACING OLD AGE 
 
 "Efficient service and justice to the employes demand a com- 
 prehensive^ wide-reaching, and effective scheme of retirement pen- 
 sionSj the advantage of which is being more and more widely re- 
 cognized by progressive commercial establishments and by for- 
 eign governments." 
 
 Former Secretary Wm. B. Wilson, of the Labour Depart- 
 ment, wrote in his Annual Report: 
 
 "In a previous report of the department attention was drawn 
 to the difficulties confronting executive officers of the Government 
 impelled in the interest of a good adminstration to dispense with 
 the service of employes whose efficiency has been materially im- 
 paired by advanced years. On the other hand, they are met with 
 the [fact that the busin;ess of the Government could be more 
 efficiently handled by active persons, whereas on the other hand 
 there looms up before them the spectre of Jiardship and in many 
 cases absolute want, which would be enforced upon faithful serv- 
 ants if they were thus to be summarily removed from the only 
 means of gaining a livelihood for which through years of train- 
 ing they are qualified. 
 
 "It is inevitable, therefore, that until such times as heads of 
 departments can accomplish this change in the personnel without 
 visiting undue hardship upon their subordinates they will be de- 
 terred by a consideration of the humanitarian phase of the matter 
 from taking such action as the situation seems to demand. 
 
 "The department accordingly reiterates its recommendation that 
 there be provided through legislative enactment an equitable system 
 of retirement — a system which will best subserve the interests of 
 efficiency and economy and at the same time insure fair financial 
 provision for those who through long and faithful service are en- 
 titled to some consideration in their declining years." ^ 
 
 Former Secretary of the Treasury W. G. McAdoo also 
 stated : 
 
 "The need for an adequate civil-service retirement law is be- 
 coming more imperative each year. The introduction of new and 
 
 1 Ibid pp 70-71. 
 
PENSIONS 167 
 
 improved methods of performing the constantly increasing volume 
 of work in the department has served to emphasize the need for 
 making some provision for the older employe who is unable to keep 
 step with progress. It does not seem humane or fair to discontinue 
 arbitrarily the service of superannuated employes who have given 
 their entire energies and spent the best years of their lives in the 
 service of the Government. To do so would in most cases leave 
 the employes without any source of income and result in serious 
 hardship. To reduce aged employes does not entirely meet the 
 need of the case, as it leaves the employe on the rolls of the depart- 
 ment. 
 
 "I believe that the enactment of an equitable retirement law 
 for superannuated and disabled employes of the civil service in 
 the Treasury Department would result in actual economy and 
 increased efficiency in the handling of the business of the depart- 
 ment, and I therefore recommend this subject to the Congress for 
 its serious consideration." ''■ 
 
 During the past two decades practically every Congress 
 has had presented to it a bill providing for retirement of the 
 employes in the United States Service. Furthermore, Presi- 
 dents of the United States, Cabinet officers, the United States 
 Civil Service Commission and heads of executive departments 
 have repeatedly advocated and pleaded for the adoption of 
 some such measure. Among the chiefs' of the government de- 
 partments, as was seen, there has been unanimous agreement 
 on the necessity for a pension provision for Federal employes 
 by means of which the continuously serious growing problem 
 of superannuation could be remedied to some extent. Not- 
 withstanding the pleas of high govenunent authorities, as well 
 as the energetic campaigns carried on by the organized em- 
 ployes of the United States, and by other social agencies, it 
 was not until the end of the sessions of the Sixty-sixth Con- 
 gress — in the spring of 1920, in the face of a presidential elec- 
 
 i Ibid p 72. 
 
168 FACINGOLDAGE 
 
 tion — that the national legislature finally saw the necessity 
 of adopting such a plan. For many years the government 
 employes bitterly complained against the inactivity of Con- 
 gress and accused the members of the Federal legislature of 
 fear that such a measure would be unpopular among their con- 
 stituents at home. 
 
 The need of finding a solution to the problem of super- 
 annuation, in order to preserve at least some standard of effi- 
 ciency in government departments, was becoming graver day 
 by day. At the same time many of the employes of the gov- 
 ernment who had faithfully given the best part of their lives 
 to the service of the nation were, when they had become too 
 old, mercilessly separated from the service. These employes, 
 broken in body and spirit, were turned adrift penniless' in 
 their old age to shift for themselves as best they could, and 
 stand out as inspiring examples for the future loyalty of ser- 
 vice on the part of their fellow workers who were on the thresh- 
 old of old age. No pen picture can accurately visualize the 
 sufferings of such men who have been turned adrift in their 
 helplessness and compelled to face the poorhouse as the only 
 place of refuge. A glimpse of the fatalism of s'ome such men 
 and the bitterness of feeling developed by others may be 
 gleaned from the following letters:^ 
 
 Washington City Post Office, 
 Office of the Postmaster, 
 April 18, 1914. 
 
 Mr. John B. Lerch, 
 
 Clerk, Mailing Division, 
 
 Washington City Post Office, 
 
 Dear Sir: In view of the fact that your services are of little 
 value to the office, due to your impaired efficiency, on account of 
 
 1 Published in Report of Hearing of Senate Com. on Civil Service and 
 Retrenchment. 
 
PENSIONS 169 
 
 advanced age and physical infirmities, I regret having to inform 
 you that your name is under consideration for separation from the 
 service. Any statement which you may desire to make in the 
 premises will receive careful consideration if submitted within five 
 days after the receipt of this letter. 
 
 Very respectfully, 
 
 Otto Praeger, Postmaster. 
 
 To Mr. Praeger's communication Mr. Lerch made the follow- 
 ing reply: 
 
 Hon. Otto Praeger, 
 
 Postmaster, Washington, D. C. 
 
 Dear Sir: Yours received, and in reply I have to say that by 
 the recommendation of Abraham Lincoln, President of the United 
 States, I was appointed a clerk in this office April 1, 1865. 
 
 It is not my place to defend my ability to do my work; for this 
 you please must inquire of my superior officers. 
 
 I am 81 years old, but my record will show how little time I 
 have lost on account of sickness in all these years, and I firmly 
 believe that I am still able to perform work to the satisfaction of 
 those over me. Furthermore, I have to inform you that, through 
 misfortune, I am penniless, my wife having been a helpless invalid 
 for the last 15 years. 
 
 One thing is sure, if I have to go out of this office I do so with 
 a clear conscience that in all my service I have done my duty faith- 
 fully. 
 
 (signed) John B. Lerch. 
 
 Another post office clerk, in San Francisco, noticed the 
 following item in the Union Postal Clerk: 
 
 "Rodney, a faithful Army horse, who has served the Govern- 
 ment steadily for 20 years is to be retired from active duty and 
 cared for by Uncle Sam for the rest of his life. This will be 
 done on recommendation of Capt. C. D. Mortimer, Third Field 
 Artillery. Rodney was never sick a day, rendered signal battle 
 service in the Spanish-American War, was sold at auction as too 
 
170 FACINGOLDAGE 
 
 old for service, was bought by a member of the Third Field 
 Artillery for $107, rendered hard service at Fort Myers, and is 
 now pensioned." 
 
 And he writes to the Secretary-Treaslirer of his Union : 
 
 My dear Mr. Flaherty: I see by the February number of the 
 Union Postal Clerk that after many years' service the Govern- 
 ment has pensioned an old horse. All I can say is "Lucky old 
 horse," and for the purpose of drawing a pension it would have 
 been better had I been born a horse than a human being. I have 
 been a "wheel horse" for the Government for the past 50 years 
 and can not get a pension. 
 
 (signed) John W. Perry. 
 
 And Mr. Flaherty adds some information, and comments : 
 
 "After 50 years a clerk in the San Francisco Post Office, enter- 
 ing the service in 1861, and on the very day he completed his 
 golden anniversary of 50 years' service he was told he was in- 
 efficient and would have to take indefinite leave of absence, with- 
 out pay of course, and now he is unable to get back in the service. 
 He is 80 years of age, has devoted 50 years, 50 productive years 
 of his life, all this time devoted to the perfection and manage- 
 ment of the Postal Service. Only in the ranks, unknown and un- 
 heard of, a minor cog; but I know that it is men like Perry who 
 made our Postal Service what it is today — the most efficient mechan- 
 ically of any government institution, and I emphasize mechani- 
 cally. It is not humanely efficient. It has not yet developed any 
 system whereby the dismissal of these old men can be eliminated." 
 
 The reports in regard to the effects and the working out of 
 the recent Sterling-Lehlbach Act of Congress providing for 
 the retirement of employes in the classified civil service, are 
 expected to yield some very valuable data on the problem of 
 Old Age Pensions. As these lines are written, however, the 
 law has just become operative and predictions in this respect 
 would be of no value. The law provides for the compulsory 
 
PENSIONS ITl 
 
 retirement on a pension of all employes in the classified civil 
 service of the United States who have reached the age of 70 
 years' and have rendered 15 years' service. Mechanics, letter- 
 carriers and post office clerks are eligible for retirement at 65, 
 while railway postal clerks may retire at 62 years of age after 
 they have rendered at least 15 years of service. An employe, 
 if he so desires, may, at the discretion of the head of his 
 department and approval by the Civil Service Commission, be 
 continued in his position beyond the retirement age for a period 
 of two years and at the end of that period may be continued 
 for another two years and so on until ten years' after the act 
 has become effective when it is provided that no employe shall 
 be continued in the service for more than four years beyond 
 the age of retirement. 
 
 The Pension Law just enacted provides for a compulsory 
 contributory system of retirement. All employes' are made 
 to contribute two and one-half per cent, of their income, which 
 is deducted from their monthly salaries or wages, by the Treas- 
 ury Department, and which goes to help make up "the civil ser- 
 vice retirement and disability fund." This contribution, it is 
 estimated, will cover about one-third of the expenses of the act. 
 The remaining two-thirds will be paid by the government as 
 its contribution. The entire cost of this retirement provision 
 was estimated by Senator Smoot to probably amount to over 
 $2,000,000 for the first year increasing steadily to amount to 
 more than $18,500,000 in the 77th year of its' operation. 
 
 The amount of the pension is generally based upon two per 
 cent, of the average annual salary multiplied by the number of 
 years of service. Thus Class A after thirty years of service 
 receive a pension amounting to sixty per cent, of their yearly 
 salary; Class' B, twenty-seven years of service fifty-four per 
 cent, of salary; Class C, twenty-four years of service forty- 
 eight per cent, of salary, etc. The maximum amount of pen- 
 sion, however, is set at $720 which is sixty per cent, of an 
 annual salary of $1,200 and which means that while the higher 
 
172 PACINGOLDAGE 
 
 paid men contribute proportionately more for their annuities, 
 they can receive no pension on salaries above $1,200 per year. 
 There was little objection to this on the part of the higher 
 priced men as they were glad to forego larger annuities for 
 the sake of getting the needed pension system adopted. The 
 minimmn pension is set at $180 per year. 
 
 The Sterling-Lehlbach Act also provides benefits for those 
 who become disabled before reaching the retiring age. This 
 must be preceded by proper medical examination certifying 
 that the disability is' "not due to vicious habits, intemperance, 
 or wilful misconduct." The amount of the pension is com- 
 puted in the same manner as provided for the regular pension. 
 No benefits are paid for less than fifteen years' service. 
 
 In the case of withdrawal from the government's service, 
 or death before the pensionable age, or if an annuitant dies 
 before he has received benefits equivalent to his contributions 
 and accumulated interest, his contributions or the difference 
 in his contributions is to be returned to him or his legal heirs 
 in a lump sum, together with four per cent, compound interest. 
 The Commissioner of Pensions under the Secretary of Interior 
 is charged with the administration of the Act. In case of a 
 complaint an appeal may be taken from the Commissioner of 
 Pensions to the Secretary of Interior. 
 
 MILITARY PENSIONS OF THE U. S. 
 
 In contrast with the, until recently, lamentably deficient pro- 
 visions for old age assistance, and the total neglect by the gov- 
 ernment of its permanent and peace time employes, must be 
 considered the exceedingly generous care the government has 
 taken of those who had given it temporary service during times 
 of war. 
 
 "After all," says Dr. Rubinow, "it is idle to speak of a popular 
 system of old age pensions as a radical departure from American 
 traditions^ when our pension roll numbers several thousand more 
 
PENSIONS 173 
 
 names than that of Great Britain. It is preposterous to claim that 
 the cost of such a pension would be excessive^ when the cost of our 
 pensions is over $160,000,000, or more than three times as great 
 as of the British pension system. In the face of such a cost, it is 
 childish to consider the system of war pensions as a sentimental 
 problem only, and to speak of the millions spent for war pensions 
 as the cost of the 'Civil War'. We are clearly dealing here with an 
 economic measure which aims to solve the problem of dependent 
 aged and widowhood. No state legislator will claim, unless it be 
 in a peroration to a fourth of July outburst of oratory, that the 
 constant pressure for extension of war-pension benefits, and the 
 systematic political work which creates such pressure, which neither 
 party has had the courage to resist — is all the result of patriotic 
 enthusiasm only. It is necessary to face the situation frankly, 
 and apply to the system of war pensions the ordinary standard 
 by which any piece of legislation is judged, inquire how far it 
 meets the problems, how efficiently, economically, and justly it may 
 work for their solution." ^ 
 
 The amounts spent on war pensions in the United States 
 are startling. Since the end of the civil war — 1866 to June 
 30, 1919 — the total amount paid out in pensions, exclusive 
 of the cost of maintenance of the Pension Bureau, was $5,521,- 
 074,958.16. In 1866 there were 126,722 pensioners and the 
 annual expenditures on pensions amounted to $15,4i50,549.88. 
 The number of pensioners was highest in 1902 when it reached 
 almost the million mark. Since that time the number has been 
 steadily declining. The total number of pensioners in 1919 
 was only 624?,427. The total amount paid out in pensions, how- 
 ever, has risen from year to year. In 1902 when there were 
 999,4146 pensioners the amount paid out in pensions was only 
 $137,504,267.99, but in 1919 the total amounted to $222,159,- 
 292.70. Furthermore, although there were 22,368 pensioners 
 less at the end of the fiscal year of 1919 as compared with the 
 previous year, the amount paid out as pensions increased from 
 
 1 1. M. Rubinow, Social Insurance, pp 404-40S. 
 
174 FACINGOLDAGE 
 
 $179,835,328.75 in 1918 to $222,159,292.70 in 1919, which is 
 an increase of $42,323,963.95 in one year. 
 
 Practically every Congress sees some new War Pension 
 legislation enacted, whether by the passage of general or of 
 special acts. At the close of the fiscal year ended June 30, 
 1919, the number of pensioners in each class under the general 
 pension law and special acts of Congress was as follows : 
 
 Classes Number of Pensioners 
 
 Regular establishment: General Laws Special Acts 
 
 Invalids 14.,128 527 
 
 Widows, etc 4,104 459 
 
 Act Feb. 6, 1907, survivors 579 
 
 Act May 11, 1912, survivors 260,127 
 
 General Law, Civil War: 
 
 Invalids 6,288 4,190 
 
 Widows, etc 39,552 4,595 
 
 Act June 27, 1890: 
 
 Invalids 267 
 
 Minors, etc 2,205 
 
 Act April 19, 1908, widows 250,471 
 
 Act Aug. 5, 1892, nurses 91 38 
 
 War with Spain: 
 
 Invalids 21,891 1,491 
 
 Widows, etc 3,488 316 
 
 Act July 16, 1918, widows, etc .... 
 
 War of 1812, widows 1,065 8 
 
 War with Mexico 73 .... 
 
 Survivors 207 8 
 
 Widows, etc 2,577 164 
 
 Indian War: 
 
 Survivors 3,398 38 
 
 Widows 1,964 63 
 
 War of 1917: 
 
 Invalids 60 l 
 
 Widows, etc 64 
 
 Total 612,529 11,898 
 
 During the same year the following pension amounts' were 
 paid out on account of the diiferent wars : 
 
 CivU War $212,211,890 
 
 War with Spain 3,878,189 
 
 War of 1812 17,704 
 
 War with Mexico 758,166 
 
 Indian Wars 1,561,537 
 
PENSIONS 176 
 
 llegular establishment 3,701,782 
 
 War of 1917 30,031 
 
 Total $222,159,289 
 
 The average amount of the pension of the different wars 
 during the fiscal year 1919 was as' follows: Civil War, $373.39; 
 War with Spain, $137.28 ; War of 1812, $218.57 ; War with 
 Mexico, $256.48; Indian Wars, $285.84; Regular Establish- 
 ment, $192.62. The average amount for all pensions was 
 $355.78 per year. In 1920, Congress further increased the 
 pensions' of civil war veterans to $50 monthly and those of 
 widows of veterans to $30 per month. This was estimated 
 to add about $65,250,000 to the present pension budget. Vet- 
 erans of the World War are cared for by the War Risk Insur- 
 ance Bureau which is expected to prevent the burden of war 
 pensions from falling as heavily upon the taxpayers as in 
 previous wars. 
 
 That Congress in passing war pension legislation has prac- 
 tically never taken cognizance of the economic necessity of 
 s'uch pensions has been demonstrated so frequently and is so 
 generally known that there is little need for its lengthy dis- 
 cussion here. The best indictment against the Congressional 
 policy with regard to war pensions is' brought by Dr. Rubinow, 
 who comes to the conclusion that: "the most singular feature 
 of the American System is that it primarily rebounds to the 
 advantage of a class least in need of old age pensions." He 
 states : 
 
 "The extensions (of war pensions) were based primarily upon 
 a more lenient attitude towards the requirement of past services 
 and records rather than upon any effort to adjust this annual dis- 
 tribution of enormous sums to economic need. As a result the 
 preposterous situation is created that various sized portions of this 
 official melon are given to thousands of people who may not at 
 all require it. No satisfactory statistics on this point exist, but it 
 is a matter of common knowledge not only that pensions are ob- 
 tained upon fraudulent representation of past services, forged rec- 
 
176 FACINGOLDAGE 
 
 ords, fictitious marriage certificates, etc., — an aspect of the problem 
 sufficiently important in itself, which need not be discussed here at 
 any length however, — but what is economically much more important, 
 a large proportion of this amount goes to individuals who have no 
 economic need whatsoever of financial assistance." ^ 
 
 It is a fact, known to all that but few of those who are now 
 receiving United States Pensions are really in need' of them ; nor 
 do those who receive pensions represent the most needy class. 
 The present war pension schemes reach largely the native aged 
 who are generally representative of the middle class of this' 
 nation. The great bulk of wage-earners, which is made up 
 Largely of the foreign born Negroes, benefit little or noth- 
 ing from such pensions. War pensions as a method of relief 
 in old age for the great mass of aged wage-earners, despite 
 their tremendous cost, are obviously inadequate and ineffective. 
 As pointed out by Rubinow in conclusion : 
 
 "The economic eiFects of the war pensions have been so care- 
 lessly treated in the pension legislation that it surprises no one to 
 find a war veteran drawing a substantial salary as a public em- 
 ploye (after having /obtained the appointment under privileged 
 conditions), and at the same time his war pension for disability; and 
 perhaps the most striking and ludicrous example of this was the 
 well known case of a prominent veteran, who some years ago re- 
 ceived one month a high pension especially voted by Con- 
 gress because of total and permanent incapacity, and immediately 
 after that an important and responsible position in the Federal Civil 
 Service, which carried with it a salary of $3,500 per annum." ^ 
 
 PENSIONS rOR, STATE EMPLOYES 
 
 Massachusetts is practically the only State in the Union 
 which has established (since 1912) a system for the retirement 
 of State employes exclusive of employes of counties and mu- 
 nicipalities. A number of States, namely, Louisiana, Maine, 
 
 1 Social Insurance p 406 
 
 2 Social Insurance p. 409 
 
PENSIONS 177 
 
 Maryland, Massachusetts, Minnesota, New Jersey, New York, 
 Rhode Island, and Pennsylvania, have had pension systems for 
 State j udges of the Supreme, Superior and other courts, as well 
 as for certain limited classes of State employes, for some time. 
 The New York provision for judges' pensions applies also to all 
 employes of the supreme court of the first, second and ninth dis- 
 tricts. The latter also requires' a contribution of one per 
 cent, of the annual salary of the employes. All the other state 
 pension provisions are non-contributory and the amounts of 
 the pensions vary from one-half to the full s'alary of the pen- 
 sioner. Most plans set the retirement age at 70 years but in 
 case of disability retirement is generally permitted at an 
 earlier age. 
 
 The Mas'sachusetts Retirement Plan for state employies 
 enacted in 1911 represents a compromise between the con- 
 tributory and non-contributory principles. In the Bay State 
 system both the State and the employes share the expense of 
 the retirement system equally between them. The employes 
 are required to contribute regularly from their wages or sal- 
 aries in accordance with the rate set by the administering 
 board. It is provided, however, that this is to be not less' 
 than one per cent, nor more than five per cent, of the annual 
 salary or wage. 
 
 The voluntary retirement age is set at 60, and at 70 years 
 the retirement is compulsory. An employe may also retire 
 after 35 years' of continuous service, regardless of age. The 
 annuity is' computed as follows ; First, he receives an annuity 
 of such amount as his own contributions have earned for him, 
 and, secondly, a pension from the State which is equivalent 
 to his' own annuity. The total amount of the retirement 
 allowance including the annuity and pension cannot be less 
 than $200 nor to exceed one-third of the annual salary. 
 
 The system is administered by a board of three members 
 which includes the State Treasurer, a second member elected 
 by the employes and a third chosen by the former two. Par- 
 
ITS FACINGOLDAGE 
 
 ticipation in the plan was made compulsory for aU employes 
 who entered the service after the fund had been established, 
 but was left voluntary for employes who were in the service 
 at the time the law was enacted. More than half of the latter 
 class of employes, however, joined the fund when the act went 
 into effect. 
 
 The Massachusetts Retirement Act also provides that the 
 contributions of employes be refunded upon leaving the service 
 of the State before the pensionable age. Since the establish- 
 ment of this system, it is claimed by reliable authorities, it has 
 worked to the satisfaction of both employes and administra- 
 tive officials. It is stated ^ that it has brought about an im- 
 provement in the efficiency of the service through the retire- 
 ment of inefficient employes and has created a feeling of greater 
 well-being and security on the part of employes of the State. 
 
 MUNICIPAL employes' PENSIONS 
 
 The movement for the pensioning of municipal employes, 
 such as policemen and firemen, although it came later in the 
 United States than in European Cities, has nevertheless, pre- 
 ceded the entire campaign of old age retirement provisions 
 for all other classes of workers. In the United States this 
 movement is about fifty years old. Municipal employes' pen- 
 sions' being the earliest to be adopted in this country, it is 
 therefore, not surprising to find these funds the most hap- 
 hazard and unsystematic of pension experiments. In review- 
 ing these numerous pension funds one fails to detect any con- 
 
 1 On January 12, 1921 a Massachusetts joint legislative Committee in a 
 report on pensions submitted to the Legislature declared: "The contribu- 
 tory system has proved to be a success in the case of those State em- 
 ployes and teachers who have been brought into it. It places a reduced 
 financial burden on the State and provides through the employe's contribu- 
 tions a savings account which is payable to the employ^ or his estate in 
 case of his resignation or death; it fixes an age at which all must retire, 
 thus safeguarding the public service against inefficiency resulting from 
 superannuation; it establishes a co-operative partnership between the 
 employes and the public; — each shares in the management, each shares in 
 the expense and each derives benefit from the system," 
 
PENSIONS 179 
 
 sistency with regard to either general principle, system, or 
 standard, and excepting the very recent ones, practically 
 none have given much thought or consideration to actuarial 
 principles. Almost every pension scheme in operation is the 
 product of a long process of amendments and modification which 
 it has undergone since its original establishment. To cite 
 a few instances: the Pittsburgh Firemen's and Policemen's 
 funds were amended a number of times since their establish- 
 ment in 1893 and new amendments are further considered. 
 In Cleveland, before the establishment of the city's present 
 Police Fund, the latter was' operated under three different 
 plans, with a total of ten amendments. In New York City 
 the Firemen's Pension and Benefit systems were amended forty 
 times before the general consolidation with the funds of other 
 boroughs took place a few years ago. In October, 1920, a 
 new law went into effect creating the New York City Em- 
 ployes' Retirement System, dividing the municipal employes 
 into three classes : labourers and unskilled workers, mechanical 
 and skilled workers, and clerical, administrative, professional 
 and technical workers, including heads' of departments. 
 
 No less confusing and chaotic are the administration and 
 the classes of workers protected by these municipal funds. 
 Some of these are administered in connection with State or 
 County funds, while others are administered by the city alone. 
 Again, certain classes of city employes are well taken care of 
 and others neglected by s'ome cities, while other cities act vice 
 versa. Only very few cities, however, make provisions for the 
 general municipal employes exclusive of firemen, policemen and 
 teachers. There is also a great difference to be found in 
 regard to the principles of contributory and non-contributory 
 schemes, and where contributions are provided, they generally 
 range from one to three and one-half per cent, of the salary. 
 The annuity paid also varies from one-half to three-fourths of 
 the salary at time of retirement. The retirement age is not 
 
180 FACINGOLDAGE 
 
 specified in many funds, depending largely on the years of ser- 
 vice. Where age provisions are made they range from 55 to 
 70 years, and where the length of service necessary for retire- 
 ment is stipulated it is ustially about twenty years. In a num- 
 ber of cases benefits are also provided for widows and depend- 
 ents. 
 
 In one-third of the 167 firemen's and policemen's funds ana- 
 lyzed by the United States Bureau of Labour in 1910 the annu- 
 ity was an entirely gratuitous gift of the municipality, while in 
 the other two-thirds the funds were made up in part by the 
 municipality and in part by contributions from the employes. 
 
 In the funds studied by the above Bureau it was found that 
 in about 40 per cent, of these the sole qualification for pen- 
 sions, on the part of firemen and policemen, was permanent 
 disability incurred while in the performance of duty regardless 
 of age or service. The other 60 per cent, usually specified 
 the length of s'ervice at about 20 years, coupled in one-third 
 of the funds with qualifications of age 50, 55, 60 or 65 years. 
 
 In only about 40 per cent, of these funds were the employes 
 found to have representation in the management of the foun- 
 dations. Twenty funds were also found to pay benefits for 
 temporary disability; 36 paid a lump sum death benefit and 
 113 paid annuities to widows or to other dependents. Where 
 payment was allowed for temporary disability it was gener- 
 ally half of the permanent annuity. Aside from these mu- 
 nicipal funds there are also to be found in most localities 
 mutual benefit associations which pay temporary and death 
 benefits' and to which the majority of firemen and policemen 
 contribute. 
 
 In addition to the regular contributions to these funds made 
 by the municipalities and employes, there is also a mis'cel- 
 laneous source of revenue such as : "fines on policemen" or 
 "fines on firemen," which include not only fines imposed for 
 violation of duty or regulations but also deductions made from 
 pay for lost time, etc. Other revenues are such as' "unclaimed 
 
PENSIONS 
 
 181 
 
 property" and "unclaimed money" which include lost, stolen, 
 or abandoned property in the possession of the police depart- 
 ment. Many municipalities provide also that the city's' or 
 State's contributions to these funds shall be secured from 
 a special revenue such as taxes' on excise, insurance companies, 
 etc. 
 
 Complete municipal pension systems including policemen, 
 firemen, teachers and all municipal employes are in opera- 
 tion in the following cities : 
 
 New York 
 
 Chicago 
 
 PhUadelphia 
 
 Boston 
 
 Pittsburgh 
 
 Minneapolis 
 
 Oakland, Cal. 
 Lowell, Mass. 
 Lynn, Mass. 
 
 Yonkers, N. Y. 
 Waltham, Mass. 
 Brookline, Mass. 
 Harrisburg, Pa. 
 
 Pensions' for policemen, firemen and teachers only, exclusive 
 of other municipal employes, exist in the following cities : 
 
 St. Louis 
 
 San Francisco 
 
 New Orleans 
 
 Providence 
 
 Cleveland 
 
 Milwaukee 
 
 Washington 
 
 Portland 
 
 Baltimore 
 
 Cincinnati 
 
 Jersey City 
 
 Rochester 
 
 Detroit 
 
 Los Angeles 
 
 Seattle 
 
 Denver 
 
 Buffalo 
 
 Newark 
 
 Indianapolis 
 
 
 Louisville 
 
 Syracuse 
 
 Dayton 
 
 Utica 
 
 St. Paul 
 
 New Haven 
 
 Cambridge 
 
 Troy 
 
 Columbus 
 
 Scranton 
 
 Trenton 
 
 Hoboken 
 
 Toledo 
 
 Paterson 
 
 Albany 
 
 South Bend 
 
 Worcester 
 
 Omaha 
 
 Duluth 
 
 Terre Haute 
 
 Passaic 
 
 Hamilton 
 
 Niagara Falls 
 
 Watertown 
 
 Charleston 
 
 Auburn 
 
 New RocheUe 
 
 
 Elmira 
 
 Mt. "Vernon 
 
 La Crosse 
 
 
 The following cities have pension schemes for only one class 
 of municipal employes, i. e., either that of teachers, policemen, 
 firemen, or other municipal employes : 
 
 Atlanta (M. E.) 
 FaU River (P.) 
 Salt Lake City (T.) 
 Reading (T.) 
 Oklahoma City (F.) 
 San Diego (P.) 
 Maiden (F.) 
 Berkeley (P.) 
 
 Chicopee (P.) 
 St. Joseph (F.) 
 WUkes-Barre (T.) 
 Jacksonville (P.) 
 Jamestown (F.) 
 Bayonne (F.) 
 Fitchburg (M. E.) 
 Topeka (P.) 
 
 AUentown (F.) 
 Lima, Ohio (F.) 
 Altoona (F.) 
 Pawtucket (P.) 
 Binghamton (F.) 
 York (F.) 
 Montgomery (F.) 
 JoUet (F.) 
 
182 
 
 Quincy (P.) 
 Bay City (P.) 
 Shreveport, La. (F.) 
 
 PACING OLD AGE 
 
 Santiago (P.) 
 Woonsocket (P.) 
 Norwicii, Conn. (P.) 
 
 Decatur, 111. (F.) 
 Meriden (P.) 
 Kingston (P.) 
 
 Pensions for teachers and firemen or teachers and policemen 
 only are to be found in thes'e cities: 
 
 Wilmington 
 Poughkeepsie 
 
 Lancaster, Pa. 
 Newburgh 
 
 Perth Amboy 
 Newport 
 
 Pittsfleld 
 
 The following cities have pensions for policemen and fire- 
 men only: 
 
 Birmingham 
 
 Spokane 
 
 Grand Rapids 
 
 Nashville 
 
 Bridgeport 
 
 New Bedford 
 
 Hartford 
 
 Camden 
 
 Tacoma 
 
 Des Moines 
 
 Council Bluffs 
 
 ZanesviUe 
 
 Richmond 
 
 Youngstown 
 
 Elizabeth 
 
 Waterbury 
 
 Akron 
 
 Peoria 
 
 Fort Wayne 
 
 Savannah 
 
 Brockton 
 
 Portland, Me. 
 
 Holyoke 
 
 Waterloo 
 
 Elgin 
 
 HaverhiU 
 
 Kansas City, Mo. 
 
 Springfield, lU. 
 
 Mobile 
 
 Sacramento 
 
 Saginaw 
 
 Sioux City 
 
 Atlantic City 
 
 Rockford 
 
 Augusta 
 
 Springfield, Ohio 
 
 New Britain 
 
 Chattanooga 
 
 Bloonungton 
 
 Clinton, Iowa 
 
 Salem 
 
 Springfield, Mass. 
 
 Davenport 
 
 Racine 
 
 Newton 
 
 Superior 
 Dubuque 
 Galveston 
 East Orange 
 Cedar Rapids 
 Jackson, Mich. 
 Aurora, 111. 
 Lorraine, Ohio 
 Colorado Springs 
 Madison, Wis. 
 Stamford 
 Chelsea 
 
 The cities of Memphis and Dallas have authorized the estab- 
 lishment of retirement funds, but did not establish such in the 
 period studied. San Antonio had neither established nor 
 authorized one when this' investigation was made. 
 
 As seen in the preceding enumeration, every one of the 
 eighteen cities in the United States with a population of more 
 than 300,000 inhabitants', in 1910, has a pension fund for its 
 policemen and firemen. The six cities with 200,000 to 300,000 
 inhabitants also pension their policemen and firemen. Nearly 
 all the cities with populations between 100,000 and 200,000 
 have some form of pensions for one class or another of mu- 
 nicipal employes. In addition, many of the smaller cities also 
 provide one form or another of retirement for particular groups 
 of their employes. Thus thirty-nine of the fifty-four cities 
 with populations from 50,000 to 100,000 have some sort of 
 
PENSIONS 183 
 
 pension plan, thirty-one of them pensioning both policemen 
 and firemen. Of the one hundred and twenty cities whose 
 population in 1910 ranged from 25,000 to 50,000, only 69 have 
 any definite pension plan. Fifty-eight cities whose popula- 
 tion according to the thirteenth census was less than 25,000 
 also have either established municipal pension funds or have 
 been authorized to do so. While policemen and firemen are 
 thus fairly well protected in their old age, only a few of the 
 bigger cities — New York, Chicago, Philadelphia, Boston, Pitts- 
 burgh, and Minneapolis — have thus far made provisions for 
 their other municipal employes, who constitute the great bulk 
 of city servants. 
 
 TEAC'HEES' RETIREMENT FUNDS 
 
 The two primary functions of old age retirement systems 
 are: First, the protection of individuals and their dependents 
 against the contingencies of old age and disability. Secondly, 
 the provision of a means of improving the efficiency and raising 
 the standard of the services rendered, by eliminating from the 
 service the superannuated and disabled who are no longer effi- 
 cient, and by attracting better ability into the particular ser- 
 vice. It is hardly necessary to point out, that nowhere are 
 these functions of greater significance than in our educational 
 system. It is of paramount importance that the best avail- 
 able talent and ability, and that superior men and women 
 should be attracted to our schools for the development of the 
 moral character and ideals of our children. It is further evi- 
 dent, moreover, that teachers living continuously in the dread 
 of old age are not the most desirable persons' for the instruc- 
 tion and inspiration of our younger generation. To provide 
 our teachers — the moulders of the future generation — against 
 the day when they are no longer able to provide for themselves, 
 becomes thus not only a matter of justice but an essential 
 factor in the welfare and high standard of our school system. 
 In the case of teachers the problem of relief from superannua- 
 
184 FACINGOLDAGE 
 
 tion is even more aggravated. It is an admitted fact that our 
 teachers form one of the most inadequately remunerated classes. 
 In many instances, indeed, although their wages are on par 
 with the lowest compensated groups in the particular com- 
 munity, a comparatively high standard of living is required of 
 them. Sufficient saving for old age under the circimistances 
 is thus out of the question. To this must be added the obvious 
 fact that many in the teaching profession — especially is this! 
 the case with women teachers — remain unmarried, and ordi- 
 narily, have no one to depend upon in old age, which aggra- 
 vates their problem of superannuation. 
 
 It is, therefore, rather surprising to learn that although the 
 United States' led the world in establishing compulsory educa- 
 tion laws at public expense, it is one of the last to make pro- 
 vision for the care and relief of superannuated and aged teach- 
 ers. While Russia, under the Czar, established a s'ystem of 
 relief for its aged teachers as early as 1819, the first legis- 
 lative interest in retirement systems for teachers in this coun- 
 try did not come until 1894, when New York City teachers 
 siecured the passage of a retirement law in the New York 
 Legislature. 
 
 According to Mr. Studensky, ^ the history of the movement 
 for teachers' retirement pensions in the United States may be 
 divided into three distinct periods. (1) The period from 
 1869 in which there first began the establishment of teachers' 
 insurance and mutual aid associations'. (2) The period from 
 1894 until approximately 1915. This was a period of retire- 
 ment legislation without regard to sound principles' and is stUl 
 not altogether a matter of the past. (3) The movement just 
 beginning, tending to the reorganization and remodeling of 
 pension systems on a more sound actuarial basis. In the first 
 two periods the government and the public remained indiffer- 
 ent to the voluntary funds established by the teachers' them- 
 selves. The funds were regarded as private teachers' associa- 
 
 1 Paul Studensky, Teachers' Pension Systems in the U. S. 1920. 
 
PENSIONS 185 
 
 tions in which the public had no concern. Since 1915, how- 
 ever, the government has' taken an active and intelligent par- 
 ticipation in the protection of teachers in their old age, as it 
 nas begun to recognize the value of such provisions both for 
 the welfare of our educational system as well as for the pro- 
 tection of the teachers. 
 
 In the beginning, teachers' protective associations were 
 formed largely for the purposes of securing burial or death 
 benefits. These loosely established' organizations required no 
 regular assessments, but assessed their members from fifty 
 cents to a dollar whenever necessary. Permanent capital they 
 considered unnecessary and therefore had none. Later these 
 burial and death benefit associations branched out to include 
 also sick benefits for a limited period. This resulted in the 
 introduction of a regular s'ystem of dues payments which 
 ranged from one to seven dollars per year. As they pro- 
 gressed they were still further extended to provide for old age 
 and disability annuities, and regular contributions based upon 
 one or two per cent, of the annual salary were introduced. The 
 teachers' contributions were generally swelled by donations 
 from charitable agencies and incomes from "benefit entertain- 
 ments" arranged for the funds. 
 
 Government participation in teachers' retirement systems 
 first began in 1894. By this time the teachers realized the 
 failure of their voluntary associations and requested the assist- 
 ance of the city government. They were encouraged and stim- 
 ulated to ask for this' help by the fact that the city had 
 already established pensions for other municipal employes, such 
 as policemen and firemen. They justly called attention to the 
 benefits derived from such systems in removing the dead wood 
 of the school system, as well as increasing the efficiency of 
 teachers, which would result in such a plan. As a result of 
 this campaign the New York Legislature in 1894 provided 
 for the establishment of a teachers' retirement fund. The 
 resources' of this fund were to come, on the part of the teachers 
 
186 FACING OLD AGE 
 
 themselves, only from deductions made from the pay because 
 of absence. The teachers were not required to make direct 
 contributions. In the following year or two, similar funds 
 which, however, required contributions from teachers, were es- 
 tablished in Brooklyn, Detroit, Chicago, St. Louis, San Fran- 
 cisco, Buffalo, Cincinnati and the State of New Jersey. Most 
 of these plans' were compulsory in character and the teachers' 
 contributions amounted to one per cent, of their salary. 
 
 As practically none of these plans' took any account of 
 actuarial principles of insurance, it soon became evident that 
 the teachers' contributions' alone were not sufficient. It did 
 not take long to discover that in practically all of these systems 
 no provision was made for permanent capital, and the funds 
 needed to meet obligations as they aros'e "were provided only 
 by hopes." The teachers then began to ask for direct con- 
 tributions from the cities or states, pointing out the benefits 
 to be derived from such provisions by the school system and 
 to the fact that other funds of municipal employes were 
 already helped along by these cities or states. These argu- 
 ments were so succes'sful, that for more than two decades 
 afterwards' the government's contributions continued to rise 
 steadily while the teachers' contributions in most instances 
 remained stationary. Furthermore, from 1894i to 1917, 
 according to Mr. Studensky, ^ no less than six cities and five 
 states adopted; teachers' pension schemes in which the govern- 
 ment bears the entire expense of the fund. During the same 
 period sixty-four cities and fourteen states established systems 
 of joint contributions' by the government and the teachers. 
 
 These funds, excepting those established more recently in 
 Connecticut, Massachusetts, New York and Pennsylvania, and 
 which are organized in accordance with sound actuarial prin- 
 ciples are, says Mr. Studensky: 
 
 "Insolvent in so far as they have failed to provide for adequate re- 
 1 Ibid, p 26. 
 
