daily balances of money appropriated for teachers' salaries; fourth, all moneys deducted from teachers' salaries for absence or any other cause, - income from this source to cease, except by two-thirds vote of the Board of Education, when the fund amounts to $100,000. The fund is in the hands of a board of trustees, consisting of the president of the board of education, the president pro tempore of the board, the chairman of the committee on teachers, the superintendent of schools, and three teachers elected by contributors to fund, on teacher elected each year. This board recommends to the board of education the amount of the assessment. Teachers are eligible who have taught thirty years, twenty of which shall be in public schools of Detroit. Twenty-five years of teaching alone in Detroit will also give eligibility. By two-thirds vote of the trustees, incapacitated teachers of twenty years' service, ten of them in Detroit, are eligible. The allowance shall not exceed $250 per Teachers resigning or being removed from service may receive, at the discretion of the trustees, not more than one-half of their contributions. annum. Massachusetts. - City of Boston. The fund is composed of $3 withheld from teachers' salaries each alternate month. It is in custody of a board of trustees, consisting of the superintendent of schools, ex officio, three male and three female teachers elected by teachers, and three members of the school committee elected by the committee. To be eligible, a teacher must have taught thirty years, ten in the public schools of Boston, and have contributed $540 to the fund. Incapacitated teachers of ten years' service are eligible. The amount of the allowance is in the discretion of the trustees, but all allowances must be uniform. Assessments are compulsory upon all teachers entering the service after passage of act (1900), and upon other teachers who may have once elected to come under its provisions. Teachers retiring from teaching after ten years' assessments may receive back one-half of their contributions.' TEACHERS MUTUAL BENEFIT ASSOCIATIONS. Retirement Funds. These exist in the cities of New York, Boston, Philadelphia, Baltimore, Cincinnati, Washington, Norwich, Conn., Hartford, Conn., Indianapolis, Saint Louis, etc. Initiation fees vary from $1 to $10; annual dues from $5 to $40. The term of service required is thirty-five to forty years, or two to five years in case of disability. Allowances range from $5 a week to $600 a year, and $100 for funeral expenses in case of death. The temporary aid during illness is $5 to $6 a week. In Baltimore the fund is only 1 For later legislation in Massachusetts, see pp. 131, 278, 279. a retiring one, and not to be used for temporary illness. There is also a Teachers' Annuity Guild in Massachusetts. The Saint Louis Teachers' Benevolent Annuity Association may be taken as an illustration. Nine hundred teachers belong, and are assessed 1 per cent. on their salaries. The fund amounts to $68,000, and in the last fiscal year the association paid out $7,755, consisting of annuities of $180 a year to 43 former teachers. The fund, in addition to the assessments, was augmented during the year by "a great public festival, held by members and participated in by children and their parents." Benefit Funds for Illness Only. These exist in Baltimore, Saint Louis, Cincinnati, Cleveland, Detroit, Chicago, Buffalo, San Francisco and Saint Paul. Initiation fee, $1 to $2; annual dues, $1 to $5; special assessments of $1 in some cases. Benefits range, in case of illness, from 50 cents a day to $10 a week; at death, either actual funeral expenses or $1 assessment on each member of fund. In Philadelphia, a teachers' fund has just received a bequest from the late Mr. Elkins of $100,000. SUMMARY OF EXISTING LEGISLATION. Ten States have statutory provisions in regard to teachers' retirement funds. In two of these, New Jersey and Maryland, there are State systems for the benefit of all teachers of the State. Fifteen cities of more than 100,000 inhabitants have successful teachers' retirement funds in operation. Twenty-five per cent. of all the public school teachers in the United States can, if they desire, participate in retiring allowance systems. The schools in which these teachers teach serve a population of 20,000,000. APPENDIX E. SAVINGS AND INSURANCE SYSTEMS OF THE FRIEDRICH KRUPP COMPANY.1 LIFE INSURANCE ASSOCIATION. In 1877 the Friedrich Krupp Company established a life insurance association for the benefit of its employees, of which a full understanding will be of much practical value, since there would seem to be no intrinsic reason why such an association could not be established in the United States, at least by very large corporations. The association was established by the Krupp Company through a foundation subsidy of 50,000 marks, on which 5 per cent. interest is paid, whether this rate is earned or not. In the mean time, the original subsidy has increased, in 1908, to 115,000 marks. The association has for its object the development of life insurance among its members, to facilitate the payment of premiums, and to obtain a reduction of cost. The association secured these advantages through a special agreement with eight representative German legal reserve life insurance companies, obtaining for itself the position of a general agency, with full powers to act in behalf of both the contractual companies and the members of the association. The association is a corporation in its own right, and is entirely separate and distinct from the Friedrich Krupp Company. The companies under agreement with the association grant the full first commission, and also the usual renewal commissions paid to the local general agency. In return for this concession the companies are granted the right, under certain restrictions, to canvass for insurance among the members of the association during working hours, while voluntary applications for insurance are referred to the companies in alternating order, to avoid discrimination in favor of one