of

sions of $100 a year for one-half the population 65 years age and over would cost $8,850,000 annually. To provide pensions of $100 a year for one-half the population 70 years of age and over would cost $5,250,000 annually.

To provide pensions of $200 a year for one-fourth the population 65 years of age and over, namely, 44,250, would cost $8,850,000 annually. To provide pensions of $200 a year for one-fourth the population 70 years of age and over, namely, 26,250, would cost $5,250,000. To provide pensions of $100 a year for one-fourth of the population 65 years of age and over would cost $4,425,000. To provide pensions of $100 a year for one-fourth of the population 70 years of age and over would cost $2,625,000.

To provide pensions of $200 a year for 18,465 persons, the estimated number of deserving non-dependent aged poor and aged dependents upon public and private charity 65 years of age or over in the State,1 would cost $3,693,000 annually. To provide pensions of $100 a year for this number would cost $1,846,500 annually. To provide pensions of $200 a year for 12,000, the estimated number of prospective pensioners 65 years of age and over in the State, exclusive of the aged dependents on public charity, -the pauper class proper, - would cost $2,400,000 annually. To provide pensions of $100 a year for this number would cost $1,200,000 annually.

The effect of pensions expenditure on local tax rates is shown in the following table, in which the increase of the tax rates is calculated: first, on the basis of an expenditure of $17,700,000 annually, the amount required to provide pensions of $200 a year for one-half the population 65 years of age and over, or of $100 a year for the total population of that age; second, on the basis of an expenditure of $10,500,000 annually, the amount required to provide pensions of $200 a year for one-half the population 70 years of age or over, or pensions of $100 a year for the entire population of that age.

In the foregoing estimates no account has been taken of any possible reduction of expenditures on ordinary poor relief through the establishment of a pension system, as diminishing the net cost. For reasons already set forth, it is hardly to be expected that the adoption of a pension scheme would, in the long run, reduce poor relief expenditures. The experience of countries that have tried the pension policy shows that no saving on this score can be counted upon to offset in part the expenses of the pension plan. The only form of poor relief expenditure that would be reduced appreciably, even during the first years of the operation of a pension system, is that of outdoor relief. The total amount now spent on outdoor relief for aged persons by public and private agencies in the State has been estimated at $510,898.08. Assuming that this outlay would be reduced one-half by the adoption of a pension system, which is undoubtedly an extreme estimate, the saving would amount to $255,449.04. This sum is insignificant when set against the millions that any general pension system would cost.

VII.

THE QUESTION OF MUNICIPAL PENSIONS.

1. THE NATURE OF THE PROBLEM.

The reality and the urgency of the problem of pensions for municipal employees cannot be disputed. The continuance of men in municipal service after they have outlived their usefulness in the positions in which they are employed means waste of the taxpayers' money and demoralization of the working force. To discharge outright aged workers who have been in the employ of the city for a long period of years is manifestly a harsh course, which the city, as an employer of labor, cannot afford to sanction by its example. Many private employers, both individual and corporate, have recognized the need and the wisdom of making some provision for the retirement of superannuated employees on allowances, and have established pension systems. The spread of the pension idea among railway and other corporations during the last decade is a most interesting development in the industrial world. The same reasons that have induced private employers to make special provision for the retirement of aged workers would seem to hold good in the case of municipalities.

These reasons are partly economic and partly humanitarian. Regarded from an economic point of view, the advantages of a pension system consist in the elimination of the waste and demoralization connected with the employment, at full wages, of old men who are no longer capable of rendering reasonably efficient service; and, further, in the promotion of a sentiment of loyalty and appreciation on the part of the working staff. The economic gain from these sources is regarded by large employers as sufficient to make up for the expense of operating a pension system. The humanitarian motive recognizes the fact that long-conti service estab

lishes some claim to generous treatment of the employee in his old age, which prohibits the humane employer from turning his aged workers adrift without adequate means of support. Thus, considerations of economy and fair play have brought about the introduction and extension of pension systems in the case of railways and other large corporate and individual employers of labor.

Much is also made by the advocates of pensions for municipal employees of the fact that many cities have already adopted the pension policy in the case of the police and fire departments and the teachers in the public schools. It is held that justice demands the extension of the pension system to employees in other municipal departments. Indeed, the need of a pension system, from the point of view of the employees, is declared to be greater in the case of the common laborers and the lower ranks of employees in general than in the case of the higher-paid members of the police and fire departments and the teaching staff of the public schools.

The arguments urged in opposition to the establishment of some system of municipal pensions may be stated thus:

1. Provision for old age and for the emergencies of life is a matter of individual concern, which should be left to the initiative of the employees themselves. This consideration has special force in the case of municipal employees. They are a specially favored class, who have less need of pension provisions than have wage earners in general. They are comparatively well paid, and should be able to provide for their old age out of their independent savings. The city should not be called upon to provide for them in the proposed manner. In answer to this objection, it is argued that, whether the employees ought to do so or not, as a matter of fact they do not make adequate individual provision for old age. The city must either assist them to do this in some way, or must continue to face the awkward dilemma of keeping worn-out employces on the pay roll, or of turning them adrift without support in their old age. The city must, it is contended, take the same course as have the progressive railway and industrial corporations which have introduced pensions for their employees.

2. The establishment of a pension system will add largely to the tax rate of the cities, which is already burdensomely high. At a time when retrenchment of municipal expenditures is everywhere conceded to be imperative the assumption of a heavy annual outlay for pensions is doubly indefensible. To this argument the answer is offered that the present method of carrying worn-out employees on the pay roll at full wages is more expensive than any pension system could possibly be. The cost and waste of the present method in the city of Boston, as well as the need and scope of a pension plan applied to the municipal service of the city, are indicated by certain returns prepared in December, 1908, at the request of the mayor.

The returns show the following facts regarding the number of pensionable employees, their length of service, compensation and efficiency:

The total number of employees over 65 years is 491; over 70 years, 168. The number of employees pensionable at the latter age is thus 65 per cent. less than that at the former. The amount of compensation paid to employees over 65 is $419,888.45; over 70, $273,000. The number over 65 reported as inefficient is 296. The compensation paid to this group is $200,194.35.

The percentage of inefficient employees among the employees 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 employees over 65, or 25 per cent. of the total. Only 5 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 employees, rank as follows: (1) paving division of street department, 109 over 65 years; (2) water department, 65; (3) sanitary division, street department, 58; (4) sewer