PENSIONS 187 
 
 serves with which to meet accrued liabilities as well as liabilities in- 
 curred through service rendered since the establishment of the sys- 
 tem. It matters not that most of these systems are still able to 
 make payments, still have unexpended cash on hand, and are and 
 will for a few years continue to be able to meet their payments. 
 They are no less insolvent than the systems which are already bank- 
 rupt. Only by shifting their huge deficiencies ahead year by year 
 do they continue their existence. By doing so they increase of course 
 these deficiencies because of the continued failure to discount future 
 liabilities. The longer they operate, therefore, the greater are the 
 deficiencies and the more insolvent the funds become." ^ 
 
 The main features of these funds may be summarized, as 
 follows : 
 
 Retirement age. — ^The retirement age is not specified 
 in the case of many funds, the former being dependent 
 entirely upon the number of years of service. Where provision 
 is made for the age of pensioning it is generally 60 years. 
 In s'ome cases also it is set at 60 for men and 55 for women. 
 The period of service required before one can qualify for a pen- 
 sion, ranges from 25 to 30 years, except in a few instances where 
 only 20 years or less, or 35 or more years of service are required. 
 In many systems the age attained and the number of years of 
 service are alternate conditions for retirement, i. e., a teacher 
 may retire upon completing a fixed period of service regardless 
 of age or, having reached the maximum age, may be pensioned 
 even though he or she has been in the service a smaller number 
 of years. In considering service years, credit is usually given 
 — except in the newer systems — for teaching experience in other 
 states or localities. 
 
 Pension amount. — The amount of the pension is usually set 
 either at a fixed sum of $500 or less' per year, or is determined 
 by the number of years of service ; or as provided in some funds 
 is entirely dependent upon the average salary received. The 
 annuity in these cases' is based approximately upon one-half of 
 
 ilbid, p 29. 
 
188 FACINGOLDAGE 
 
 the salary of the last few years or upon both salary and length 
 of service. In the new funds it is generally provided that the 
 benefit is divided into an annuity and a pension. The first is 
 based upon the contributions and age of the pensioner while 
 the pension equals that of the annuity and is given by the 
 government. 
 
 Contributions. — ^The contributions to the funds in most 
 castes are derived from three general sources. The contribu- 
 tions of the teachers themselves ; appropriations from the 
 different school boards ; and whatever is derived from accrued 
 interest, donations, legacies, bequests, and &'o forth. In most 
 systems the teachers' contributions to the funds amount to 
 from one to three per cent, of their annual salaries. These are 
 usually graded in accordance with the number of years' in the 
 service, the contribution being highest for those lonlgest in 
 the service. In the new systems the contributions of each 
 teacher depend upon the age at which he begins to contribute 
 and upon the number of years of prior service. The "pension" 
 is fixed at a certain proportion of the teacher's salary and 
 increases with each year of service up to 35 years, when it 
 ceases to increase. 
 
 In case of mental or physical incapacity partial annuities' 
 are generally provided in most funds. These are computed 
 by taking a percentage or fraction of a percentage of the 
 yearly salary multiplied by the number of years of service. 
 A minimum period of service is' usually required even for the 
 granting of partial annuities. This latter period varies from 
 five years in most city funds to twenty-five years in a few 
 others. In practically all retirement systems, provision is 
 made for both compulsory and optional retirement age periods. 
 The latter is usually determined at the discretion of the Board 
 of School Directors, and may precede the compulsory retire- 
 ment age period by about five years. 
 
 Of the 24 systems analyzed in detail by Mr. Studensky, it 
 was found that while 19 of these exact contributions from 
 the teachers, only eight provide refunds in case of death. Of 
 
PENSIONS 189 
 
 the latter a few provide for the refund of one-half of the con- 
 tributions without interest ; in others, especially the newer ones, 
 the entire accumulation with compound interest is returned. In 
 case of dismissal or resignation most systems provide for the 
 return of all contributions, although a number make no such 
 provision. 
 
 In 1917 there were in existence in the United. States 94! 
 teachers" retirement systems; 22 of which were State systems 
 and 74 local systems. These covered a total of 332,554 
 teachers. Fifty-seven of the 94 systems have been in exist- 
 ence only since the last decade. The extent to which these 
 funds may be expected to take care of the superannuated 
 teachers may be appreciated from Professor W. F. WiUough- 
 by's summary in his introduction to Mr. Studensky's book. To 
 quote Prof. Willoughby: 
 
 "Of the nearly one hundred teachers' retirement systems now in 
 operation in the United States, only a few can escape total collapse 
 unless fundamentally altered. Some of these systems include ten, 
 fifteen, or even twenty thousand teachers each. Twenty-two of 
 them are state-wide in their operation. They apply to over three 
 hundred thousand public school teachers, i. e., to nearly one-half of 
 the total number of teachers in the United States and they have 
 liabilities in the neighbourhood of half a billion dollars, for the dis- 
 charge of which, in large part, there are no assured assets. Be- 
 sides the necessity for putting these systems upon an equitable and 
 sound financial basis, there is need for the establishment of retire- 
 ment allowance systems in those states and localities which as yet 
 have none. At present seventeen states have neither state nor local 
 pension systems for their public school teachers, and in twelve of 
 the remaining states there are only a few local systems. Approxi- 
 mately one-half of all the public school teachers in this country are 
 not covered by any pension provision." ^ 
 
 1 Ibid, pp XV-XV 
 
CHAPTER X 
 
 OLD AGE BENEFITS OF FRATERNAL 
 AND TRADE UNION ORGANIZATIONS 
 
 fhaternal insurance 
 
 The earliest forms of mutual assistance and insurance 
 benefits organized by the middle and working classes were 
 through the agency of fraternal organizations. Many of 
 these had their beginning in the mediaeval trade guilds. The 
 industrial revolution, with its' resultant hazards, spurred and 
 swelled these organizations tremendously until there have been 
 developed the numerous fraternal orders and secret societies 
 now in existence most of which have benefit provisions of one 
 form or another. 
 
 The fraternal organizations, as incorporated associations, 
 supply to their own members on a co-operative plan, various 
 forms of insurance — ^largely against sicknes's, death and dis- 
 ability. When confronted with problems of old, age relief, 
 these societies, ordinarily raise only sums stifficient to cover 
 contingencies as they arise. This usually results in the 
 younger generations granting aid to the older members with 
 the expectation that in their old age they, too, will be provided 
 for in a similar manner. The inevitable effect of this is that 
 as the burden of supporting the older members becomes heavier, 
 fewer younger members are attracted into these societies. 
 Furthermore, many of the younger group, when confronted 
 with heavy assessments, drop out and leave the older members 
 to hold on until the final collapse. It is', therefore, not sur- 
 prising to discover that the early history of these societies, 
 
 as insurance instruments, is strewn with financial wrecks. 
 
 190 
 
OLD AGE BENEFITS 191 
 
 Few of these societies have even today adjusted their rates 
 on a scientific basis or upon actuarial principles, and many are 
 still insolvent. 
 
 Of the hundreds of fraternal societies in the United States 
 the number of those having benefits which may be classed as 
 old age pensions is insignificant. Only three out of 117 
 fraternal associations in Massachusetts in 1907 had such 
 benefit provisions. Still more negligible is the number of aged 
 who are actually in receipt of such benefits. 
 
 "A Circular of inquiry addressed to 60 of the leading fraternal 
 beneficiary corporations organized outside of the State of Massa- 
 chusetts brought 36 replies. Of the associations replying, 31 stated 
 that they pay an old lage pension and annuity allowance, or gra- 
 tuity in some form. Five have no old age benefits. Some of 
 the latter, however, pay benefits for total and permanent disability. 
 The age of 70 is the usual age at which an old age pension is pay- 
 able. Twenty-four societies out of 26 answering the inquiry on this 
 point give the age 70, and two the age 75, as the pensionable age. 
 In many cases permanent disability is also required as a condition 
 for the receipt of an old age pension. The amount of the pension is 
 commonly one-tenth of the face value of the insurance certificate 
 carried by the member. It is usually provided that the one-tenth 
 shall be paid annually until the whole amount of the certificate has 
 been canceled, or for ten years, or until the age of 80. Twenty-five 
 associations pay this amount of benefit. Two societies pay only one- 
 twentieth of the amount of the certificate; one pays one-fifth in five 
 installments ; and one pays one-half of the certificate upon its surren- 
 der. The great majority of the societies have thus far paid nothing 
 on account of old age benefits, as they have been organized but a 
 short time and payments are not yet due. Fourteen societies re- 
 port payments on this account, as follows: $100 for two members; 
 $200 for one member; $200 for two members; $400 for one member; 
 $400 for two members; $3,896.40 for 12 members; $7,276.58 for 17 
 members; $2,642.73 for 24 members; $5,700 for 34 members; $5,125 
 for 56 members; $10,000 for 200 members; $14,800 for a number of 
 
192 FACINGOLDAGE 
 
 members unstated; $49,021.85 for 385 members; and $10'1',799 
 for 748 members." ^ 
 
 The Pennsylvania Commission also studied 155 fraternal 
 organizations listed in the Report of the Insurance Commis- 
 sioner of that State. The membership of many of those or- 
 ganizations ran into the thousands. The report listed 95 
 fraternal corporations with charters from other States and 
 59 with charters from Pennsylvania. In the case of the for- 
 mer only nine were listed definitely as giving old age benefits. 
 The number of Pennsylvanians' receiving such benefits was 31. 
 A letter of inquiry addressed to all the Pennsylvania organ- 
 izations brought thirty-nine replies. None of these paid old 
 age benefits as such. Thirty-two paid no benefits which could 
 even be classified as' superannuation allowances, although a 
 number paid disability benefits. 
 
 On May 11th, 1921, the Indiana State lodge of the Eagles 
 adopted the following resolution: — 
 
 "Whereas, Modern industry, with its intricate, swiftly moving 
 machinery, and rush for production, requires the steady nerve, ready 
 initiative, and exhaustless energy of youth, and places the elderly 
 workman at a serious disadvantage, even if it does not debar him 
 from employment; and 
 
 "Whereas, Experience has proved that the remuneration received 
 during his productive years is, in many cases, through no fault of 
 his own, utterly inadequate to enable the workingman to "lay by" 
 sufficient to provide for the non-productive years of later life — 
 statistics showing that in the United States, alone, there are 1,250,- 
 000 such old-age dependents on public and private charity; and 
 
 "Whereas, Such charity, with its brand of pauperism, inflicts an 
 unjust stigma upon those unfortunate victims of our industrial 
 system who have expended the energy of their vigorous years in 
 production for the benefit of society; and 
 
 "Whereas, The pension is not a form of charity, but an honor- 
 able recognition of hitherto not fully rewarded service; and 
 
 1 Massachusetts Report, pp 168-69. 
 
OLD AGE BENEFITS 193 
 
 "WhereaSj Among civilized nations^ the United States is the only 
 prominent one that has not in some form or other recognized the 
 obligation of the state to the humble toilers whose labours are the 
 basis of its prosperity; and 
 
 "Whereas, The Fraternal Order of Eagles is particularly inter- 
 ested in this question^ not only because of the economic status of a 
 large portion of its membership, but also because of its fundamental 
 principle of upholding justice. Therefore, be it 
 
 "Resolved by the Indiana State Aerie, That we are in favour of 
 governmental old age pensions, and that we invite our sister State 
 Aeries and the subordinate Aeries of the Order to unite with us in 
 requesting the Grand Aerie of 1921 to take such action as will 
 awaken public sentiment to the wisdom of State and Federal pro- 
 vision that shall remove from the minds of the labourers of the land 
 the haunting fear of want and pauperism in old age." 
 
 TEADE UNION SUPERANNUATION BENEFITS 
 
 Mr. Samuel Gompers, President of the American Federa- 
 tion of Labour, stated in a letter addressed to the "Committee 
 on Miners' Home and Pensions" : "The general purpose — 
 that the organization ought to take care of its' aged and 
 indigent members, and to make some provision for their wel- 
 fare and protection — is a most worthy one. It is in accord 
 with the general fraternal concept that underlies the whole 
 organized labour movement. It has much in common with the 
 more sensitive social conscience that has led to general provi- 
 sions for those in want." He further warns that "Many of the 
 proposals for social insurance are of a compulsory na- 
 ture. Wage earners now find thems'elves confronted by this 
 alternative; either labour organizations must make more com- 
 prehensive and more adequate provision for trade union bene- 
 fits, or else they will have forced upon them compulsory social 
 insurance iinder the control and direction of government agen- 
 cies. Compulsory) social insurance will inevitably result in 
 supervision by the Government of the normal activities of trade 
 unions and in the delegation to governmental agents of all 
 
194. FACING OLD AGE 
 
 matters that vitally affect the interests, the rights, the wel- 
 fare and the freedom of wage-earners." 
 
 It is also the general conviction of trade unionists, that 
 a pension paid by the union to its old members is of inestim- 
 able value. Trade union experience, with established benefit 
 features, has proved these to be sources of strength. They 
 are "holding and binding the membership together in a bond 
 of human sympathy, winning the admiration and respect of 
 even those who are opposed to union organization." As an 
 organizing factor, it is invaluable. It attracts and prompts 
 to identify themselves' with labour organizations, members who 
 would perhaps otherwise remain on the outside. The fact 
 that a member is rewarded for loyalty to the union by being 
 provided for in his declining years not only promotes greater 
 promptness in the payment of dues, but reduces the lapses of 
 dues to a minimum. Furthermore, it causes many to consider 
 well before contemplating the severing of their connection with 
 the union for any but very s'erious reasons. 
 
 It would appear from the preceding that among trade unions 
 at least — ^where the principle of fraternal brotherhood is most 
 firmly established — ^there would be found complete measures and 
 comprehensive schemes for the protection of their members in 
 their declining days. This, however, is not the case; and thus 
 far, the American labour movement has done comparatively 
 little in the way of providing opportunities for protection 
 against old age. While it is true that the more radical element 
 in the labour unions abhor the idea of belonging to an "insur- 
 ance company" rather than to a class-conscious .labour organ- 
 ization, the influence of this group has as yet been compara- 
 tively ineffective and the lack of old age provisions cannot 
 be credited to its opposition. 
 
 The 1908 Report of the United States Commissioner of 
 Labour lists 18 Trade Union organizations as paying benefits 
 for temporary disability and death. Four of these pay 
 benefits for temporary disability, permanent disability, and 
 
OLD AGE BENEFITS 195 
 
 death; three pay benefits for temporary disability, permanent 
 disability, death and superannuation, and two pay benefits for 
 temporary disability, permanent disability, death and super- 
 annuation and death of members' wives. Of the 83 unions 
 that pay death benefits, 18 pay permanent disability bene- 
 fits. Only four were paying superannuation benefits. Four 
 other unions were at that time accumulating a fund for the 
 payment of superannuation benefits which are now in opera- 
 tion. 
 
 THE INTERNATIONAL TYPOGRAPHICAL UNION 
 
 The first American Trade Union to institute an old age pen- 
 sion system was the International Typographical Union. The 
 history of the pension system of this labour organization is 
 s'o interesting and indicative of the whole problem of fraternal 
 insurance that it is of value to discuss it at length. This 
 union, which began to take care of its aged workers as early 
 as 1892, has ever since been in the vanguard of the movement 
 to extend old age pensions to all persons. As early as' 1894 
 the International Typographical Union opened its Union 
 Printers' Home at Colorado Springs, Colorado, in order to 
 take care of the old and infirm members, "who through their 
 steadfast loyalty and many sacrifices to the I. T. U. have 
 made the present organization possible." After several years 
 of experience with this Home — generally conceded to be a good 
 one — the I. T. U. became aware of the fact that many aged 
 and incapacitated members were unable to avail themselves of 
 the benefits of the Home because of family ties and long associ- 
 ations in their respective communities. Once this was real- 
 ized, to further insure the members against abject poverty and 
 public or private charity, an old age pension system was 
 established at the annual convention of the Union in 1907. 
 This became operative in March, 1908. 
 
 The plan, as originally adopted, provided for the payment 
 of four dollars per week to members 60 years of age, having 
 
196 FACINGOLDAGE 
 
 a continuous active membership in good standing of twenty 
 years, unable to obtain sustaining employment at the printing 
 trade, and not earning more than $4.00 per week at the 
 trade. At the 1910 Convention the law was amended so as to 
 render eligible to pension, members 70 years of age, having 
 a continuous active membership in good standing of ten years. 
 Provision was also made in the law for members totally inca- 
 pacitated for work whose applications for admission to the 
 Home had been disapproved by reason of their aifliction ; such 
 members were required to have twenty years' continuous active 
 membership in good standing. 
 
 In 1911, at its convention in San Francisco, the I. T. U. 
 finding that the preceding amendment still did not reach a 
 large number of men whom it was' necessary to assist and 
 also that the experience of the first few years of its pension 
 fund warranted a further extension of the benefits, increased 
 the pension allowance to five dollars per week to the following 
 three classes of members: 
 
 First: Members 60 years of age who have been members 
 in good standing for a period of twenty years, including and 
 ante-dating the enactment of the pension law, and who find it 
 impossible to secure stistaining employment at the trade. 
 Applicants under this provision of the law must have been mem- 
 bers in good standing at the time the pension law became 
 effective and must have maintained active membership since 
 that time. 
 
 Second: Members who have reached the age of 70 years 
 and who have been in continuous good standing for a period 
 of ten years and who find it impossible to secure sustaining 
 employment at the trade. 
 
 Third: Members' who are totally incapacitated for work, 
 who have been continuous active members for twenty years, 
 and whose applications for admission to the Home have been 
 disapproved because their afflictions are such as to render them 
 ineligible for entry to that institution, In January, 1920, 
 
OLD AGE BENEFITS 197 
 
 the pension was further increased to six dollars per week. 
 
 The fund for the payment of pensions is provided by a 
 tax of one-half of one per cent, of the weekly earnings of all 
 members. 
 
 Since March, 1908, when the assessments were first made, 
 the total receipts of this fund, up to May 31, 1920, were 
 $3,856,161.09, from the tax assessment, $204,833.59 was de- 
 rived from interest, and $1,379.50 from returned pensions. 
 The total receipts were $4,095,4.67.02. 
 
 The expenditures made during the same time were $3,022,- 
 449 paid to pensioners ; and $86,158.26 for administration 
 and registration system. The balance of the fund on May 31, 
 1920, was $986,859.76. 
 
 The financial operations of this fund during the first few 
 years' were declared eminently satisfactory. So much so that 
 when the receipts in the first year exceeded the amount ex- 
 pended there was a temptation to reduce the amount of assess- 
 ment. Gradually, however, it was found that although the 
 assessments continuously increas'ed, the expenditures on 
 pensions grew steadily until in 1917 the latter exceeded the 
 total income by nearly $20,000. At the 1917 Convention 
 of the I. T. U. it was, therefore, recommended that the pro- 
 vision whereby a member at the age of 70 of but ten years 
 standing was entitled to a pension be repealed. This was done 
 the following year. During the year 1919, however, the in- 
 come from assessments exceeded the amount expended on pen- 
 sions by more than $200,000, although the number of pen- 
 sioners during the same year increased from 1,483 to 1,510. 
 The secret of this remarkable revival lies in the increased aver- 
 age earnings of the members of the International Typograph- 
 ical Union upon which the assessments are based. The annual 
 wages of the I. T. U. members increased, according to the 
 Secretary of the Union, from $1,264.88 in 1918 to $1,615.25 
 in 1919. 
 
 From the above conditions it is obvious that the future of 
 
198 FACINGOLDAGE 
 
 the Old Age Pension Fund of the I. T. U. is neither stable 
 nor secure. Should there be a depression in business or a low- 
 ering of wages the existence of the fund is' threatened, unless 
 the accumulated revenue fund is sufficiently large to protect 
 it. Otherwise, it will necessitate either a reduction in the pen- 
 sions or an increased rate of assesstaent. 
 
 Up to May 31, 1920, 3,093 applications for pensions by 
 the I. T. U. were received. Of this number! 92 petitions 
 were disapproved, 92 were withdrawn and 2,909 were approved. 
 Death removed 1,399, leaving 1,510 pensioners on May 31, 
 1920. The high death rate of 45.23 per cent, among these 
 pensioners is significant. This is doubtless due to the advanced 
 ages of the pensioners. The average age of all applicants 
 is 64.24 years. The membership of the unions having mem- 
 bers on pension in 1920 was 57,520. The pensioners' repre- 
 sented 2.62 per cent, of the membership of these unions which 
 in return constituted over three-fourths of the total member- 
 ship of the I. T. U. During the fiscal year ending May 31, 
 1920, 156 pensioners were added. 
 
 THE OEDEE, OF EAILKOAD TELEGEAPHEES 
 
 The Order of Railroad Telegraphers has established a pen- 
 sion fund for life annuities to old and faithful members of the 
 order who have reached an advanced age in life, as well as to 
 those totally disabled through physical and mental infirm- 
 ities. In order to be eligible to membership, one must be a 
 member continuously for at least five years, immediately prior 
 to the filing of application for membership with the pension 
 fund. Members 60 years of age and over are not eligible to 
 membership in the pension fund after January 1, 1916. 
 
 The fund is maintained from an admis'sion fee of five dollars 
 from all applicants for membership in the pension fund and 
 from a semi-annual assessment thereafter "equal to an equal 
 division of $240 over the period ensuing between the age of 
 
OLD AGE BENEFITS 199 
 
 the applicant at the time of admission to the pension fund and 
 his 65th birthday after which his or her assessments shall 
 cease." 
 
 When a member of the pension fund attains the age of 65, 
 he is' paid a monthly salary of $20 during the balance of his 
 or her natural life. 
 
 In order to obtain a total disability pension, eight years' 
 membership is required. The assessments cease as soon as 
 placed on retirement roU. 
 
 The pension fund is entirely self stistaining and can in no 
 way create any financial liability to the Order of the Railroad 
 Telegraphers. 
 
 The Secretary and Treasurer of the Order writes: "We 
 win probably discontinue our pension plan at our next con- 
 vention, due to the fact that this proposition has not received 
 the support of our members as' was anticipated. If it is dis- 
 continued, all money paid into the fund, will be returned to the 
 members of this department." 
 
 THE BRICKLAYESS' FUND 
 
 The Bricklayers', Masons' and Plasterers' International 
 Union of America has an Old Age and Disability Belief Fund. 
 This Union provides that when a member has' been in continu- 
 ous good standing for a period of twenty or more years, and 
 has passed the age of sixty and who through some bodily 
 infirmity is unable to secure sustaining employment at any 
 occupation and has no means of support, he is then entitled 
 to make application and receive five doUars per week benefit 
 from the Relief Fund. 
 
 A member who meets with some accident while working at 
 his trade on a building, during working hours, and is incapac- 
 itated from work, and who has ten years of continuous stand- 
 ing to his credit, is entitled to disability relief, of five dollars 
 per week. 
 
200 FACINGOLDAGE 
 
 The widow of a member, entitled to old' age or disability 
 relief, who is without means of support and who has reached 
 the age of sixty years at the time of her husband's death, is 
 entitled to the five dollar weekly payment until she dies or 
 remarries. 
 
 It is provided in the by-laws, that each member shall pay 
 into the treasury of the International Union such relief dues 
 as may from time to time be levied by the International Union 
 in convention assembled. The present assessment to the fund 
 is fifty cents a month for each member. 
 
 This Union has jurisdiction over the United States and Can- 
 ada. The general average membership for the first five years' 
 existence of the fund was approximately 72,000. About 4.67 
 per cent, of the membership made application for relief, of which 
 only about two-thirds were approved. In May, 1920, the 
 union had on its rolls 1,387 old age beneficiaries; in addition 
 93 were receiving disability benefits and 248 widows were on 
 the relief list. Each of these was drawing five dollars per 
 week as a pension. The Secretary of the union states : 
 
 "Our experience shows that the number on the relief roll is 
 continually growing larger, although the last two years the in- 
 crease has been very small, but it will continue to grow larger for 
 the reason that the percentage of claims rejected are for the 
 reason that they lack a year or two from being old enough, or a 
 year or two from having the required number of years continuous 
 good standing." 
 
 OTHER UNIONS 
 
 The Brotherhood of Locomotive Firemen and Enginemen 
 reports "an insurance feature in which every member must 
 participate if he is able to pass the required, medical exami- 
 nation," but "has no Old Age Relief Fund." 
 
 The Order of Railway Conductors of America has' a relief 
 fund. All members of this Order are eligible to participate 
 and receive assistance from this Fund, provided they are totally 
 
OLD AGE BENEFITS 201 
 
 disabled and without means of support for themselves' and fam- 
 ilies. 
 
 It is encouraging to note that the labour organizations 
 which have established pension systems of late, have learned 
 somewhat from the experience of their predecessors and are 
 at least attempting to adjust their rates on a more sound 
 actuarial basis ; and in addition they provide many other safe- 
 guards for the stability of their funds which do not exist in 
 the earlier systems. 
 
 The Pension Association of the Brotherhood of Locomotive 
 Engineers was first authorized in 1912 and was revised and 
 readopted May 22, 1918. Its constitution provides' that 
 after the passage of this law, no one 60 years of age and over 
 shall be admitted to membership. On and after June 30, 1916i, 
 no application shall be received for membership to the Pen- 
 sion Association from those who have reached the age of 50 
 years. And on and after December 31, 1919, no one can join 
 who has reached the age of 45 years, while after December 
 31, 1920, members who have reached the age of 40 years' are 
 barred from membership. It is also provided that only such 
 members of the B. of L. E. who are earning at least $60 
 per month are eligible to membership in this Association; also 
 "no person who is' out of employment temporarily caused by 
 sickness or injury, can become a member of this Association, 
 during such period." In addition to these restrictions, "All 
 applicants for membership' in this Association will be required 
 to pass a physical examination by a competent and reliable 
 physician, and those having physical or mental defects may 
 become members of this Association, provided that proper and 
 legal waivers be furnished by such applicants exempting this 
 Association from any and all liabilities resulting therefrom." 
 
 Benefits are extended to the following: First: "Any mem- 
 ber of this Association in good standing, who was in active 
 service at the time of enrollment as a member, but who from 
 physical or mental cause is totally and permanently disquali- 
 
202 FACING OLD AGE 
 
 fied, or has been retired on account of old age, shall receive 
 from the funds' of this Association a monthly pension as here- 
 inafter provided. 
 
 "Any member of this Association who voluntarily retires 
 from active service will not be entitled to receive a pension on 
 account of old age until he has reached the age of 63 years." 
 
 Second: "Any member of this Association, in good stand- 
 ing, who was not in active service at the time of enrollment as 
 a member of this Association, who from physical, mental, or 
 other cause, is unable to perform any kind of remunerative 
 employment, or who has reached the age of 70 years, shall 
 receive from the funds of this Association a pension as here- 
 inafter provided; provided further, however, that no member 
 shall receive a pension for disability caused by his use of 
 intoxicants, or unlawful acts." 
 
 Third: "All members of this' Association, who are 65 years 
 of age and are in active service, may if they so elect, volun- 
 tarily retire permanently from such service, and thereupon 
 become eligible to a pension at once. All other members who 
 have reached the age of 70 years shall be granted a pension." 
 
 The contributions and the pensions' of this Association are 
 graded, and vary in accordance with the age and period of 
 contribution. The amount of dues paid by each member 
 follows : 
 
 "All active members under the age of 30 years shall pay 50 
 cents per month. 
 
 "All active members from the age of 30 to 35 years shall pay 
 $1.00 per month. 
 
 "All active members from the age of 35 to 40 years shall pay 
 $1.50 per month. 
 
 "All active members from the age of 40 to 45 years shall pay 
 $2.00 per month. 
 
 "All active members from the age of 45 to 50 years shall pay 
 $2.50 per month. 
 
 '"All active members from the age of 50 to 55 years shall pay 
 $8.00 per month. 
 
OLD AGE BENEFITS 203 
 
 "All active members from the age of 55 to 60 years shall pay 
 $3.50 per month. 
 
 "All active members from the age of 60 to 65 years shall pay 
 $4.00 per month. 
 
 "All active members from the age of 65 years shall pay $4!.50 
 per month." 
 
 The pensions allowed are based upon the following scales: 
 
 "Any member of this Association who has been declared a pen- 
 sioner by the board of Governors, who shall have paid dues for 
 60 months, or less, shall receive a pension from this Association 
 for the remainder of his life, of $25.00 per month. 
 
 "Those paying the dues from 61 months to 120 months, $30.00 
 per month. 
 
 "Those paying the dues for 121 months to 160 months, $30.00 
 per month. 
 
 "Those paying the dues for 121 months to 180 months, $36.00 
 per month. 
 
 "Those paying the dues for 181 months to 240 months, $40.00 
 per month. 
 
 "Those paying the dues for 241 months to 300 months, $45.00 
 per month. 
 
 "Those paying the dues for 301 months to 360 months, $50.00 
 per month. 
 
 "Those paying the dues for 361 months to 420 months, $55.00 
 per month. 
 
 "Those paying the dues for 421 months to 480 months, $60.00 
 per month. 
 
 "Those paying the dues for over 480 months, $65.00 per month." 
 
 The Brotherhood of Locomotive Engineers also has in ad- 
 dition an Indigent Fund and an Insurance Relief Fund. 
 
 The Pressman's Union adopted a pension plan, by first 
 creating a sinking fund from the accumulations of a 25 cent , 
 assessment per month for all members for five years, before 
 the payment of pensions became operative. This, it is believed, 
 will create a sufficient fund which when placed on interest will 
 
204. FACINGOLDAGE 
 
 insure stability and prevent the gradual increase of the per 
 capita tax as was the case with other established funds. 
 
 Since 1913, District Number 21, United Mine Workers of 
 America, has had the following pension system: 
 
 Each member pays 40 cents assessment per month, which may 
 be raised or lowered when necessary. 
 
 All members, 60 years of age, when they have discontinued 
 work in the mines, or those physically disabled from performing 
 further labour in and around the mines, having no other means 
 of support, and who have been in good standing for five years 
 preceding January 1st, 1913, receive $3.00 per week. Those 
 joining the Union after January 1st, 1913, are not eligible to 
 benefits unless they have been members in good standing for 
 five years prior to making application for pension. 
 
 THE UNITED MINE WOKKERS OF AMERICA 
 
 At the 1916 International Convention of the United Mine 
 Workers of America, a Committee was appointed "to investigate 
 and report on the advisability and possible cost, to the Inter- 
 national Union, of erecting and maintaining a suitable home 
 wherein to care for the aged, infirm and decrepit members." 
 
 After a careful investigation of the Soldiers' Home, and 
 Homes for the Aged, maintained by the different unions, and 
 fraternal organizations, in the United States and England, 
 the Committee reached the conclusion that "taking the estimate 
 of other homes, it would cost about $40.00 per month for each 
 resident for clothing, food, medical attendance and medical 
 supplies." 
 
 The Committee further reported that "The question of pen- 
 sion, with or without a home, was early called to our atten- 
 tion, and as the different organizations with whom we came 
 in contact either had pension systems in active operation or 
 were preparing to adopt pension systems, we deemed it advis- 
 able to gather all the data possible on the subject." In com- 
 paring the safeguards adopted by other organizations, and in 
 its "endeavours" to select such as are actually necessary, to 
 
OLD AGE BENEFITS 205 
 
 make the plan a success, the Committee at the 1917 Inter- 
 national Convention of the U. M. W. A. recommended the 
 following plans for creating and maintaining a pension system. 
 
 "(1) An old age disability pension fund is hereby enacted 
 by an assessment of 40 cents per month per member, which 
 shall automatically be raised or lowered as necessary under the 
 direction of the board of trustees hereinafter provided for, 
 but in no case shall the assessment exceed 60 cents per month 
 per member. 
 
 "(2) Said assessment shall be in full force and operation 
 on and after April 1, 1918. 
 
 "(3) A sinking fund shall be created by the accumulation 
 of said assessment for a period of three years from and after 
 April 1, 1918. 
 
 "(4) That on and after April 1, 1921, all members in good 
 standing who have reached the age of sixty-five years and who 
 have been continuous members in good standing for a period 
 of ten years immediately preceding their application for pen- 
 sion and have paid their regular monthly assessment to the 
 pension fund for at least three years, whose earning capaci- 
 ties' have been reduced to less than twenty-five dollars per 
 month, and who have no visible means of support other than 
 their labour, shall be eligible to receive a pension of twenty 
 dollars per month payable monthly. 
 
 "(5) That on and after April 1, 1921, any member who 
 has been a continuous member in good standing for ten years 
 immediately preceding his application for pension and who has 
 "paid his regular monthly assessment to the pension fund for 
 at least three years and who is totally incapacitated for 
 work by reason of accident or sickness of a permanent char- 
 acter, who has no visible means of support other than his 
 labour and who has been denied aid from compensation laws 
 or has tried and failed to recover reasonable damages for in- 
 juries sustained, shall, upon satisfactory proof, be allowed 
 a pension of twenty dollars' per month, payable monthly ; the 
 
206 FACING OLD AGE 
 
 trustees to have the right to appoint a physician or physicians 
 to make an examination if they deem it necessary." 
 
 From a canvass of 609 miners' locals with a total member- 
 ship of 120,568 the Committee has learned that there were 
 4,199 members from 60 to 65 years old; 1,928 from 65 to 70 
 years of age, and 156, from 70 and over. In addition there 
 were also 1,497 incapacitated members under 60 years of age. 
 
 The Committee admitted that this was a very large per 
 cent., as compared with the membership of other organizations, 
 but recommended the adoption of 65 years of age as the min- 
 imum age for the payment of pension^. 
 
 It accepted the experience of the International Typograph- 
 ical Union as a safe guide for its own contemplated plan. 
 It stated that in the latter Union there is a fraction more 
 than 22 pensioners to each 1,000 members, which they assumed 
 would hold true of their own membership. Since that time the 
 miners have given up the plan of establishing their own pen- 
 sion fund but have instructed their committee to work for 
 the passage of old age pension laws. 
 
 During the Convention of the United Brotherhood of Car- 
 penters' and Joiners of America in September, 1920, the officers 
 of the Union were instructed to formulate plans for an old age 
 pension system for the members of the organization. 
 
 The experience of even the firmly established and best in- 
 tentioned fraternal pension systems in this country has not 
 proved these to be very satisfactory instruments. It is, 
 doubtless, this recognition that has prompted the Inter- 
 national Typographical Union to adopt the following resolu- 
 tion at its 1917 Convention: 
 
 "Whereas, The United States of America is the only great 
 nation in the World (excepting Russia) that does not provide old 
 age pensions for its worn out and worthy workers ; and 
 
 "Whereas, The consequent necessity of American workers to pro- 
 vide their own benefits is a gross injustice, and frequently ends in 
 failure through no fault of the workers ; and 
 
OLD AGE BENEFITS 207 
 
 "Whereas, The Government of the United States of America 
 has demanded that its citizens protect the honour of the nation with 
 their lives in a great war, while this Government has not in the 
 past been responsive to the demands of its workers to protect 
 their honour; therefore, be it 
 
 "Resolved, That the International Typographical Union, in 
 convention assembled, endorse and urge the passage of the old age 
 pension bill introduced in Congress by George I. R. Sherwood, 
 for the benefit of all American workers." 
 
 And in May, 1920, the Pennsylvania State Federation of 
 Labour also adopted by a unanimous vote the following 
 resolution : 
 
 "Whereas, — The United States is now the only industrially 
 developed country that has as yet made no provision for the aged 
 and superannuated workers, and 
 
 "Whereas, — The recent Report of the Pennsylvania Commis- 
 sion on Old Age Pensions shows conclusively that the problem 
 of old age is largely due to the industrial development of our 
 state as a result of which aged workers are relegated to the 
 industrial scrap-heap as useless and of no value as soon as their 
 pace begins to slacken, and 
 
 "Whereas, — It is now obvious to all that with prices soaring 
 skyward from day to day, and with wages never catching up with 
 the advancing prices, it is absolutely impossible for the wage- 
 worker to provide for old age from his own earnings, and 
 
 "Whereas, — The only present alternative facing the aged worker 
 is either that of going to the poorhouse or accepting charity, as 
 even when the worker attempts to save, by denying himself and 
 his family the most essential comforts, he often fails at the end 
 because of sickness or unemployment, which is not only an evil 
 and unjust, but ultimately works to the detriment of industrial 
 efficiency, as well as the welfare of the State, and 
 
 "Whereas, — It must be recognized that the worker who has 
 helped to create the wealth of this country and who has spent the 
 greatest part of his life in productive labour, has by his work, 
 made sufficient contributions to the progress of the state and nation 
 
208 FACINGOLDAGE 
 
 to entitle him to a living when industry or exhausted health no 
 longer permits him to work for a living, and 
 
 "Whereas, — The Pennsylvania Old Age Pension Commission 
 plans to submit a bill to the 1921 State Legislature providing for 
 a state system of old age pensions, therefore 
 
 "Be It Resolved, — That the Pennsylvania Federation of Labour 
 in convention assembled in Altoona, goes on record as urging the 
 above Commission to submit such a bill to the Legislature, and 
 the Federation further urges every State Senator and Assembly- 
 man to do his utmost in helping to promote this sadly-needed and 
 humane Legislation, and be it further 
 
 "Resolved, — That the secretary of the Federation be instructed 
 to include in his questionnaire to candidates for the State Legis- 
 lature, a question regarding the condidate's attitude to proposed 
 legislation on the question of Old Age Pensions, and no can- 
 didate shall be endorsed by the State Federation who has declared 
 himself against such Legislation." 
 
 That attempts made by the working classes to provide 
 against old age may frequently end in failure, is well borne 
 out from the preceding analyses and is generally recognized. 
 Labour organizations and labour leaders have therefore been 
 most active in agitating for governmental pension systems in 
 old age. Knowing the difficulties confronting them in estab- 
 lishing their own provisions, labour unions have repeatedly 
 declared that "The responsibility of caring for the veterans 
 of industry who in times of peace have been the mainspring 
 in the work of material progress, and in times of war have 
 always been ready to sacrifice their all, either in the field 
 of active operations or in bearing the burdens of taxation and 
 support, should as a matter of right and justice rest upon the 
 Government." 
 
 The inadequacy of the present means of protection in old 
 age is thus evident from the preceding three chapters. Under 
 the present conditions of costs of living and wages, thrift and 
 individual savings sufficient for old age cannot be seriously 
 considered possible for many wage-earners. Neither can the 
 
OLD AGE BENEFITS 209 
 
 industrial concerns be depended upon to take care of their 
 aged workers, since they have no assured permanency and 
 take care of only a fraction of the workers they employ. 
 While the recent Federal Retirement plan will take care of 
 many a needy employe, there stUl remain thousands of other 
 Federal employes as well as employes of states* and municipal- 
 ities who need to be protected. The fraternal and trade 
 union old age benefit funds are generally insecure and, at best, 
 the number that they can protect is inconsiderable. 
 
 The insufficiency of the present methods of aged relief in 
 the United States is succinctly summarized by the Pennsyl- 
 vania Commission regarding such provisions in that state. 
 The Commission states that : 
 
 "Of all the multifarious forms of industrial, municipal and fra- 
 ternal pensions in the State the number of Pennsylvania wage- 
 earners actually on pension lists in 1918 hardly reached ten thou- 
 sand. In the seventeen leading industries listed the number of 
 former Pennsylvania employes actually receiving old age pen- 
 sions was 2,152. The number of wage-workers receiving pensions 
 from concerns having no regular pension system would hardly 
 exceed an additional five hundred. Of all the railroad workers 
 in the State only about four thousand aged employes are receiv- 
 ing old age support. However, even if these systems were 
 operated more extensively, it is clear that they are largely depen- 
 dent upon the arbitrariness of the employer, which makes the 
 receipt of a pension very uncertain for many employes. The 
 period of service required is often too long. These schemes, it 
 was apparent, discriminate unfairly against those who cease to 
 be employes. In a few cases in the contributory schemes, em- 
 ployes either do not have their contributions returned or have them 
 returned without interest. Generally industrial pensions are con- 
 sidered merely deferred wages. These industrial systems specify 
 that a pension may be terminated at any time; that the establish- 
 ment of such a system is not to be construed as conferring a con- 
 tractual right, and that the company reserves the right to dis- 
 charge an employe or terminate the system at any time. 
 