company against another. The association is a self-governing body, in which every member has at least one vote; but the voting privileges are 1 This material is embodied in letters and reports made to the Prudential Insurance Company by its statistician, Mr. Frederick L. Hoffman, who made an extended personal investigation in Germany and Austria in 1909, for the purpose of obtaining accurate and conclusive information regarding government insurance in those countries. so arranged that there is one vote for every 1,000 marks insurance, or for every 50 marks annual annuity. The pecuniary concessions to the association are equally divided, and one-half of the amount of the concession goes to the immediate benefit of the insured by way of premium reduction, while the other half goes to the funds of the association to be used for general purposes; this half, however, is made good by a subsidy of equal amount by the F. Krupp Company, so that the members obtain directly the full benefit of the concessions secured. In addition to this subsidy, the F. Krupp Company pays the annual expense of management, which during 1908 amounted to not quite 20,000 marks. The direct benefits to members resulting from this association are as follows: 1. During the first year of insurance, one-half of the agent's commission, which would otherwise be payable to the insuring company. 2. From the second year of membership, and every year following thereafter, a premium reduction of 8 per cent. for insurances up to 3,000 marks, a reduction of 6 per cent. for insurances from 3,000 to 9,000 marks, and a reduction of 4 per cent. for insurances of more than 9,000 marks. For 1909 and thereafter, however, the premium reductions will be 8 per cent. for insurances under 4,000 marks, 7 per cent. for insurances from 4,000 to 9,000 marks, 6 per cent. for insurances from 9,000 to 12,000 marks, and 4 per cent. for insurances of more than 12,000 marks. In case of sickness and absolute need, the members are entitled, after the facts have been carefully determined, to have their premiums paid out of the funds of the association, which, as previously stated, arise out of the reserved amounts secured by the concessions from the companies and the annual grants made by the Friedrich Krupp Company. Members also may obtain loans for personal needs in the manner that such loans are granted, in the first instance without interest, but for subsequent loans an interest rate of 3 per cent. must be paid. Such loans can be repaid in instalments. The payment of the premium is automatic by deductions from the salaries or wages paid. At the end of 1908 there were 7,215 policies in force with the association, for the sum of 17,025,000 marks. (A) In other words, the life insurance association acts as a general agency for its members, who, however, must be employees of the firm of Krupp, but the scope of the association includes the wives and the children of the members. The latter, however, can only be insured up to their majority. The premiums must be paid in cash to the association, or they may (as is usually the case) be deducted in instalments from the pay of the employees. Almost without exception the wage-earning members have their premiums in this wise deducted from their two-weekly pay. Through this arrangement a most valuable service is, therefore, extended to the insured, far more valuable, indeed, than the mere reduction in the cost of insurance; but the aid of the association does not end here, for it includes all the transactions which may be necessary, obtaining surrender values or policy loans, as well as the payment of claims, and, I suppose, possible litigation with the insurance companies in case of dispute. Free and qualified technical advice is given in all insurance matters to the members through the officials of the association. (B) The most popular forms of insurance selected are limited payment endowment policies. Practically no annuities have been applied for. On December 31, 1908, the association had been thirtytwo years in existence, and during the year 1,289 new policies were written, for 3,296,269 marks, while 504, for 1,121,315 marks, were discontinued, leaving a net increase during the year of 785 policies, for 2,174,944 marks; so that on December 31, 1908, there were 7,215 policies, for 17,025,229 marks ($4,052,004.50), in force, or an average policy of 2,359.69 marks ($561.61). The premium payments made to the association during the year were 608,724 marks, and after deducting from this one-half of the value of the concession in premium reduction through the various companies of 19,266 marks, the association paid net to the insurance companies the sum of 589,457 marks. In addition, there was an increase of 6,838 marks in interest charges on policy loans. In the case of 626 policy loans an interest charge was made, and in 233 cases no interest charge was made. The net annual gain to the members of the association through the arrangement entered into with the different companies is given as 59,357 marks, or approximately 8.4 marks per member per annum. The number of applications received during 1908 was 1,277, of which 62 were declined and 43 postponed. Of the applications accepted, 82, for 345,000 marks, were upon the lives of members' families. Of 1,277 applications, 1,243 were for endowment policies. The policies were nearly all participating, 363 being for uniform dividend reduction and 912 for increasing premium reduction. There were 14 applications accepted for pon-participating policies. By amounts of insurance, it appears that 416 applications were for 1,000 marks, 237 for 1,500 marks, 284 for 2,000 marks, 145 for 3,000 marks, 19 for 4,000 marks and 87 for 5,000 marks. For higher amounts, 14 were for 6,000 marks, 18 for 9,000 marks, 27 for 10,000 marks, 13 for sums of over 10,000 marks to less than 100,000 marks and 1 policy was for 100,000 marks, showing that all classes of employees participate in the beneficial arrangement, which it would seem should not be impossible in the case of large |