CHAPTER X

THE PENSION SYSTEMS OF THE UNION AND OF THE SEVERAL STATES

The federal government.-This system is instructive in relation to workingmen's insurance both as a precedent and as a warning. The costly errors committed in its foundation and administration will warn the future legislator to prepare carefully and scientifically in advance a consistent. and reasonable plan. The pension idea itself, in spite of faults of law and administration, has already prepared the way for insurance of old age for wage earners. From the beginning of our history as a people the pension method of caring for servants of the community has been familiar. The earliest settlers of New England adopted the principle that it was both the duty and the interest of the commonwealth to provide pensions for those who risk their lives in war for the defense of all.

In 1636 the Plymouth Pilgrims enacted a regulation that whosoever should set forth as a soldier and return maimed should be maintained by the colony for the rest of his life. The Virginia Assembly of 1644 passed a law providing pensions for disabilities. Our first real pension law was passed by the Continental Congress, August 26, 1776.

The central and state governments thus sought to encourage enlistments in times of national danger.

With the beginning of the Civil War pensions there is noted increasing liberality in conducting pension affairs. Up to 1879 a man, to be eligible for a pension, must have applied within five years after his discharge. The Arrears Pension Act of 1879 is one of the most noted of our pension laws. It provided that all pensions which had been granted under the general laws regulating pensions should commence from the date of the discharge of the person on whose account the pension had been granted. The rate of the pension for the inter

vening time from which the pension had been granted was to be the same as that for which the pension had been originally granted.1

From this time the sums expended rapidly increased. Military land grants.-Ever since the War of the Revolution the government has given land freely to veterans of the wars. In addition to grants made by special acts of Congress the government has issued since the war for independence 598,628 warrants for 783,030 acres (Rep. Com. of Pensions, 1906, p. 10).

In this connection we must compare the expenditures for pensions in this country and in Europe. It is true that we have no industrial insurance systems, but we give to a large number of superannuated workers a vast sum in the form of veteran pensions. In the year 1891 Great Britain expended on military pensions £5,410,822, less than $27,054,000; France, $29,857,000; Germany, $13,283,000; Austria, $12,245,000. The expenditures of the United States for the same purpose in that year were $118,548,959.2 The disbursements for pensions by the United States from July I, 1790, to June 30, 1906, were $3,459,860,311.23. The amounts paid for the fiscal year 1905-6 were as follows:

Regular Army and Navy (invalids, widows and

dependents)

Civil War, general law

Civil War, Act of 1870

War with Spain

War of 1812

War with Mexico

Indian wars

Treasury settlements

3

.$ 2,521,802.10

56,789,837.93

74,010,063.41

3,442,156.53

101,278.27

1,376,396.36

622,874.85

135,878.80

$139,000,288.25

Adding expenses of administration, total

......

139,881,726.85

1 Butler, in N. C. C., 1906.

2 Forum, Vol. XII, p. 426.

Report of Commissioner of Pensions, 1906, p. 11.

The total number of pensioners on the rolls June 30, 1906, was 985,971. The highest number of pensioners at one time was $1,004,196, on January 31, 1905. As the veterans are growing old and feeble the rate of mortality is high and the cost will rapidly decrease. Evils and abuses have been inevitable. For many years since the Civil War the nation has grown rapidly in wealth; the systems of tariffs on imports may have reduced the income of multitudes of consumers but along with the taxes on internal revenue objects, as alcoholic liquor and tobacco, have yielded the federal government an income sufficient to meet the expenses of military and civil service, to reduce the national debt to small proportions, and to produce an enormous surplus which has been a constant temptation to extravagance. Under these circumstances the veterans and their friends, with the aid of political pressure, have been able to secure from Congress such liberal laws as the civilized world cannot elsewhere show. As the manufacturers have desired to retain the high tariffs on imports as a protective measure they. had to find a way, or many ways, to spend the surplus, and the soldiers could easily appeal to patriotic sentiment in asking generous pensions.

Homes for disabled volunteer soldiers.-In addition to their pensions, which may be used for the personal care and enjoyment of the men or for the support of their families, the disabled volunteer soldiers have the use until death of some one of the homes provided by the nation or by one of the states. The grounds of these homes are made attractive and are visited by many people on account of their beauty. The inmates are well fed, comfortably clothed in army uniforms, and receive the best medical care. Theatrical, musical, and literary entertainments are provided without charge, and chaplains conduct religious services. During the year ending June 30, 1905, 34,053 members were shel

tered in the national and 19,677 in 30 state homes; a total of 53,730, an increase of 1,879 over the preceding year.*

The expenditures for 1905 of the ten branches of the National Home were $3,343,696.67; the average annual cost per person was $157.76; the average age of those who served in the Mexican and Civil Wars, 66.26 years; of the Spanish War, 37.56 years. The 34,053 persons received pensions to the amount of $3,454,752.58 in charge of the superintendents; an average of $122.82, of which $786,369.45 was paid to families and $2,624,419.53 to the pensioners themselves. The amount paid to state homes was $1,138,879.87. The state homes are inspected by officers of the National Home and reports are made to the board on their condition and management. The percentage of deaths to the whole number cared for rose from 0.655 in 1867 to 6.351 in 1905. Of the 34,053 in the National Home 12,374 had wives living, or minor children, or both, and 21,679 were single. The National Home owns 5,308.50 acres of land, valued at $345,231.51, and buildings valued at $9,401,651.68; total $9,746,883.19. The budget calls for $5,208,844 for 1907.

How far do these military pensions act as pensions for workingmen? On this point it is difficult to secure exact information. Most of the present pensioners went into the army as volunteer soldiers when they were quite young, and immediately after the wars returned to their ordinary vocations, if they were not too much enfeebled by disease or crippled by wounds. They came from all forms of industry. In appointments to civil positions the veterans have always been favored. Since the great majority of the old soldiers came from manual occupations, it seems fair to presume that

Laws and Regulations, National Home for Disabled Volunteer Soldiers, 1906; Report of the Board of Managers of the National Home for Disabled Volunteer Soldiers, 1906.

the military pension system has acted in great measure as a workingmen's pension system. Many of the old men and women who, in Europe, would be in almshouses are found in the United States living upon pensions with their children or in homes to which paupers are not sent, and they feel themselves to be the honored guests of the nation for which they gave the last full measure of devotion.

The extravagance and abuses of this military pension system have probably awakened prejudice against workingmen's pensions. The most severe criticism is based on the moral effects of having a secure income without saving or labor. Unquestionably some of the old soldiers have permitted themselves to live in idleness and vice because they were satisfied with a petty pension; just as numerous children of rich men are deprived of motive to struggle by the prospect of falling heir to wealth for which they render no equivalent. But most of the veterans did not thus ignobly decay in idleness. The vast majority of them returned to their occupations and made the most of the favorable opportunities. Many were mutilated or enfeebled and so could not find and retain positions in competition with stronger men. Their idleness was enforced. The argument from occasional abuses does not go far. Rich men continue to prepare fortunes for their children, although they are often enough reminded of the danger, and children rarely refuse to accept legacies because of the moral perils. Our nation will never retreat from its liberal policy toward the brave defenders of its life merely because a few will pervert its gifts. Old-age industrial pensions are offered by many intelligent employers precisely because they tend to foster economic virtues, and surely this system would not produce an opposite effect by being made universal. If workmen contribute to the fund their thrift is cultivated. All depends on the wisdom of the method.