210 FACINGOLDAGE 
 
 "Of the nearly fifty thousand public school teachers in Pennsyl- 
 vania, only a little more than 600 are receiving pensions from the 
 various pension funds. The number of policemen, firemen, and 
 other municipal and State employes in the State receiving old age 
 pensions did not exceed 1,700. The inadequacy of protection 
 against old age provided by trade unions, or fraternal organiza- 
 tions has already been discussed. It was seen that most of these 
 are not established upon sound actuarial principles. Many have 
 become insolvent and many more are liable to dissolution at any 
 time. As a rule, all these pension funds are exempt from the 
 strict supervision required of private insurance companies. The 
 total number of pensioners in the State (not including pensioners 
 of the United States) constitutes three per cent, of the total 
 population over 65 years of age in the State. In other words, 
 only three out of every hundred or thirty out of every thousand 
 persons, 65 years of age and over, were protected by old age 
 benefits in Pennsylvania in 1918. This percentage is computed 
 on the total population 65 years of age and over as given by the 
 1910 Census. It is obvious that it would be still lower if the 
 increase in the aged population during the past eight years was 
 taken into consideration." ^ 
 
 1 Report of Penna. Commission, pp 216-17. 
 
PART FOUR 
 
 OLD AGE PENSIONS: WHAT THEY ARE 
 
 AND THEIR OUTLOOK FOR THE 
 
 UNITED STATES 
 
CHAPTER XI 
 
 THE PURPOSE AND NATURE OF 
 PENSIONS 
 
 A pension may be defined as a regular allowance or pay- 
 ment made in consideration of past services. Pensions were 
 granted first by kings and other royalties to persons who dis- 
 tinguished themselves in art, literature, and science, as well 
 as to feudal retainers for military or political services. It 
 was also customary to grant pensions to prominent jurists, 
 university professors, and well-known clergymen, who had ren- 
 dered distinguished public service. The grant of a royal pen- 
 sion to an individual was usually taken as a token of gratitude 
 for valuable contributions made to the credit or benefit of the 
 crown, the country, or the public. In more democratic nations 
 the government still pensions soldiers and war veterans in recog- 
 nition of their devoted service in the defence and proitec- 
 tion of their country. 
 
 The more recent demands for the establishment of old age 
 pensions, as a social policy, applicable to all citizens, is merely 
 the natural extension of this principle to the veterans of indus- 
 try, to men and women who by brain and brawn have made 
 vital and essential contributions to the social welfare. To 
 extend this protection in old age to the working classes is merely 
 to recognize the changes wrought in our industrial system 
 which make the welfare, comfort and happiness of all the 
 people depend largely upon the labour of those who work for 
 wages. 
 
 The smug business man who takes his train in New York 
 after theatre hours at night, goes to sleep in his puUman-car 
 and upon awakening finds himself in Pittsburgh or Boston 
 
 213 
 
214i FACINGOLDAGE 
 
 ready to transact his business there, doubtless never thinks of 
 the thousands of manual workers who toiled to make these 
 achievements possible. Neither does the self-sufficient citizen 
 think of these workers when he steadily speeds along at forty 
 miles per hour on a well-paved highway in his comfortable 
 limousine, or at any other time when he accepts all the mod- 
 ern comforts and conveniences as a matter of course due to 
 him. Even those, who, like Carlyle, still hark back and sing 
 praises of the eighteenth century, do not fail to take advan- 
 tage of the comforts' of the nineteenth and twentieth centuries, 
 such as the railways, telephone, telegraph, and even the talk- 
 ing machine. Despite their condemnations ojf modem con- 
 veniences, they never go back to the stage-coach when they 
 go from New York to Pittsburgh or any other city. What- 
 ever the evils and faults of the modem industrial order — and 
 its evils are legion — it cannot be denied that on the whole it 
 has worked to the ultimate good of most concerned. Only the 
 old and superannuated wage-earners derive little benefit from 
 industrial development. The immediate effect upon them is 
 their replacement by machinery and their inability to find 
 other employment. For it is known to all that aged persons 
 are not wanted in modem industry. With the introduction 
 of newer processes of production, the experience of the old 
 workers counts for little, and they are generally eliminated 
 from industry and are thus deprived of the only means by 
 which they can secure a livelihood. To grant pensions to such 
 workers, during the days when modern industrial develop- 
 ment permits them no longer to provide for themselves, would 
 be merely a recognition of their services and a compens'ation 
 for their losses, even as we compensate property owners for 
 disturbance to property when it is taken from them for the 
 general good. 
 
 In the preceding chapters the inadequacy of the existing 
 provisions against old age have been recited, together with 
 the diflSculties which the old face in attempting to obtain 
 
NATURE OF PENSIONS 215 
 
 security, under the conditions of modern life. It is obvious 
 that the lack of old-age provisions demoralizes the individual 
 and is harmful to society as a whole. Society's loss, as a result 
 of this insecurity, is inestimable. Furthermore, from what- 
 ever angle it may be examined, it is evident that the problem 
 of economic support of the aged is with us, and whether met 
 in one form or another, society ultimately bears the burden. 
 An old-age insurance or pension system would unquestionably 
 rais'e the general standard of living, as it would eliminate to 
 a great extent the dread and fear of old age which now affects 
 adversely the productivity and efficiency of a great many in- 
 dividuals. That the granting of alms, either private or pub- 
 lic, is not only insufficient and unsatisfactory, but exercises 
 a degrading effect upon the recipients and is repugnant to the 
 self-respecting person, and can therefore not at all be consid- 
 ered a constructive policy, seems evident from the preceding 
 discussions. As aptly expressed by a Committee of the 
 National Association of Manufacturers in a special report 
 upon this subject: 
 
 "While the social activities of the state are marked by humane 
 legislation in many forms, for the betterment of the individual, 
 its system of poor relief is antiquated. Poor relief makes no dis- 
 tinction between the worthy and the unworthy; the social stigma, 
 the depravation of the citizenship and often the publication in 
 the town report of the name of the recipient and the amount 
 doled out to him, make the system onerous and the opprobrious 
 epithet of 'pauper' is the price the citizen pays for help." 
 
 That there is a problem of old age which is largely the 
 creation of modern machine industry, is now recognized by all. 
 Practically all civilized governments now consider this an 
 important national problem which must be dealt with with- 
 out delay. Its solution is generally sought in a broad con- 
 structive social policy rather than in the haphazard chari- 
 table and individual methods of relief. There are few industri- 
 
216 FACINGOLDAGE 
 
 ally developed nations at present that have not yet adopted 
 a definite course of social action in remedying the problems 
 faced in old age. Of all English-speaking peoples, the United' 
 States is most backward in this respect, despite its high indus- 
 trial development. 
 
 In dealing with this problem European governments have 
 generally followed one or two of the following methods of 
 caring for their aged. A number of countries also adopted 
 plans which involve a combination of features of each scheme. 
 The methods generally followed may be classified under the 
 following headings: (1) A system of voluntary insurance. 
 (2) Compulsory contributory insurance. (3) Gratuitous or 
 straight pensions by the Government. While the writer 
 has formed decided opinions upon the merits of each of these 
 schemes, it is the intention to present here an unbiased analysis 
 of the arguments in favour and against each of these systems. 
 The adoption of any one of them depends a great deal upon 
 the social and economic conditions of the particular State, 
 or Country, and an impartial discussion of each system is 
 essential. 
 
 I. VOLUNTARY INSURANCE 
 
 Voluntary insurance against old age may be classified into 
 several types. (A) Private voluntary insurance. (B) Vol- 
 untary insurance under Public Administration. (C) Volun- 
 tary subsidized Insurance. 
 
 (A) Private Voluntary Insurance. — Under this head may 
 be included: (1) The old age mutual insurance as provided 
 by trade unions and fraternal orgauiizations, (2) insurance 
 against old age by industrial corporations and (3) insurance 
 with private companies. All of these forms are business propo- 
 sitions pure and simple. They involve no State action other 
 than supervision. The extent of old age insurance by means 
 of the above agencies, is very limited. 
 
 (B) Voluntary Insurance Under Public Administration, — 
 
NATURE OF PENSIONS 217 
 
 With this form of insurance there is no state subsidy, but the 
 government sells annuities and insurance at cheap rates. 
 In addition to governmental guarantees, the State in most 
 instances bears the expense of administration. This is the 
 underlying principle in the State Savings Bank System in 
 force in Massachusetts and Canada and to a minor extent 
 in respect to insurance in Wisconsin. The aims of this insur- 
 ance is to facilitaJte savings against old age and to make it 
 attractive and accessible to wage-earners. The amount of in- 
 surance is' limited and opportunities are offered employers of 
 labour to co-operate with their employes either by making 
 conltributions towards the payment of the premium or by col- 
 lecting it. The advantage of this form of state savings over 
 private insurance lies in the cheapening of the premiums by 
 the elimination of profit and the cost of adminisitration. 
 
 (C) Voluntary Subsidized Insurance.^The object here is 
 to put a premium on savings for old age. The State, in this 
 case, subsidizes individual thrift by means of a State contri- 
 bution. These systems were practised for some time in France, 
 Belgium, Italy, and Spain and still exist in some of these 
 countries. They are devised with the special purpose of serv- 
 ing the wage workers. The amounts of the subsidies vary in 
 each country. The latter are not given to the insured but 
 deposited to his or her account and go to swell the amount 
 of the pension purchased. 
 
 The three preceding forms of voluntary insurance are the 
 evolutionary outgrowth of one another. The chief reason 
 urged in favour of voluntary insurance is that it encourages 
 thrift and maintains the self-respect of its beneficiaries. It 
 is pointed out however by all experts that in practice after 
 many decades of effort it has failed to accomplish its purpose. 
 Even generous subsidies do not seem to attract more than a 
 small part of the wage-earners, and in most countries these 
 systems have been partly or entirely superseded by other 
 methods. Reference has already been made to the Massachu- 
 
218 PACINGOLDAGE 
 
 setts experiment where after twelve years existence of the sav- 
 ings system only about three hundred persons took advantage 
 of this form of insurance. Even subsidized insurance, accord- 
 ing to the experiences of the different countries, has at no 
 time or in any land accomplished its purposte. The working 
 people obviously either cannot or do not avail themselves of 
 such insurance. Neither is this fact surprising in view of our 
 previous analysis of the actual conditions of wage-workers. Dr. 
 Rubinow, after an exhaustive discussion of the voluntary scheme 
 in the several European countries concludes: 
 
 "1. That even a heavily subsidized system of voluntary old 
 age insurance attracts only a small proportion of the working 
 class, presumably of the better paid strata. 
 
 "2. That even of those who begin accounts, a large and growing 
 proportion fails to continue to make the necessary contributions 
 with any regularity. 
 
 "3. That usually only the minimum is contributed which is neces- 
 sary to acquire the subsidies. 
 
 "4. That the workingmen are forced to reduce their old age pen- 
 sions in order to safeguard the interest of their families, and 
 
 "5. That the pensions actually acquired are pitifully small." '^ 
 
 II. COMPULSORY CONTEIBUTOEY INSURANCE 
 
 The contributory form of insurance came about as a logical 
 result of the failure of the voluntary systems. The great 
 mass of wage-workers being either unwilling or unable to insure 
 themselves against old age, European governments s'ought to 
 overcome this by making it obligatory for certain classes of 
 wage-workers — ^whose yearly income did not exceed a certain 
 amount; — to insure themselves against old age. The govern- 
 ment continued making it attractive by subsidizing the 
 insurance. Germany was the first country in Europe to 
 establish compulsory insurance for working people. A system 
 
 1 Rubinow, Social Insttrance, p 334. 
 
NATURE OF PENSIONS 219 
 
 patterned after the German one was adopted by France in 
 1910. Systems embodying the compulsory principles were 
 als'o established in Austro-Hungary, Chile, France, Greece, 
 Iceland, Italy, Luxemburg, Netherlands, Portugal, Roumania, 
 Russia, Spain, Sweden, and Switzerland. 
 
 Under the compulsory form of insurance all wage-workers 
 earning below a certain income are compelled to insure. Sal- 
 aried workers above a set amount are not obligated to insure 
 but may, in common with other classes, take out voluntary 
 insurance. Participation in the plan begins at an early age. 
 Contributions are generally made both by the employer and 
 employe in equal parts. The state's contribution consists of 
 bearing the expenses of administration. In addition, the 
 latter also makes a direct contribution to the pension after it 
 has matured. In Germany the contributions of the workers are 
 graded in accordance with their income, while in France it is 
 uniform for all adult males, females and minors. The 
 employes' contributions are collected by the employer who is 
 allowed to discount them from the wages of his workers. The 
 age when one becomes entitled to a pension is set at 60 years 
 of age in France, and 70 years, until 1917, in Germany. Be- 
 fore a person, however, can receive a pension he must have 
 made a minimum number of contributions ; this in Germany is 
 1,200 weeks, and in France thirty annual contributions. To 
 protect also those who cannot make the required number of 
 contributions, provisions are made in both countries reducing 
 the required period of contributions by 40 weeks for each 
 year of age over iO in Germany and 30 in France, when the 
 law went into effect. The amount of the pension allowed 
 under these plans is very small, rarely exceeding $60 a year 
 previous to the war — an allowance which obviously could not 
 go very far. No country which has introduced compulsory 
 insurance has at any time attempted to rais'e more than fifty 
 per cent, of the necessary funds from the insured persons. 
 In Germany the contributions from the insured persons 
 
220 FACINGOLDAGE 
 
 amounted to about 40 per cent, of the total disbursements, 
 while in other countries it amounts to about 30 per cent, of 
 the funds disbursed. 
 
 The advantages of the system of compulsory contributory 
 insurance are as follows: (1) Its possibility of universality. 
 By means of compulsion, insurance not only can be extended 
 to all classes that need most the protection against old age, but 
 can also be made most effective. 
 
 (2) Compulsory insurance removes any suggestion of 
 charity. Under this system the worker gets his pension 
 a a matter of right even when he is not poor. "It is not 
 a dead-level system. It preserves a normal relation between 
 the standards of life before and after the age of pen- 
 sion and also preserves a just relationship between services 
 rendered and the rewards granted, for it is usually based upon 
 the length of contributions, which is the length of activity." ^ 
 (3) It encourages thrift even though not of a voluntary 
 nature. (4) The need of old age pensions is largely a result 
 of the industrial problem and ought to be borne by industry. 
 "It is economically just, in so far as it exacts a contribution 
 from the industry, for superannuation is not less a factor 
 of modern industrial life than is the rate of accidents or of 
 sickness. If it be just that each industry should contribute 
 to the cost of accident compensation in proportion to the 
 number of accidents occurring, rather than that the entire 
 cost be forced back upon the national treasury, it would seem 
 to be equally just that an industry which uses up men by 
 45 or 56 years may be made to contribute to the cost of 
 old-age support in a greater degree than another industry 
 or occupation in which men can preserve their productive life 
 until 65. Looking upon it in another way, the justice of the 
 claim may be admitted, that a contribution on the part of the 
 industry to old-age insurance is but a deferred wage ... if, 
 under modem industrial conditions, it could be expected that 
 
 1 Rubinow, Social Insurance, p 386. 
 
NATURE OF PENSIONS 221 
 
 the wage-workers themselves would be able to raise the stand- 
 ard of wages to the necessary level s'o as to include the cost 
 of old-age support, and that they would use this additional 
 increment for that purpose, no compulsory system would be 
 necessary. But the compulsory system is necessary just be- 
 cause these two conditions are found to be impossible."^ 
 (5) It does' not burden taxation directly. (6) Compulsory 
 insurance is also urged because of the fact that more countries 
 have adopted this plan than any other, and because it has 
 proved successful in several countries where it has been in effect 
 for some years. 
 
 The objections to the compulsory principle of insurance 
 are: (1) It cannot be made universal, as it omits many who 
 may need such protection no less than wage-earners. It is 
 evident that it can only be made to apply to persons who are 
 in regular employment. It is next to impossible to coUect 
 contributions from persons who are irregularly employed, from 
 agricultural labourers, from those who are their own employ- 
 ers, from women who work at home not for wages, from small 
 merchants, and so forth. (2) Even through compulsion it is 
 diflBcult to reach the poorest classes of workers who are most 
 in need of old-age support. These people simply cannot save 
 enough to contribute to pension funds. Thrift among workers 
 who do not receive a living wage is a delusion, and even if 
 possible, is uneconomic and unsocial. (3) Compulsory in- 
 surance, it is contended, lessens the quality of self-help and 
 reliance in the individual. Said the Chairman of the Mas- 
 sachusetts Commission: "If this is the country of wealth it 
 is also the country of individualistic ideals and achievements. 
 It was founded to secure individual liberty of thought and 
 action with opportunities for working out one's own salva- 
 tion. This is its peculiar destiny and its special mission, and 
 its' greatest contribution to humanity will be in terms of char- 
 acter rather than wealth. Not for any reason of sentiment, 
 
 a Social Insurance, pp 386-387. 
 
222 PACINGOLDAGE 
 
 but because our national progress under the individualistic 
 ideal has been such as to demonstrate its wisdom and sound- 
 ness, do I believe we should take no steps calculated to take 
 us away from this path of development." ^ 
 
 (4) Where the compulsory system is established the sums 
 contributed by the insured are practically insignificant. Not 
 only does the state make a direct subsidy to the Insured, but 
 it also bears the expenses, which because of the inherent com- 
 plexities of conducting the administrative machinery and the 
 recording of facts for a long period of years with reference 
 to contributions, is enormously expensive. It has, therefore, 
 also been advanced that there is practically no difference between 
 the state paying pensions outright, and collecting the contri- 
 butions by the compulsory principle. (5) Compulsory insur- 
 ance, it is argued by some, is class legislation, as it places the 
 wage-earning classes under a special regime. It necessi- 
 tates the creation of a vast bureaucratic system. "It would 
 be nothing but taxation, and being exacted from unwilling 
 subjects, would carry with it none of the good influences' of 
 voluntary thrift." ^ (6) Old Age is not a problem of industry 
 alone, for people grow old despite all human efforts. (7) The 
 amount of the pension under the compuls'ory-contributory 
 system is small and the age set is too high. The pensions 
 as paid in European countries are, as is commonly expressed, 
 "too little to exist on and too much to die on." (8) Com- 
 pulsory contributions, furthermore, are inelastic and cannot 
 be adjusted to the particular needs of the various industries 
 and localities. (9) The proponents of American individual- 
 ism also declare that it is un-American, distasteful and 
 contrary to the American spirit. The compulsory principle, 
 it is claimed, is intolerable and would not be accepted by the 
 American citizens. Mr. Arthur M. Huddell, a dissenting 
 
 3! Magnus W. Alexander, Bulletin of Bureau of Labour Statistics," No. 
 
 212, p 774. 
 
 2 Charles Booth, Pauperism and the Endowment of Old Age, p 187. 
 
NATURE OF PENSIONS 223 
 
 member of the Massachusetts Commission states the case as 
 follows : 
 
 "To my mind, compulsory insurance is un-American, and cannot 
 be considered in any way as a solution of this question. The wages 
 of the workman will not permit any compulsory assessments for 
 insurance. There is a vast diiFerence between this and compulsory 
 sanitary laws, compulsory education and compulsory quarantine 
 laws. A poor man can comply with any of the above laws with- 
 out an expenditure of money or in any way reducing his wages, 
 which he could not do with a compulsory insurance law, as that 
 would be equivalent to a reduction in wages. There is not suffi- 
 cient margin between the living expenses and the wages of the 
 workman to permit that reduction in his wages." ^ 
 
 (10) The compulsory principle is also believed to be uncon- 
 stitutional, as it obligates certain groups to set aside a certain 
 percentage of their earnings to provide for old age. 
 
 nl. STRAIGHT OR NON-CONTRIBUTOEY PENSIONS 
 
 Just as the compulsory insurance principle was largely an 
 outgrowth of the failure of voluntary insurance the estab- 
 lishment of straight pension systems may also be said to have 
 come about principally because of the complexities involved in 
 and the limited effectiveness of the compulsory insurance princi- 
 ple. While straight or gratuitous pensions are comprehensive 
 and immediately effective, compulsory insurance forms require a 
 long term of years before they can become operative and ca- 
 pable of coping with the immediate problems. State pensions 
 were first inaugurated in order to secure an immediate means 
 of reKeving the pressing problem of the aged poor. This 
 form of outdoor relief is a marked improvement over the in- 
 door relief previously followed which involves the destruction 
 of the amour propre and independence of the recipients. 
 A straight pension is an economic remedy for an economic ill 
 
 1 Massachusetts Report, 1910, p 337. 
 
224 I*ACiNG OLD AGE 
 
 readily adapted to the needs created by the modern industrial 
 development. Under this system neither the employer nor the 
 employe make direct contributions. The funds are paid out 
 from the general treasury. Systems of gratuitous pensions 
 have been adopted in Alaska, Australia, Denmark, France, 
 Great Britain, New South Wales, New Zealand, and Uruguay. 
 
 State pensions are usually granted to all persons who have 
 complied with the requirements of the particular law. The 
 specifications usually provide that a person before receiving 
 a pension must have attained a certain age ; that he must hafvei 
 been a citizen with a long period of residence ; that he must not 
 have an income from any source above the s'pecified amount. 
 Sometimes it is also required that he must have fulfilled a cer- 
 tain period of service. In addition to these, most countries 
 require also certain moral and character qualifications. In 
 many countries pensions are denied on account of family deser- 
 tion, neglect of minor children, dninkenness, or prison sen- 
 tence. It is generally specified that pensions are given to the 
 "deserving poor." The first of these gratuitous systems was 
 established in Denmark in 1891. Due to the influence of Lloyd 
 George, a straight old-age pension system was adopted by 
 Great Britain in 1908. In 1915, the Territory of Alaska 
 and the State of Arizona had enacted similar systems, the 
 latter of which was declared unconstitutional by the Supreme 
 Court of that State before it became operative. Although 
 the principles involved are the same in aU countries, the re- 
 quirements and qualifications are widely varied in the several 
 countries' operating these systems of pensioning the aged. 
 
 The non-contributory form of old-age relief is one of the 
 most popular and most widely discussed plans. The par- 
 ticular points in favour of this scheme as over the voluntary 
 and compulsory systems may be outlined as follows: 
 
 (1) Its simplicity. Straight pensions are given only under 
 definite and well defined conditions ; the amounts are fixed and 
 little administrative expense is required. 
 
NATURE OF PENSIONS 225 
 
 (2) Straight state pensions are just, as it is the duty of 
 the state to take care of its aged poor. This obligation of 
 the state, was recognized by the latter long ago in its distri- 
 bution of poor relief. Pensions in old age, while following the 
 same principle, remove the stigma and degradation of the pres- 
 ent system of poor relief. It is pointed out that the state 
 at present attempts to relieve most classes of suffering, except 
 old age. Pensions, are, therefore, simply an extension of the 
 duties of the state aimed to remove the suffering and terror 
 associated with old age. "It is compulsory now upon our 
 citizens to make a living, but if they wish to become crim- 
 inals, the state will support them. But the man who wants 
 to remain a law-abiding citizen and try to support his family 
 is compelled to provide for old age, when the facts are that 
 he is unable at the present time to secure many of the com- 
 forts of life. Every law-abiding citizen has rendered to his 
 country some service, which entitles him to look forward to 
 a pension given in return; and as at present the premium 
 placed upon crime and poverty is un-American, something 
 should be done to provide for the law-abiding, self-supporting 
 citizen." ^ 
 
 (3) Governmental pensions while nominally non-contribu- 
 tory, have in reality been contributed by all in the taxes paid. 
 Mr. Lloyd George states this as follows: 
 
 "As long as you have taxes upon commodities which are con- 
 sumed practically by every family in the country, there is no such 
 thing as a non-contributory scheme . . . Again, the worker who 
 has contributed by his strength and his skill to the increase of 
 the national wealth, has made his contributions to the fund from 
 which his pension is to come when he is no longer able to work." "^ 
 
 It is thus evident that those who have given a considerable 
 part of their lives in useful* service have already made those 
 
 1 A. M. Huddell, Mass. Report p 338. 
 
 2 Ibid p 332. 
 
226 FACINGOLDAGE 
 
 contributions to the state and are entitled to freedom from the 
 dread and anxiety over their needs during their declining years, 
 as well as from the disgraceful brand of pauperism. 
 
 (41) Non-contributory pensions by the state would stimulate 
 people to greater loyalty, ambition, independence and hope- 
 fulness ; and would give the individual a stake in his country, 
 thus increasing his patriotism and his interest in government 
 and national affairs. James T. Buckley, a dissenting member 
 of the Massachusetts Commission, argues that : 
 
 "Assurance through a pension^ contributory or otherwise, that 
 one's last days would be spent in peace and comfort, with no fear 
 of poverty and want, would have a strengthening influence upon 
 the individual, enabling him to go to his daily task with a calm 
 and contented mind, and would tend to increase 'the sense of per- 
 sonal responsibility and independence.' " ■'■ 
 
 "A pension in old age," declared also John Metcalfe, "would 
 be no small gain and certainly a most conservative measure to give 
 the expression 'my country' some little material meaning, even if 
 that tangible something was but the security that after 65 years 
 of individual struggling with the tasks of life, the state pro- 
 vided a small pension for every man and woman in the land. It 
 would be no small gain if this measure led the men and women 
 to look out on life with more hope and on national and com- 
 mercial affairs as something which affected them personally, and 
 in which they should take a deep interest." ^ 
 
 (5) A pension to be secured in old age would encourage 
 thrift and savings. As the pension alone is rarely s'ufficlent 
 to cover all the needs, the wage-earners would make an effort 
 to lay aside whatever possible, so that their savings together 
 with the annuity would assure them of a minimum of comfort. 
 The fact that they can never save sufficiently to provide for 
 old age is, perhaps, the greatest deterrent factor which pre- 
 vents people who could afford to do so from saving the little 
 
 1 Ibid p 230. 
 
 2 Metcalfe, The Case For Universal Pensions, p S3. 
 
NATURE OF PENSIONS 227 
 
 they can. When there is assurance, however, that one's last 
 days would be spent in peace and some comfort with no fear 
 of want and the poorhouse, it would have an encouraging in- 
 fluence tending to cause most persons to make some provision 
 for the future. Says Mr. Metcalfe: 
 
 "The principle which underlies the habit of saving, in my 
 opinion, is exactly the same as that which induces a hen to lay 
 its egg where there is at least one egg already — what I will call 
 the principle of the nest egg — and that just as you induce a hen 
 to lay its egg where you have placed one egg you would induce the 
 artisan and labourer to begin to put something by from his earn- 
 ings by providing him with a certain small sum in the shape of a 
 pension for old age." ■'■ 
 
 Indeed, the savings accumulations' of the countries which have 
 adopted this system of pensions such as Denmark, Great 
 Britain, New Zealand, etc., seem to bear out this contention. 
 
 (6) Pensions in old age would keep families intact. They 
 would increase filial affection and respect for parents. What 
 we respect and venerate in the aged is not old age as such, 
 but the superiority in judgment, experience and independence 
 of means. And one of the principle reasons why the aged 
 in modem society, especially as found among the lower paid 
 wage-earning classes, are less esteemed, is, doubtless, because 
 the aged wage-earner instead of having steadily improved his 
 position is compelled to steadily give way to younger men. 
 Unable to earn a living wage, in his regular employment, he 
 is compelled to do the work that needs little mental and physi- 
 cal labour. This generally means accepting employment of 
 a menial nature. In this work he naturally loses his own self- 
 respect, and once that is lost, the loss of respect for him on 
 the part of his fellowmen and even of his own relations follows 
 soon. A pension in old age would not only protect his inde- 
 pendence and respect, but also would very often make him a 
 
 1 Ibid p 86. 
 
228 FACING OLD AGE 
 
 welcome addition to the family of the son or daughter, where 
 without it he would be a burden. 
 
 (7) A non-contributory pension system is unquestionably 
 the most feasible plan to be suggested at the present time for 
 the United States. The Massachusetts experiment has shown 
 how futile and inadequate voluntary insurance systems are in 
 this country. As most of our social legislation was first origi- 
 nated in the States and only later on followed by national 
 legislation, a system of compulsory insurance by the individ- 
 ual States would, under our conditions of free labour migra- 
 tion and mobility, necessitate an expenditure upon the account- 
 ing and recording of statistics, an essential to the compul- 
 sory-contributory principles, which would make it almost pro- 
 hibitive from consideration. 
 
 ARGUMENTS AGAINST NON-CONTBIBUTOKY PENSIONS 
 
 The Massachusetts Commission on Old Age Pensions, Annu- 
 ities and Insurance, brought the chief arguments against a 
 non-contributory pension plan for the United States in its 
 repofrt of 1910. The Commission concluded that: "The 
 adoption of any scheme of non-contributory pensions in Mas- 
 sachusetts, or in any other American state, seems inadvisable 
 and impracticable." The reasons given against this plan by 
 the Commission and other critics are as follows: 
 
 (1) The heavy expense involved in such a plan. The Com- 
 mission estimated that for Massachusetts to pay a pension of 
 $200 per year or four dollars per week for half the population 
 70 years of age and over, would cost that State not less than 
 .$10,000,000 per year. The cost would, of course, be greatly 
 increased if the pensionable age is set at 65. 
 
 While this is true it must be remembered that a great deal 
 of this cost is already being paid by the citizens at present 
 through the different charitable and philanthropic agencies, as 
 well as public poor relief. To a considerable extent, therefore, 
 
NATURE OF PENSIONS 229 
 
 the cost of the pension would be met by savings on the present 
 expenditures of public and private philanthropy. 
 
 Indeed, according to Prof. Woodbury, ^ the proportion of 
 paupers over 70 years of age in England fell from 23 per cent, 
 of the population of this age in 1905 to 18.6 per cent, in 
 1910, one year after pensions began to be paid. After the 
 1911 amendment, which entitled persons receiving poor relief 
 to pensions, the number of those 70 years of age and over who 
 were given outdoor relief in England decreased from 138,323 
 persons in January, 1910, to only 8,563 in January, 1913, a 
 decrease of 94.6 per cent. The number of indoor paupers 
 also showed a decrease of 19.8 per cent, from 1906 to 1912. 
 The cost of outdoor relief in 1910 dropped from 11% to 7% 
 pence per head of population. In New Zealand, also, the 
 expense per capita of the population on poor relief fell 10.5 
 per cent, from 1899 to 1901 as a result of a grant of 11,000 
 pensions. Moreover, as is advanced by a dissenting member 
 of the Massachusetts Commission, the argument of heavy ex- 
 pense : 
 
 "is fallacious, for the ultimate expense of any given project 
 is the same^ whether that cost be levied directly upon those who 
 are to benefit by the scheme, as in the proposed contributory 
 scheme, or indirectly upon the same beneficiaries through the 
 medium of the State tax." " Again Dr. Rubinow justifies the 
 increased cost on the ground that: "when an institution is to be 
 established, first its necessity, its usefulness, or harmfulness must 
 be considered, and only then the question of ways and means comes 
 into the foreground." ^ 
 
 (2) Straight pensions, it is contended, is class legislation, 
 as they tax the rich for the benefit of the poor. "There is 
 no real ground for the assertion that because an industrious 
 
 1 Quarterly Journal of Economics, Vol. 30, 1915 p 152. 
 
 2 Massachusetts Report, 1910, p 332. 
 
 3 Social Insurance p 281. 
 
230 FACINGOLDAGE 
 
 man has failed to earn a sufficiency, he has a right to be re- 
 warded for his industry out of the proceeds of a tax levied upon 
 his neighbours, to whom he has rendered no service, or none 
 which has not been paid for in wages." ^ 
 
 (3) Gratuitous governmental pensions, some argue, would 
 destroy the habit of thrift, as it would lessen the sense of per- 
 sonal responsibility and independence. The ultimate test 
 of a pension system, it is contended, is not the degree of com- 
 fort and security bestowed upon the aged poor but its effect 
 upon the character and self-dependence of the workers. A 
 pension to all, it is claimed, puts no premium upon thrift and 
 would only demoralize the class it is intended to help. This 
 case is stated by a leading opponent of social insurance in 
 this country as follows : 
 
 "It (gratuitous pensions) will undermine and tend to destroy 
 the self-respecting character of our people as citizens of a democ- 
 racy where economic independence achieved by individual efforts, 
 self-sacrifice and self-denial, is, after all, the only aim vporth while. 
 However much we may be inclined to permit ourselves to be 
 deceived by specious arguments of guesswork philanthropy into 
 believing the gift is to help the recipient and not to hinder, such 
 gifts, with rare exceptions, are opposed to principles of character- 
 building and of a character-maintenance throughout all the years 
 which constitute the span of human life. . . . Hold out the pros- 
 pect thatj such effort is not necessary, that earnings may be 
 squandered for a thousand and one needless purposes, that re- 
 straint upon family expenditures is not required, and the most 
 powerful incentive which makes for character and growth in a 
 democracy is taken away." ^ 
 
 President A. T. Hadley, of Yale University, also stated: 
 
 "We need measures which shall increase individual responsi- 
 bility rather than diminish it; measures which shall give us more 
 
 1 William H. Lackey, Old Age Pensions p 103. 
 
 2 F. L. Hoffman, quoted by Mass. Com. p 233. 
 
NATURE or PENSIONS 231 
 
 self-reliance and less reliance on society as a whole. We cannot 
 aiiord to countenance a system of morals or law which justifies 
 the individual in looking to the community rather than to himself 
 for support in age or infirmity." ^ 
 
 The moral level upon which the above arguments are based 
 IS obvious. These critics who display so much apprehension 
 of undermining the much talked of habit of thrift with which 
 every working man is supposed to be endowed, ignore the fact 
 that the great majority of the people who reach old age and 
 who qualify for pensions in the countries having pension 
 systems, is in itself sufficient evidence that there was either 
 no habit of thrift to be destroyed, or that the conditions of the 
 wages were so low that savings were impossible, as was con- 
 clusively shown in a previous chapter. Where was the thrift 
 habit of the 58.8 per cent, of the aged 70 and over who in 
 1912, when pensions began to be paid out, qualified for pen- 
 sions in England and Wales ; the 68.4 per cent, who quali- 
 fied in Ireland ; the 34i per cent, in rich Australia and New 
 Zealand; the estimated 16 to 26 per cent, in prosperous Ger- 
 many; the 35 per cent, in thrifty Denmark, and the 50 per 
 cent, of the aged who qualified for pensions in the land of thfe 
 most thrifty of peoples, France? It is preposterous to con- 
 tend that the habit of thrift can be destroyed by a pension, 
 which at best, is hardly sufficient to keep body and soul to- 
 gether — paid at the remote and uncertain possibility of attain- 
 ing old age. On the contrary, it would doubtless prove an 
 incentive to saving, as the pension allowance meeting only the 
 bare necessities would enable a person with a little savings' to 
 spend his declining days in comfort. The Wisconsin Indus- 
 trial Commission, in its report of 1915, points out that non- 
 contributory pensions do not discourage savings and cites the 
 example of Denmark, which was the first to establish such 
 a system, and where after twenty years of experience the num- 
 ber of applicants for old-age pensions shows a tendency to de- 
 1 Ibid p 240. 
 
232 FACINGOLDAGE 
 
 crease rather than the contrary, so that it cannot be said that 
 habits of thrift have declined. 
 
 "I have found in Denmark that the people who had most right 
 to speak with authority on the subject maintain that the law has 
 not acted in a way detrimental to thrift. The Inspector General 
 of the Sick Relief Funds holds that they are more thrifty." (Miss 
 Seller's evidence before Aged Pensioners Committee, 190S, p 5).^ 
 "Whether we take Germany, Australia or Denmark, the answer is 
 the same. Thrift, instead of vanishing before old age pensions, 
 has actually increased. There has been more money placed in the 
 German Savings Banks since 1891."^ 
 
 The Australian Royal Commission, in its report of 1907, 
 concluded that "The question as to whether thrift is discour- 
 aged by old age pensions has been inquired into by your 
 Commissioners, and, they have arrived at the conclusion that 
 the fact of a necessitous person being entitled to a pension 
 of 10s. a week at the age of 65 years will not have any appreci- 
 able influence on saving habits at an earlier age." 
 
 Mr. Miles M. Dawson, is quoted as saying: "I think there 
 has been an error about pensions checking the savings. In any 
 country where it has been adopted, in Denmark, Great Britain, 
 New Zealand, etc., the amount of savings has been continually 
 enlarging.^ 
 
 In an article in the Survey * Dr. Rubinow very skilfully 
 inquires : 
 
 "What other explanation can there be for this over-emphasis 
 of the virtue of thrift, unless it be the old ascetic principle that 
 there is virtue in practicing self-denial, in getting along without 
 things which we need ? Humanity's progress is based upon efforts 
 
 1 Quoted by Harold Spender, Contemporary Review Vol. 93 p 94. 
 
 2 Ibid p 104. 
 
 3 Bulletin of U. S. Bureau of Labour Statistics No. 212 p 778. 
 
 4 The Survey, New York, Feb. 28, 1914. 
 
NATURE or PENSIONS 233 
 
 get things which man wants. Has all human progress been im- 
 ral? 
 
 Whose morals suffer therefrom? Even the unworthy old man 
 woman over 70 is a weak, dependent, often decrepit, and help- 
 s person whose immorality represents no danger to society, 
 i who cannot be permitted to starve or freeze on the streets, if 
 
 are to protect our own moral nature from destruction. And 
 far as the young men and women are concerned, their conform- 
 ce or nonconformance to the recognized moral precepts will 
 ircely be influenced by the chance of getting an old-age pension 
 seventy. Whether it be the hope of rewards, or the fear of 
 nishment that must be relied upon to raise the moral level, 
 her seems too remote and problematic. When the fear of 
 imal damnation fails, the hope of five shillings per week in the 
 Q and uncertain future can scarcely succeed any better. . . . 
 "Why do we continue to worry so much about the morals of the 
 irking class, disregarding the fact that if freedom from anxiety 
 
 to the future must be demoralizing there is a perceptible 
 ment in society outside of the working classes free from such 
 rries ? 
 
 "Why can we not recognize the fact that the wage-worker 
 es not, will not, cannot be guided in his existence by the fear 
 
 what will happen to him after seventy, if he lives so long.'' 
 e shall fail to make headway in our social insurance efforts 
 til we are able to recognize these obvious inevitable facts. 
 "And if it be true that the morals of the working class need 
 'orm as much as the economic conditions of its existence, by all 
 ;ans let us think of some more effective pedagogical method 
 m the threat of contingent punishment postponed until a day 
 len moral regeneration is both impossible and useless." 
 
 (4) Non-contributory pensions wouldl lower wages. This 
 gument is based upon the following assumptions: (a) Be- 
 use of the direct competition of the pensioned employe, 
 i) The prospect of a pension in future years would lead 
 )rkers to accept lower wages than they would otherwise be 
 sposed to demand. This, it is claimed, is the case in some 
 the industries where pensions are now established, (c) It 
 
234. FACINGOLDAGE 
 
 would encourage undesirable immigration,' as it would invite 
 immigrants from outside the state, and thus depress the wage 
 rates by over-crowding the labour market. The fallacy of 
 the first of these objections has' already been pointed out in 
 another place, where it was shown that the number of people 
 still able to do work at the age when pensions! are given is 
 very insignificant. These men at 65 and 70 years of age are 
 hardly a factor in the labour market. Moreover, this argu- 
 ment, if true, would apply equally as well to any form of sav- 
 ings or even to contributions from children. It is evident that 
 a man with no income whatsoever is a more dangerous com- 
 petitor in the labour market than the man' with some means 
 of support. The second argument is obviously far fetched. 
 It requires considerable imagination to conceive the idea that 
 the prospect of a \ very meagre assistance in their old age 
 would alone be sufficient to make wage-earners work for lower 
 wages. It is known to all students and government experts 
 that the wage rates paid, at the present time, do not take into 
 consideration any savings and bear no relation to necessary 
 unemployment due to invalidity and old age. While there is 
 some truth in the contention that in the industries having reg- 
 ular pension systems the wage rates of certain classes of 
 workers — especially those past their middle age — may be lower 
 than in other industries not having such systems, it is because 
 there is an incentive to work in the one particular industry 
 over the others which have no such benefits. A state or na- 
 tion-wide pension system would in the very nature of such a 
 plan eliminate this objection. As to the third contention of 
 encouraging immigration it is not borne out by the facts in the 
 countries' where such systems are in operation. Long terms 
 of residence within the state are required everj^where, and im- 
 migration, as is well-known, is not popular with men past mid- 
 dle age. That a small pension given when reaching oldi age 
 would hardly be a sufficient inducement to young immigrants, 
 is self-evident. 
 
