CHAPTER II

LOCAL RELIEF SOCIETIES

The most simple and primitive form of industrial insurance is found in the numerous mutual benefit associations which exist everywhere and under many forms. Some of these are aided by the employers and others are supported entirely by the contributions of the members. These mutual aid associations are the elementary school of thrift, of brotherhood, and of the future social policy which is growing up within these voluntary organizations. These societies rarely have any centralized organization to bind them together, the state does not recognize their existence until they become federated and important, and their by-laws have no direction from actuarial experts. They spring up spontaneously and by imitation in response to economic necessity, and they are found among wage-earners of many occupations and of many nationalities in our large cities. German, Scandinavian, Italian, and Hebrew immigrants find in their little societies protection and support in the hour of sickness and sorrow. The negroes have similar organizations and are greatly attached to them. Reliable statistics are not accessible, because there is no central office nor general system of reports. The administration is often changed and usually inadequate, while the bookkeeping is ordinarily very crude and unsatisfactory. It would be almost impossible to reduce their premiums and benefits to tabular form, because each society has its own peculiarities. All that is here attempted is to give a certain number of significant illustrations and to call attention to certain general tendencies.

Mutual aid societies of immigrants from Europe.-In

a foreign land and among strangers the poorer immigrants seek fellowship, encouragement, and care among those who understand their language and sing the songs of fatherland. In the large cities the people of the same race or nationality establish societies of a charitable nature in order to succor their countrymen who have not yet won a secure place and means of self-support. Those who have lived in this country some time and have become prosperous are proud to relieve the distress of those recently arrived. Public relief and the alms of other races are felt to be disgraceful, and soon the industrious immigrants prefer to aid each other through contributions to a mutual benefit society where the thought of alms is not present. For some time the benefit societies retain something of the character of their origin in charitable relief, but the tendency is to remove them as fast as possible from this ground. Naturally these independent new citizens associate themselves with persons of their own race and language. This tendency is fostered by the fact that immigrants often form "colonies" of members of the same nationality and religious confession, and thus we have Bohemian or Italian quarters and sometimes a Ghetto. Frequently these colonies contain thousands of persons who come from the same land, speak the same tongue, and worship after the same ritual. The Russian Jews dwell in the same region of a city, the Italians are for the most part Catholics, and the Bohemians are Catholic or free-thinkers. It follows very naturally that many of these local societies are composed of families of the same language and religion. The synagogue or church may easily become the social center of the organization, and on festival occasions the place of public worship may witness their ceremonies and incidentally advertise their advantages.

In the city of Philadelphia, in the year 1892, was founded the society of the Independent Chevra Kadisho,

whose purpose was to furnish poor families with money for funeral expenses. It has about 3,000 members, each of whom pays ten cents each month as dues. There are three other societies of a similar character in the city. Mr. Bernheim tells us that the lodges furnish social recreation and contribute materially to the elevation of the social condition of the residents of a Ghetto. Various branches of the brotherhoods extend in every direction and there are few families which are not connected with some organization. The Ghetto in Chicago contains seventy-five registered lodges, of which thirty-two belong to the federation B'rith Abraham and twenty to the Western Star, and others to less conspicuous unions. In this respect they resemble the lodges so popular among their Christian neighbors which furnish life insurance to their members and so render an important economic service which is the principal ground for their existence. Here we see a common tendency to federate local lodges into larger societies or brotherhoods, a form of union which will be studied more closely in the chapter which will follow later on "Fraternal Benefit Societies."

Mutual benefit societies in mercantile and manufacturing establishments.-Common employment in the same house furnishes a canvenient basis for organization of a mutual benefit society in a simple and imperfect form. Here again the mutual benefit fund is established to avoid dependence on charitable appeals. Wherever people come together in considerable numbers and with moderate and small incomes, a prolonged illness, a serious accident and the extraordinary demands of a funeral inevitably start someone to collect money to meet the emergency. This instinctive appeal to humanity is enforced by the reflection that no one knows who may require assistance next. The employer is usually asked to contribute to this fund. But the whole arrange

ment is unsatisfactory. The liberal pay relatively much, the stingy shirk duty, yet will sometimes make heavy demands when trouble strikes them, while the vicious or thriftless make special burdens for others. It is found that a regular payment provides a fund, even if a small one, that it lasts longer than spasmodic charity, that it distributes the burden more fairly, and that no one feels himself disgraced by taking his share when it becomes necessary. Without attempting any classification a few examples will illustrate the variety of methods and the general tendencies of this type of mutual benefit associations.

The Employees' Mutual Benefit Association of the department store of Carson, Pirie, Scott & Co., Chicago, is a specimen of this group. This association was founded in the year 1895. All employees of the firm are eligible for membership. The officers are elected by the members, and the element of self-government is strong. The members are divided into two classes: (1) Class A, composed of those who receive more than $5 weekly wages; (2) Class B, those who receive $5 or less. The initiation fees are $1 and 50 cents, the monthly dues are 35 cents and 15 cents, which are collected by the simple process of deducting the dues from payments of wages. The sick benefits are $6 or $3, according to the class, paid during 6 weeks after the first week. The death benefits are $100 or $50, paid out of a fund raised by assessments of 25 and 15 cents on the occasion of a death. In a report of January 1, 1906, it is said that there were 790 members, an increase from 525 of the year before. On April 18, 1906, there were 1,056 members, indicating a rapid growth. During the year 1905 the expenditures for sick benefits were $3,194; funeral expenses, $100; medical attendance, $142.50; costs of administration, $75.50; charitable relief, $25. Of the members 394 participated in benefits during 1905. The entire expenditures

since the establishment of the fund had been $20,870.37. Membership is voluntary. Significant is the opinion of the administrator of this fund based on his observation of its value and limitations. He has reached the judgment that the success of the fund proves that it is desirable to secure sickness insurance at low cost. In order to be successful a benefit society must meet all claims promptly after careful investigation. What is good for a few must be good for all wage-earners, and therefore he recommends that the state levy a small tax on all employers according to the number of their employees. The premiums should be fixed by a competent actuary according to the rates of wages paid. From this tax a fund would furnish safer and cheaper sickness and invalidity insurance and death benefits than could be furnished by fraternal organizations. Branch societies could be organized and administered by unsalaried officers in each store and factory, and in each office the premiums could be collected and the benefits paid out. In case of change of employment the employee could be transferred to the society of the place to which he goes. The only condition of membership would be employment in some particular enterprise. One consequence of this arrangement would be that an employee would rarely desert his position without good reason and thus lose his claims by a strike or unworthy conduct. Many employers already expend considerable sums for charity and for protection against strikes which might much more profitably be paid out in insurance. The state as well as employers would derive advantage from this organization because the tendency would be to diminish the causes of social disturbance. This opinion is given at this point as an indication of the influence of practical administration of such funds on a business. man. Criticism is reserved for a suitable place.

The Siegel-Cooper Company Employees' Association