NATURE OF PENSIONS 235 
 
 (5) Straight pensions, concluded the Massachusetts Com- 
 'ssion, would have a disintegrating effect upon the family, 
 i non-contributory pension system would take away, in part, 
 e filial obligation for the support of aged parents, which 
 a mam bond of family solidarity. It would strike at one 
 the forces that have created the self-supporting, self-re- 
 lecting American family. The impairment of family soli- 
 -rity IS one of the most serious consequences to be appre- 
 nded from an experiment with non-contributory pensions." ^ 
 
 Mr. A. M. Huddell, in presenting a dissenting opinion 
 )on this point states: 
 
 "The facts that are before us as to the influence of pensions 
 the American family have either been entirely overlooked or 
 sconstrued by the majority of the commissioners. We have 
 fore us the pensions of the veterans of the Civil War, their 
 dows and orphans, and I fail to find the evidence that war- 
 nts any statement to the effect that this pension by the United 
 ates Government has disintegrated the family, or lessened 'the 
 ial obligations' for the support of the aged parents; or has in 
 y way impaired the family solidarity. On the contrary, the 
 nsions to the veterans of the Civil War have built up the Amer- 
 m family, and the filial obligations of the family have been 
 •engthened and its solidarity maintained. An old person liv- 
 y with a married son or daughter that is striving to bring up 
 family and provide for them as an American family should be 
 ovided for, and give to the children a proper education, can find 
 place for the old veteran or his widow who receives a pension 
 jm the Government in the family, because they do not take away 
 om the family any of the necessities of life, or stop in any way 
 e education of the children. At the same time, the independ- 
 ce of the veteran or his widow is maintained, because they have 
 ough to pay for their needs at that period of life. . . . With 
 is pension the old veteran and his widow are made comfortable 
 their old age by living with their children, their friends, or in 
 L Report of Mass. Com. p 301. 
 
236 FACINGOLDAGE 
 
 homes where they are paying their own way, and have a feeling 
 of independence that old people should have. They know they 
 are not taking away from the family any of the necessaries of 
 life, or hampering the education of the children through any 
 expense of their own support. Any extra expense in the work- 
 man's family directly affects the education of the child, compel- 
 ling him to leave school and seek employment to help maintain 
 the family." ^ 
 
 The same argument is also answered by Mr. L. W. Squier 
 as follows : 
 
 "Fortunately or unfortunately, according to the standpoint of 
 religion and economics from which one views the matter, we 
 Americans have not that conception of the family as the unit of 
 society, as the Oriental in all his religious and economic train- 
 ing. In China and Japan it is rare to find any individual in 
 want about sixty years of age, who has not some relative, no 
 matter how remote, whose ethics and religion command him to 
 make a place in his home for the indigent one, and provide for him 
 as if he were a member of his own immediate family. Almshouses, 
 private indoor or outdoor relief, for the old, are hardly known in 
 these Oriental lands, where high ethical regard for the aged is 
 instilled in the individual's common mind from infancy. Unfor- 
 tunately, however, in this country no such esteem for the aged 
 (prevails except among his near relatives and especially in agri- 
 cultural communities. In our manufacturing centres especiallj', 
 the helpless, destitute grandfather or grandmother is regarded 
 as a distinct burden to the household, the carrying of which often- 
 times forces the children out of school and into the streets, factories, 
 or shops, in order to provide for the added increment to the 
 household expenses which the taking on of an aged relative, no 
 rnatter how near he may be to the immediate family, entails." ^ 
 
 Dr. Rubinow answers it this way: 
 
 1 Ibid pp 334-335. 
 
 2 Old Age Dependency, pp 312-13. 
 
NATURE OF PENSIONS 237 
 
 There is a good, old-fashioned atavistic nobility of sentiment 
 )ut this argument which will greatly please all good men and wo- 
 n except those who have to be supported by their children, and 
 ise who have to support their parents and also their own families 
 a wage-earner's budget. Scientifically the argument is certain- 
 original, because it assumes the basis of the family to be the 
 )port of the older generation by the younger, while it has always 
 ;n fairly well agreed upon by all students of society that the 
 le was on the other foot, and that the care of the children by the 
 rents was the proper function of family. It further seems to 
 ume that we love our burdens, and that when parents cease be- 
 ; burdens the children cease loving them. 
 
 'It assumes that the standing of a superannuated parent in a 
 uily is in an inverse proportion to the amount he is able to con- 
 3ute to the family budget. It is an appeal to an ideal of patri- 
 ihal family which has been dead for a century in every indus- 
 il country, and which really never had any strong hold upon 
 lerican life. Of course, its inapplicability to the aged single 
 n or the aged spinster aunt will be evident. For it certainly 
 mot be dlaimed thiat the support of all spinster aunts is also a 
 idamental principle of American family solidarity. Then again 
 !n married people may not have any children, or may have lost 
 \m. One must remember that New England was practicing 
 ;e suicide long before the term ever became popular. As a 
 tter of fact, the very data gathered by the Commission shows 
 it of the inmates of almhouses and benevolent homes over 
 enty-five per cent, were single and of those receiving outdoor re- 
 f fifteen per cent. 
 
 "Furthermore, (these data also show how these almshouses and 
 nes do break down the solidarity of the American family. Of 
 ;ir inmates forty-two per cent, had adult children living at 
 le of entrance, of the several thousand pensioners receiving out- 
 or relief, sixty per cent, had adult children at the time of inves- 
 ation, and fifty-nine per cent, other near relatives. It is really 
 rprising that the Commission did not recommend discontinu- 
 ce of aid, both institutional and outdoor, because of the demoral- 
 ng effect upon said children and relatives. 
 "However, the same table which conveys the information just 
 
238 FACINGOLDAGE 
 
 quoted shows that while there were children in some 60 per cent., 
 in only 22 per cent, were they able to render aid; that this propor- 
 tion was only some 10 per cent, in case of the inmates of homes, and 
 about 50 per cent, in case of persons receiving outdoor relief. 
 Moreover, it appears from another table that some 40 per cent, 
 were receiving aid from children or relatives, as outdoor relief is 
 seldom bountiful." ^ 
 
 From the investigations of the Pennsylvania Commission on 
 Old Age Pensions it was disclosed that in the case of iimiates 
 of both almshouse and benevolent institutions over sixty-five 
 and a half per cent, had no children living. Of the aged appli- 
 cants for relief, about forty per cent, had no children, and 
 among the general aged population, although the percentage of 
 those having no children at all was little more than 10 per cent., 
 only 24 per cent, of the aged were actually supported by 
 children, while 43 per cent, had no other sources of in- 
 come. 
 
 (6) Straight pensions are objected to alsb because they 
 resemble charity much more than a system of insurance in 
 which the worker makes a contribution. This, however, de- 
 pends largely upon public opinion. Considered in the light 
 of deferred real wages instead of poor relief, the receipt of 
 a pension would not involve any degrading effect. 
 
 Professor Coman, an opponent of the straight pension 
 system, stated ^ that in her investigation of the Danish old 
 age pension system every Dane interrogated — from tax-payer 
 to administrator — as to whether the pension was merely a new 
 form of poor relief ansVered "No." In Great Britain also 
 it is declared old age pensions are not looked upon as poor 
 relief but as an annuity due them from the government. 
 
 (7) Non contributory pensions by the state, argues the 
 Massachusetts Commission, will result in "mischievous political 
 
 1 Social Insurance, pp 314-15. 
 
 2 The Survey N. Y. Jan. 17, 1914. 
 
NATURE OF PENSIONS 239 
 
 effects. It would open the door to political favouritism of va- 
 rious sorts." William H. Lackey contends that "Such a ques- 
 tion would infallibly pass into the competitions of party war- 
 fare. It would become in most constituencies one of the most 
 prominent of electioneering tests. Rival candidates would be 
 competing for the vote of a wage-earning electorate who had 
 a direct pecuniary interest in increasing or extending pensions 
 and in realizing the conditions on which they are given. Cam 
 it be doubted that in many cases their first objective would be 
 to outbid another, and that national and party politics would 
 soon be forced into a demoralizing race of extravagance.'"' ^ 
 These apprehensions of the Massachusetts Commis'sion and 
 Mr. Lackey have so far, however, not been realized in the coun- 
 tries that have established such systems. Even critics of 
 these schemes have so far made no contentions that party 
 politics' has deteriorated or been affected considerably by the 
 pension plans. 
 
 (8) The constitutionality of a non-contributory scheme is 
 also questioned by the Massachusetts Commission. Strangely 
 enough, however, it admits that firemen, policemen and teach- 
 ers who "are not only rendering peculiarly hazardous meri- 
 torious services to society, but also have deprived themselves 
 of the full opportunity of earning the largest returns for 
 their services in a competitive way . . . have some claim upon 
 the State for special consideration in the matter of public 
 support in old age. This claim, however, cannot exist in the 
 case of persons employed in the ordinary competitive callings." 
 The fallacious reasoning of the Commission at this point is 
 self-evident. Surely, those who toil in the bowels of the earth 
 mining coal for the industries of the nation, those who bring 
 the milk to the babies in the city, and those who provide us 
 with food, clothing, shelter, and other necessities are just as 
 essential to the public welfare as the classes enumerated by 
 the Commission! 
 
 1 The Forum Vol. 28 p 699. 
 
240 FACING OLD AGE 
 
 The basis of the Massacliusetts Commission's opposition 
 to the non-contributory system is summed up in its concluding 
 paragraph as' follows: 
 
 "A non-contributory pension system is simply a counsel of de- 
 spair. If such a scheme be defensible or excusable in this coun- 
 try, then the whole economic and social system is a failure. The 
 adoption of such a policy would be a confession of its breakdown. 
 To contend that it is necessary to take this course is to assume 
 that members of the working class either cannot earn enough, or 
 cannot save enough, to take care of themselves in old age. If 
 that be true, then American democracy is in a state of decay which 
 no system of public doles could possibly arrest, but would rather 
 hasten." -^ 
 
 While the premises of the Commission are evidently true, 
 as was shown conclusively in the earlier chapters of this book, 
 it does not necessarily follow that its conclusions are logical. 
 Woe to the patient whose physician upon diagnosing his ill- 
 ness throws up his hands in despair and rather than operate 
 or admit the origin of the illness permits him to die, because 
 he had discovered that the cause is a real one and not an 
 imaginary one! 
 
 IV. THE CASE FOR AND AGAINST UNIVERSAL PEJSTSIONS 
 
 In any discussion of the merits of the compulsory-contribu- 
 tory or non-contributory pension systems, the question whether 
 it should apply universally or only to a partial extent is 
 always to be taken into consideration. As compared with the 
 present policy of poor relief, a universal pension plan means 
 a complete reversal of this method. It is based no longer upon 
 the theory of relief of destitution only. It aims to extend 
 pensions without any conditions to all, or almost all, the aged 
 above a certain age. The funds are to be drawn from the 
 
 1 Report of Mass. Com. p 310. 
 
NATURE OF PENSIONS 241 
 
 common purse. This would necessarily involve a steady in- 
 crease in both the number of persons and cost and would, as 
 stated by Sir Charles Booth, mean that "The policy of doing 
 so is the opposite of that adopted in savage states, where the 
 old, when incapable, are knocked on the head." No such com- 
 plete system, however, is as yet in operation anywhere. The 
 principle of partial insurance or pensions is, as was pointed 
 out before, established now in many countries. Pensions as 
 established now by foreign countries are given only to men 
 and women belonging to certain wage groups or to persons hav- 
 ing fulfilled certain specified requirements. 
 
 The universal principle is advanced principally because, it 
 is argued, if pensions were offered to all aged persons, it 
 would remove entirely the savour of dependency or pauperism. 
 Charles Booth, the foremost advocate of universal pensions 
 in Great Britain, presented the case for such a system as 
 follows : 
 
 "The idea in the minds of those who think that poverty and 
 desert should be the conditions of relief, tend rather to an elab- 
 oration of the Poor Law, which by classifying those who ask its 
 aid and varying the awards, shall make them as often a mark of 
 merit as a stigma of disgrace. I must confess that this, to me, ap- 
 pears an impossible ideal. I can imagine no court of inquiry that 
 could be trusted. I believe that the selected poor who receive pen- 
 sions or were provided for in almshouses, to which only their pov- 
 erty and their good conduct entitled them, would stiU be considered 
 and consider themselves paupers, by whatever name they 
 might be called. If to obtain a certificate of merit involved a 
 searching inquiry into the past life of each applicant, it would, I 
 believe, be strongly resented and most of all by the most worthy. 
 Even the simplest form such an inquiry could take, limiting itself to 
 proof of thrift, would be unsatisfactory, as the best proof of thrift 
 would always lie in having no need to apply. 
 
 Mr. Booth further argues: 
 
24*2 FACINGOLDAGE 
 
 "Indoor relief lacks humanity and outdoor encourages improvi- 
 dence. We are therefore justified in seeking some better plan. 
 Pensions at 65 are suggested, to be acquired voluntarily with state 
 aid. But to be eiFectual, the system must be universal, or the im- 
 provident would still trust to the rates (outdoor relief), and their 
 treatment unceasingly oscillate between foolish kindness and un- 
 popular severity. If the system is to be universal, it must be com- 
 pulsory; and if compulsory, its cost, however collected, is taxation. 
 Moreover, to be satisfactory, the system must apply to the old of 
 our own time. We shall not tax ourselves for n benefit only to be 
 realized after 40 years have passed. But if this system is to be 
 universal, and to apply to our own old people, the forms of in- 
 surance become absurd. Why ear-mark the payments and accumu- 
 late funds at all? It is not insurance we require but the endow- 
 ment of old age.' '' 
 
 In another connection he states : 
 
 "Benefits which all may enjoy carry with them no slur. Edu- 
 cational endowments as enjoyed by the rich, free elementary edu- 
 cation as bestowed upon the poorer classes, the facilities offered by 
 free libraries etc., are cases in point. Pensions open to all and 
 paid for out of taxation would have nothing, either morally or 
 economically, in common with pauperism." ^ 
 
 And again: "No other plan of selection is possible except at 
 sacrifice of independence. To select the poor is to pauperize, 
 to select the deserving is to patronize. To do either is to humil- 
 iate." ^ 
 
 In favour of the universal plan is also urged its simplicity 
 and cheapness of administration. This system requires no 
 comT)l"'cated or troublesome conditions of eligibility, nor does 
 it entail many details. 
 
 Many of the objections to the universal plan have already 
 been stated in the discussions of the compulsory and non-con- 
 
 1 Booth, Pauperism, p 235. 
 
 2 Quoted by Mass. Com. p 241. 
 s Booth, Pauperism, p 237. 
 
NATURE OF PENSIONS 243 
 
 tributory systems. What has been brought against the for- 
 mer systems may be applied equally well, and even more justly 
 to the universal scheme. Additional objections may be 
 summed up as follows: 
 
 (1) Its increased cost. A universal scheme is obviously the 
 most costly of all pension systems, and, to give a pension to 
 all people — ^weU-to-do and wealthy who do not need them — 
 IS a waste of money. 
 
 (2) There are also objections against the giving of pen- 
 sions indiscriminately to undeserving persons such as crimi- 
 nals or paupers. "The inclusion of criminals and paupers 
 within the pensionable population is indefensible on any 
 ground of individual desert or public policy. Such persons 
 clearly have no claim to a pension, whatsoever may be true 
 of the deserving and respectable aged poor. Moreover, the 
 policy of pensioning the industrious and thriftless, the sober 
 and the intemperate, the deserving and the undesen^ing, in- 
 discriminately, would be in the highest degree pauperizing and 
 demoralizing. It would put a premiuml upon thriftlessness 
 and dependency." ^ 
 
 (3) Any such state-wide scheme has no finality to it. Once 
 embarked upon this venture, there would always be the agita- 
 tion and temptation to reduce the age of pensioning and in- 
 crease the pension amounts. 
 
 (4) Under a universal scheme there would be even less 
 means' of preventing fraud and Imposition. This, it is pointed 
 out, is' continually taking place in army pensions. 
 
 (5) The pensioner may dissipate his income on the day 
 when it is paid. The pension would benefit little those who 
 are too old or infirm to live alone and must reside in institutions. 
 
 (6) No country has as yet embarked upon such a broad 
 pension plan. 
 
 1 Report of Mass. Com. p 243. 
 
CHAPTER XII 
 
 THE PENSION MOVEMENT IN THE 
 UNITED STATES 
 
 The movement for the inauguration of a definite and con- 
 structive social policy in regard to the superannuated workers 
 in the U. S. is of comparatively recent origin. Aside from mili- 
 tary and municipal pensions, government insurance or pensions 
 in old age are not known in this country. Indeed, while in Eng- 
 land legislative committees were seeking a solution for the 
 problem of old age as early as the beginning of the 19th cen- 
 tury, the first study of conditions of the aged in this country, 
 authorized by a State Legislature, was not made until almost 
 a century later. The first such study in the U. S. was author- 
 ized by the Massachusetts Legislature in 1907. Furthermore, 
 while practically every government in Europe has now in opera- 
 tion a definite system of old age protection which has, in some 
 countries, been in existence for many years, legislative solution 
 of the problem of old age dependency in this country seems, as 
 yet, so distant that it is almost considered an utopian ideal. 
 
 Although much more consideration has been given this 
 problem by the diflTerent industrial organizations, who are con- 
 fronted by it as a pressing economic problem, it is surprising 
 to note that even in this field the movement has spread largely 
 within the last decade. As was' pointed out in an earlier 
 chapter, the railroad concerns were the first to establish retire- 
 ment systems ; but prior to the present century there was prac- 
 tically only one railroad in the U. S. — ^the Baltimore and Ohio 
 — that had inaugurated a pension plan for its aged employes. 
 It is Very likely that more than three-fourths of the pension 
 systems of industrial concerns now in operation, did not begin 
 
 244 
 
PENSION MOVEMENT 245 
 
 to appear until the last decade. In 1910, L. W. Squier 
 upon sending out over 1,000 letters of inquiry to the largest 
 employers of labour in the country, found only 29 systems 
 of old age pensions of one kind or another in existence at that 
 time. The Mass'achusetts Commission in the same year found 
 only four firms with regular pension systems in that State. 
 In 1919, also, the Pennsylvania Commission in canvassing all 
 concerns in that State employing 500 and more workers, found 
 only about 20 such concerns, exclusive of railroads, having a 
 regularly established pension fund. Half of these, however, 
 were not Pennsylvania concerns, but national in scope, such 
 as the packing houses, International Harvester Company, etc. 
 A thorough canvass made by the New York Merchants' As- 
 sociation in 1920, revealed only 142 regular systems through- 
 out the country. The negligible number of employes in the re- 
 ceipt of such pensions has been already pointed out. Simi- 
 larly, the scanty protection against old age afforded the work- 
 ing masses, by means of municipal pensions, fraternal and 
 trade union insurance has also been shown in earlier chapters. 
 Although, from a pragmatic viewpoint there is little to 
 point to tangible achievements along the line of old age insur- 
 ance or pensions in the United States, the first steps towards 
 a definite policy in regard to this problem have, nevertheless, 
 been made within the last fifteen years — especially during the 
 decade preceding our entrance into the European war. Dur- 
 ing that period a remarkable interest in this problem was dis- 
 played not only by numerous industrial concerns, business and 
 commercial groups, and students of social insurance, but the 
 first steps towards active governmental participation were 
 actually taken by the appointment of a number of State Com- 
 missions to study this problem, through the endorsement of 
 this movement by many high Federal and State officials, by 
 the introduction of a number of bills in Congress providing 
 for such pensions and by the actual adoption of a straight 
 pension plan in the State of Arizona, the establishment of a 
 
246 FACINGOLDAGE 
 
 savings bank system in the State of Massachusetts, and the 
 selling of insurance by the State of Wisconsin. The State 
 Commissions, together with the pioneer students and advocates 
 of social insurance in the United States, have, during the last 
 fifteen years, created a formidable and exhaustive literature 
 upon the subject, which at least takes these discussions out 
 of the realm of speculation and ignorant controversy and 
 places the entire problem upon a sound basis of fact and 
 knowledge of conditions as they prevail in the United States). 
 
 As in the case of most social legislation, Massachusetts 
 Was the pioneer in providing some legislation in regard to the 
 aged. Its savings bank system was authorized by the 
 State Legislature in 1907. Under this insurance system the 
 following forms of insurance are offered to residents of the 
 Commonwealth of Massachusetts, or persons regularly em- 
 ployed therein: (1) Straight Life Insurance; (2) Twenty Pay- 
 ment Life Insurance; (3) Twenty Year Endowment Insur- 
 ance; (4s) Old Age Annuities; (6) Combination Insurance 
 and Annuities and (6) Immediate Annuities. The maximum 
 life insurance policy written is $4,000 and the maximum an- 
 nuity cannot be for more than $800 per year. 
 
 The expenses involved in the administration of the savings 
 bank insurance are home largely by the State. In order to 
 reduce the expenses involved in this forai of insurance, banks 
 are not permitted to employ paid solicitors or house-to-house 
 collectors of insurance premiums. In addition, dividends to 
 stockholders are also eliminated. As a result of this, it is 
 claimed that savings banks are able to offer insurance at con- 
 siderably lower rates than the rates formerly charged by com^ 
 mercial companies. In addition, every policy holder at the end 
 of each year receives a check from the bank representing his 
 share of the net profits of the business. The different insur- 
 ance banks have agencies in large manufacturing and com- 
 mercial establishments, people's institutes, social settlements 
 and trade unions. 
 
PENSION MOVEMENT 24T 
 
 In 1907 the Massachusetts Legislature also adopted a reso- 
 lution providing for: "an investigation and report relative 
 to the adoption of a system of old age insurance and pensions." 
 A Commission on Old Age Pensions, Annuities, and Insurance 
 was then appointed which, after bringing in a preliminary 
 report, was extended and given a larger appropriation, and 
 m 1910 brought out a very comprehensive report. This was 
 the first report of its kind to bring out exceedingly valuable 
 information in regard to the actual conditions of the aged in 
 the United States as well as' valuable summaries of the 
 European pension plans. 
 
 For five years the Massachusetts Report remained prac- 
 tically the only official report in this country which dealt 
 exhaustively with the subject of old age dependency. The 
 Mas'sachusetts Commission declared itself against straight gov- 
 ernmental old age pensions, on the ground that any such legis- 
 lation whether on the subject of old age pensions or insurance, 
 would be premature at that time. Its arguments against non- 
 contributory pensions have already been presented in the pre- 
 ceding chapter. In regard to compulsory insurance the 
 majority of the Commission declared: 
 
 "The adoption of any scheme of insurance in this State appears 
 to be inexpedient at the present time. The practical objections 
 to the principle of compulsion are weighty. The idea itself is 
 essentially distasteful to Americans. In England it was aban- 
 doned as quite out of question, in view of the prejudice against com- 
 pulsion. In this Commonwealth this practical objection is rein- 
 forced by constitutional difficulties. In view of these conditions, 
 it would be futile to recommend any compulsory insurance system at 
 this time. Whatever the outcome of American experiments with 
 social insurance may be, whether in the direction of the final es- 
 tablishment of compulsory systems, or the extension of voluntary 
 schemes, the introduction of the former can hardfy be seriously con- 
 sidered now. In any event, long training in the development of 
 volnntary insurance agencies seems desirable, to furnish the prep- 
 
248 FACINGOLDAGE 
 
 aration and foundation of any scheme of State insnnance, if such 
 should be found ultimately necessary and desirable. 
 
 "It is conceivable, however, that the final solution of the problem 
 of old age insurance may be found in some system of obligatory 
 State insurance." ^ 
 
 On the other hand, Mr. Arthur M. Huddell, one of the dis- 
 senting members of the Commis'sion concluded : 
 
 "I am convinced that the fact of being compelled to live in the 
 poorhouse or dependent upon private charity in old age has a more 
 degrading influence on character than anything else, and should be 
 eliminated from among working people. A non-contributory pen- 
 sion system would stimulate the citizen and help to build up his 
 character. It would not discourage thrift, as the man who has an 
 opportunity is only too eager to save, and he would strive to save 
 over the long road of life to the pensionable age, so as to provide 
 for the breakdowns by sickness or disease that every man fears. 
 
 "The thrift habit is hard to build up among the poorer class of 
 people because they do not earn money enough to make even a 
 beginning." ^ 
 
 The Massachusetts Commission also declared that it found 
 in Massachusetts "no alarming amount of old age destitution." 
 It contended: "If any general system of old age pensions' is 
 to be established in this country, this should be undertaken by 
 the National Congress." 
 
 In 1915, the Industrial Commission of Wisconsin brought 
 out a concise and able report on old age pensions, though les3' 
 comprehensive on its informational side. The Commission, 
 besides presenting the pension systems abroad, also conducted 
 an investigation regarding the status of the aged population in 
 Wisconsin. Although the Commission stated that "the 
 present report is not to be taken as an endorsement of any 
 
 1 Mass. Report pp 310-11. 
 
 2 Ibid p 334.. , J ; ( 
 
PENSION MOVEMENT 249 
 
 plan or scheme of old age pensions', but rather a suggestive 
 advocacy of legislation, favourable to the idea," the Commis'- 
 sion did present definite plans for old age relief, which com- 
 bined both the straight pension and the voluntary insurance 
 '^cheme. Its plan for a straight annuity provided for the 
 granting of a pension at the age of 65, or 60 years if perma- 
 nently incapacitated, to U. S. citizens after they had resided 
 ten years in Wisconsin. Before a person could qualify for 
 this pension the plan also stipulated! that he must be of good 
 moral character and that he did not have property above debts, 
 valued at more than $500, exclusive of a homestead, nor more 
 than $2,000 inclusive of a homestead. The applicant could 
 have also no income more than $300 per annum if married, 
 nor more than $200 if single. The amount of pension was 
 proposed to be "such a sum which, when added to the appli- 
 cant's other means of support, from whatever source derived, 
 will suffice for the reasonable comfort and well-being of the 
 applicant, but no pension shall exceed the sum of $150 per 
 annum per each person." In order to raise the necessary fund 
 the Commission suggested that one-half of it be furnished by 
 the State and the other half by the county. The State's 
 quota, it was proposed, "should be raised by a special poll 
 tax of $1.50 per annum, upon all citizens of the State between 
 the ages' of 20 and 60." The Commission also proposed a State 
 Insurance system which would sell old age insurance on weekly 
 or monthly premiums and should offer insurance to trade 
 unions, fraternal organizations and employers of labour. 
 The administrative expense of the fund, it was suggested, 
 should be borne by the State. 
 
 In 1917, the Ohio Legislature created a Commission on 
 Health and Old Age Insurance, which made an extensive report 
 on Old Age Pensions, giving a great deal of data on the con- 
 ditions of the aged in Ohio, the conditions of the inmates of 
 county infirmaries and a description of the general condition of 
 
250 FACING OLD AGE 
 
 these institutions. In addition, there is some discussion of the 
 European pension systems. The Commission's final recom- 
 mendations were as follows : 
 
 "I. The State should provide for the payment of a weekly pen- 
 sion not exceeding $5.00 per week to all persons 65 years of age, 
 but the combined pension and income of any such person shall not 
 exceed $350 annually. 
 
 II. The following shall be excluded: 
 
 1. Aliens and persons who have been citizens for less than 15 
 years. 
 
 2. Persons who have not been residents of the State for 15 years. 
 S. Persons convicted of a penitentiary offense, within 10 years. 
 
 4. Persons who have disposed of any property in order to 
 qualify for a pension. 
 
 5. Tramps and professional paupers. 
 
 III. A voluntary system should be established and administered 
 at the expense of the State so that individuals may purchase 
 annuities not to exceed $10 a week by regular payments or by 
 lump sum purchase. 
 
 IV. A person 65 years of age or over who qualifies for a pension^ 
 but does not take his pension until later, should receive the de- 
 ferred pension, computed from the date of qualification as an an- 
 nuity when he does go on the pension roll. Such deferred pension 
 shall not be considered in determining the amount of income in 
 Section I. 
 
 V. The property in excess of $100 of any person who receives 
 an old age pension shall, upon the death of such person, be trans- 
 ferred to the State for disposal and from the proceeds thereof shall 
 be deducted the amount which has been paid to the pensioner. 
 Any residue shall then be paid to the lawful heirs. 
 
 VI. The old age pension system should be administered by a 
 State Board of Pensioners, consisting of three members. 
 
 VII. A County Board of Welfare should be created to combine 
 all of the welfare work of the county, including administration of old 
 age pensions, mothers' pensions and blind pensions. The board 
 should be unpaid and should employ a county welfare director 
 
PENSION MOVEMENT 251 
 
 selected from a civil service list without regard to residence or 
 political consideration." 
 
 Shortly after the appointment of the Ohio Commission, the 
 Pennsylvania Legislature also created a Commission to Inves- 
 tigate Old Age Pensions. This Commission because of its very 
 limited appropriation and short period of work could not 
 arrive at definite recommendations. It therefore asked the 
 Legislature to extend its life for a longer period. It brought 
 out, however, in 1919 a very comprehensive report upon the 
 subject. The Pennsylvania Commission's investigations of 
 the aged in that State covered a wider scope and included 
 phases not previously dealt with by any of its predecessors. 
 It made exhaustive studies of the dependents in county poor- 
 houses, private benevolent homes, and aged persons who resided 
 in their own homes. It also made a study of the moral and 
 financial conditions, as well as the general management of Penn- 
 sylvania almshouses. In addition, the report contains a sum- 
 mary of a great many pension schemes for old age protection, 
 as operated in foreign countries. The Commission summar- 
 izes its findings in that State as follows : 
 
 "Aside from the aged dependents found in almshouses, benevo- 
 lent or fraternal homes, and those receiving public or private re- 
 lief there is a considerable proportion (43 per cent.) of the aged 
 population 50 years of age and over, in the State, who, when reach- 
 ing old age have no other means of support, except their own 
 earnings. Only a small percentage (38 per cent.) of the general 
 aged population in the State claim to possess personal property of 
 their own. This would indicate clearly that many of these aged 
 folk — when their power of earning is steadily declining with ad- 
 vancing years — will fall dependent, in many cases through no fault 
 of their own, either upon the State or upon private charity. The 
 investigations also show that in most of the industries in our State, 
 many workers become unfit before reaching the age of 50, with the 
 inevitable result of steadily decreasing earnings. In certain 
 industries, like that of the railroads, for instance, it appears that 
 
252 FACINGOLDAGE 
 
 more than half of the workers become impaired before their 50th 
 birthday. It is also shown that when the prime of life has passed, 
 many Pennsylvanians are compelled to change their occupations, 
 which ordinarily involves a decline in wages. This decline, with 
 the majority of aged people, appears to be due entirely to sickness 
 and enfeebled age. The increasing problem of old age stands 
 out even more significantly when it is remembered that while the 
 earning power of most wage-workers is steadily decreasing, after 
 a certain period of age has been attained, the expenditures on food 
 and rents, even under normal price conditions, remain the same, 
 while that on medicine is steadily increasing. The investigations 
 also disclose that as far as Pennsylvania is concerned, the problem 
 of support of the aged is largely a native problem, rather than an 
 imported one. The immigrant paupers all claim to have had a long 
 term of residence in both the United States and Pennsylvania. 
 
 "Regarding the aged paupers and the non-dependent aged classes, 
 the outstanding differences lie, it would appear, in the respec- 
 tive family connections and physical conditions. In the almshouses 
 pauper group, 40 per cent, were found to be single, 39 per cent, 
 widowed, and only 16.9 per cent married. Among the inmates of 
 benevolent homes for the aged, the percentages were 30.1 single; 
 58. S widowed; and only 7.8 married. More than 65 per cent, of 
 both of these groups had no children living and of those that had 
 children, more than 90 per cent, were reported unable to help sup- 
 port. On the other hand, among the non-dependent aged, only 
 5.4 per cent, were found to be single, 38.2 were widowed, while 
 55.1 per 6ent. were married and still living together. Only 10.6 
 per cent of the latter group had no children living. Again, of the 
 paupers nearly 90 per cent, had never possessed any property, 
 while the percentage of the propertyless among the non-dependent 
 aged, was 62 per cent. With regard to the physical condition, it is 
 also shown that while 64 per cent, of the aged persons residing in 
 their own homes were still in fair or sound physical health, the per- 
 centage of those in good health in pauper institutions was 35.9 in 
 the case of inmates of the benevolent institutions, and only 12.3 
 per cent, in the case of the almshouse inmates. 
 
 "That dependency in Pennsylvania is not entirely due to the per- 
 sonal shortcomings of the individuals, is evidenced from the excel- 
 
PENSION MOVEMENT 253 
 
 lent recommendations given practically all the inmates of alms- 
 houseSj followed up by the Commissionj by their former employers. 
 Giving due consideration to the fact that most humans will strain 
 a point rather than give a poor recommendation, the reliable quali- 
 ties of these inmates are evidenced nevertheless, from the fact that 
 most of these inmates have served for long periods of time with 
 one employer (30 per cent, serving for more than 10 years). 
 
 "The Commission's investigations also disclose an exceedingly 
 confusing and bewildering system of management of our county 
 poorhouses. Not only do many of the officials connected with 
 these institutions have little knowledge of the problems involved 
 in the care of the aged, but there is obviously a laxity in the man- 
 agement of these institutions and the distribution of county funds. 
 The State supervision of these aged homes is insufficient, loose and 
 hardly competent. Careful records are kept in only a few institu- 
 tions. There is no uniform method of accounting. Computations 
 of costs are made in almost as many forms and methods as the men 
 making them. Many of the per capita costs of almshouses given 
 in the report of the State Board of Public Charities do not repre- 
 sent the actual cost. The latter do not include the interest on 
 farm products. According to the Commission's estimate from rec- 
 ords submitted by the directors of the poor to the State Board of 
 Public Charities, the average cost per capita per inmate, in 1917, 
 was $5.87 per week. The cost in the private institutions was 
 even higher than that. It is also shown that in a few instances 
 the per capita costs were more than abnormally high. 
 
 "From the Commission's study of the existing means providing 
 for the protection of the aged and superannuated, it is also ap- 
 parent that they are insufficient and can never be expected to meet 
 the situation to any extent. It is shown that with all the numerous 
 forms of aged benefits provided, only about 10,000 aged people in 
 the State are actually benefited. Of the numerous large industries 
 in Pennsylvania only about twenty make it a rule to care for 
 their aged employes after long and faithful service. While all 
 the large railroads in the State pension their faithful workers — 
 after a long period of service — the number of railroad workers ac- 
 tually benefited, as compared with the total number of workers in 
 this industry is insignificant. It also appears that only the first 
 
254 FACINGOLDAGE 
 
 and second class cities in Pennsylvania provide against the old 
 age of their various municipal employes. The number of persons 
 who may expect old age benefits, as such, from fraternal or trade 
 union organizations is hardly worth considering." 
 
 In its bill, submitted to the 1921 Pennsylvania Legislature, 
 the Commission proposed a system of non-contributory or 
 gratuitous old age assistance. The system was to be admin- 
 istered mainly by a state board created for that purpose, 
 although county boards were also set up for the purpose of 
 rendering local assistance in administering the plan. Pension 
 payments were proposed to commence at the age of 65 and 
 were to be granted to all men and women, citizens of the 
 United States, who have resided at least 15 years within the 
 State. The bill also suggested that in the case of a person 
 who has lived in Pennsylvania for 40 years, the residence re- 
 quirements immediately preceding application should be reduced 
 from fifteen to five years. Excluded from the receipt of pen- 
 sions were the inmates of charitable and correctional institu- 
 tions ; and those whose income exceeded $300 per year, or 
 whose property was valued at more than $5,000, inclusive of 
 a homestead. The biU permitted the retention of a homestead, 
 when personally used, and provided for the deduction of the 
 total amount granted in pensions, from the proceeds of the 
 accumulated property upon the death of the pensioner. ITie 
 maximum pension was set at $25 per month and the funds were 
 to be raised by the State, either through a special tax, or by 
 raising the current inheritance taxes. The Commission esti- 
 mated that about 100,000 persons 65 years and over in Penn- 
 sylvania would qualify for pensions which would involve an 
 annual cost of from $18,000,000 to $20,000,000. 
 
 In 1919, the Connecticut Commission on Public Welfare 
 while it made no extensive study of its own of the problem of 
 old age in that State concluded that : 
 
 "We may criticize the ineffectiveness and the cost of existing 
 
PENSION MOVEMENT 255 
 
 forms of voluntary insurance against the disabilities of agCj just as 
 we may realize that a considerable burden is imposed on the State 
 by the maintenance of those who, for one cause or another, are 
 unable either to work or to find work and so become wholly depen- 
 dent on the State or on private charity. Notwithstanding this, it 
 is doubtful if the situation in Connecticut, with regard to the ex- 
 tent of the disability or the necessities of those who become so dis- 
 abled, is so acute as to call for the initial experiment in this report 
 to be made by the General Assembly." 
 
 Commissions to study the subject of Old Age Pensions were 
 also appointed by the States of California, Illinois, and New 
 Jersey. The latter Commissions, however, were instructed to 
 study both Health and Old Age Insurance and while they have 
 brought out reports on the health insurance question, have 
 given little consideration to the problems confronting old age. 
 
 In addition to investigating commissions upon the subject, 
 there have been several attempts at definite remedial legisla- 
 tion. For several years past the Massachusetts Legislature 
 as well as the Legislatures of a few other States had a number 
 of bills presented which provided for old age pensions. In 
 the 1920 Legislature of Massachusetts five different bills pro- 
 viding for old age pensions of one form or another were intro- 
 duced. So far, these have all met with little success. Defi- 
 nite legislation on the subject in this country was first made 
 in Arizona in 1915. Through the initiative and referendum 
 a law was enacted in that year for the granting of old age 
 pensions to all needy citizens of the United States who have 
 been residents of the State of Arizona for at least five years 
 and who have reached at least 60 years of age. The amount 
 of the pension was set at $15.00 per month. The act, how- 
 ever, was promptly declared unconstitutional by the Supreme 
 Court of Arizona, and no concrete legislation upon old age 
 insurance or pensions has as yet been adopted by any State in 
 the Union. 
 
 Even the National Congress did not escape the introduction 
 
256 FACINGOLDAGE 
 
 of bills dealing with remedial legislation upon the aged problem. 
 The first bill was introduced by Congressman William B. Wil- 
 son (ex-Secretary of Labour), in 1909. This biU provided 
 for the establishment of a national old age pension system of 
 $120 per year for all persons over 65 years of age whose 
 property possessions did not amount to over $1,500 or whose 
 income did not exceed $240 a year. This bill was drawn up 
 under a subterfuge of organizing an "old age home guard 
 of the United States," in which the bill proposed men and 
 women of that age could enlist in order to receive a pension. 
 Nothing, of course, came out of this biU. 
 
 In 1911 Congressman Victor L. Berger — the first Socialist 
 representative — introduced a bill providing a pension of $4.00 
 a week or less to all persons 60 years of age and over who 
 do not possess an income of over $10 a week. The bill 
 required 16 years of citizenship, good and moral character and 
 provided for the pension to increase or decrease every twelve 
 months in accordance with a sliding schedule. This bill 
 attracted great attention and brought the problem of old age 
 pensions before the public at that time as never before. Another 
 bill was introduced by Congressman M. Clyde Kelly, on June 
 10, 1913. Mr. Kelly's bill proposed to pension all persons 
 who have attained 65 years of age, who have been citizens for 
 20 years, and whose income during the 12 months next pre- 
 ceding the application did not average nine dollars per week. 
 The bill excluded from the receipt of pensions, persons who 
 habitually refused to work, paupers and criminals. The 
 amount of the pension was graded according to the claimant's 
 income, ranging from four dollars per week, if the income was 
 less than six dollars, to one dollar if the income did not exceed 
 nine dollars per week. The administration was to be in charge 
 of the Secretary of the Interior. 
 
 Since then several other bills' providing for old age pensions 
 have been presented in the United States Congress. Before 
 the 66th Congress there was a bill providing for Old Age 
 
PENSION MOVEMENT 257 
 
 Pensions, patterned after Mr. Kelly's bill, introduced by 
 Senator Charles L. McNary, of Oregon. This bill aimed to 
 pension all persons who have attained the age of 65 years, who 
 have been citizens for 20 years, and whose income from any 
 source for the twelve months next preceding the application 
 did not average six dollars per week. Pensions were not to be 
 given to persons who had habitually failed to work according 
 to their ability or who were being maintained as paupers or in- 
 mates of correctional institutions. The bill proposed that 
 every person who fulfilled the required conditions, should be 
 placed upon the pension roll and be entitled to receive a pension, 
 which was to be provided by an annual appropriation from 
 Congress. The pension was to be graded according to the 
 following schedule: "four dollars a week when the average 
 weekly income of the pensioner, as calculated under the act, 
 does not exceed six dollars ; three dollars when the income ex- 
 ceeds six dollars but does not exceed seven dollars ; two dollars 
 when the income exceeds seven dollars, but does not exceed eight 
 dollars, and one dollar when the average income exceeds eight 
 dollars, but does not exceed nine dollars. The bill further pro- 
 vided that the pension may be increased or decreased every 
 twelve months, whenever the pensioner's income increased or de- 
 creased, according to the terms of the schedule. When both 
 husband and wife are pensioners and living together the pension 
 of each was to be three-fourths of the regular rate. The ad- 
 ministration of this act was to be in charge of the Secretary of 
 the Interior. 
 
 In tracing the movement for old age protection in the 
 United States notice must be taken not only of the interest 
 displayed by the State and national legislatures but also of 
 the important recognition given this subject by industrial ex- 
 perts, business and commercial bodies', political and church 
 organizations and other associations of various kinds as well as 
 the demands for such legislation steadily and vigorously made 
 by the growing labour movement of the United States. 
 
258 FACINGOLDAGE 
 
 The second industrial conference called by President Wil- 
 son, in its report of March 6th, 1920, declared: 
 
 "There have been many plans of health insurance and old age in- 
 surance elaborated in other parts of the world and advocated in 
 the United States. Without discussing whether such plans, when 
 based upon government subsidy or compulsory action, are con- 
 sonant with American ideals, the Conference believes that an ex- 
 tension and simplification of the insurance principle as a means of 
 promoting thrift, saving and independence, would be advanta- 
 geous to the people. The alternative to such insurance against 
 sickness and old age lies in a wage adequate to cover these items. 
 The Conference therefore suggests that the Federal Government 
 should inaugurate a careful, authoritative investigation on the whole 
 sub j ect. 
 
 "The problem of health and old age insurance, and its pro- 
 motion by some means consonant with national ideals, demands 
 consideration. If such means can be devised, they will furnish a 
 relief to the states in the care of the ill, the indigent and the aged." 
 
 So far, the sentiment of the business and commercial groups 
 in this country has not been very sympathetic towards any 
 governmental action in regard to the aged. In 1917, the 
 Boston Chamber of Commerce selected a s'pecial committee to 
 study this problem, which, apparently influenced by the conclu- 
 sions of the Old Age Pension Commission of that State, de- 
 clared in its report : 
 
 "Your Committee has considered various plans for non-contrib- 
 utory old age pensions and is unanimously opposed to any such 
 measure with the non-contributory feature for the following rea- 
 sons: 
 
 "1. There is no such need for legislative provision for old age in 
 Massachusetts as there was in any foreign country in which leg- 
 islation has been enacted. Pensions in any case would be less nec- 
 essary than health insurance. Health insurance and accident com- 
 pensation lead to preventive measures and increase the earning 
 
PENSION MOVEMENT 259 
 
 power of workers, but old age pensions are remedialj not preventive 
 and are, therefore, less valuable socially. 
 
 "2. These foreign systems which involve contributions from em- 
 ployes are, therefore, preferable to the English system of outright 
 payment. In France and Germany the worker gets his pension as 
 a matter of right even when he is not poor. In England and un- 
 der the proposed plan for Massachusetts only the poor may have 
 pensions. That is, the proposed plan has essentially a poor law 
 character and is not an industrial measure. 
 
 "3. Non-contributory pensions weaken the inducement to thrift. 
 
 "4. The inevitable effect of the establishment of a system of non- 
 contributory old age pensions would be a constant pressure to 
 lower the age limit and increase the amounts of the pension. 
 
 "5. The proposed Massachusetts law would tend greatly to in- 
 crease the taxes ; and Massachusetts is at present making a radical 
 experiment with its tax laws. The pensions now proposed are low, 
 the age of eligibility is high, and few except the almshouse old are 
 recommended to be dealt with. The proposed tax burden will 
 therefore increase greatly in succeeding years. 
 
 "6. To raise the necessary money large extra taxes would have 
 to be levied on the capital and Industries of the Commonwealth, 
 This would result in the first instance in a serious disturbance to 
 present industrial conditions. It might also have a tendency to 
 lower Wages. 
 
 "7. Owing to the uncertainty of conditions due to the great war, 
 it would be unwise for the Commonwealth to assume a large in- 
 crease in its liabilities. 
 
 "8. The constitutionality of such legislation is extremely doubt- 
 ful." 
 
 The National Association of Manufacturers also had a com- 
 mittee studying the problem. This Committee declared in its 
 report that: 
 
 "It is fair to state, however, that every able-bodied man who is 
 reasonably intelligent and industrious should through his own ef- 
 forts on reaching the age of 65, have this provision available. 
 This does not mean that every man should have set aside enough him- 
 self, although many ought, but certainly should have set aside 
 something so that with aid from his children, he and his wife 
 
260 FACINGOLDAGE 
 
 should have at least the means of existence and not become de- 
 pendent on the state or the community. 
 
 "Generally speaking, the people of the United States may be di- 
 vided into two classes in their means of support upon reaching the 
 period of superannuation, viz : those who have the means of sup- 
 port and those who are the subjects of poor relief. This does not 
 include those who are mentally or physically deficient and who may 
 be the inmates of public institutions and not regarded as coming 
 under the category of poor relief." 
 
 And it concluded, that: "After careful consideration of the en- 
 tire question of old age insurance and considering particularly the 
 importance of preserving the best quality of citizenship for the 
 United States and the maintenance of our institutions on the best 
 basis, your Committee recommends the following resolutions: 
 
 "We believe that evidence is lacking to prove a present ne- 
 cessity for the enactment of old age pension legislation for the civil 
 population and we further believe that it is a moral responsi- 
 bility of the employer to encourage, assist and inspire his employes 
 with the importance and necessity of ways and means for mak- 
 ing provisions for contingencies of life, including old age." 
 
 The merits of the above arguments have been discussed 
 earlier and need not be repeated here. To what extent these 
 conclusions are based upon facts has also been indicated in 
 the preceding chapters. However, a more sympathetic note 
 is struck by Alba B. Johnson, President of the Baldwin Loco- 
 motive Works and of the Pennsylvania State Chamber of Com- 
 merce in his introduction to a special report on Old Age 
 Pensions prepared for the latter organization in 1919. Mr. 
 Johnson states : 
 
 "A new principle is coming to be recognized, viz : that a large 
 proportion of those who are unfit for the competition of life are so 
 through no faults of their own, but because of faults in the social 
 system for which they have had no responsibility. Their incompe- 
 tence is part of the burden which should be carried by the more 
 competent and the more fortunate. In our complex civilization 
 there are also many who are rendered unfit by occupation or by ac- 
 
PENSION MOVEMENT 261 
 
 cidents unavoidable in the processes of industry. The undeserved 
 penalty therefore should be borne by the community as an essential 
 part of the cost of production." 
 
 Although planks on social insurance were not adopted by 
 the leading political parties in the last campaign, despite their 
 recommendation by the advisory platform committees, the 
 question has been before the American public as a political 
 subject by its inclusion in the platform of the Progressive 
 Party in 1912, while the demand for an old age pension plan 
 has been a permanent plank in the platform of the Socialist 
 Party since its beginning and was contained also in the plat- 
 form of the Farmer-Labour Party. 
 
 The importance of the problem of the aged is now also 
 recognized by the churches and their leaders. The Federal 
 Council of Churches of Christ has since 1911 included in its 
 social creed a plank for suitable provision for the old age of 
 the workers. 
 
 The administrative Committee of the National Catholic War 
 Council composed of four Catholic Bishops also declared in 
 their social reconstructive program in 1919 : 
 
 "The State should make comprehensive provision for insurance 
 against illness, invalidity, unemployment, and old age. So far as 
 possible the insurance fund should be raised by a levy on industry, 
 as is now done in the case of accident compensation. The industry 
 in which a man is employed should provide him with all that is 
 necessary to meet all the needs of his entire life. Therefore, any 
 contribution to the insurance fund from the general revenues 
 of the State should be only slight and temporary. For the same 
 reason no contribution should be exacted from any worker who is 
 not getting a higher wage than is required to meet the present 
 needs of himself and family. Those who are below that level can 
 make such a contribution only at the expense of their present wel- 
 fire. Finally, the administration of the insurance laws should be 
 such as to interfere as little as possible with the individual free- 
 dom of the worker and his family. Any insurance scheme^ or any 
 
262 FACINGOLDAGE 
 
 administrative method that tends to separate the workers into a 
 distinct and dependent class, that offends against their domestic 
 privacy and independence or that threatens individual self-re- 
 liance and self-respect, should not be tolerated. The ideal to be 
 kept in mind is a condition in which all the workers would them- 
 selves have the income and the responsibility of providing for all the 
 needs and contingencies of life, both present and future. Hence 
 all forms of State insurance should be regarded as merely a lesser 
 evil, and should be so organized and administered as to hasten the 
 coming of the normal condition." 
 
 The demands made by the labour unions for such plans 
 have already been pointed out. 
 
 At the time of this writing there are a number of bills 
 providing for old age pensions before the various State Legis- 
 latures'. Their fate is as yet unknown. But whatever that 
 may be it is obvious to all students of the problem that the 
 movement for social insurance in the United States is growing 
 rapidly and must succeed eventually.^ On the whole, one may 
 say, that social insurance in this country is being opposed 
 by practically the same groups who fought against the adop- 
 tion of workmen's compensation laws, child labour regulations, 
 and similar social legislation, which are now on the statute 
 books of practically all states. It may well be that the 
 inauguration of old age pensions in this country will be pre- 
 ceded by health and invalidity insurance provisions. But that 
 a complete program of social insurance cannot for long be 
 ignored or postponed is now evident to all who are willing to 
 face the facts as they are, rather than hark back to traditions 
 or prejudices which have no basis in fact at the present time. 
 
 1 In 1921 bills providing for old age pensions were introduced in the 
 following states: Illinois, Indiana, Iowa, Kentucky, Massachusetts, 
 Montana, New York, Ohio, Pennsylvania, Washington, and Wisconsin. 
 
PART FIVE 
 
 OLD AGE INSURANCE AND PENSION 
 
 SYSTEMS OF FOREIGN COUNTRIES 
 
 AND VARIOUS STATES 
 
CHAPTER XIII 
 
 VOLUNTARY AND SUBSIDIZED 
 SYSTEMS OF OLD AGE INSURANCE 
 
 The first State efforts to relieve the problems of old age 
 were generally made by means of some form of voluntary or 
 subsidized savings insurance. The adoption of the compulsory 
 principle of insurance against old age was unthought of at 
 first. The States' assistance was limited to encouraging and 
 helping the wage-earning classes to accumulate savings which 
 would protect them against old age. The Teutonic nations 
 were the first to inaugurate the compulsory principle of social 
 insurance. In the early days Latin s'peaking countries were 
 proud of the fact that they did not adopt the German principle 
 of compulsion and, instead, established voluntary systems of 
 savings insurance. Englis*h speaking peoples, on the other 
 hand, have generally followed the non-contributory or straight 
 government pension plans. 
 
 Voluntary and Subsidized Old Age Savings Systems were 
 established as' early as the middle of the last century. 
 Although practically all countries started out with voluntary 
 insurance plans the latter are in operation now in compara- 
 tively few countries. Most nations were compelled to abandon 
 them as ineffective and substitute either compulsory insur- 
 ance or straight pensions. France was the first to follow Ger- 
 many's example in adopting a compulsory old age insurance 
 system in 1910. Since the signing of the Armistice, Italy 
 and Spain have also changed from voluntary to compulsory in- 
 surance, while a few other countries have either adopted com- 
 pulsory insurance plans or have been considering the adoption 
 
 265 
 
266 FACING OLD AGE 
 
 of such recently. The merits of these plans and the reasons 
 for their abandonment have been discussed in an earlier chap- 
 ter and need not be repeated here. In the chapters that 
 follow an account of the old age pension systems as they 
 exist abroad is presented. An effort has been made to bring 
 them up to date. However, on account of the war, and the 
 general difficulties of securing European data which resulted 
 from it, this aim has been only partly realized. 
 
 BELGIUM 
 
 The Belgian "General Savings and Retirement Fund" was 
 originally founded in 1850 . As in the case of all voluntary 
 insurance plans, it was created for the purpos'e of inducing 
 wage-earners to provide for their old age, by affording them 
 opportunities to save under the protection of the government. 
 During the fifty years that followed the establishment of this 
 fund many devices were employed to attract a greater number 
 of persons to make deposits. This was done by reducing still 
 further the minimum of deposits, by influencing children from 
 six to fourteen years of age to j oin the fund and by appropria- 
 tions for annual subsidies made by the national and provincial 
 governments to mutual aid societies and similar organizations 
 which induce their numbers to join the fund. In spite of all 
 these encouragements, however, there was little success made in 
 securing any considerable number of wage-earners to make 
 deposits and provide for their old age. 
 
 In 1900, a law was enacted which sought further to en- 
 courage wage-earners to provide annuities for their old age 
 by adding state subsidies to their own deposits and by giving 
 special grants to the needy aged. The law permitted any 
 person over 18 years of age to pay into the fund for himself 
 or for another person. The depositors were not required 
 even to make regular payments either at fixed periods or of 
 a fixed amount. The minimum of deposit was one franc 
 (normally 19 cents). The principal aim of this fund was to 
 
OLD AGE INSURANCE 267 
 
 attract the poorer classes, as the law excluded from benefits 
 those classes who paid above a certain maximum amount in 
 taxes' or licenses, as well as state officials who were entitled 
 to old age pensions by virtue of previous laws. The annuities 
 were paid at the age of 65 and could not exceed 1,200 francs 
 ($231.60). In addition to the regular annuity the government 
 made a contribution in the form of a premium which was added 
 to the sums paid by the insured. The government subsidies 
 ceased when the total credited to the insured person was suffi- 
 cient to secure him an annuity of 360 francs ($72.00). 
 
 The government subsidies' granted under the law of 1900 
 were small and did not prove sufficiently attractive to the old 
 people. The amounts were therefore increased by an amend- 
 ment passed in 1903. The latter provided a government 
 allowance of one hundred per cent, on the first six francs 
 ($1.16) deposited by a person who on January 1st, 1903, was 
 between the ages of 40 to 45 ; the subsidy increased to 150 
 per cent, for those who were between the ages of 45 to 50 on 
 that date, and amounted to 200 per cent, on the first six francs 
 for those persons who were 50 years old at the time the law 
 was enacted. These extraordinary subsidies naturally in- 
 creased the number of depositors tremendously. According 
 to Dr. Rubinow : -^ "In 1890 the number of insured was only 
 12,000 and under the influence of the subsidies began to grow, 
 though slowly, and by 1899 it amounted to 169,000. The 
 systematic granting of su'bsidies ordered by the act of 1900, 
 in one year doubled the number of depositors. In 1902 it 
 reached half a million. The increase in the rate of subsidies 
 in 1903 brought the number to 636,000 and by 1910 it was 
 well over 1,000,000." There are no figures' available in this 
 country to show the tendency of the savings fund since the 
 conclusion of the war. Savings in general, however, have 
 greatly increased in Belgium. During the last eleven months 
 of the year 1919, the Belgian post-office savings banks re- 
 1 "Social Insurance," p. 842. 
 
268 PACINGOLDAGE 
 
 ceived deposits' amounting to 368,000,000 francs as against 
 262,000,000 francs in 1913. ^ 
 
 The savings fund could not meet the immediate problem 
 of old age. The Belgian government, therefore, in addition to 
 subsidizing savings, practically established a system of tem- 
 porary old age pension grants. These pensions were given to 
 aU persons 65 years of age and over, provided they were Bel- 
 gian subjects and had been residing in Belgium at least one 
 year prior to their application for relief. These straight 
 pension grants were given only to workmen, i. e. "men and 
 women actually working with their hands for an employer, in 
 consideration of a wage, whether such work be performed on 
 time wage or piece wage, at home or away from home, and 
 whether it be domestic, agricultural, industrial or handicraft 
 work." The claimant, the law also specified, must be in want, 
 which was defined as "a state in which the resources of the 
 person are insufficient to enable him to support himself and 
 his family in accordance with the standard of comfort pre- 
 vailing among workmen of his trade in the district in which 
 he resided." 
 
 The amount of the straight pension given was very small, 
 namely 65 francs ($12.55) per year. The pensions were 
 originally intended to cease in 1911 and government subsi- 
 dies were to be given only to those who had made deposits in 
 the savings fund. However, in May, 1911, the law was fur- 
 ther extended to continue till 1914. 
 
 The experiences of the Belgian fund are s'ometimes pointed to 
 as indicating the success of voluntary insurance. However, 
 while it is true that the Belgian experience has proved quite 
 successful, it must be accounted for by the extreme measures 
 undertaken to attract depositors. It is obvious that subsidies 
 of 150 to 200 per cent, would attract a great number of 
 persons. But these are hardly different from straight pen- 
 sions. Prior to the war, it was also claimed by students of 
 1 Economic Review, March 31, 1920, London. 
 
OLD AGE INSURANCE 269 
 
 social insurance that in spite of all efforts, the average annual 
 payment per deposit in Belgium was steadily declining. ^ 
 
 CANADA 
 
 The Canadian Parliament, in 1908, passed an act author- 
 izing the is'suing of government annuities for old age. This 
 act was amended in 1909, in 1910, in June, 1913, and in 1920. 
 The law originally authorized the Minister of Trade and Com- 
 merce to make contracts with any person domiciled in Canada 
 for the sale of an immediate deferred annuity, as follows: 
 "(1) for the life of the annuitant, (2) for a term of years 
 certain, not exceeding 20 years, provided the annuitant 
 shall so long live, (3) for a term of years certain, not exceed- 
 ing 20 years, or for the life of the annuitant, which ever 
 period shall be the longer. Also for an immediate or deferred 
 annuity to any two persons' domiciled in Canada during their 
 joint lives and with or without continuation to the survivor." 
 
 The system of government annuities is at present in charge 
 of a Superintendent of government annuities in the Post Office 
 department. Payments are made in three forms : weekly pay- 
 ment, yearly payment, and single payment. The rates for 
 females are somewhat higher than those for males. Premiums 
 may be paid to the department directly or to any postmaster. 
 Any person resident or domiciled in Canada may now pur- 
 chase an annuity. Plans are also provided by which employers 
 may co-operate with their employes in the purchase of 
 annuities. 
 
 No annuity can be granted on the life of any person other 
 than that of the actual annuitant. It cannot be less than 
 
 1 According to the latest information available, Belgium has apparently 
 abandoned its voluntary system and has adopted instead a straight pension 
 plan. The December, 1920, American Labour Legislation Review (page 
 230) states that on Aug. 20, 1920, a new old age pension law was enacted in 
 Belgium. "Persons born before 1858 upon reaching the age of 65 are to 
 receive an annual pension of from 600 to 720 francs. This amount will be 
 reduced if the claimant has an independent income, but certain sources of 
 income are exempt. The cost of the pensions is to be shared five-eighths 
 by the state, one-eighth by the province and two-eighths by the commune." 
 
270 FACINGOLDAGE 
 
 $50 a year and the total amount payable by way of an annuity 
 cannot exceed $5,000 a year. The age limit of 55 years for- 
 merly required at which an annuity could begin was abolished 
 in 1920. If the annuitant dies' before the expiration of the 
 specified number of years, the annuity must be paid to his 
 legal representatives for the remaining number of years, 
 unless agreements to the contrary have been made between the 
 State and the annuitant. The rate of interest on moneys 
 returnable was increased from three to four per cent, by the 
 1920 amendment. 
 
 Up to Dec, 1920, there were a total of 4,957 annuities 
 issued in Canada. The total receipts up to the same date 
 were $4,751,677.17. The average amount of annuity pur- 
 chased was about $250. ^ This small number of annuitants 
 is exceedingly significant in view of the fact that the Annui- 
 ties Act "was passed in order to promote habits of thrift, and 
 to afford facilities whereby the people of Canada might be 
 aided and encouraged to make provision for old age by the 
 purchase of Annuities" and by the department's advertising 
 the fact that under the recent amendment if "a man who began 
 at the age of 20, to buy an annuity of $500 to commence 
 at 60 — ^which he could do at a cost of but little more than 
 one dollar per week — were to die just before the first payment 
 of annuity was due, his heirs would receive the tidy sum of 
 $5,191.83." 
 
 In addition to the voluntary system of insurance against 
 old age, the government has also provided, for the benefit of 
 the employes of the Intercolonial Railways and Prince Edward 
 Island Railways, a separate fund which was established by an 
 act of March 27, 1907, and which was later amended in 1908, 
 and in June, 1913. Under this fund, the insured persons and 
 the state contribute equal shares ; the latter's contribution, 
 however, cannot exceed $100,000 per annum. The employe's 
 
 i Figures supplied by S. T. Bastedo, Sup,erintendent, Canadian Gov- 
 ernment Annuities. 
 
OLD AGE INSURANCE 271 
 
 first monthly contribution is fixed at three per cent, of the 
 monthly wages and the remainder at one and one-half per 
 cent.. Pensions are given, (1) to those who have attained the 
 age of 70; (2) to thos'e who have become physically or men- 
 tally incapacitated; (3) to persons who have attained the age 
 of 60 and wish to be retired from service (after 15 years of 
 service in all three cases) ; (4<) to persons permanently dis- 
 abled, as a result of injuries while at work; and (5) to per- 
 sons who at the time when the act was passed have already 
 reached the age of 70 and who have been at least ten years 
 in the service. The amount of the pension is based on one and 
 one-half per cent, of the average monthly pay received during 
 the eight years immediately preceding the granting of the 
 allowance, multiplied by the number of years' of service. The 
 maximum pension is limited to $20 per month, and cannot be 
 more than two-thirds of the average monthly wage. It is 
 also provided that before an employe can become entitled to 
 participate in any of the benefits he must serve six months on 
 probation, during which period he must contribute to the fund. 
 The Canadian Royal Commission on Industrial Relations in 
 its report of 1919 declared: 
 
 "We recommend the question of making some provisions by a 
 system of State Social Insurance for those who through no fault 
 of their own are unable to work^ whether the inability arises from 
 lack of opportunity, sickness, invalidity, or old age. Such insur- 
 ance would remove a spectre of fear which now haunts the wage- 
 earner and make him a more contented and better citizen.'' 
 
 JAPAN 
 
 A postoffice life insurance system was adopted by the Diet 
 of Japan in the 1915-16 Session and went into operation in 
 October, 1916. The business is under the Minister of Com- 
 munications. Each of the 7,000 postoffices in Japan acts as 
 an agency for the receiving of contract applications and the 
 collecting of premiums for life insurance policies. All per- 
 
272 FACINGOLDAGE 
 
 sons between the ages of 12 and 60 inclusive, are eligible for 
 insurance. 
 
 Policies are of two kinds, whole life and endowment. The 
 latter are divided into 10, 15, 20, 25, 30, 35 and 40 year 
 endowment policies. Medical examination is not required but 
 in all cases individual applicants must have a personal inter- 
 view with a postoffice official. Provisions are also made for 
 group insurance. 
 
 On March 31, 1920', there were a total of 1,599,715 insur- 
 ance contracts in operation. The total premiums amounted 
 to $347,095 and the contracts in force to $76,355,222. Over 
 58 per cent, of the policies were whole life policies and 41.6 
 per cent, were endowment policies. ^ 
 
 In October, 1920, the government established a bureau in 
 the -department of Communications' to deal with the question 
 of State life insurance. Hitherto only a small section had 
 been engaged in this work. The new bureau with its increased 
 staff is expected to take up the matter of State life insurance 
 on much broader lines. ^ 
 
 SWITZERLAND 
 
 There is no federal insurance law in Switzerland at the 
 present time. Each Canton makes its own insurance pro- 
 visions. As a result both the voluntary and compulsory-con- 
 tributory insurance plans can be found there. The two vol- 
 untary cantonal insurance organizations are the Social Insur- 
 ance Fund of Canton Neuchatel and the Old Age Insurance 
 Fund of Canton Vaud. The former is a mutual organiza- 
 tion with optional membership which was established by the 
 cantonal law of May 15, 1906, and which enjoys a cantonal 
 subsidy. It provides straight life insurance policies as well 
 as combination and annuity policies. 
 
 1 Labour Review, April 1921, p 191. 
 
 (2) Daily Intelligence, Vol 1, No. 5, Jan. 11, 1921, International Labour 
 OfBce, Geneva. 
 
OLD AGE INSURANCE 273 
 
 Of the total number of policies' in Canton Neuchatel dur- 
 ing the year 1913, 6,620 policies, representing insurance to 
 the amount of $1,242,920, were straight life insurance policies, 
 and 7,707 policies representing $2,653,750, were mixed poli- 
 cies and 545 policies, representing $50,180, were annuity 
 policies. 
 
 The Old Age Insurance Fund of Canton Vaud was established 
 by a law enacted in March, 1907. This fund combines old age 
 insurance with the various forms of savings deposits. The 
 premiums or deposits' may be either definite or provisional. 
 In the latter case deposits may be withdrawn within ten years 
 after payment. The principal purpose of this fund is to en- 
 able employers to provide for old age insurance for their work- 
 men without being compelled to risk losing s'uch payments, in 
 case of the premature death or disability of the insured. The 
 insurance fund also makes special efforts to encourage deposits 
 by women and children, especially school children. In addition 
 the cantonal government makes very liberal contributions to 
 the premiums or deposits of citizens of the Canton, who are 
 industrial tradesmen or workmen, whose annuities do not fall 
 due before their 55th year, and whose annual premiums' or 
 deposits range from six francs ($1.16) and do not exceed 60 
 francs ($11.58). 
 
 The total number insured persons in this fund during the 
 years 1912 and 1913 were 13,823 definite and 14,996 pro- 
 visional. The total premiums received during the same year 
 were $30,141 and $33,531 respectively, to which there was added 
 $15,052 and $16,664 cantonal contributions. The total pay- 
 ments to the insured amounted to only $470 and $724 respec- 
 tively. The comparatively low payments are explained by the 
 fact that the fund has been in existence a short time. 
 
 A commission of experts appointed by the Swiss Federal 
 Assembly to study the problem of social insurance brought 
 in a comprehensive report ^ in regard to the problem in June 
 1 Message du Conseil Federal k I'Assembl^e F^d6ral,e, au 21, juln. 
 
274. FACINGOLDAGE 
 
 1919. The Commission recommended the adoption of a Fed- 
 eral compulsory insurance system against old age and invalid- 
 ity. The insurance, it suggested, should be made compulsory 
 either for certain classes of workers or for the entire Swiss 
 population. The Commission recommended that the pension- 
 able age be set at either 60 or 65 years. The contributions, 
 the experts suggested, are to be made by the insured persons, 
 the employers, the confederation, the Cantons and the Com- 
 munes. It made no definite recommendations in regard to 
 either the amounts of contributions or the pensions payable. 
 It left to the law givers to decide whether they shall be uni- 
 form as in France, or shall vary in accordance with earnings, 
 contributions and age as in Germany and in a few other 
 countries. The Commission favoured a uniform rate of pen- 
 sion, however, although it did not preclude a modest gradua- 
 tion according to the length of time insured, or the taking 
 out of supplementary insurance. 
 
 To meet the immediate needs of the aged, the Commission 
 recommended the granting of straight annuities to those who 
 have passed the age limit at the time the law is enacted. This 
 to apply only during the period! of transition, until this class 
 gradually disappears. The Commission also recommended the 
 continuation of the voluntary insurance plans now in existence 
 for purposes of supplementary insurance. 
 
 MASSACHUSETTS 
 
 The Massachusetts system of Savings Bank Life Insurance 
 and Old Age Annuities was devised and sponsored largely by 
 Supreme Court Justice Louis D. Brandeis and the Massachu- 
 setts Savings Insurance League which Justice Brandeis organ- 
 ized. The plan first went into operation in June, 1908. 
 Under the State law, savings banks were authorized to estab- 
 lish insurance departments, and to issue policies upon the lives 
 of persons, as well as to sell annuities in accordance with the 
 regulations provided by the State Insurance Commissioner. 
 
OLD AGE INSURANCE 275 
 
 These savings banks insurance departments have no stock- 
 holders and are established solely for the benefit of the depos- 
 itors. 
 
 The Massachusetts system of Savings Bank Insurance is 
 a State aided plan in so far as the State largely bears the 
 expenses involved in the administration of the system, and aims 
 to give to Massachus'etts wage-earners and their families all that 
 their money can possibly buy of real insurance. Justice Bran- 
 deis stated that the purpose of the act was ( 1 ) "To give Massa- 
 chusetts wage-earners an opportunity to secure safe life in- 
 surance at the lowest possible cost, as a substitute for indus- 
 trial life insurance; (2) To give to Massachusetts wage- 
 earners an opportunity to make provisions for their old age 
 by the purchase, out of current earnings, of annuities at the 
 lowest possible cost. (3) It is also designed to furnish 
 a partial solution of the problem of providing for the super- 
 annuated workingman, by making the opportunities for saving 
 the workingman's money as numerous as the opportunities for 
 wasting it." ^ 
 
 In addition to purchasing straight life insurance policies, 
 res'idents of Massachusetts may, under the State's Savings 
 Banks Insurance System, secure also (1) Twenty Payment 
 Life Insurance; (2) Twenty year Endowment Inslirance; 
 (3) Old Age Annuities; (4) Combination Insurance and 
 Annuities; and (5) Immediate Annuities. The maximum 
 annuity is limited to $1,000. Agencies for collecting premi- 
 ums have been established by the Insurance Banks in large 
 manufacturing and commercial establishments, peoples' insti- 
 tutes, social settlements, and trade unions. In 1920 there 
 were more than 300 such agencies scattered throughout the 
 State. The amounts of the monthly payments for the differ- 
 ent policies are given in a table on the following page. 
 
 For the eleven years the system has been in operation there 
 were, early in 1920, over 20,000 policies written of all kinds. 
 1 Report of Massachusetts Conmiission, pp 191-192, 1910. 
 
276 
 
 FACING OLD AGE 
 
 MONTHLY PREMIUMS OF SOME OF THE OLD AGE 
 
 COMBINATION INSURANCE ANNUITIES 
 
 IN MASSACHUSETTS 
 
 Old Age Annuity • 
 
 Beginning 
 Annuity $200 Annuity $200 Annuity 
 
 at Age at Age 60 at Age 65 
 
 15 $1.68 $1.06 
 
 16 1.76 1.10 
 
 17 1.84 1.16 
 
 18 1.94 1.20 
 
 19 2.04 1.26 
 
 20 2.14 1.32 
 
 21 2.24 1.38 
 
 22 2.36 1.46 
 
 23 2.48 1.54 
 
 24 2.62 1.62 
 
 25 2.76 1.70 
 
 26 2.92 1.78 
 
 27 3.08 1.88 
 
 28 8.24 1.98 
 
 29 3.44 2.08 
 
 30 3.64 2.20 
 
 31 3.84 2.32 
 
 32 4.04 2.44 
 
 33 4.34 2.58 
 
 34 4.62 2.74 
 
 36 4.92 2.90 
 
 36 6.24 3.08 
 
 37 6.60 3.28 
 
 38 6.00 3.48 
 
 39 6.44 3.70 
 
 40 6.94 3.96 
 
 41 7.48 4.22 
 
 42 8.08 4.62 
 
 43 8.76 4.86 
 
 44 9.54 5.22 
 
 45 10.42 6.62 
 
 46 11.44 6.06 
 
 47 12.62 6.58 
 
 48 14.02 7.14 
 
 49 15.66 7.78 
 
 60 17.66 8.62 
 
 51 20.12 9.38 
 
 52 23.18 10.36 
 
 53 27.16 11.54 
 
 54 32.50 12.92 
 
 55 40.00 14.60 
 
 56 16.68 
 
 67 19.28 
 
 58 22.66 
 
 69 27.20 
 
 60 33,66 
 
 Combination Insurance & Annuity 
 
 $250 Insur- 
 
 $260 Insur- 
 
 ance and 
 
 ance and 
 
 $200 Annuity 
 
 $200 Annuity 
 
 at Age 60 
 
 at Age 65 
 
 $1.89 
 
 $1.28 
 
 1.97 
 
 1.33 
 
 2.06 
 
 1.38 
 
 2.15 
 
 1.44 
 
 2.26 
 
 1.60 
 
 2.36 
 
 1.57 
 
 2.47 
 
 1.64 
 
 2.59 
 
 1.71 
 
 2.72 
 
 1.79 
 
 2.85 
 
 1.87 
 
 2.99 
 
 1.96 
 
 3.15 
 
 2.05 
 
 3.31 
 
 2.14 
 
 3.49 
 
 2.25 
 
 3.68 
 
 2.36 
 
 3.98 
 
 2.48 
 
 4.11 
 
 2.61 
 
 4.35 
 
 2.74 
 
 4.61 
 
 2.89 
 
 4.89 
 
 3.03 
 
 5.19 
 
 3.22 
 
 5.63 
 
 3.40 
 
 5.89 
 
 3.60 
 
 6.29 
 
 3.82 
 
 6.75 
 
 4.05 
 
 7.24 
 
 4.31 
 
 7.79 
 
 4.59 
 
 8.40 
 
 4.89 
 
 8.09 
 
 5.23 
 
 9.88 
 
 5.61 
 
 10.78 
 
 6.02 
 
 11.80 
 
 6.48 
 
 12.99 
 
 7.02 
 
 14.39 
 
 7.58 
 
 16.06 
 
 8.26 
 
 18.07 
 
 9.00 
 
 20.54 
 
 9.87 
 
 23.63 
 
 10.88 
 
 27.62 
 
 12.07 
 
 32.97 
 
 13.48 
 
 40.48 
 
 16.19 
 
 .... 
 
 17.29 
 
 .... 
 
 19.92 
 
 .... 
 
 23.32 
 
 .... 
 
 27.88 
 
 .... 
 
 84.29 
 
OLDAGEINSURANCE 277 
 
 The number of old age annuities was less than 300. The 
 ismiajiL .nXilniber of old age annuitants may be taken as a fair 
 indication of the possibilities of voluntary insurance in this 
 country. With a population of nearly four million and after 
 eleven years' experience, less than 300 persons are taking 
 advantage of this form of old age insurance in Massachusetts. 
 Miss Alice H. Grady, Secretary of the Savings Bank Life Insur- 
 ance, while admitting that the Massachusetts experience would 
 seem to show that the people are either unwilling or unable 
 to purchase old age annuities, contends, however, that: 
 "this inference is not entirely correct, the simple fact being 
 that the people do not know about them. For lack of funds 
 we have not yet been able to demonstrate what could be done 
 by means of an educational campaign to teach the people what 
 deferred annuities are and the advantage of this form of sav- 
 ings against old age. 
 
 "We believe," continues Miss Grady, "that if the time shall 
 come when we are able to bring home to our people, by means 
 of a systematic educational campaign, the knowledge and bene- 
 fits of this system, we shall find them both intelligent and re- 
 sponsive to this form of appeal, and ready to make voluntary 
 s'avings against old age, as they are now learning to do against 
 sickness and death." 
 
 That the Massachusetts experience with voluntary insur- 
 ance has proved unsuccessful seems' obvious. To explain the 
 general apathy on the ground of mere ignorance is to ignore 
 the basic problems discussed in the preceding pages. The 
 difficulties of saving for old age are unquestionably more 
 fundamental and are indicative of the success voluntary old 
 age insurance systems may have in this country. Unfortun- 
 ately, the persons who need this insurance most cannot take 
 advantage of it. However, there are other advantages which, 
 it is claimed, have come about as the result of the adoption 
 of the Bay State plan. Miss Grady contends that: "Coin- 
 cident with the establishment of savings-bank life insurance 
 
278 FACINGOLDAGE 
 
 in Massachusetts, the big industrial companies not only im- 
 proved the conditions of their policies but also reduced the 
 cost of their weekly premium insurance about 20 per cent. 
 The great significance of this reduction has become increas- 
 ingly apparent as the years have come and gone. For instance, 
 during the year 1915, the wage-earners of Massachusetts 
 alone paid to the industrial insurance companies on weekly 
 premium policies the astonishing sum of $12,000,000. Had it 
 not been for the reduction in cost above referred to, it is a fair 
 ass'umption that the amount paid to the industrial companies 
 last year (1916) by our Massachusetts people would have 
 been not $12,000,000 but $15,000,000. Those $3,000,000 
 remain in the pockets of the Massachusetts wage earners or 
 have been used by them to purchase other necessities of life. 
 Bearing this in mind it is not difficult to understand why the 
 State is willing to contribute the modest smn of $20,000 a 
 year toward the support of an institution which has been 
 instrumental in bringing about this immense saving to our 
 people. One might even go so far as to hazard the suggestion 
 that the people of Massachusetts are getting an extraordinary 
 good return on an exceedingly small investment." -"^ 
 
 WISCOKSIN 
 
 In 1911 the Legislature of Wisconsin authorized the issu- 
 ing of policies of life insurance and annuity contracts by the 
 State. This was' done by establishing a "Life Fund," "to be 
 administered by the State without liability on the part of the 
 State, beyond the amount of the fund, for the purpose of 
 granting life insurance and annuities, to persons who at the 
 time of the granting of such insurance and annuities, are within 
 the State or residents thereof." 
 
 Applicants must be between the ages of twenty and fifty in- 
 clusive. These may purchase the following policies: (1) 
 Ordinary life; (2) Twenty payment life; (3) Ten year 
 endowment; (4) Endowment at age sixty-five; or (6) Term 
 t Bulletin United States Bureau of Labour Statistics, No. 212. p 903. 
 
OLD AGE INSURANCE 279 
 
 to age sixty-five. The advantages of this state fund are: 
 (1) Its soundness; (2) Its low cost of operation, as profits 
 are eliminated and no agents' commissions to be paid; (3) No 
 great overhead expense, as it is under the State Insurance 
 Commissioner and only clerical help are being paid from the 
 Life Fund. 
 
 When the Wisconsin Life Fund was established its promoters, 
 among the many other advantages claimed for it, declared 
 that : "it is' the stepping stone to annuities to protect old age 
 and perhaps to solving other economic and industrial prob- 
 lems." Unfortunately, the life-fund in Wisconsin has' been a 
 political pawn. It was sponsored and established during a 
 LaFoUette State administration and the Fund was fairly 
 successful in its first few years. Then an opposing State 
 administration came in and efforts to develop the life fund have 
 slackened until it has become practically unknown in the State, 
 Today, it is said that the only persons who are maintaining their 
 insurance policies are the university professors at Madison. 
 
CHAPTER XIV 
 
 COMPULSORY-CONTRIBUTORY OLD 
 AGE INSURANCE 
 
 AUSTRIA 
 
 A system of old age insurance for salaried persons and sev- 
 eral other classes, was advocated in Austria as early as 1888, 
 about the time the German Old Age Insurance plan was 
 adopted. The first bill providing for such insurance, however, 
 was not introduced until 1901. The first law enacted went 
 into effect on January Ist, 1909. This act provided a limited 
 system of contributory old age and invalidity insurance, re- 
 stricted to certain classes of salaried employes. On June 25, 
 1914?, the law was' amended in essential respects by an Impe- 
 rial decree, which was to become effective on the first of October, 
 1914. On account of the declaration of war, an order dated 
 August 24, 1914, provided that the benefits should be retro- 
 active as from the first of August, 1914. 
 
 Although the object of this insurance also was to build up 
 a right to an invalidity or old age pension for the inspired 
 persons, the Austrian system differed from most other compul- 
 sory schemes. For instead of being a system of working- 
 class insurance, it was established for the middle-class'es and 
 the salaried employes. Under this plan only the following 
 classes' were compelled to insure: (1) Employes working in 
 Austria, who have the character of officials by virtue of their 
 position; (2) Those engaged in duties of a preponderatelj; 
 intellectual character, both of which groups must have at least 
 a total annual income under one and the same employer of 
 600 kr., (normally $121.80); (3) Those engaged in the man- 
 
 280 
 
COMPULSORY-CONTRIBUTORY 281 
 
 agements of works or departments of works; (4*) Supervisors 
 over the work of other persons ; and ( 5 ) Those serving on the 
 staffs of offices and counting-houses. Salesmen and other 
 clerks were included under the compulsory insurance only if 
 they have received the required higher education. The law did 
 not compel those engaged in domestic service, to insure, or as 
 workers and apprentices in the production of goods, in indus- 
 try, mining, agriculture and forestry. Exempted from the 
 compulsory insurance were also persons who did not enter an 
 employment to which the insurance applies until they were 
 55 years of age; employes of the state, communes, etc., for 
 whom other provisions have already been made, but only in 
 case their pension is higher than the lowest provided by the 
 laiw. A number of other classes' of employes were also ex- 
 empted. 
 
 The obligation to insure under the Austrian law begins at 
 the end of the 18th year. The insured are divided into six 
 classes, according to their annual salaries which range from 
 600 kr. ($121.80), for the lowest class, to over 3,000 kr. 
 ($609) for the highest class. Allowances, gratuities, etc., are 
 included in the total income. The premium paid monthly for 
 the six classes, prior to the war, ranged from six kr. ($1.22) 
 to 30 kr. ($6.09), and by the 1920 amendment was increased in 
 the same proportion for the various classes. The employer 
 was made to pay two-thirds of the premium in the four lower 
 classes and one-half of the premium in the two higher classes. 
 An amendment adopted July 23, 1920 increased the classes to 
 16, ranging from 600 kr. as originally required in the lowest 
 class to those earning salaries of 18,000 kr. in the highest class. 
 In case of an annual income over 7,200 kr. ($1,461.60), the 
 insured person was to pay the whole premium himself. 
 
 An old age pension was to be paid, in the case of insured 
 men, either after 40 years of contribution at any age, or it 
 was to be paid after five years of contribution on reaching the 
 age of 70. In case of women, only 35 years of contributions 
 
282 FACINGOLDAGE 
 
 were required, when the age of 55 had been reached, or after 
 five years of contribution after reaching the age of 65. This 
 was changed by the 1920 amendment to 60 for men and 55 for 
 women. The amount of the pension varied with the salaried 
 classes and the number of contributions made. The pension 
 ranged from 180 kr. ($36.54.) for the lowest class to 270 kr. 
 ($54.81) the second class; 360 kr. ($73.08) the third class; 
 640 kr. ($109.62) the fourth class; 720 kr. ($14-6.16) the 
 fifth class, and 900 kr. ($182.70) for the sixth class. The new 
 amendment increased this pension to 645 kr. for the first class 
 and 5400 kr. for the sixth class. Pensions of half the amounts 
 were also paid to the widows of insured persons, who drew an 
 invalidity or old age pension during their lives or had acquired 
 a right to such a pension. 
 
 The administration of the insurance plan is under a cen- 
 tral pension institution and its' local oiEces. In 1911 there 
 were 108,311 persons insured in Austria. Due to the Allies' 
 partition of Austria and its general state of bankruptcy, com- 
 parative statistics at the present writing, even if they are 
 possible, would be of little value. 
 
 The State also has had a compulsory old age pension fund 
 for the government mining employes which was established as 
 early as 1854. The State paid one-half of the contributions 
 to that fund. 
 
 CZECirO-SLOVAKIA 
 
 Compulsory insurance against invalidity and old age for 
 salaried employes was established in what is now Czecho-Slo- 
 vakia, as the result of a law of 1906, which was amended in 
 1914. The following forms of insurance are off^ered: (1) 
 Invalidity pensions in case of incapacity for work; (2) Old age 
 pensions to men after 40 years of membership, and to women 
 after 35 years of membership; (3) Pensions corresponding to 
 one-half of that granted the insured to the widow of the inspired ; 
 (4) Grants for the education of children until they reach 18; 
 
COMPULSORY-CONTRIBUTORY 283 
 
 and (5) A grant from tjie total indemnity in caste the insured 
 dies within the first five years. In the case of invalidity pen- 
 sions medical care is provided in addition. 
 
 As is the case with the Austrian system the insurance is com- 
 pulsory for those who are 18 years of age and upward whose 
 income exceeds 600 crowns but not over 3,000 crowns. The 
 contributions from both employer and employe as weU as the 
 pensions are similar to those described in the Austrian 
 system. 
 
 In 1919 the following amendments to the law were to be 
 submitted to the National Assembly: (1) The age for 
 admission to be decreased from 18 to 16 years; (2) The mini- 
 mum salary conditions to be abolished and new salary levels 
 to be included in the compulsory law; (3) The invalidity and 
 old age pensions to be supplemented by grants for education 
 of children; (4) The provision of a burial benefit; and (6) 
 That the pension be increased up to the amount of 50 per cent, 
 if the health of the beneficiary requires the constant care of 
 outsiders.^ 
 
 CHILE 
 
 In February 1911, a law was enacted in Chile requiring state 
 railroads to establish an insurance fund for the retirement of 
 incapacitated salaried employes and workmen and for the 
 compensation of persons injured in the s'ervice. 
 
 The fund is made up from the following sources: (1) By 
 deducting five per cent, from the employes' wages; (2) By the 
 retention of the first monthly increase in pay; (3) By the 
 accumulation of fines and penalties, unclaimed pay, etc., and 
 (4) By adding 54.8 cents to every $365 receipts. 
 
 Office employes who have been in the service for ten years 
 and who are completely incapacitated for work, may be re- 
 tired with as many fortieths of 75 per cent, of earnings 
 
 1 G. Sousek, La Conference du Travail et r:fitat Tshecko-SIovak, 1919. 
 p. 61-63. 
 
284. FACINGOLDAGE 
 
 as their years in service. Day labourers employed in the main- 
 tenance of ways, etc., having ten years of s'ervice and totally 
 incapacitated for work may be retired with 50 per cent, of 
 wages. Persons engaged in the upkeep of rolling stock, 65 
 years of age, 30 years in the service and incapacitated for 
 work, retire with 50 per cent, of wages. The year's work 
 must be of not les's than 250 days. 
 
 Persons permanently incapacitated because of accident are 
 compensated by the payment of full wages. 
 
 FRANCE 
 
 For more than half a century France has experimented with 
 voluntary and subsidized old age insurance, but without suc- 
 cess. Finally in 1910 France was the first country to follow 
 Germany's example, and adopted a national compulsory system 
 of old age insurance. The original act has since been 
 amended several times, especially by the acts of September 
 20, 1912 ; August 17, and December 25, 1915. 
 
 The present act provides that all workers and peasants 
 (salaried or wage-earners) earning less than 3,000 francs 
 (normally $579) must take out old age insurance. State 
 employes who do not come under the regulations' of civil and 
 military pensions' are also required to insure themselves. The 
 law exempts several large industrial groups who were already 
 protected by more liberal compulsory provisions. The insur- 
 ing of a person may begin from the age of 12. 
 
 The contributions to the insurance fund are of three kinds, 
 depending upon the age and sex of the insured person. Adult 
 males pay nine francs ($1.34) per year; adult females six 
 francs' ($1.16) per year; and minors under 18 years of age 
 pay four and one-half francs ($0.87). The employer is required 
 to duplicate this contribution and is also made responsible for 
 the entire payment of the premiums. He is permitted to de- 
 
COMPULSORY-CONTRIBUTORY 285 
 duct the worker's share from his wages, and receipts it by a 
 system of special stamps which are affixed to the employe's 
 card. 
 
 The age when one may be pensioned is 60. Pensions may 
 be drawn, however, at 55 with a proportionate deduction in 
 both the amount of pension and the state subsidy. The amount 
 of a pension is based upon the number of contributions made 
 and the age of the instired. In order to obtain a regular pen- 
 sion, 30 payments are required. This is reduced to 28 for all 
 who have performed at least two years of military service ; and 
 in the case of women, one annual payment for the birth of each 
 child is deducted from the required thirty years. The State 
 adds to each regular pension 100 francs ($19.30). This is 
 still more increased by one-tenth to those persons, of either 
 sex, who shall have brought up at least three children to the 
 age of 16. For those who have made less than thirty pay- 
 ments, but more than fifteen, the state subsidy is computed on 
 a basis of 3.33 francs ($0.64) for each year of contribution. 
 No state subsidy is given in cases of less than fifteen annual 
 payments. 
 
 To meet the immediate problem of relief for the aged, the law 
 of 1910 als'o provided that all persons who were already 35 
 years of age at the time the law was passed, must insure. To 
 those between the ages of 35 and 40, regular state subsidy was 
 given. If 46 years old, in 1910, the stibsidy was raised two 
 francs and thereafter it was raised two francs for every ad- 
 ditional year at which insurance began. Those over 65 years 
 of age at the time the law went into effect, were continued to 
 be given pensions in accordance with previous laws. 
 
 On January 1, 1914, the number of insured pers'ons was 
 7,710,380, of which number 696,921 were voluntarily insured. 
 The figures given for 1915 were 6,722,332 compulsory in- 
 sured and 594,511 voluntarily insured. The year following, 
 1916, the nuijibers were 7,078,726 and 510,734 respectively. 
 
286 FACINGOLDAGE 
 
 The smaller numbers in the war years are not due however to 
 an actual decline, as two or three provinces which were included 
 in 1914, were not included in the two following years, due to the 
 German invasion.^ 
 
 That the declaration of war affected materially the receipts 
 of the fund is evident from the fact that while for the first 
 half of 1914 the receipts amounted to $3,665,833, the second 
 half of the year yielded only $1,599,135. Indeed a compar- 
 ison of the receipts for the pre-war and war years shows that 
 more than one-half of the persons insured have been unable 
 to continue their payments' into the fund during the state of 
 war. 
 
 The amount of premiums paid into the fund in these years 
 was as follows : ^ 
 
 1912 8,483,740 
 
 1913 8,786,429 
 
 1914 5,264,958 
 
 1915 3,704,035 
 
 1916 4,611,297 
 
 Since 1911, when the law first went into effect, the number of 
 persons retired each year was as follows : 
 
 1911-12 186,092 
 
 1913 706,714 
 
 1914 220,925 
 
 1915 115,026 
 
 1916 97,842 
 
 Total 1,326,599 
 
 On December 31, 1916, there were 1,1581,325 retired persons 
 under the Labourers' and Peasants' Retirement Fund.* 
 
 The principle of compulsory insurance against infirmity and 
 old age was applied to French miners long before the adop- 
 tion of the general compulsory insurance law. The former 
 
 a Monthly Labour Review, March, 1919, p. 293. 
 
 2 Ibid, June, 1919, p. 293. 
 
 8 Ibid. , , 
 
COMPULSORY-CONTRIBUTORY 287 
 
 was established in 1894». An amending act dated February 
 25th, 1914!, repealed the previous legislation and created an 
 Autonomous Pension Fund for miners, to be administered by 
 a council of 18 persons, the employers, employes and the gov- 
 ernment to be represented by six members each. For the pur- 
 pose of forming a basic capital for these pensions, the act 
 provided that the mine owners pay every month into the fund 
 four per cent, of the wages of the workers. The regular 
 contribution is borne one-half by the employers and one-half 
 by the workers. The right to a pension begins at 55 years of 
 age. Miners who can prove that they have worked for wages 
 for at least 30 years or at least 7,920 days (absence on 
 account of sickness is not deducted) in French mines have 
 the right, in addition, to a state allowance of 100 francs and 
 a bonus from a special fund. In case of permanent incapac- 
 ity a miner is entitled to a pension regardless of age. The 
 state was to pay, according to the amended act, 2,000,000 
 francs annually towards the general administrative expenses 
 and certain other purposes. 
 
 On the ninth of March, 1920, the law was amended providing 
 for greater subsidies from the state. The state's subsidy in 
 the future will be 860 francs per annum for miners, and 430 
 francs for their widows. The total annual pensions were raised 
 to 1,500 francs and 750 francs respectively. Another feature 
 of the amendment is the inclusion of persons, who, after having 
 worked as miners for ten years, become trade union officials'. ^ 
 
 On October 21, 1919, a law was promulgated also provid- 
 ing for a minimum retirement pension of 1,800 francs for each 
 male employe upon reaching the age of 60 years after 30 years 
 in the service of the state and 1,500 francs per each female 
 employe upon the age of 55, after she has been 30 years in the 
 state's service. The state's service includes the following indus- 
 tries : Manufacture of tobacco and matches ; manufacture of 
 
 1 Journal Official de la R^publique Fran9aise, Paris, March 10, 1920, 
 The Labour Gazette, April, 1920, London. 
 
28^ FACINGOLDAGE 
 
 goods in transit; general bureaus of printing and engraving, 
 posts and telegraphs, and of mints and metals ; military estab- 
 lishments under the supervision of the ministers of war and 
 industrial reconstruction; and arsenals and naval establish- 
 ments. The pensions are subject to the regulations concern- 
 ing premium payments into the national old age retirement 
 fund. 
 
 The law also provides that an employe may be retired for total 
 disability after 15 years of service in which case the pension 
 shall be reduced by one twenty-fifth per each year not served 
 to 25. On the other hand, the pension is increased one-thir- 
 tieth and one-twenty-fifth for those eligible to retirement after 
 the respective years of service for each year above their limits. 
 A widow's pension is equal to one-third of that to which the 
 husband was entitled at the time of his death. The pension is 
 increased to one-half of that to which the husband was entitled 
 in case three or more children under 16 are left. ^ 
 
 The comprehensiveness of the French insurance system is 
 still further evidenced by the fact that in addition to the com- 
 pulsory insurance systems, the French law also provides a 
 system of voluntary insurance which is extended to private 
 persons with small incomes, small employers of labour, peas- 
 ant proprietors, independent workingmen and wage-earners, 
 with incomes of more than 3,000 francs ($579), but less than 
 5,000 francs ($965). The Act of December 25th, 1915, also 
 raised the maximum life annuity from 1,200 to 2,400 francs, 
 ($231.60— $463.20). 
 
 GERMANY 
 
 Germany was the pioneer in the field of sbcial insurance. 
 Insurance against old age was first established in that country 
 in 1889. In 1911 Germany adopted a most comprehensive 
 system of workingmen's insurance, which included, besides the 
 payment of old age pensions, sickness, accident, invalidity and 
 1 Monthly Labour Review, Feb. 1920, pp 229-230. 
 
COMPULSORY-CONTRIBUTORY 289 
 
 survivors' benefits. Under the German law insurance was made 
 compulsory for all manual workers and those other wage and 
 salaried persons whose annual income did not exceed 
 2,000 marks (normally $476). The obligation to insure 
 begins with the 17th year. 
 
 Prior to 1916, the age of eligibility for an old age pension 
 was set at 70 years. An Imperial law of June 12, 1916, 
 reduced this age from 70 to 65 years. This law was made 
 retroactive taking effect as from the first of January, 1916. 
 In addition to the payment of old age pensions the German 
 system also provides for invalidity pensions which are granted 
 in case of permanent disability before the pensionable age. 
 The latter is given to all persons unable to earn one-third of 
 the normal wages in the same occupation and locality. As 
 would be expected, many more pers'ons are receiving invalidity 
 than old age pensions. The former has steadily increased 
 while the latter has steadily declined. In 1914, there were 
 998,339 invalidity pensions paid, as compared with 87,261 old 
 age pensions. The comparative growth and decline of the two 
 forms of pensions may be seen from the following: In 1891 
 there were 31 invalidity pensions ; this increased to 405,335 in 
 1900; in 1908 it rose to 868,086, and in 1914 it numbered 
 998,339. The aggregate expenditures for the old age and in- 
 validity pensions stood as one to two in 1894; it reversed to 
 two to one in 1900, eight to one in 1908, and eleven to one 
 in 1912. The reduction of the pensionable age from 70 to 
 65 reduced this' proportion considerably. The consequences 
 of this reduction for the first complete year, during which it 
 was enforced, may be seen from the following: The number 
 of new pensions granted by the insurance offices of the various 
 States increased from 11,276 in 1915, to 92,120' in 1916. 
 Those granted by other offices' of a special nature rose ten- 
 fold in the same interval. ^ 
 
 The insurance contributions in Germany are made jointly 
 1 The Labour Gazette, March, 1918, p 98, London. 
 
290 FACINGOLDAGE 
 
 by the State, the employers and the employes. The State 
 bears part of the expenses of administration by the pay- 
 ment of pensions through the postoffices, and contributes, in ad- 
 dition, a fixed sum each year toward every pension. The 
 amounts of the weekly premiums that are paid by the em- 
 ployers and employes are in equal parts. The employer is 
 made responsible for the insurance of all his employes and 
 for the payment of their premiums. He is permitted to 
 deduct the latter's contributions from their wages, and re- 
 ceipts it by affixing special stamps to the worker's receipt 
 card. 
 
 The contributions' to the fund are not uniform but vary in 
 accordance with the annual earnings of the workers. For this 
 purpose, the insured persons were divided, until recently, into 
 five classes ranging from those earning less than 350 marksf 
 ($83.37) per year, in the first class, to those earning more 
 than 1,150 marks ($273.93) per year in the fifth class. Until 
 1917, the weekly contribution for these classes ranged from 
 16 pfennige ($0,038) to 48 pfennige ($0,114) per week. On 
 January 1, 1917, however, owing to the extra sums expended 
 as a result of the reduction in the age limit, the contributions 
 were increased to 18 pfennige per week for the first class, and 
 50 pfennige per week for the highest group. Another amend- 
 ment was adopted in April, 1920. The new law increased the 
 weekly contributions from 90 to 140 pfennige respectively 
 (normally .2104 and .3303 cents). ^ This enormous increase 
 in the weekly contributions, since the beginning of the war is, 
 of course, explained by the depreciation of the German money. 
 Participants of the war were exempted from payments during 
 the war. 
 
 In July 23, 1921, a new law was adopted increasing the 
 classes to eight and the weekly payments from 3.50 marks for 
 the lowest class to 12 marks for the highest. It is further 
 1 Monthly Labour Review, November, 1920, p. 208. 
 
COMPULSORY-CONTRIBUTORY 291 
 
 provided that this law continue in eiFect until December, 1926. 
 
 The German law provides that in order to be eligible for 
 an old age pension, one must have at least 1,200 weekly con- 
 tributions. To meet the immediate problem of old age relief 
 the required number of contributions was reduced by 40 weeks 
 for each year of age over 40 at the time the law became opera- 
 tive. Persons over 70 years of age at the time of the passage 
 of the law were thus pensioned outright, but they had to show 
 that they had worked in a trade coming under the insurance law 
 for three years. 
 
 The amount of the old age pension prior to the war ranged 
 from 110 marks ($26.20) per year to 230 ($54.79) per year, 
 according to the wage class the insured person was' in. The 
 government's contribution consisted of a uniform state subsidy 
 of 50 marks ($11.91) to all pensioners. The minimum annuity 
 was set at 60 marks ($14.29) for the first wage class. The 
 annuity was then increased by 30 marks ($7.15) for each suc- 
 ceeding class until it reached 230 marks ($54.79). On account 
 of the increasted cost of living during the war, a Federal decree 
 of January 3, 1919, introduced pension bonuses which provided 
 flat increases in the pensions in order to meet the high cost of liv- 
 ing. The amended law of April 29, 1920, established the fol- 
 lowing bonus rates which are granted to recipients of invalidity, 
 old age, and survivors' pensions. A monthly bonus of 30 
 marks ($7.14) is added to invalidity and old age pensions, 
 while a monthly bonus of 10 marks ($2.38) is added to 
 orphans' pensions. By the end of 1920 there was a great de- 
 mand for a further increase in the pension rates, on account of 
 the continued increase in the cost of living. 
 
 The German invalidity and old age insurance system is 
 administered by approximately 50 territorial and special 
 "institutes" under the general supervision of the central insur- 
 ance office. The administration is in the hands of highly 
 trained experts. To each insurance office are attached several 
 
292 FACINGOLDAGE 
 
 boards of arbitration which adjudicate cases in dispute. These 
 consist of an impartial chairman, a secretary and two represent- 
 atives of both employers and employes. In 1914, the total 
 cost of administration of the insurance system was 24,156,658 
 marks ($5,754,116). The government's contributions to old 
 age, invalidity and survivors' pensions amounted to 84,500,000 
 marks ($20,111,000), in 1916. 
 
 The German system, in addition to paying pensions, makes 
 also an effort to prevent invalidity whenever possible. The 
 invalidity institute has the power to provide a course of medi- 
 cal treatment, such as would reduce or prevent the loss of 
 earning power. For this purpose, a chain of 65 or more 
 sanitoria are maintained, which before the war, treated annu- 
 ally about 70,000 persons. The war has naturally increased 
 the work of these preventive institutions. It is claimed that 
 80 per cent, of the cases treated are discharged as cured. 
 The institutes are also authorized to invest part of their re- 
 serve in slich manner as will promote the social welfare of the 
 working classes. In order to improve the health and well being 
 of the ins'ured persons, the social insurance institutes prior 
 to the declaration of war, erected model dwellings for 
 workmen, as well as convalescent homes, people's baths, labour 
 colonies, etc. The Insurance institutes claim that this has re- 
 sulted in a considerable reduction in the death rate and sick- 
 ness rate in Germany. 
 
 Since the inauguration of the war, the German insurance 
 carriers have invested a great deal of their money in govern- 
 ment war bonds. Of the 120,000,000 marks net assets 
 of the Berlin Institution in 1918, nearly 70,000,000 marks 
 were invested In war bonds. As a result of this, and the con- 
 tinued depreciation of the German mark since the signing of 
 peace, the insurance institutes have been in a desperate con- 
 dition. In 1918 the Berlin State Insurance Institute had to 
 borrow about 58,000,000 marks (normally $14,000,000). In 
 the same year the Institutes suffered a deficit of approximately 
 
COMPULSORY-CONTRIBUTORY 293 
 
 4,000,000 marks. The deficit for 1920 amounted to about 
 20,000,000 marks.i 
 
 The average amount of an old age pension in 1914! was 
 167.99 marks ($40.02) or about $3.33 per month. Because 
 of the steady rise in wages which decreased the number of per- 
 sons in the lower wage groups, the average pension paid has 
 risen steadily. In 1891 it amounted to 124 marks ($29.54). 
 In 1900 it was $84.67, and in 1908 it was $89.58. The aver- 
 age amount of the invalidity pension, increased from $41.60 in 
 1909 to $46.51 in 1913. In 1917 the average pension was 
 about $45.24 per year. In 1913 the number of persons insured 
 under the invalidity and old age insurance act was 16,823,800. 
 This represented 24.4 per cent, of the total population. From 
 1891 to 1913 the distribution of the contributions toward the 
 invalidity and old age pensions was as follows : The employers 
 contributed $418,026,865, representing 40.7 per cent, of the 
 total contributions. The insured persons contributed a simi- 
 lar sum. The aggregate state subsidy during this period 
 amounted to $191,981,177, which repres'ented 18.6 per cent, 
 of the total contributions. The total contributions for the 
 22 years amounted to $1,028,034,907. 
 
 In 1918, a German writer declared that it would cost much 
 more than 1,000,000,000 marks ($288,000,000) annually to 
 discharge all of Germany^s social insurance subsidies.^ Rep- 
 resentatives/ of the German State invalidity insurance institutes, 
 at a conference in Berlin in May, 1918, declared that, in order 
 that the heavy burdens may be borne more easily the solvency 
 and efficiency of the insurance institutes must be assured by 
 the introduction of higher wage-classes for insured persons with 
 earnings in excess of 1,500 marks ($357.00). It was also 
 urged that insurance be extended to persons 15 years of age 
 and to small business men as well as railroad employes with in- 
 
 1 Soziale Praxis uiid Archiv fiir Volkswohlfahrt, Berlin, May 19, 1920, p 
 778. 
 
 2 K61nisch,e Zeitung, Cologne, December 12, 1918. 
 
294 FACINGOLDAGE 
 
 comes of 2,000 to 5,000 marks ($476 to $1,190). ^ In July, 
 1921, this was increased to invalid persons earning up to 
 15,000 marks annually. 
 
 On January 1st, 1913, the act creating the salaried em- 
 ployes' insurance system went into operation. This was pri- 
 marily for the payment of old age invalidity, and survivors' 
 pensions. A waiting period of ten and five years respectively, 
 for the payment of such benefits, is provided, but this period 
 may be shortened by the payment of extra premiums. Under 
 this insurance provision, pensions are paid if the earning ca- 
 pacity of the insured has been lessened by 50 per cent, instead 
 of two-thirds, as required under the general insurance system. 
 The contributions here are made by the employers and 
 employes with no state subsidy. During the year 1916, the 
 total amount of contributions paid to the institute by the 
 employers and employes was, in round figures, 113,000,000 
 marks ($26,894,000). This insurance system was very un- 
 popular, and the obligation to insure was contested by many 
 people during the same year. While only few of these special 
 pensions were given during the year 1916, the insurance insti- 
 tute for salaried employes granted such other benefits as pro- 
 vided by law. First of these was the granting of medical and 
 curative treatments. This insurance is objected to by many, 
 as it is claimed that its creation was mainly for political 
 reasons, in order to separate the salaried employes from wage- 
 workers, as a special class. 
 
 The conference of insurance experts in 1918 already referred 
 to urged that the salaried employes insurance be discon- 
 tinued as a special institution, and that it be incorporated 
 in the general invalidity insurance plan. The conference de- 
 clared that: "While the exceedingly expensive salaried em- 
 ployes insurance in. its present form could be tolerated as a 
 luxury as long as favourable economic conditions prevailed, 
 this is no longer possible at present, when great economy in 
 
 |i Monthly Labour Review, Jan. 1919, pp 285-88. 
 
COMPULSORY-CONTRIBUTORY 295 
 
 all spheres has become an imperative duty. It seems, more- 
 over, not possible to permit this insurance system to accumu- 
 late and hoard a billion marks during the next five years, of 
 which not even the interest would be paid in benefits' to the 
 insured." ^ At the present writing there is a movement 
 supported by the Socialists and the institutes to combine both 
 systems. On May 31, 1920, the income limit of salaried 
 employes who are subject to obligatory insurance was raised 
 to 15,000 marks (normally $3,750) per annum,^ and on July 
 23, 1921, was further increased to 17,000 marks. 
 
 GREECE 
 
 A compulsory invalidity and old age ins'urance system for 
 Greek sailors was enacted in 1907. The cost is divided equally 
 between the insured, the employers and the State.^ 
 
 ICELAND 
 
 Iceland established a compulsory system of old age and in- 
 validity insurance in 1890. In accordance with the law, "All 
 servants between the ages of 20 and 60, all day labourers, and 
 persons working with their parents must annually contribute 
 to this fund $0.27 for men, and $0.08 for women. The male 
 head of the household must pay this contribution for every 
 person who resided with him during the year, but he may 
 deduct it from the wages of his employes. For the non-pay- 
 ment of these contributions, property may be attached. The 
 only persons exempt from paying contributions are those with- 
 out means who are responsible for maintaining one or more 
 dependents who are unable to provide for themselves; those 
 unable to earn wages on account of sickness or other cause; 
 and those who have provided for their old age by purchase 
 of an annuity of at least 150 kroner ($40.20). 
 
 1 Monthly Labour Review, Jan. 1919, pp 285-88. 
 
 2 The Economic Review, May 19, 1920, London. 
 
 3 Report of Special Inquiry Relative to Aged and Dependent Persons 
 in Mass., Boston, 1916, p 102. 
 
296 FACING OLD AGE 
 
 "Pensions are granted to persons over 60 years of age who 
 have received no poor relief during a prior period of ten years. 
 The mininnim pension is 20 kroner ($5.36) and the maximum 
 pension granted may not exceed 200 kroner ($53.60). 
 
 "Funds are administered in cities by the magistrates, in 
 rural communities by the parish-council, and these officials may 
 set aside as their salaries four per cent, of all contributions 
 levied. They must also elect two persons who audit the annual 
 balance sheet of the respective funds." ^ 
 
 ITALY 
 
 Like many other countries, Italy first experimented with 
 voluntary and subsidized old age insurance. The National 
 Institute for Insurance of Workmen against invalidity and old 
 age was merely an institution for voluntary insurance and was 
 established in 1898. Its purpose was to offer protection against 
 old age to all Italian citizens who were engaged in manual labour 
 or who on their own account did not pay a tax exceeding 30 lire 
 (normally $5.79) per annum of any nature. In addition to 
 the regular annuity the government added a contribution not 
 to exceed 10 lire ($1.93) per annum. While other classes also 
 were permitted to insure, the latter were not given the special 
 subsidies. 
 
 The Italian voluntary insurance system was no more suc- 
 cessful than those of other countries. From 1898 to 1910 the 
 total nmnber of accounts opened was about 300,000, which 
 constituted only two per cent, of the total population gain- 
 fully employed in that country. During all this time the gov- 
 ernment was continuously beset by the demands of organized 
 labour and social workers for the enactment of a compulsory 
 old age and invalidity insurance law. During the war the 
 government was compelled to comply in part with these de- 
 mands. Thus in April, 1917, a viceregal decree made it compul- 
 sory for all auxiliary war establishments to insure their workers 
 in the National Insurance Institute. In accordance with this 
 1 Ibid, 1916, p 102. 
 
COMPULSORY-CONTRIBUTORY 297 
 
 decree over 600,000 workers were insured in the Institute. 
 
 Shortly after the Armistice was signed the government intro- 
 duced a bill in the Chamber of Deputies, providing for compul- 
 sory old age and invalidity insurance. As the bill was hailed 
 unanimously by both employers and employes, and in order to 
 secure speedy action, a decree was issued on April 21, 1919, 
 establishing obligatory old age and invalidity insurance. The 
 act went into effect January 1, 1920. 
 
 The Italian Insurance Act against disability and old age is 
 compulsory for (1) All Italian subjects of both sexes, whether 
 at home or in the colonies, between the ages of 15 and 65, who 
 work for an employer in any industry, trade or profession, 
 including "home industries," agriculture and public service, or 
 who are occupied in domestic service or in any private employ- 
 ment; (2) Aliens working at the same occupations, provided 
 reciprocal treatment is granted to Italians abroad. 
 
 The following are exempted from the obligation to insure: 
 (1) Non-manual workers whose average monthly salary exceeds 
 350 lire ($67.55) ; (2) all half-share and tenant falrmers whose 
 annual income exceeds' 3,600 lire ($694>.80) ; (3) Men in the 
 merchant marine service employed on Italian ships who are 
 already insured in the merchant marine's Invalidity F'und; (4) 
 State and public service employees for whom insurance schemes 
 are already in existence. 
 
 The new Italian old age and invalidity insurance law provides 
 for equal contributions from the employer and the insured per- 
 sons. The contributions are based, as in Germany, upon a slid- 
 ing scale in accordance with the daily earnings of the insured 
 pers'on. The bi-weekly contributions are as follows : 
 
 Bi-Weekly Contribution 
 Daily Earnings of Insured of Employer and Employ^ 
 
 2 lire and less 0.60 lire 
 
 Over 2 to 4 lire 1.00 " 
 
 Over 4 to 6 lire 1.60 " 
 
 Over 6 to 8 lire 2.00 « 
 
 Over 8 to 10 lire 2.60 " 
 
 Over 10 lire 3.00 " 
 
298 FACINGOLDAGE 
 
 As in Germany and France, the contributions are collected 
 by the employer, who affixes stamps to special cards provided 
 for that purpose. The employer is held responsible for the col- 
 lection of both his own and his employe's shares. He is per- 
 mitted to deduct the worker's contribution from his wages and 
 penalties are prescribed for incorrect deductions. 
 
 Pensions are granted to (1) persons 65 years of age who 
 have paid at least 240 fortnightly contributions ; (2) at any 
 age in case of permanent incapacity to persons who have made 
 at least 120 bi-weekly contributions. A person is considered 
 disabled if his earning ability is reduced to less than one-third 
 of the current earning capacity of persons working in the 
 s'ame occupation in the same locality. The pension may be 
 suspended when the person improves to such an extent as to 
 make the definition no longer applicable. 
 
 The pension amount is made up of two parts. (1) The part 
 corresponding to the contributions made by the insured per- 
 s'on and his employer, and (2) the part granted by the State. 
 The first amounts to 66 per cent, of the first 120 fortnightly 
 contributions, plus 50 per cent of the next 120 contributions 
 together with 25 per cent, of the remaining contributions'. 
 The second part is made up of 100 lire ($19.30) for each 
 (pfension each year. 
 
 The 1919 Decree provides that persons' who have undergone 
 a period of active military service, and persons disabled 
 through sickness, not exceeding one year, are entitled to 
 credit of the lowest bi-weekly contributions, even though they 
 have not made such contributions. 
 
 In case of death of an insured person before he becomes 
 entitled to a pension, his Vidow or his children under 15 years> 
 of age shall receive a monthly grant of 50 lire ($9.65) for a 
 period of six months. 
 
 When invalidity has been established, hospital treatment may 
 be provided for a disabled person with his consent by the Na- 
 tional Social Insurance Institute, which bears all expenses. 
 
COMPULSORY-CONTRIBUTORY 299 
 
 The Italian scheme is administered by the National Social 
 Insurance Institute under the supervision of the Ministry of 
 Industry, Commerce and Labour. The council of administra- 
 tion consists of six representatives of the employers, eight of 
 the compulsorily insured persons, two of the voluntarily insured 
 persons, five members selected from among social insurance ex- 
 perts, and one official from each of the following departments : 
 Industry, Commerce, Labour and Finance, and the director gen- 
 erals' of the National Insurance Institute, the National Acci- 
 dent Insurance Institute and of the insurance institutes in the 
 Ministry of Finance. In addition to the National Social In- 
 surance Institute, a Provincial Provident Institute was estab- 
 lished in each province, which is trusted with the administration 
 of the present law. The executive committee administering 
 these institutes is made up of an equal number of representatives 
 from the ministers of industry, commerce, labour and finance; 
 the insured pers'ons and the employers. Arbitration boards 
 as well as boards of appeal are also set up by the decree. 
 
 The Italian law provides that insured persons' may in- 
 crease their pensions' through voluntary contributions. Vol- 
 untary pensions' may be secured by (1) Independent workers 
 whose yearly income does not exceed 4,200 lire ($810.60) ; 
 (2) Married women of compulsorily insured husbands and all 
 other women engaged in domestic work; (3) Small peasant 
 proprietors, shop keepers and professional workers whose an- 
 nual direct State taxes do not exceed 200 lire ($38.60) ; 
 (4t) Those persons who at the coming in force of the present 
 decree were already voluntarily insured, even though they do 
 not come under one of the above groups. 
 
 The State is still seeking to encourage voluntary insurance 
 and for that reason contributes in the case of non-obli|ga- 
 torily insured persons one-third of the annuity acquired through 
 voluntary contributions', and one-sixth of the total annuity 
 in the case of supplementary Insurance taken out by those 
 compulsorily insured. 
 
300 FACINGOLDAGE 
 
 The Decree provides for an annual contribution by the 
 State to the National Institute of 50,000,000 lire ($9,650,000) 
 during the first ten years of the operation of the plan. The 
 state subsidies are paid from these funds. ^ 
 
 LUXJEMBUaG 
 
 A compulsory system of old age and invalidity insurance was 
 first established in Luxemburg in 1911-12. As in the case of 
 the Austrian Act, insurance was made compulsory for the higher 
 wage-groups rather than those of the lowest wage groups. The 
 law compelled all persons to insure who were earning not less 
 than 3,000 marks ($715) annually. Persons who earned not 
 more than 3,600 marks ($858) could in addition take out volun- 
 tary insurance. The act also provided for institutional care to 
 prevent incapacity as well as for the care of widows and depend- 
 ents in case of death. 
 
 In the beginning, the pensionable age was set at 68 years. 
 In June, 1914, however, the age was reduced to 65. In order 
 to receive a pension at that age one must have proved that he 
 has worked in the Duchy for at least 2,700 days in an occupa- 
 tion subject to compulsory insurance. The law also provided 
 that "Luxemburg subjects who on January 1, 1912, are 65 
 years of age or more, and who prove that during the five years 
 which immediately preceded this date they have regularly exer- 
 cised in the Grand Duchy an occupation subject to compulsory 
 insurance, shall be entitled to claim one-third of the original 
 pension." And further: "Insured Luxemburg subjects' who 
 have completed the 65rth year of their age within ten years 
 immediately following January 1, 1920 . . . shall be en- 
 titled to old age pensions, if they give proof that during the 
 five years immediately preceding January 1, 1920, they have 
 
 1 The Labour Gazette, January 1920, p 10, London; Monthly Labour Re- 
 view, December 1919, pp 34.9-358. 
 
COMPULSORY-CONTRIBUTORY 301 
 
 regularly exercised in the Grand Duchy an occupation subject 
 to compulsory insurance, and that since that date up to the 
 completion of their 65th year they have worked on an aver- 
 age of 270 days a year." ^ 
 
 The contributions in Luxemburg, as in most countries, are 
 made by the State, the employers and employes. The State 
 subsidy, prior to the World War, was a jSxed sum of 48 marks 
 ($11.43) for every insured man and 38.40 marks ($9.15) for 
 every insured woman. In order to provide for these subsidies, 
 the Act of 1914 set aside a credit of 125,000 francs, to be 
 paid annually, for 50 years, to the deposit of the Invalidity 
 and Old Age Insurance Institution. The total contribution 
 of the employers is at the rate of 2.1 per cent, of the 
 wages earned. This' is divided equally between the employer 
 and the employe. The former was' made responsible for the 
 payment of the premiums, by the Act of 1911, and was author- 
 ized to deduct the employes' share from the wages. The Act 
 of 1914 modified this, so that by mutual agreement, the re- 
 tention of deductions corresponding to the contributions due, 
 may 'be postponed until the final settlement (this to be not 
 later than December 31, of each year) ; while the share o,f 
 contributions of agricultural workers, working partly on their 
 own account and partly for others, is collected direct from 
 such persons'. The amendment also provided that the Manag- 
 ing Committee of the Insurance Institution may require a se- 
 curity to be deposited by contractors domiciled in a foreign 
 country, who temporarily employ in the Grand Duchy persons 
 liable to insurance. 
 
 The contributions to this fund in 1912, the first year of its 
 existence, were as follows: from industrial and miscellaneous 
 occupations, 1,339,000 francs, and from agricultural 53,777 
 francs. The benefits paid out during the fiscal year 1912-13 
 were 29,464 francs to insured persons in industrial and mis'- 
 
 1 Bulletin of International Labour-office, Vol. 9, no. 7, p 310, 1914. 
 
302 FACINGOLDAGE 
 
 cellaneous occupations, and 16,04<5 francs to agricultural 
 workers. 
 
 NETHERLANDS 
 
 On the fifth of June, 1913, the Netherlands established a 
 system of old age and invalidity insurance. The act compels 
 the insurance of aU workmen in the Netherlands over 13 years 
 of age, who are not in active military service, and whose annual 
 income is not in excess of 1,200 florins ($482). Compulsory 
 insurance applies also to seamen and workmen employed in 
 a foreign country by Dutch establishments. Exempted from 
 compulsory insurance are those who work for wages only 
 occasionally and for short periods ; those already entitled to 
 a pension from the State or private establishments; and those 
 who pay a property or an income tax exceeding 2,000 florins. 
 The government, it is also provided, is to pay an annual sub- 
 sidy to the insurance fund of 10,000,000 florins ($4,020,000), 
 for a period of 75 years. Prior to 1914, the government also 
 paid to the districts a subsidy of 50 florins ($20.10) per 
 pension. 
 
 The insured person is entitled to an annuity in the event 
 of disablement or after the completion of his 70th year of age. 
 Incapacity is' defined as the inability to earn one-third of 
 the normal wage. In the case of death the surviving children 
 receive annuities until the age of 13. In order to be eligible 
 for an invalidity annuity, every insured person must have paid 
 150 premiums. Persons convicted of crime, recipients of 
 public charity and those of immoral character are disqualified 
 for a pension. It is also required that one must have been a 
 resident of the country for at least 20 years and a citizen for 
 at least five years before he is entitled to a pension. 
 
 As in Germany, persons' subject to compulsory insurance are 
 divided into five classes — ^those earning less than 240 florins, 
 the lowest ($96.48), and those earning 900 ($361.80) or more 
 florins, the highest. The weekly premiums paid vary from 20 
 
COMPULSORY-CONTRIBUTORY 303 
 
 cts. ($0.08) for the first class to 48 cts. ($0,193) in the fifth 
 class. The premium is paid by the employer, who is entitled to 
 deduct from the weekly wages a sum ranging from four cts. 
 for the first wage class, to 24 cts. in the fifth wage group in the 
 case of adults, and half the amount of the premium for each 
 wage class in the case of minors. The employers bear a greater 
 share in the lower wage groups and bear an equal amount in the 
 case of the upper wage classes. Military conscripts, while in ser- 
 vice, are assigned to the second wage class and their premiums 
 are paid by the State. 
 
 The amount of the annuity is computed as follows: The 
 pension amounts to 325 times the total of the premiums pafidi 
 up, divided by the number of weeks during which the person 
 has been insured. To this is added 14 per cent, of the total 
 amount of the premium paid up, which must not be less than 
 one-fifth of the original pension. "In accordance with this 
 formula an insured person who has paid 48 weekly contri- 
 butions each year, from the age of 20 to the age of 70, and 
 whose wages were $5.00 a week up to the age of 25, $6.00 a 
 'week up to the age of 30, $7.00 a week thereafter, would be 
 entitled to a pension of about $2.30 a week at the age of 70. 
 In the event of his becoming incapacitated at the age of 30, 
 he would from that time on receive about $1.25 a week. 
 Should such incapacity not occur until his fortieth year, he 
 would receive about $1.50 a Iveek, and if it did not occur 
 until his fiftieth year, he would receive about $1.80 a week." ^ 
 
 The Act also provides that in cases of persons subject to 
 compulsory insurance, and when permanent disability may be 
 averted by medical treatment, the "Labour Council" may 
 cause such insured persons to be subjected to such treatment 
 or placed in the proper institution at the expense of the State 
 Insurance Bank. 
 
 1 Report of a special inquiry relative to aged and dependent persons 
 in Mass., Boston, 1916, p 102. 
 
304 FACINGOLDAGE 
 
 In addition to the compulsory insurance system, Holland 
 also provides a system of voluntary insurance against old age 
 and disability for those exempted from the former plan. 
 
 NOB.WAY 
 
 In February, 1907, a Commission was appointed in Norway 
 to study the problem of invalidity and old age insurance. The 
 Commission finished its work in 1912, and submitted a draft 
 of a bill for a national invalidity and old age insurance 
 system. This bill proposed that all male and female persons 
 residing in Norway or belonging to the crews of Norwegian 
 vessels, Norwegian citizens in Norwegian employment in for- 
 eign countries and Norwegian citizens employed by foreigners 
 in Norway, shall be compelled to insure themselves against 
 invalidity and old age. The insurance begins with the age of 
 16 years. 
 
 The proposed scheme provided for the payment of an inval- 
 idity pension, invalidity existing when the earning power is 
 reduced to less than one-third the normal, after four years 
 of contributions and after a waiting period of 26 weeks from 
 the time of invalidity. If a person earns 1,500 crowns ($402) 
 a year, he is not to be considered disabled under any condition. 
 The old age pension was to mature at 70 years. An invalid- 
 ity pension was to cease as soon as an old age pension was 
 drawn. Medical and institutional care were also provided in 
 the proposed bill. 
 
 The bill provided that the cost of the administration of the 
 insurance should be borne by the state and the commune; the 
 cost of the insurance proper, however, to be met by the contri- 
 butions of the insured persons. In addition, it was suggested 
 that the commune pay 25 crowns ($6.70) annually for every 
 current invalidity pension. During the time of sickness or ac- 
 cident, the commune was to pay also the contributions', in 
 case the insured person was unable to pay them himself. 
 
COMPULSORY-CONTRIBUTORY 305 
 
 The premiums, the Commission proposed, are to be paid 
 for 50 years, but persons over 70 years of age when the law 
 goes into effect are exempt from payments. Contributions 
 were to be two per cent, of the earnings but not less than two 
 crowns ($0.54) a year. A fraction of one per cent, on the 
 property of an insured person was to be added to the contri- 
 bution. A deduction of five per cent, from the contribution 
 was made for each dependent of the insured person. No 
 child over 14, however, was to be considered dependent. 
 
 The bill proposed a rather unique system of computing the 
 amounts of the pension. The framers of the bill argued that, 
 "On the coming into force of the insurance, the sums at 
 present expended for public and private poor relief, which are 
 raised by taxation, will decrease considerably. This should 
 result in a saving to persons who for some reason or other are 
 exempt from insurance, and also to corporations, foundations, 
 and societies, the income of which is subject to special taxa- 
 tion. If such individuals and incorporated bodies do not give 
 some equivalent for this saving, they would actually obtain an 
 advantage at the expense of the insured persons because ex- 
 penditures which would otherwise be borne by all persons sub- 
 ject to taxation would in such case be borne exclusively by 
 the insured person. Since the national insurance system does' 
 not intend to bring about such a shifting of the social burden, 
 the bill provides that all persons who have ceased to pay 
 regular contributions, all persons who are not subject to insur- 
 ance, and all taxable corporations', foundations, and societies, 
 the income of which has not been taxed in the assessment on 
 their stockholders, partners, or members, must pay to the na- 
 tional insurance institution an equivalent for their savings in 
 taxes, the amount of which shall be determined on the basis of 
 statistical computations." The Commission, therefore, sug- 
 gested that the total fund, in addition to the regular contri- 
 butions, should consist also of the insured person's savings in 
 poor relief and private support, as well as the current invalid- 
 
306 FACING OLD AGE 
 
 ity subsidy of the commune. In order to make the pension 
 uniform, a basic pension of somewhat more than 53 crowns 
 ($14.20) per year was to be paid to the insured person regard- 
 less of the amounts of the premiums paid. The basic pension 
 was to be increased in accordance with the number of contri- 
 butions made, the economic conditions, and the number of the 
 dependents of the insured person. An additional grant of 15 
 crowns ($4.02) was provided for every child under 14. If 
 both husband and wife were receiving a pension, 20 crowns 
 ($5.36) for every child under the age of 14 would be granted. 
 
 Contributions, it was recommended, would be collected along 
 with the Communal taxes. The employers were to pay the con- 
 tributions of their employes, as' well as those of their employes' 
 families. The employer might deduct the cost from his em- 
 ployes' wages. The Commission suggested that if the pension 
 granted by the usual method of computation were too small, the 
 commune might grant an increase. ■"■ 
 
 PORTUGAL 
 
 The Republic of Portugal, by decrees issued in 1919, estab- 
 lished a system of obligatory insurance covering sickness, inval- 
 idity, old age and industrial accidents. Invalidity, old age and 
 survivors' insurance is made compulsory for all persons from 
 15 to 65 years of age earning less than 900 escudos (the normal 
 value of the escudo is $1.08). The classes exempted from this 
 compulsory insurance include: (1) Public officials already en- 
 titled to pensions; (2) soldiers employed as labourers; (3) 
 infirm persons who cannot earn one-third of their average 
 wages and entitled to free subsistence; (4) all other classes of 
 wage-earners who are already insured. 
 
 The insurance is administered by the State under the direc- 
 tion of the Institute of Compulsory Social Insurance. The 
 
 1 Proposed scheme of National Social Insurance for Norway, by Nicholay 
 L. Bugge, Secretary in the Norwegian Ministry of Finance. (Manuscript 
 copy in the Library of the U. S. Bureau of Labour Statistics.) 
 
COMPULSORY-CONTRIBUTORY 307 
 
 fund is made up from the following sources: (1) from a six 
 per cent, assessment on all salaries or wages up to 900 escudos, 
 which constitutes the employers' contribution; (2) a similar 
 assessment of one and one-half per cent, constituting the 
 employes' contribution; and (3) by an annual state subsidy 
 of 18.33 escudos for each soldier recruited. As in other 
 countries, payments are made by means of special stamps' 
 placed in a book held by the insured. The proportions of the 
 contributions payable by employers, employes, and the State 
 may be revised every other year. 
 
 The invalidity annuity varies in accordance with the num- 
 ber of premiums paid into the fund as follows: (1) 235 
 weekly payments entitle the insured to a pension equal to 
 one-sixth of the total deferred annuity which may be acquired 
 under the law; (2) 470 weekly premiums entitle one to a 
 pension equal to one-third of full annuity; (3) 705 weekly 
 premiums to one-half of full pension; (4) 940 weekly pre- 
 miums to two- thirds annuity; (5) 1,175 weekly contributionsi 
 to five-sixths of full annuity; and (6) 1,410 premiums! to 
 full annuity. 
 
 The fuU old age pension is paid when the insured has reached 
 70 years of age and has paid 1,410 weekly premiums. 
 
 In order to provide for those who were past the age 
 and who were unable to make the full number of contributions, 
 the law provides that those who were 45 years of age at the 
 time the act was instituted shall receive 75 per cent, of the 
 full annuity; those over 50 years of age, 50 per cent., and 
 those over 60 years old 25 per cent. 
 
 The 1919 Act established also annuities for dependents 
 which may be procured by extra payments. In addition, the 
 law provides that any mutual aid association which supplies 
 disability annuities to labour may become associated with the! 
 Social Insurance Institute by transferring its invalidity, old 
 age and widows' and orphans' fund to the Institute. 
 
 Mutual sickness funds, parish councils and labour organ- 
 
308 FACINGOLDAGE 
 
 izations are required to aid the institute in its supervision, 
 in order to carry into effect the provisions of this decree. ^ 
 
 KOUMANIA 
 
 In 1912, Roumania passed a law which established a com- 
 pulsory old age and invalidity insurance system in that 
 country. The Roumanian act follows both the German and 
 French systems. The contributions, as in France, are uniform 
 for all classes. They were set at 45 bani (normally 0.87) for 
 the first ten years from the date the act became effective. 
 The contributions are divided equally among the employers and 
 employes. In Roumania also the employer is made responsi- 
 ble for his own and his employes' contributions. He may de- 
 duct the latter's contributions from the wages. 
 
 The age of pensioning is set at 65. In order to be eligible 
 for a pension, one must have made at least 12 weekly con- 
 tributions. The regular old age annuity amounts to 160 lei 
 (normally $28.95). Invalidity pensions of the same amounts 
 are paid to the insured persons only after 16 weeks of con- 
 secutive illness'. The incapacity annuity is increased by ten 
 bani ($0.02) for every weekly contribution in excess of 2,000. 
 
 RUSSIA 
 
 Prior to the 1917 revolution there was no general provi- 
 sion for invalidity and old age insurance in Russia. The only 
 classes protected against old age were certain groups of gov- 
 ernment employes under separate funds. However, as the 
 Czar's government controlled a great many industries' these 
 government employes constituted a considerable number. An 
 old age pension fund granting pensions after 25 years of ser- 
 vice to employes of State mines was' established as early as 
 1797. In 1804 this was extended to all employes of govern- 
 ment factories. 
 
 1 Monthly Labour Review, January, 1920, pp 261-265; Ibid, December, 
 1920 pp 161-162. 
 
COMPULSORY-CONTRIBUTORY 309 
 
 The miners' 'fund paid pensions after 35 years of service, 
 and required all over 18 years of age, engaged for at least one 
 year in the work, to become members of the fund. The Rail- 
 road Employes' Pension Fund required all employes of State 
 and private railroads to insure themselves. A pension was 
 paid after 15! years of service. A similar fund existed for the 
 employes of the State Liquor Monopoly. A separate savings 
 fund for old age also existed for the workers of factories and 
 harbour works operated by the ministry of marine. Another 
 fund against old age was operated for the members of the 
 volunteer fleet. A compulsory contributory pension fund was 
 also established for all the employes of the Zemstvo. Practi- 
 cally all these funds were controlled by the members of the par- 
 ticular funds. 
 
 In 1914 the government's contribution to these funds 
 amounted to 117,994 roubles (normally $60,694-). 
 
 According to the meagre available information ^ a decree 
 published by the Russian Soviet government on March 8, 1918, 
 established a complete scheme of government protection against 
 sicknes's, invalidity, old age, unemployment, etc. Pensions are 
 given to workers having served at least five years in their enter*- 
 prise and who have lost their working capacity, and have no 
 other resources beyond the product of their own labour. The 
 amount of the pension, in case of complete disability, is equal 
 to the full wages received. In unhealthful industries a pension 
 is given regardless of length of service. 
 
 SPAIN 
 
 Provisions for the creation of deferred life annuities on a 
 voluntary and State subsidized basis were established in Spain 
 in 1908. The law enacted in that year provided for a system 
 of voluntary insurance for wage-workers and State employes 
 
 1 Labour Conditions in Soviet Russia, International Labour OfBce, 
 London. 
 
310 FACINGOLDAGE 
 
 who earned below 3,000 pesetas (normally $579) per year. 
 The maximum amount of the pension was limited to 1,500 
 pesetas ($289.50) per year. The State subsidy varied but 
 was limited to twelve pesetas ($2.32) per person, during the 
 first ten years of the institution's existence. State subsidies 
 were given only to Spanish citizens living in Spain, pro\dded 
 they had made some payments into the fund during the pre- 
 ceding year. 
 
 On March 11, 1919, when Parliament was' suspended be- 
 cause of political disturbances, a royal decree made insurance 
 against old age compulsory, for all wage-earners between the 
 ages of 16 and 65 whose total annual income does not exceed 
 4,000 pesetas. 
 
 The National Old Age Insurance Institution, which was 
 established in 1908 is charged with the administration of the 
 compulsory old age insurance system. The National Insti- 
 tute is also to be assisted by self-governing benefit societies 
 set up in each district or province as well as by other insur- 
 ance societies. In addition, an advisory committee from among 
 employers and employes is appointed by the National Insur- 
 ance Institution. 
 
 The decree divides the contributions into two periods, one 
 called the "Preliminary or Initial" period, and the other the 
 "Normal" period. For the first period (the duration is not 
 stated) the contributions are paid only by the State and the 
 employers. During the "Normal" period the workers also 
 are expected to make contributions, and the preliminary annu- 
 ity is to be converted into a standard pension, which will serve 
 to increase its amount. 
 
 The insured population also is divided into two groups ; one 
 includes persons who have not yet reached their forty-fifth 
 year at the time the decree was put into force; the other in- 
 cludes all those who are 45 years or more. 
 
 The initial pension for persons under 45, if there is no ces- 
 
COMPULSORY-CONTRIBUTORY 311 
 
 sation of work, is fixed at 365 pesetas a year upon reaching 
 the age of 65. 
 
 The contribution of the workers may be used to increase the 
 pension, or it may be applied to a temporary pension before the 
 regular pension is due; or it may be applied to an indemnity 
 for dependents in case of the death of the insured person. The 
 insured may also increase his contributions so as to obtain 
 an annuity up to a maximum of 2,000 pesetas or to life in- 
 surance capital up to 5,000 pesetas. The insurance fund is 
 derived from three sources — the employers, the State, and the 
 employes. The employer pays an average premium for every 
 worker, regardless of age, thus making it easier for employers 
 to calculate the amount of the premium they will be required 
 to pay and avoiding the possibility of preference for younger 
 men. The premium rate is fixed at 3 pesetas (58 cents, par) 
 monthly for each employe under 45 years of age who has been 
 in the employ of the same employer for one month, and 10 cen- 
 times (1.9 cents, par) per day for shorter periods. The In- 
 stitute of National Insurance is empowered to change these 
 irates as needed. An additional tax of 5 per cent on the pre- 
 miums is levied for administrative expenses. A supplementary 
 fund from inheritances and other sources is created for in- 
 'creasing the pensions of those over 45 years of age when the 
 law took effect. The contribution from the State is fixed at 
 12 pesetas ($2.32, par) annually for each worker who has been 
 employed one year, or 1 peseta (19.3 cents, par) per month for 
 each of those who have been employed one month. The State's 
 quota will be increased 25 per cent, after certain groups now 
 otherwise insured are included. Employes making voluntary 
 payments may apply their personal quota ( 1 ) to increase their 
 initial pension, (2) to form a temporary pension which ad- 
 vances the age of retirement, or (3) to form a fund in case of 
 accident. Unless the applicant specifies, his payments are 
 used for the first purpose. 
 
312 FACINGOLDAGE 
 
 The annuities may also be increased by regional, provincial 
 and municipal organizations, by employers, or by social insur- 
 ance organizations. If the insured person dies before having 
 reached his 65th year his heirs have the right to the capital 
 accumulated by his own and employers' contributions, includ- 
 ing compound interest. In case of invalidity before the age of 
 65 he may be paid the same sum or may convert the pension 
 into an immediate life pension. If the pension is sufficient to 
 provide an annual life pension of 180 pesetas a year it is admin- 
 istered by the Provident Institute. If the capital is not suflS- 
 cient for this, it is transferred to a charitable institution upon 
 whom the law imposes care of the old person until his death. 
 
 The decree offered special advantages to be extended in the 
 form of increased State grants to employers who had already 
 provided insurance for their workers or made arrangements to 
 insure their employes before the law became compulsory. 
 Greater subsidies are also provided to workers who make con- 
 tributions to increase the minimum pension provided during 
 the preliminary period at the joint expense of the State and 
 the employer. Employers who fail to make the required con- 
 tributions are penalized by being prohibited from taking part 
 in any contracts of the State, provinces, or communes'; from 
 participating in the benefits of the law in the protection of 
 industry and from being an elector of, or eligible for, profes- 
 sional bodies. Old age insurance may be carried through any 
 of the public or private institutions, provided they come up 
 to the specified regulations'.^ 
 
 SWEDEN 
 
 The Swedish system of compulsory old age insurance is the 
 most comprehensive and universal of any now in existence. It 
 was' enacted in 1913. The Swedish scheme is not limited to 
 certain wage-groups, as is the case in practically all countries, 
 
 1 Labour Gazette, June 1919, p 228, London; Revue du Travail, Nov. 1, 
 1919, Belgium. 
 
COMPULSORY-CONTRIBUTORY 313 
 
 but applies to every Swedish man or woman above the age 
 of 16 until the completion of his or her 66th year. The only 
 classes exempted are persons' who are permanently incapaci- 
 tated for work; State employes already provided with pen- 
 sions; elementary school teachers; members of the army and 
 navy, clergymen and the wives of persons thus exempted. 
 
 The administration of the insurance is in the hands of a 
 pension committee which is made up as follows: The king 
 appoints a representative in every pension district in the coun- 
 try. The latter appoints the chairman of the district pen- 
 sion committee. Six other members and their substitutes are 
 elected by the communes. 
 
 In Sweden every man and woman from the 16th year on con- 
 tributes, in the form of an annual ,tax or premium, a sum 
 amounting to three crowns' ($0.80). This contribution is in- 
 creased by two crowns for those having incomes from 500 to 
 800 crowns ; the surtax is increased by five crowns for incomes 
 from 800 to 1,200 crowns and by ten crowns for incomes' of 
 1,200 crowns and over. The law provides- that the annual con- 
 tribution payable by each person shall be collected by the com- 
 mune in which the person is registered. The commune is held 
 responsible for all accounts, and must pay into the fund an 
 amount corresponding to the contributions that may not have 
 been paid. The wife's contribution is to be paid by her hus- 
 band. The father is responsible for the pension contributions 
 for children under 18 years' who are registered as residents in 
 his house. Should the employer pay a contribution on behalf 
 of his employes, he may retain the sum disbursed out of the 
 wages paid, within six months of such payment. 
 
 The insurance benefit consists in an invalidity pension in 
 the case of permanent incapacity for work, regardless of age, 
 and in an old age pension on attaining 67 years of age, even 
 if incapacity has not yet set in. The amount of the annual 
 pension for men is 30 per cent, of the total contributions paid, 
 and for women the pension amounts to 24 per cent. It is also 
 
314. FACINGOLDAGE 
 
 provided that pensioners permanently incapacitated for work, 
 whose total annual income does not exceed 50 crowns ($13.40), 
 receive in addition to their pension out of the Exchequer 150 
 crowns ($40.20) per annum per man and 140 crowns ($37.52) 
 per woman. This State subsidy decreases to one-half if the 
 pensioner's income is over 50 crowns ($13.40), and ceases 
 altogether when the income amounts to 300 crowns ($80.40) 
 per man or 280 crowns ($75.04) per woman. In the event 
 of fully paid up pension contributions, the government subsidy 
 is increased by .08 per cent, for every crown paid. The pen- 
 sion additions are borne to the extent of three-quarters of the 
 amount by the State, while the remainder is divided between 
 the Landsting and the communes. 
 
 Excluded from the receipt of pensions in Sweden are those 
 in receipt of poor relief, habitual drunkards and idlers. If 
 institutional care is given, the institution may claim the right 
 to the pension in order to reimburse itself to the amount charged 
 for the care of the pensioner. Imprisonment or conviction 
 for more than one month stops the receipt of a pension during 
 that time. It may be claimed, however, by the dependents for 
 their support. 
 
 The law also provides that in order to become entitled to 
 a higher pension than that provided for in the act, every 
 Swedish subject who has reached the age of 15, may, by pay- 
 ing contributions not to exceed 30 crowns ($8.04) per annum, 
 become entitled to a higher pension. To all voluntary contri- 
 butions paid within each year, an amount equal to one-eighth 
 of the contributions is added by the government. The amount 
 of the pension is one and one-half per cent, of the volun- 
 tary contribution in the case of a man, and one-sixth less than 
 that, in the case of a woman. 
 
 To meet the immediate problem of old-age relief, a provision 
 stipulates that, for persons who during the years 1914 up to 
 and including 1918, have acquired the right of an addition to 
 their pension or support, or to an increase thereof, this benefit 
 
COMPULSORY-CONTRIBUTORY 315 
 
 is to be calculated as from 50 to 90 per cent, of the sums 
 otherwise provided in the act; and for persons who, when the 
 act comes into force, are between the ages of 25 and 45 years, 
 27.5 to 20 per cent, for men, or 22 to 16 per cent, for women, 
 of the contributions paid. The increased cost is borne by the 
 government. 
 
 The total number of pensions granted under this law in 1914!', 
 the first year of the operation of the plan, was 33,138. The 
 total amount paid was 1,875,457 crowns ($502,622). The 
 average pension was 56.6 crowns ($15.17). Of the pensions 
 paid 10,565 were granted to men, amounting to a total of 
 623,120 crowns ($166,996), or 58.98 crowns ($15.81) per 
 man; 22,573 pensions were granted to women, amounting to 
 1,252,336 crowns ($335,625), or 55.48 crowns ($14.87) per 
 woman. In the same year the total number of persons insured 
 under this act was 3,225,700. The contributions of the pen- 
 sioners amounted to a total of 14,571,000 crowns ($3,905,028), 
 more than seven times the amount disbursed during the same 
 period. The number of voluntary cases insured in 1914 was 
 028. 
 
 SWITZERIiAND 
 
 A system of obligatory state old age and invalidity insurance 
 was introduced in the Swiss Canton of Glarus by an act passed 
 in May, 1916. The system is very similar to the one in opera- 
 tion in Sweden. This act made it obligatory for all persons 
 between the ages of 17 and 50 who have their legal residence in 
 the Canton to insure themselves against the contingencies of 
 invalidity and old age. In case of removal to another Canton 
 insured persons may retain their insurance by paying an in- 
 creased annual contribution. Persons who reside abroad leave 
 the insurance, but in case they return to Switzerland within 
 four years they may re-enter the insurance, by paying an in- 
 creased contribution for the period of their absence. 
 
316 FACINGOLDAGE 
 
 The insurance contributions in Canton Glarus are made up 
 from tlie following sources: (1) By an annual contribution 
 from the Canton of 85,000 francs, and the interest derived 
 from the Old Age and Invalidity Insurance Fund and other 
 associations; (2) By an annual contribution from the Com- 
 munes of one frc. per head of the population; (3) By an 
 annual contribution of six frcs. from each insured person. The 
 annual contributions may be commuted by making a single 
 payment ranging from 125 frcs. at the age of 17 to 4*70 frcs. 
 at the age of 49. Invalidity pensions are payable to persons 
 who, having been insured for five years, become incapable of 
 work on account of illness or other infirmities for at least one 
 year, regardless of their age. Old Age pensions are payable 
 from the age of 65. Before one can draw an old age pension 
 to the full amount, however, he must have paid altogether at 
 least 400 frcs. (i.e. 33 years' contributions plus interest). 
 Otherwise, the pension is reduced accordingly. 
 
 The amount of the annual invalidity pension begins at 150 
 frcs. and increases annually by ten frcs. up to a maximum of 
 300 frcs. for men and 250 frcs. for women. The amount of 
 the annual old age pension is : 
 
 Men Women 
 
 At the beginning of the 66th year 180 frcs. 140 frcs. 
 
 At the beginning of the 67th year 210 frcs. 160 frcs. 
 
 At the beginning of the 68th year 240 frcs. 180 frcs. 
 
 At the beginning of the 69th year 270 frcs. 210 frcs. 
 
 At the beginning of the 70th year and upward. . 300 frcs. 250 frcs. 
 
 A claim to a pension is considered lapsed if the insured per- 
 son takes up his residence abroad after he had began to draw 
 his annuity ; in this case the person concerned may demand the 
 reimbursement, without interest, of the contributions he had 
 paid. The insurance is administered through the State Old 
 Age and Invalidity Institution. Special provisions regulate 
 voluntary insurance, to which persons of from one to 17 years 
 of age may be admitted. ^ 
 1 Bulletin of International Labour office. Vol. XL, Nos. 6, 7; 1916. 
 
COMPULSORY -CONTRIBUTORY 317 
 
 There are also in Switzerland a large number of special 
 government funds with definitely restricted membership, such 
 as the employes of the federal railways and of the post-office 
 department. Membership in these funds is made compulsory. 
 The contributions are borne jointly by the insured persons and 
 the federal government. The plan suggested by a recent Com- 
 mission of experts for a Federal Compulsory old age and in- 
 validity insurance system has been discussed in the preceding 
 chapter. 
 
CHAPTER XV 
 
 NON-CONTRIBUTORY OR STRAIGHT 
 OLD AGE PENSION SYSTEMS 
 
 ALASKA 
 
 In 1915, the Legislature of the Territory of Alaska passed 
 an Act providing for the payment of pensions to aged persons. 
 Under this law "any pioneer of Alaska, regardless of sex, who 
 has attained the age of sixty-five years and shall have resided 
 in Alaska for ten consecutive years or more since the year 
 1905, and is entitled to the benefits of the Pioneers' Home at 
 Sitka, Alaska, or of the Home for Indigent Pioneers at Fair- 
 banks or elsewhere in Alaska (should the same be established) 
 may, in lieu of aji application to be received and cared for at 
 such home, make an application to the Board of Trustees of 
 said Alaska Pioneers' Home, for an allowance to be paid out 
 of the revenue of said Home; and thereupon said Board shall 
 investigate the case of such applicant, and if they find that his 
 or her case is worthy, and that he or she is in actual need of 
 such allowance, the said trustees shall enroll him or her as a 
 beneficiary of said Home . . . and in conformity therewith, an 
 allowance shall be paid for his or her use. . . . Provided that 
 if any person pensioned under the provisions of this act, shall 
 be admitted to the Alaska Pioneers' Home or other Territorial 
 Institutions, any pension granted hereunder shall be suspended 
 during the time such person shall be an inmate of any such Ter- 
 ritorial Institution, nor shall any pension be paid to any per- 
 son who has been absent from the Territory of Alaska for a 
 period not to exceed one year." 
 
 The original bill provided for allowances not to exceed 
 
 318 
 
NON-CONTRIBUTORY 319 
 
 $12.50 per month in any case. This was amended in the 1917 
 and 1919 sessions so that the present law specifies that each 
 allowance shall not exceed $12.50 per month for men and 
 $25.00 per month for women as the Board of Trustees in their 
 discretion shall allow "having regard to the necessities of the 
 applicant." Each allowance is paid quarter-yearly. The 
 residence requirements were also changed to 15 years by the 
 1919 Amendment. 
 
 The law forbids the granting of allowances to any person 
 who absents himself from the Territory of Alaska for a period 
 exceeding one year unless with written permission of the Board. 
 In case of lack of revenue and when allowance installments are 
 not paid, the amended Act stipulates that "it shall remain an 
 obligation of the Territory of Alaska to the beneficiary, the 
 arrears of which shall be paid as soon as funds shall be avail- 
 able." It is' also provided that the applicant for assistance 
 "in consideration of the receipt of the benefit of this Act, 
 agrees that all property of which he or she is possessed or 
 seized, shall, after his or her death, vest in and become the 
 property of the Territory of Alaska." 
 
 In 1917, the Legislature also provided that "the sum of 
 thirty thousand dollars or so much thereof as may be necessary, 
 is hereby appropriated for the purposes of this act; . . . 
 provided that the Board of Trustees shall not grant allowances 
 calling for an expenditure in excess of fifteen thousand dollars 
 in any one year; and further provided, that any excess fund 
 not issued the first year shall be available for use the following 
 year." 
 
 ABIZONA 
 
 The first attempt to establish a non-contributory insurance 
 system in the United States was made in the State of Arizona 
 in 1914. By means of the initiative petition and a popular 
 vote of 25,827 in favour and 12,394 against, legislation 
 was enacted in that year providing for old age pension 
 
320 FACINGOLDAGE 
 
 grants. The pensions were to be given to all needy citizens 
 of the United States who have been residents of the 
 State of Arizona for at least five years prior to their applica- 
 tion. Pensions were to begin at 60 years of age. The amount 
 of the pension was set at $15 per month and was to be given 
 so long as the pensioner continued to reside in the State. In 
 November, 1915, the Supreme Court of Arizona declared the 
 Act unconstitutional. 
 
 AUSTRALIA 
 
 The separate Australian States of New South Wales, Queens- 
 land, and Victoria had established old age pension systems prior 
 to 1908. On June 10, 1908, a new old age and invalidity Act 
 was passed which superseded the previous separate acts. The 
 new law, which became effective July 1, 1909, and was amended 
 in some essential respects in December, 1912, applies to the 
 entire Commonwealth, and includes the States of New South 
 Wales, Victoria, South Australia, West Australia, Queensland, 
 and Tasmania. 
 
 The Australian law grants pensions' to all males over 65 
 years of age and to all females over the age of 60. In order 
 to receive a pension a person must have resided in Australia for 
 at least 25 years. In addition, the pensioner must also be of 
 good character and not have been imprisoned for four or 
 more months within five years immediately preceding the pen- 
 sionable age. No pensions are given to persons who are wife- 
 dteserters, drunkards', etc. Neither are pensions granted to 
 those whose property is valued at more than £310 ($1,509). 
 Excluded from the pension grants are also Asiatics or aborig- 
 inal natives of Australia, Africa, New Zealand, or the Islands 
 of the Pacific. 
 
 The Australian Act also provides for an invalidity pen- 
 sion in addition to the old age pension. The former is pay- 
 able to any person above 16 years of age, who is permanently 
 incapacitated for work, and has resided in Australia for at 
 
NON- CONTRIBUTORY 321 
 
 least five years. The applicant for an invalidity pension must 
 have no claim upon an employer for accident compensation 
 and be without property or income in excess of the pension 
 amount. The act of 1912 also specifies that gifts or allow- 
 ances given to a pensioner by children, grandchildren and rel- 
 atives, etc., are not included in the income. The Australian 
 Law of 1912 also makes' naturalized citizens entitled to pen- 
 sions from the time of their naturalization, instead of after 
 three years of waiting, as was required previously. The law 
 stipulates that permanently incapacitated persons include the 
 permanently blind. By Acts passed in November, 1912, and 
 December, 1914, the government of Australia set aside a 
 credit of three million, and five and one-half million pounds 
 respectively, for the purpose of the invalidity and old age 
 pension funds. 
 
 The amount of the pension is not fixed. The law requires 
 that the amount of pension shall be "at such rate as, having 
 regard to all circumstances of the case, the commission which 
 determines the pension claim deems reasonable and sufficient." 
 The pension must not exceed, however, £26 ($127) per year. 
 Nor may the pension be of such amount as to bring the pen- 
 sioner's total income above £52 ($250) per year. In case 
 the pensioner has property, the pension is reduced to the 
 extent of one pound ($4.87) for .every ten pounds ($48.70) 
 of the net property exceeding 50 pounds ($243) exclusive 
 of the home, or above £100 ($487) including the home. 
 When both husband and wife are pensioners, deduction in case 
 of each of them is one pound for every ten pounds of net 
 property above 25 pounds. 
 
 The administration of the Australian Old Age Pension Act 
 is in the hands of a Commissoner of Pensions for the Com- 
 monwealth. The Commissioner is assisted by a deputy com- 
 missioner in each state. Each state is further divided into 
 districts, each of which is placed in charge of a registrar. 
 The latter's duties are to receive and invelstigate pension 
 
322 FACINGOLDAGE 
 
 claims and in general to carry out the provisions of the law. 
 The Pension Commissioner and his deputies are empowered 
 to summon witnesses, receive evidence on oath and to require 
 the production of books and documents. The district regis- 
 trar after proper investigation makes a recommendation to a 
 local magistrate who makes a further recommendation, 
 whereupon the application is transmitted to the deputy Com- 
 missioner. The pension certificate is then issued either by the 
 deputy or Commonwealth Commissioner. 
 
 The number of pensioners in Australia has been increasing 
 steadily ; the following figures show the continuous rise : 
 
 Number of Old Age 
 Years and Invalidity Amounts Paid 
 
 Pensioners in Pensions 
 
 1909 60,432 
 
 1910 65,492 $7,286,007.78 
 
 1911 82,953 9,092,841.17 
 
 1912 89,834 10,452,333.44 
 
 1913 96,682 11,138,507.67 
 
 1914 104,645 12,544,377.69 
 
 1915 111,309 13,159,167.59 
 
 1916 115,222 13,915,621.36 
 
 1917 120,453 
 
 The cost of administering these pensions rose from 
 $180,752.44 in 1910 to $216,055.27 in 1916. This amounted 
 to $12.06 per 100 pounds distributed in 1910, and decreased 
 to $7.48 per 100 pounds in 1916. The average fortnightly 
 pension amounted to $4.64 in 1910 and $4.70 in 1916. The 
 total cost of administering the old age and invalidity pensions 
 in 1916 amounted to about 1.5 per cent, of the total money 
 actually paid in pensions. In the same year, of the total 
 91,783 old age pensioners in Australia, 37,832, or 41 per 
 cent., were males and 53,951, or 59 per cent., were females. 
 
 DENMARK 
 
 Denmark led the world in instituting a non-contributory 
 or straight pension system for the aged, just as Germany was 
 
NON-CONTRIBUTORY 323 
 
 the pioneer in establishing compulsory insurance. Old age 
 pensions were established in Denmark as early as 1891. It 
 was the purpose of the Danish system to provide respect- 
 able old persons with some assistance without their becoming 
 paupers. The public authorities are required to help anyone 
 so long as he cannot provide for himself or for his dependents. 
 
 According to the Danish law, the age when one may become 
 entitled to a pension is set at 60 years. The conditions of 
 eligibility are many and rigorous. The claimant to a pen- 
 sion must prove that he is unable to provide the necessities 
 of life for himself or his dependents. No pensions are 
 given to applicants who have ever been convicted of a crime, 
 unless subsequently restored to civil rights. The claimant 
 must also not have squandered his means. He must not have 
 received poor relief, except medical aid, during the five years 
 prior to his application for a pension. A pensioner must 
 also be a Danish subject and must have resided at least ten 
 years in a fixed locality prior to application. 
 
 The amount of the pension is not specified in the Act. The 
 law provides that the assistance granted and the pensioner's 
 other income "must be suflicient for the person relieved and 
 for his family, and for the treatment in case of sickness." 
 What is a sufliiciency is decided by the local authorities. In 
 considering the total income no account is taken of any in- 
 come amounting to less than 100 kroner ($26.80) per year. 
 The nature of the relief given may consist either of money or 
 supplies, such as food, fuel and rent. Usually money grants 
 are given In the cities, while necessary goods are given in the 
 rural sections. Pensioners who are unable to care for them- 
 selves, are cared for in special homes, which are in the form of 
 detached cottages, or in single large institutions. During 
 the years 1911-12 three per cent, of the pensioners were cared 
 for in these homes. 
 
 The pension is given to the head of the family, treating the 
 family as a unit, and is larger for heads of families than for 
 
324. FACINGOLDAGE 
 
 individuals. In determining the amount of the pension, the 
 former social conditions and manner of living are taken into 
 consideration. Poor relief granted to the wife in the past 
 is considered as poor relief granted to the husband. Pensions 
 are continued untU the conditions under which they were 
 granted have changed. 
 
 The contributions to the old age relief fund are made both 
 by the State and the communes in equal parts. The pensions 
 are administered by the municipal and communal authorities 
 who employ well trained men for that purpose. The entire 
 system is under the supervision of the Minister of the Inte- 
 rior, to whom all appeals from local authorities are taken. 
 
 As in Australia and other countries, the number of pen- 
 sioners has increased steadily since the inauguration of the 
 system. In 1902 there were 60,066 pensioners ; in 1908 
 71,185, and in 1911 their number was 79,340. Of the 
 79,340 pensioners in 1911, 16,710 or 21 per cent, were heads 
 of families ; 20,085 or 25 per cent, were dependents ; 9,356 
 or 12 per cent were single men, and 33,034 or 42 per cent, 
 were single women. The cost of the pensions had increased 
 since the beginning of the system enormously. In 1892 the 
 amount spent on pensions was 2,600,000 kroner ($696,800) 
 and in 1913-14 it amounted to 14,013,954 kroner ($3,755,740). 
 
 GEEAT BRITAIN 
 
 The problem of the government providing some form of assist- 
 ance for the aged poor was in the foreground for half a cen- 
 tury in England. The question assumed a definite shape and 
 attracted an especially great deal of attention in the early 
 nineties of the last century, through Mr. Charles Booth's in- 
 vestigations into the causes of pauperism in old age. The 
 evils connected with the English Poor Law System were gen- 
 erally known and an improvement of the conditions was de- 
 sired by all. An attempt to relieve the problem of aged de- 
 
NON-CONTRIBUTORY 329 
 
 pendency by means of voluntary savings and insurance, 
 through the post-offices, failed as in other countries. A number 
 of Royal Commissions and departmental committees to inves- 
 tigate and to consider alterations in the system of English 
 Poor Law Relief were appointed during the two decades that 
 elapsed between Booth's investigations and the adoption of 
 an old age pension plan. The deliberations and reports of 
 these commissions and departmental committees served to 
 focus public opinion on the problem of the aged poor. Finally 
 in 1908, Prime Minister Asquith announced in his budget speech 
 the intention of the government to establish an old age pension 
 act. His outline of the plan soon became law, now known as 
 the Old Age Pensions Act of 1908. 
 
 This Act, as amended in 1911, established a non-contrib- 
 utory system of old age pensions throughout the United 
 Kingdom. Pensions, under this law, are granted to all men 
 and women, married or single, who have attained their 70th 
 year. The conditions required in the original law for the re- 
 ceipt of a pension included the following: that the claimant 
 has resided in the United Kingdom for at least 20 years prior 
 to his application. That the applicant is a British subject. 
 A naturalized British subject is eligible if he has been natural- 
 ized for 20 yearis, and has resided for the same period in 
 the United Kingdom. Previous receipt of poor relief or resi- 
 dence in a workhouse does not disqualify ; but the receipt of 
 poor relief, except medical aid, after the granting of a pension 
 disqiialifies the pensioner from a further pension. Paupers 
 arriving at the age of 70 may, if they choose, give up their 
 outdoor relief or workhouse residence and receive an old age 
 pension instead. The act also specifies that a pensioner must 
 be so far of good character as not to have been a prisoner 
 during the preceding ten years, and not to have habitually 
 failed to work so that his wife and children became dependent 
 on public funds. The act also disqualifies from a pension 
 habitual drunkards, persons actually in prison or under de- 
 
326 FACINGOLDAGE 
 
 tention as lunatics, as well as inmates of institutions, where the 
 board and lodging amounts to an income above the pensionable 
 limit. The property qualifications, as provided in the original 
 act, limited the claimant's income to £31, 10s. (normally $153) 
 per annum. 
 
 The pension amounts vary in accordance with the total in- 
 come of the pensioner. The original act provided a maximum 
 pension amount of 5s. (normally $1.22) per week. The pen- 
 sions were paid as follows : 
 
 Rate of 
 £. S. D. Pension 
 
 When the yearly income did not exceed 21 Os. Ss. 
 
 When the yearly income did exceed £21 Os. Od. 
 
 and did not ,exceed 23 12 6s. 4s. 
 
 When the yearly income did exceed £23 12s. 6d. 
 
 and did not exceed 26 6 3s. 
 
 When the yearly income exceeds £28 Ss. and 
 
 does not exceed 28 17 6 2s. 
 
 When the yearly income exceeds £28 17s. 6d. 
 
 and does not exceed 31 10 Is. 
 
 When the yearly income exceeds £31 10s. Od. . . Nil. 
 
 Property yielding no income does not, under the English 
 law, disqualify from a pension, but a house is reckoned at its 
 rental value and savings in a bank is considered as if it were 
 yielding two and one-half per cent, interest. The incomes of 
 husband and wife are added together and each is considered 
 as possessing half the total. Regular allowances, gifts, etc., 
 from friends, relatives, or charity organizations are included 
 in the income. Pensions are paid to both husband and wife. 
 
 In the autumn of 1916 the government decided, in order to 
 assist cases of distress among old age pensioners, that 
 additional allowances of not more than 2s. 6d. a week should 
 be paid to pensioners who were suffering "special hardship" 
 through the war from the high prices of food and other eco- 
 nomic conditions. Additional payments began in August, 1917. 
 The additional allowances were not granted to inmates of in- 
 firmaries or institutions of the poor. The allowances were 
 decreased if the pensioner's income increased and vice versa. 
 
NON-CONTRIBUTORY 327 
 
 The extra pensions were originally intended to be payable 
 only during the continuance of the war. 
 
 Early in 1919 a Departmental Committee on Old Age Pen- 
 sions was created and instructed "to consider what altera- 
 tions, if any, as regards rates of pension or qualification should 
 be made in the existing statutory scheme of old age pensions." 
 This committee held many hearings, studied the different 
 phases of the pension law in England and abroad, and finally 
 made the following recommendations : ^ 
 
 (1) Amount of Pension: "After considering the matter 
 with care," the committee declared, "we recommend that the 
 pension should be increased to 10s. a week permanently as 
 against the actual 7s. 6d. of today, the additional allowance 
 of 2s. 6d. being absorbed in the new pension. This wiU 
 for the present roughly restore the pensioner to his pre-war 
 position, and we hope that there may be gradually such a fall 
 in prices that this 10s. will ultimately represent a substantial 
 increase in the value of the original pension." 
 
 (2) Income Qualification: "We have been insistently 
 forced to advocate that the means limit be abolished alto- 
 gether, and that the old age pension be given to all citizens at 
 the age of 70. We are of the opinion that no other course 
 will remove the very serious objections to the present system." 
 
 (3) Age of Pension: "The qualifying age shall remain at 
 70 pending inquiry as to the possibility of extending the scope 
 of the Insurance Acts." The committee further declared: 
 
 "Our inquiries have indeed shown that such provision is wholly 
 inadequate. We are informed that only 23 per cent, of the popula.- 
 tion between the ages of 65 and 70 are in insurance, of whom only 
 one-sixth are women, and that 17 per cent, of the insured popula- 
 tion between these ages are expected to be in receipt of disablement 
 benefit at any time. These figures suggest that there must be a 
 large mass of invalidity, especially among women in the years im- 
 mediately preceding the pension age, for which at present no sat- 
 
 1 Report of the Departmental Committeie on Old Age Pensions, 1919, 
 London. 
 
328 FACINGOLDAGE 
 
 isfactory provision is made. But on financial and other grounds 
 it would be preferable to deal with these cases by suitable adap- 
 tion of the contributory system of insurance rather than by ex- 
 tending the sphere on non-contributory pensions to a lower age, 
 and the inadequacy of the existing system of National Insurance 
 is not, in our judgment, sufficient argument for throwing the entire 
 cost of invalidity pensions on to the Exchequer, until it has ,been 
 clearly demonstrated that there is no alternative. 
 
 "We. therefore, as we have already indicated, recommend that 
 investigation be made into the possibility of so developing and ex- 
 tending the existing system of insurance as to make adequate pro- 
 vision thereunder for all cases of invalidity and disability aris- 
 ing before the age of 70. 
 
 "Accordingly, we do not in this report and at this time recom- 
 mend a reduction of age, though we appreciate the facts which 
 lead to requests for this reduction. They disclose a state of things 
 which cannot be left as it is. There is a real problem, and we 
 feel bound to add that unless it can be met in connection with 
 National Insurance and met adequately, particularly in the case of 
 women, which seems to us the most pressing, some development of 
 the pension system or some substantial reduction in the pension age 
 will become imperative. 
 
 (4) "Outdoor relief, or home assistance should not be dis- 
 qualification for the receipt of pension. Pensions should not be 
 paid to inmates of public institutions for more than three 
 months. 
 
 (5) "Aliens should become eligible for pensions 10 years 
 after naturalization if they have been residing in the United 
 Kingdom for at least 20 years, and the possibility of recip- 
 rocal international agreements should be considered. British- 
 born wives of aliens should be eligible for pensions. 
 
 (6) "The term of residence required to qualify for pension 
 should be 12 years after reaching the age of 50. Reciprocal 
 arrangements with regard to residence within the British Em- 
 pire are suggested. 
 
NON-CONTRIBUTORY 329 
 
 (7) "Disqualification for any ^riod following a term of 
 imprisonment should be abolished save in the case of habitual 
 inebriates. 
 
 (8) "The 'failure to work' disqualification should be aban- 
 doned." 
 
 As a result of the Committee's recommendation Parlia- 
 ment amended the Old Age Pension Act in December, 1919, 
 embodjdng practically aU the Committee's recommenda- 
 tions. 
 
 The amended act became operative Jan. 2, 1920. 
 
 In accordance with the amended Act, the maximum pen- 
 sion was increased to 10s. per week. The yearly income above 
 which no pension could be granted was increased from £31, 
 IDs. to £49, 17s. The provision which disqualified a re- 
 cipient of poor relief from pensions was abandoned. This 
 was done because it was believed that the latter was an arti- 
 ficial disqualification and led to inadequate standards of living. 
 The condition as to residence was reduced to 10 years and 
 changes were also made in the qualifications of former prisoners, 
 the status of wives of aliens, etc. 
 
 In 1909, the first year of the English plan, the number of 
 pensioners was 647 ,494*. This increased to 987,238 at the 
 close of the fiscal year 1914^15. According to the census of 
 1911, 624 out of every 1,000 persons of pensionable age in 
 England and Wales, were receiving pensions. In other words, 
 only two of every five persons 70 years of age and over, in 
 England and Wales had private annual incomes of their own, 
 amounting to at least £31 ($153). The expenditures on pen- 
 sions increased from £8,077,110 ($39,307,259) for the year 
 1908-09 to £12,315,061 ($59,931,245) for the year 1913-14. 
 In 1919, the amount reached nearly £8,000,000 (normally 
 about $90,000,000). 
 
 The total number of persons in receipt of old age pensions on 
 March 31, 1919, was 920,198, of whom 911,706 were receiving 
 the additional allowances granted during the war. The num- 
 
330 
 
 FACING OLD AGE 
 
 ber of pensioners from the first year of operation to the pres- 
 ent were as follows : 
 
 
 Table showing 
 
 the number of Pensions Payable on the Last 
 Friday in March. 
 
 Year 
 
 England 
 
 Wales 
 
 Scotland 
 
 Ireland 
 
 Total 
 
 1909 
 1910 
 
 369,037 
 414,108 
 
 24,663 
 27,381 
 
 70,294 
 76,889 
 
 183,600 
 180,974 
 
 647,494 
 699,352 
 
 1911 
 
 575,789 
 
 38,084 
 
 91,805 
 
 201,783 
 
 907,461 
 
 1912 
 
 602,441 
 
 40,083 
 
 94,319 
 
 205,317 
 
 942,160 
 
 1913 
 
 626,753 
 
 41,890 
 
 96,239 
 
 203,036 
 
 967,921 
 
 1914 
 
 642,161 
 
 42,474 
 
 97,294 
 
 202,202 
 
 984,131 
 
 1915 
 
 648,868 
 
 42,537 
 
 96,895 
 
 198,930 
 
 987,238 
 
 1916 
 1917 
 
 647,109 
 629,787 
 
 42,001 
 40,606 
 
 95,277 
 91,666 
 
 193,725 
 185,731 
 
 978,112 
 947,780 
 
 1918 
 1919 
 
 630,909 
 618,845 
 
 40,800 
 38,973 
 
 90,500 
 87,681 
 
 180,868 
 173,699 
 
 943,077 
 920,198 
 
 The following table also shows the amounts paid in pensions 
 during each year since the adoption of the plan: 
 
 Year 
 
 1909 
 1910 
 1911 
 1912 
 1913 
 1914 
 1915 
 1916 
 1917 
 1918 
 1919 
 
 Amount 
 £ 
 
 2,026,395 
 
 8,468,128 
 
 9,683,442 
 
 11,714,434 
 
 12,138,108 
 
 12,375,561 
 
 12,560,565 
 
 12,606,678 
 
 13,732,207 
 
 16,961,018 
 
 17,728,000 
 
 The old age pension set is administered by the Local Gov- 
 ernment Board which operates through local pension commis- 
 sions, and paid officers. The administrative expenses for the 
 year ending March, 1920, are shown in a table following. 
 
 Great Britain's liberality in providing pensions for the 
 aged was explained by Lloyd George in 1917, in reply to a dep- 
 
NON-CONTRIBUTORY 331 
 
 Customs and Excise Department £335,000 
 
 Post Office 156,000 
 
 Local Pension Committee* 64,500 
 
 Ministry of Healtii 6,294 
 
 Scottish Board of Health 1,186 
 
 Local Government Board (Ireland) 6,500 
 
 Registrar General's Office 2,850 
 
 Registrar General's Office (Scotland) 1,150 
 
 Public Record Office (Ireland) 1,830 
 
 Stationery and Printing 2,200 
 
 U|tation from the Parliamentary Commission of the Scottish 
 Trade Union Congress.^ The Prime Minister declared that 
 the benevolence of the State would be developed and extended 
 in the future according to its means. When he introduced 
 the Old Age Pension BUI, the premier declared, they began 
 spending £8,000,000. The £8,000,000 grew to between £12,- 
 000,000 and £13,000,000, at the beginning of the war, and now 
 the £13,000,000 had grown into something like £18,000,000. 
 They now had 7s. 6d. for the old age pensioner, and they had 
 5s. for those who were incapacitated. That had made a 
 difference which it was very difficult to reckon or to portray in 
 words, in the lives of hundreds of thousands of old people who 
 deserved well of the community. "He hoped the State would 
 go on extending and recognizing the obligations it owed to 
 these people. He thought the worker in any rank of life ought 
 to be able to claim as a matter of right from the community, 
 the same security as the civil servant against indigence and 
 squalor and misery, when his strength had given out. The 
 war had opened people's eyes. The sort of individual conflict 
 which constituted almost the life of the nation before the war 
 was merging into a sense of community and fraternity which 
 had come from common trials and burdens and sorrows. He 
 thought that after the war the country, shouldering the heavy 
 burden of the war, would be in a better temper and a better 
 
 •Includes expenses in connection with claims for Separation Allowances 
 to Old Age Pensioners. 
 1 Local Government Chronicle, Oct. 27, 1917, London. 
 
332 FACINGOLDAGE 
 
 frame of mind to consider every cause which was righteous, and 
 the cause of the blind, the afflicted, the aged and the miserable 
 amongst us were of that kind." 
 
 Bearing the above in mind it is significant to note that as 
 this book goes to press, the newspapers report that at the 
 National Old Age Pension conference held recently in New- 
 castle, England, letters were read from thirty-two members of 
 Parliament favouring universal pensions. 
 
 KEW ZEALAND 
 
 A non-contributory old age pension system was established 
 in New Zealand in 1898. The original law was amended in 
 important respects in 1905, 1912, and 1913. As amended in 
 1913 and 1914* the Act provides for the payment of pensions 
 to every male( person at the age of 65 or upwards and to every 
 female person at the age of 60 years or upwards. Pensions are 
 granted also to males at the age of 60 years and females at 
 the age of 55 years who have two or more children under the 
 age of 14, dependent upon them for support. 
 
 The ehgibiHty qualifications for a pension are rigorous. 
 Pensions are granted only to those who have fulfilled the fol- 
 lowing requirements : The pensioner must have resided in 
 New Zealand continuously for not less than 25 years immedi- 
 ately preceding his claim. Occasional absences when the total 
 sudh period does not exceed two years are permitted. The 
 claimant must not have been imprisoned for four months, or on 
 four occasions, during the period of 12 years immediately prece- 
 ding the date of his claim, nor imprisoned for a term of five 
 years during the last 25 years. The pensioner must have also, 
 if a husband, not deserted his wife or neglected to maintain 
 his children, or if a wife deserted her husband or such of her 
 children as were under 14 years of age. The claimant must in 
 addition be of good moral character and one who has for at 
 least the last year led a sober and reputable life. The law 
 
NON-CONTRIBUTORY 333 
 
 also forbids granting pensions to those whose yearly income 
 exceeds £60 ($292) and those whose accumulated property 
 amounts to over £260 ($1,265). In case of a married couple 
 the income of both husband and wife must not exceed £90 
 ($438) per year. As in Australia, pensions are not given to 
 Asiatics, Maoris and aboriginal natives. 
 
 The amount of the annual pension is set at £26 ($127). 
 One pound from the pension is deducted for every one pound 
 of income over £34 ($165) and for every £10 ($48.70) of net 
 property in excess of £50 ($243)'. Where the pensioner is a 
 woman under 65 years of age the amount of the pension shall 
 be further diminished by one pound for every year or part of a 
 year by which the age of the applicant is less than 65 years. 
 An additional pension, the amount of which is left at the dis- 
 cretion of the magistrate but which may not exceed £13 per an- 
 num may be given to pensioners when young children are depen- 
 dent upon him or her. 
 
 Personal property is not taken into consideration in determin- 
 ing the amount of accumulated property. It is also specified 
 that a pensioner may retain a home to the value of £650 
 ($3,163). Provisions are made for the transfer of such prop- 
 erty to the Public Trustees. The pensioner, or his survivors 
 if entitled to a pension, are permitted to reside in the said prop- 
 erty. At the death of the pensioner the Public Trustee sells 
 the property and deducts out of the proceeds the total amount 
 paid in pensions since the transfer of such property together 
 with four per cent, interest. 
 
 In case the pensioner is married and living with his wife the 
 net capital value of all the accumulated property of each is 
 deemed half the total of both. The yearly income of each is 
 also deemed half the total annual incomes of both. The total 
 pension granted to both husband and wife living together must 
 not exceed, together with the total incomes of both, £100 for the 
 year. The law also provides for institutional care for those 
 who are unable to maintain homes for themselves. 
 
334 
 
 FACING OLD AGE 
 
 As in Australia, the pension system is administered by a 
 Commissioner of Pensions and district registrars. The colony 
 is divided into districts for this purpose. Pensions are awarded 
 for one year only, but may be renewed. 
 
 The following table shows the steady increase in the number 
 of pensioners and the cost of the scheme from its beginning 
 in 1899 to 1920. 
 
 Number of Pensioners and Amounts spent in New Zealand 
 each year since 1899 to 1920: 
 
 Year No. of Pensioners 
 
 1899 7,443 
 
 1900 11,285 
 
 1901 12,405 
 
 1902 12,776 
 
 1903 12,481 
 
 1904 11,926 
 
 1905 11,770 
 
 1906 12,582 
 
 1907 13,257 
 
 1908 13,569 
 
 1909 14,396 
 
 1910 15,320 
 
 1911 16,020 
 
 1912 16,649 
 
 1913 16,509 
 
 1914 18,050 
 
 1915 19,352 
 
 1916 19,804 
 
 1917 
 
 1918 19,960 
 
 1919 19,872 
 
 1920 19,993 
 
 Amount Spent 
 £3,124 
 167,342 
 197,292 
 207,468 
 210,140 
 203,164 
 195,475 
 254,367 
 314,184 
 325,199 
 336,780 
 362,496 
 383,393 
 406,256 
 415,761 
 416,776 
 460,814 
 479,339 
 
 482,468 
 475,869 
 
 From 1898 to 1920, a total of 67,275 persons applied for 
 old age pensiions in New Zealand. Grants were made to 
 54,062 persons. During the fiscal year which ended in 1920, 
 a total of 3,029 claims for pensions were made and 2,289 new 
 pensions were granted. In the same year 2,168 pensions were 
 cancelled either because of death of pensioner or for other 
 reasons, leaving a net increase of 121 pensioners. The average 
 pension during the last fiscal year amounted to £23, 12s. 
 The percentage of European pensioners to the total 
 European population was 1.6 in 1920. The total amount 
 
NON-CONTRIBUTORY 335 
 
 disbursed on old age pensions since the begjinning of the 
 pension law up to 1920 was £7,928,788.^ 
 
 URU&UAT 
 
 On May 15, 1919, an old age pension law went into effect in 
 Uruguay. The act provides for the pensioning of all persons 
 upon reaching the age of 60 years, or other persons who have 
 become totally incapacitated and are indigent, regardless of 
 their age. Foreigners or naturalized citizens who have resided 
 continuously in Uruguay for 15 years are entitled to pensions. 
 
 The Uruguayan law is somewhat different from most other 
 systems in that it provides for contributions from employers 
 but not from employes. The 'fund for the payment of these 
 pensions is made up from the following: (1) A monthly tax of 
 20 centesimos (20.68 cents) payable by the employers for 
 each person employed by them: (2) A surtax upon real estate 
 valued at 200,000 pesos ($206,840) and over. The surtax 
 ranges from 1.05 pesos ($1.09) per 1,000 pesos valuation on 
 property valued at from 200,000 pesos to 300,000 pesos to 
 1.30 pesos ($1.34)) per 1,000 pesos on property valued at 
 700,000 pesos and over. (3) A tax on playing cards of 20 
 centesimos (20.68 oetnts) if imported and ten ceritesimos 
 (10.34 cents) if manufactured within the country. (4) An 
 increase of twelve centesimos per liter (11.7 cents per 
 quart) of the present tax on imported liquors. (5) An 
 internal tax of 60 centesimos per liter (58.7 cents per quart) 
 on imported alcohol and domestic alcohol not destined for 
 denaturation. (6) The tax on imported brandies was 
 increased by 13 centesimos (13.44 cents). 
 
 The annual pension is to be not less than 96 pesos ($99.28) 
 and may be paid in cash or in supplies. In case a pensioner 
 is in receipt of any annuities or allowances in excess of ten 
 
 1 Twenty-Second Annual Report of the Pensions Department, 1920. 
 Wellington, New Zealand. 
 
336 FACINGOLDAGE 
 
 pesos ($10,341) the pension granted under this Act is reduced 
 to 50 per cent of that sum in excess of ten pesos. ^ 
 
 On September 30th, 1919, the National Congress of Uruguay 
 passed another act providing for pensions for pubKc service 
 employes which include the railroad, telegraphy tramway, tele- 
 phone and water and gas distributing companies. 
 
 The full pension is paid after 30 years of service, but a 
 right to a proportional pension is acquired after ten years of 
 service, continuous or not. Employes of this class are entitled 
 to one-thirtieth part of the full pension for each year of ser- 
 vice. In case of permanent incapacity employes are entitled 
 to a pension regardless of length of service. The pension 
 ranges in accordance with the average wages for the last five 
 years of service. Pensions are also paid to dependents and 
 survivors of employes.^ 
 
 1 Monthly Labour Review, Sept. 1919, pp. 349-350. 
 
 2 Ibid. August 1920, pp. 135-13T. 
 
APPENDIX 
 
(A) BILL INTRODUCED BY SENATOR McNARY 
 
 IN THE SENATE OF THE 
 UNITED STATES 
 
 August 15, 1919. 
 
 A BILL 
 
 To provide old-age pensions. 
 
 Be it enacted by the Senate and House of Representa- 
 tives of the United States of America im, Congress assembled. 
 That every person in whose case the conditions laid down 
 by this Act for the receipt of an old-age pension are fulfilled 
 shall be entitled to receive such a pension as long as those 
 conditions continue to be fulfilled, and the receipt of an old- 
 age pension under this Act shall not deprive the pensioner 
 of any franchise, right, or privilege, or subject him to any 
 disability. 
 
 iSec. 2. That the conditions for the receipt of an old-age 
 pension by any person shall be as follows : 
 
 (a) The person must have attained the age of sixty-five 
 years. 
 
 (b) The person must have been a citizen of the United 
 States for the twenty years next preceding the application 
 for a pension under this Act. 
 
 (c) The person must not have had an income from any 
 
 source, exclusive of the pension herein provided for, for the 
 
 twelve months next preceding his application, averaging $6 
 
 per week. 
 
 Sec. 3. That a person shall be disqualified for receiving or 
 
 330 
 
340 FACINGOLDAGE 
 
 continuing to receive an old-age pension under this Act, not- 
 withstanding the fulfillment of the above conditions — 
 
 (a) If before he becomes entitled to a pension he has habitu- 
 ally failed to work according to his ability, opportunity, or 
 need for the maintenance and support of himself and those 
 legally dependent on him: Provided, That a person shall not 
 be disqualified under this paragraph if he has continuously 
 for the ten years previous to attaining the age of fifty-five, 
 by means of payments to fraternal, benefit, or other societies, 
 or trades-unions, or other approved steps, made such pro- 
 visions against old age, sickness, infirmity, or want, or loss of 
 employment, as may be recognized as proper provision for 
 the purpose; and any such provision, when made by the hus- 
 band, in the case of a married couple living together, shall, as 
 respects any right of the wife to a pension, be treated as 
 having been made by the wife as well as by the husband. 
 
 (b) While he is being maintained in any place as a pauper 
 or lunatic. 
 
 (c) While he is detained in prison after conviction for a 
 felony, and for a further period of ten years after the date 
 of release from imprisonment for such cause. 
 
 Sec. 4. That every person fulfilling the required conditions 
 shall be placed upon the pension roll of the United States 
 and be entitled to receive until death a pension from the 
 United States Government provided by an annual appropria- 
 tion from Congress. Such pension shall be graded accord- 
 ing to the following schedule: 
 
 When the average weekly income of the pensioner as cal- 
 culated under this Act does not exceed $6, $4 per week; 
 exceeds $6, but does not exceed $7, $3 per week; exceeds $7, 
 but does not exceed $8, $2 per week; exceeds $8, but does not 
 exceed $9, $1 per week. 
 
 Sec. 5. That in calculating the income of a person for 
 the purpose of this Act, account shall be taken of — 
 
 (a) The income which that person may reasonably expect 
 
APPENDIX 341 
 
 to receive during the succeeding year in cash, excluding any 
 sums receivable on account of an old-age pension under this 
 Act, that income, in the absence of other means for ascertain- 
 ing the same, being taken to be the income actually received 
 during the preceding year. 
 
 (b) The yearly value of any advantage accruing to that 
 person from the ownership or use of any property which is 
 personally used or enjoyed by him. 
 
 (c) The yearly income which might be expected to be de- 
 rived from any property belonging to that person which, 
 though capable of investment or profitable use, is not so in- 
 vested or profitably used. 
 
 (d) The yearly value of any benefit or privilege enjoyed 
 by that person. 
 
 Sec. 6. That in calculating the income of a person being 
 one of a married couple living together, the income shall not 
 in any case be taken to be less than one-half the total income 
 of the couple: Provided, That when both husband and wife 
 are pensioners, except where they are living apart pursuant 
 to any decree, judgment, order, or deed of separation, the 
 rate of the pension shall be three-fourths of the rates given 
 in the above schedule. 
 
 Sec. 7. That if it appears that any person has directly 
 or indirectly deprived himself of any income or property in 
 order to qualify himself for the receipt of an old-age pension, 
 or for the receipt of an old-age pension at a higher rate than 
 that to which he would otherwise be entitled under this Act, 
 that income or the yearly value of that property shall be 
 taken to be part of the income of that person. 
 
 Sec. 8. That any assignment of or charge on and every 
 agreement to assign or charge an old-age pension under this 
 Act shall be void and on the bankruptcy of a person entitled 
 to an old-age pension the pension shall not pass to any 
 trustee or other person acting on behalf of the creditors. 
 
 Sec. 9 That the said pension shall be paid in thirteen 
 
342 PACINGOLDAGE 
 
 equal installments in each year in advance. It shall begin 
 on the date the claim is filed, and the arrears from that time 
 to the time of allowance shall if the claimant be then living, 
 but not otherwise, be paid in a lump sum. 
 
 Sec. 10. That the said pension may be increased or 
 decreased every twelve months, whenever the pensioner's in- 
 come increases or decreases, according to the terms of the 
 schedule. 
 
 Sec. 11. That wherever in this Act the masculine pro- 
 noun is used it shall be held to include the feminine pronoun 
 also. 
 
 Sec. 12. That all claims for old age pensions under this 
 Act shall be filed with the Department of the Interior, to- 
 gether with affidavits containing such statements as may be 
 prescribed by the Secretary of the Interior, who shall make 
 such rules and regulations as may be necessary to carry out 
 the provisions of this Act. 
 
 (B) BILL PRESENTED BY THE PENNSYLVANIA 
 OLD AGE PENSION COMMISSION TO THE 1921 
 PENNSYLVANIA STATE LEGISLATURE, AND W^HICH 
 IN ITS MAIN PROVISIONS HAS, IN EFFECT, THE EN- 
 DORSEMENT OF THE SOCIAL INSURANCE 
 COMMITTEE OF THE AMERICAN ASSOCIATION FOR 
 LABOR LEGISLATION 
 
 AN ACT 
 
 Providing for the protection and assistance of aged per- 
 sons under certain conditions in the Commonwealth of Penn- 
 sylvania and prescribing penalties for violation of its pro- 
 visions and making an appropriation therefor 
 
 Section 1 Be it enacted hy the Senate and House of Repre- 
 sentatives of the Commonwealth of Permsylvania in General 
 Assembly met and it is hereby enacted by the authority of 
 the same That beginning January first one thousand nine 
 
APPENDIX 343 
 
 hundred and twenty-three subject to the provisions and under 
 the restrictions imposed by this act every person (man or 
 woman married or single) shall while residing in the Com- 
 monwealth of Pennsylvania be entitled to assistance in old age 
 
 Administbation 
 
 Section 2 (a) The central authority shall be vested with 
 a State Old Age Assistance Board hereinafter called State 
 Board composed of three (3) citizens of the State who shall 
 be appointed by the Governor for a term of four years except 
 that of the members first appointed one shall be appointed 
 for a term of two years, one for a term of three years and 
 one for a term of four years Each member of the Board shall 
 receive in addition to the necessary expenses incurred in the 
 performance of their duties ten dollars per diem while act- 
 ually engaged in the business of the Board Vacancies shall 
 be fiUed in the same way as the original appointment was 
 made 
 
 (b) The State Board shall appoint a State Old Age 
 Assistance Superintendent who shall be a person having had 
 experience and training in the problems of organized relief 
 who shall be familiar with the social and economic conditions 
 of the State of Pennsylvania and who shall in general be 
 qualified by training and experience for this work 
 
 (c) The State Board shall fix the salary of the Super- 
 intendent which shall not exceed seven thousand five hundred 
 dollars '($7,500) per annum and the Superintendent with 
 the approval of the State Board shall appoint the necessary 
 number of assistants and fix their salaries and duties 
 
 (d) There shall be in each county a County Old Age 
 Assistance Board hereinafter known as the County Board to 
 consist of three citizens of the county who shall be appointed 
 by the Governor with the approval of the State Board on the 
 recommendation of the County Commissioners except that of 
 the members first appointed one shall be appointed for a term 
 
344. FACINGOLDAGE 
 
 of two years one for a term of three years and one for a term 
 of four years Vacancies shall be fiUed in the same way as 
 the original appointment was made The members of the Board 
 shaU serve without pay except that necessary expenses in- 
 curred while in the performance of their duties shall be paid 
 to them 
 
 (e) The State Board as well as the County Board shall 
 perform all the duties imposed upon them by this act and 
 the State Board shall have authority to make the rules and 
 regulations required to carry out the provisions of this act 
 
 (f) The County Board with the approval of the State 
 Board and State Superintendent may appoint one or more 
 local investigators who shall be trained and experienced in 
 the problems of organized charity at a salary for each not 
 to exceed two thousand five hundred dollars ($2,600) per 
 annum The County Board or its investigator or investigators 
 shall investigate all cases properly brought before them and 
 the recommendations of the County Board shall be forwarded 
 to the State Board for its approval provided that in case of 
 complaint or grievance a rehearing may be had before the 
 State Board which decision shall be final provided further 
 that the claimant may again apply for assistance in the same 
 manner to the County Board one year after date of first 
 application 
 
 (g) The State Board and the County Boards shall be re- 
 quired to meet at regular intervals of not less than two (2) 
 months and at such times as may be fixed by the rules of the 
 Boards 
 
 Allowance 
 
 Section 3 (a) The amount of assistance shall be fixed by 
 the State Board with due regard to the conditions in each 
 case but in no case shall it exceed twenty-five dollars ($25) 
 per month 
 
APPENDIX 345 
 
 QUAUCFICATIONS OF ClAIMAJSTTS 
 
 Section 4 Old Age assistance may be granted only to an 
 applicant who 
 
 (a) Has attained the age of sixty-five or upwards 
 
 (b) Is a citizen of the United States 
 
 (c) Resides in the State of Pennsylvania and has so re- 
 sided continuously for not less than fifteen years immediately 
 preceding the date of application for assistance Provided 
 That continuous residence in Pennsylvania shall not be deemed 
 to have been interrupted by occasional absence therefrom 
 where the total period of aU such absence does not exceed 
 two years or in case the person has been absent from the 
 State while in the employ or service of the State or of the 
 United States and provided further that a person who re- 
 sided in the State of Pennsylvania forty (40) years at least 
 five (5) of which have been immediately preceding the date 
 of application shall be deemed quahfied in respect to residence. 
 
 (d) Is not at the date of making application an inmate 
 of any prison jail or workhouse infirmary insante asylvun 
 county or district poorhouse or any other public reform or 
 correctional institution 
 
 Property Qualifications 
 
 Section 6 (a) The income of the claimant from all sources 
 at the date of application for relief shall not exceed three hun- 
 dred dollars ($300) per annum and also the net capital value 
 of the accumulated property of such person or the accumu- 
 lated property of husband and wife together must not exceed 
 five thousand dollars inclusive of a homestead 
 
 (b) The claimant must not have deprived himself or her- 
 self directly or indirectly of any property for the purpose 
 of qualifying for old age relief 
 
 (c) The aged person must have no child or any other per- 
 son responsible for the support of such person under the laws 
 
346 FACINGOLDAGE 
 
 of the State of Pennsylvania adjudged by the assistance author- 
 ities fully able financially to support the applicant 
 
 (d) At the death of the person so assisted or the last sur- 
 vivor of a married couple the total amount of the assistance 
 since the first grant together with three percentum interest 
 shall be deducted and allowed by the proper courts out of the 
 proceeds of the property as a preferred claim against the 
 estate of the person so assisted and refunded to the State 
 Treasury to the credit of the Assistance Fund leaving the 
 balance for distributing among the lawful heirs in accordance 
 with the law provided that the State assistance authorities 
 may demand the assignment or transfer of such property to 
 the State Board upon the first grant of assistance The State 
 Board shall establish such rules and regulations regarding the 
 care transfer and sale of such property as it deems advisable 
 and also provide for the return of the balance of the claim- 
 ant's property in its hands whenever assistance is withdrawn 
 or the claimant ceases to request it 
 
 Calculation op Income 
 
 Section 6 (a) The annual income of any property inclu- 
 sive of a homestead shall be computed at five per centum of its 
 determined value 
 
 (b) In ascertaining the claimant's income and amount of 
 assistance his income for the last preceding year shall be 
 deemed his annual income and the property owned at the 
 end of that year as his accumulated property provided that 
 when the claimant shows to the satisfaction of the assistance 
 authorities the loss of personal income derived from personal 
 earnings it shall be deducted from the income of the preceding 
 year in considering the assistance grant 
 
 How Administered 
 Section 7 (a) A claimant for an assistance grant under 
 
APPENDIX 34)7 
 
 this act shall deliver his or her claim in writing to the County 
 Board of the county in which the claimant resides in the 
 manner and form prescribed by the State Board All state- 
 ments in the application shall be sworn to or affirmed by the 
 applicant setting forth that all facts are true and correct in 
 every material point 
 
 (b) After proper investigation a copy of the application 
 for old age assistance with the decision of the County Board 
 and recommendation of the amount of assistance if any and 
 the material reasons for such decision shall be promptly for- 
 warded to the State Board In case the State Board decides 
 against the grant or reduces its amount upon demand of the 
 claimant it shall set a date for a hearing before the County 
 Board which shall be attended by the State Superintendent 
 or his assistant with fuU powers of investigation The claim- 
 ant shall be notified sufficiently in advance of the date of the 
 hearing on which he may attend to support his claim where- 
 upon the recommendations of the Board with the report of 
 the Superintendent or his assistant shall be forwarded to the 
 State Board whose decision thereon shall be final 
 
 (c) For the purpose of such investigations the boards both 
 State and county shall have the power to compel by subpoena 
 issued by either board the attendance and testimony of 
 witnesses and the production of books and papers All wit- 
 nesses shall be examined on oath and any member of the State 
 or county boards may administer said oath 
 
 (d) In the investigation of any claim for old age assistance 
 and any renewal thereof the State board shall investigate and 
 determine all cases by such means and in such manner as it 
 deems proper 
 
 Section 8 (a) When the claim is established and the rate 
 of the first year's grant is fixed the county board shall in the 
 manner prescribed certify the same to the State board which 
 shall issue the claimant an old age assistance certificate stat- 
 
348 FACINGOLDAGE 
 
 ing the amount of the monthly or quarterly payment and 
 which shall be good for one year 
 
 (b) An assistance certificate shall be required for each sub- 
 sequent year to be renewed or issued after satisfactory in- 
 vestigation 
 
 Section 9 (a) The assistance shall commence on the date 
 named in the old age assistance certificate which shall be the 
 first day of the month within which the certificate is issued 
 provided that in case of assistance granted the assistance cer- 
 tificate shall be issued not later than three (3) months after 
 application has been made 
 
 (b) All installments shall be paid in monthly or quarterly 
 payments as the county board shall recommend the payments 
 to be made in such form and manner as may be prescribed by 
 the State board 
 
 Section 10 (a) If at any time during the currency of an. 
 old age assistance certificate the recipient or the wife or hus- 
 band of the recipient becomes possessed of any property or 
 income in excess of the amount allowed by law in respect to 
 the amount of assistance granted the county board may on 
 inquiry and with the approval of the State Board either can- 
 cel the assistance or vary the amount thereof during the 
 period of the certificate And it shall be the duty of the 
 recipient to immediately notify the county board of the re- 
 ceipt and possession of any such property or income 
 
 (b) If on the death of any recipient of an old age assis- 
 tance grant it is found that he or she was possessed of property 
 in excess of the amount allowed by law in respect to the amount 
 of the assistance granted double the total amount of the relief 
 granted in excess of that to which the recipient was by law 
 entitled may be recovered by the State board as preferred 
 claim from the estate so found in excess The Attorney Gen- 
 eral at the request of the State board shall take the necessary 
 proceedings to recover such claims and the amount recovered 
 shall be paid into the State Treasury 
 
APPENDIX 349 
 
 Section 11 On the death of a recipient of old age assistance 
 the installment then accruing and such other reasonable 
 funeral expenses as necessary for the burial of such person 
 shall be paid to such persons as the county board directs 
 provided that these expenses do not exceed one hundred dollars 
 ($100) and provided further that the estate of the deceased 
 is insufficient to defray these expenses 
 
 Section 12 (a) When an old age assistance recipient be- 
 comes an inmate of any charitable or benevolent institution 
 the amount of assistance shall be paid to the governing author- 
 ities of that institution and shall be applied toward defraying 
 the actual expenses of such person in such institution pro- 
 vided that the State board has approved and is permitted freely 
 to visit and inspect said institution and provided further that 
 any surplus assistance moneys remaining after defraying such 
 cost shall be paid to the recipient It shall not be lawful how- 
 ever for the authorities of any charitable institution receiving 
 public moneys to refuse admission as an inmate of such insti- 
 tution or to refuse to grant relief on the grounds that the 
 person is an old age assistance recipient under this act 
 
 (b) During the continuance of the assistance no recipient 
 shall receive any other relief from the State or from any 
 political subdivision thereof except for medical and surgical 
 assistance 
 
 Section 13 All old age assistance grants shall be absolutely 
 inalienable by any assignment sale charge on execution or 
 otherwise and in case of bankruptcy the assistance shall not 
 pass through any trustee or other persons acting on behalf of 
 the creditors 
 
 Fines Punishment and Criminal Pkoceduke 
 
 Section 14 If at any time the State board has reason to 
 believe that any old age assistance certificate has been im- 
 properly obtained it shall cause special inquiry to be made by 
 the county board and may suspend payment of any install- 
 
350 FACINGOLDAGE 
 
 ment pending the inquiry It shall also notify the county 
 board of such suspension If on inquiry it appears that the 
 assistance certificate was improperly obtained it shall be can- 
 celled by the state board but if it appears that the certificate 
 was properly obtained the suspended installment shall be pay- 
 able in due course 
 
 Section 15 (a) Any person who by means of wilfully false 
 statement or representation obtains or attempts to obtain 
 
 (a) An assistance certificate not being justly entitled to 
 
 (b) An assistance of a larger amount than he is justly 
 entitled to 
 
 (c) By any means of personation or any other fraudulent 
 device whatsoever obtains or attempts to obtain payment of 
 any forfeited installment grant 
 
 (d) By wilfully false statement or representation he aids 
 or abets any person to obtain an old age assistance certifi- 
 cate or any installment payable thereunder 
 
 (e) Aids and abets in buying or in any way disposing of 
 the property of an old age assistance recipient without the 
 consent of the State board shall be guilty of a misdemeanor 
 and upon conviction thereof shall be sentenced to pay a fine 
 not exceeding five hundred dollars ($500) and to undergo 
 imprisonment not exceeding three years or both in the dis- 
 cretion of the court 
 
 Section 16 (a) Any person who violates any provision of 
 this act for which no penalty is specifically provided shall 
 be subject to a fine not exceeding five hundred dollars ($500) 
 and to undergo imprisonment not exceeding three years or 
 both in the discretion of the court 
 
 (b) Where an old age assistance recipient is convicted of 
 an offense under this section the assistance authorities may 
 cancel the assistance certificate in respect to the issue of 
 which the offense was committed 
 
 Secton iT If any recipient under this act is convicted 
 of any crime misdemeanor or felony or any other offense 
 
APPENDIX 351 
 
 punishable by imprisonment for one month or any longer 
 period the county board shall direct that payments be not 
 made during such periods Furthermore if the recipient is 
 found incapable of taking care of his money or himself on 
 the testimony of at least three witnesses the county board may 
 direct the installment of his assistance be paid to any other 
 reputable person for his benefit or may recommend the sus- 
 pension of same to the State Board for such period as it 
 deems fit 
 
 Section 18 In case of forfeiture of an assistance certifi- 
 cate the person whose assistance is so forfeited shall be dis- 
 qualified to make any application for a new assistance certificate 
 until the expiration of one year from the date of forfeiture 
 
 Funds and Expenses 
 
 Section 19 The funds for the payment of old age assist- 
 ance shall be furnished by the Commonwealth of Pennsyl- 
 vania 
 
 Section 20 (a) All expenses incurred by the State Board 
 in administration investigation and salaries shall be borne by 
 the State and a sum of $50,000 for the next two years is 
 hereby appropriated for this purpose 
 
 (b) All expenses incurred by the county boards in admin- 
 istration investigations and salaries shall be paid by the county 
 treasurer from the moneys of the county 
 
 Annual Repoet Hearings Etc 
 
 Secton 21 Within ninety (90) days after the close of each 
 calendar year the State Board shall make a report for the 
 preceding year stating 
 
 (a) The total number of recipients 
 
 (b) The amount paid in each 
 
 (c) The total number of applications 
 
 ' (d) The number granted assistance the number denied and 
 
352 FACINGOLDAGE 
 
 the number cancelled during that year and such other infor- 
 mation as the State Board may deem advisable 
 
 Section 2£ All methods of procedure in hearings investi- 
 gations recording registration and accounting pertaining to 
 the old age assistance under this act shall be in accordance 
 with the rules and regulations as laid down from time to time 
 by the State Board 
 
 Section 23 Every assistance granted under the provisions 
 of this act shall be deemed to be granted and shall be held 
 subject to the provisions of any amending or repealing act 
 that may hereafter be passed and no recipient under this act 
 shall have any claim for compensation or otherwise by reason 
 of his assistance being affected in any way by any such amend- 
 ing or repealing act 
 
 Section 24 Within ninety days of the signing of this act the 
 Governor shall appoint the members of the State Board