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Benevolent homes,

TABLE 13. — Present Financial Condition exclusive of Almshouse Inmates - Concluded.

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III.

DESCRIPTIVE ACCOUNT OF EXISTING SYSTEMS OF OLD AGE PENSIONS, INSURANCE AND ANNUITIES.

1. ORIGIN OF THE PROBLEM.

The problem of old age pensions or insurance is of modern origin. It is one of the questions of social readjustment consequent upon the industrial revolution. Before the era of the factory system this problem hardly existed. In the earlier period, as Carlisle has impressed upon us, the economic relations between men were of a permanent character. The labor contract was life-long. The worker lived under the paternal protection of the master, who felt obliged to provide for him in sickness, accident and old age. He was not expected to make independent provision for the emergencies of life. In the background, moreover, stood the Church, ready to dispense alms with a free hand.

The industrial revolution changed all this. Temporary contract took the place of permanent service. The employer recognized no obligation to support the worker throughout life. The latter was thrown upon his own resources, and was expected to take care of himself in periods of infirmity, misfortune and old age. Thus arose the problem of old age pensions or insurance, which, in essence, is the problem of devising an effective system of providing for the old age of worn-out workers.

During the last generation a widespread interest has developed in this problem. This interest has been prompted by two classes of motives, - humanitarian and economic. The uppermost consideration in the minds of the men who first turned public attention to this question was the desire to reduce the volume of human misery. They were shocked

by the extent of old age pauperism. They proposed that a system of old age pensions be established, as a means of taking aged workers out of the almshouses and enabling them to spend their last years in self-respecting comfort. This humanitarian motive has been reinforced by an economic object. It has been recognized that the aged worker is a burden on industry. His retention in active employment, after he has passed the limit of his efficiency, means economic waste. A system of old age pensions has therefore been advocated as a means of retiring workers at a reasonable age, and removing this handicap on industry.

In the field of legislation on this question Germany led. the way in 1889, when the first old age and invalidity insurance was passed by the Imperial Parliament. Denmark followed this example in 1891. Then three of the Australasian colonies of Great Britain established old age pensions systems, New Zealand in 1898, New South Wales in 1900 and Victoria in 1901. Belgium introduced a system of old age insurance and pensions in 1900. France and Italy also have adopted special measures for old age relief. In 1908 the Commonwealth of Australia enacted an invalidity and old age pension law on June 10, to go into effect July 1, 1909; the Canadian Parliament passed an act providing for the issue of government annuities of old age on July 20; and England adopted the old age pension act on August 1, to go into effect January 1, 1909. Projects of old age insurance have been under parliamentary consideration in Austria, Norway and other European States.

No American State thus far has established any general system of old age pensions or insurance. There are in operation in several States special pension schemes for certain classes of public employees, chiefly policemen, firemen and school teachers. There is no scheme now in existence, or in prospect, making general provision for old age pensions or insurance. Indeed, Massachusetts is the first State to authorize a comprehensive inquiry into the pension and insurance question through a State commission. In 1905, to be sure, the Legislature of Illinois created a commission to investigate and report to the Governor the draft of a bill pro

viding a plan for industrial insurance and workingmen's old age pensions. This commission, however, limited its investigation to the subject of accident insurance of employees, leaving the question of old age pensions untouched. Thus in the United States the question has hardly, as yet, received any serious attention from Legislatures, while in Europe it has been a subject of repeated investigation and extensive legislation.

Although American Legislatures have not dealt with this question, American railroad and industrial corporations have been establishing retirement systems of their own. This movement began in 1884, when the Baltimore & Ohio Railroad established its pension system, and during the last decade it has spread rapidly. Not only railroad and industrial corporations, but street railroad companies, banks and mercantile establishments, have instituted retirement systems for their employees.

At the same time there has been a steady development of industrial insurance. The fraternal organizations and the trade unions have contributed also some share toward the solution of this problem. The pension systems for certain branches of public service, to which reference has already been made, have assisted further toward this end.

The first task of an investigator in this field is to examine the legislative measures and the various agencies which have thus been put into operation in the effort to solve the problem of old age pensions and insurance.

2. OLD AGE PENSION SYSTEMS IN FOREIGN COUNTRIES.

The following outline of old age pension and insurance laws in foreign countries covers the States that have enacted such legislation up to the present time. In Norway and Sweden the question of adopting some pension or insurance scheme has been investigated recently by public commissions, and it is not unlikely that parliamentary action will be taken in the near future. Further legislation on this subject is contemplated, also, in Denmark and France. So far as existing legislation at this date is concerned, the following sketch is believed to be complete.

(a) Germany.

The first German old age and invalidity insurance law was passed in 1889, and supplementary legislation was enacted in 1891. In 1899 a new act was passed, making important modifications of the old age insurance provisions. The old age insurance, as now provided under the amended law, is a part of a comprehensive system of insurance legislation covering sickness, accident and invalidity, as well as old age. In their origin the German insurance laws were an indirect result of the Social-Democratic agitation which began in Germany in 1863. Under the leadership of Bismarck the government adopted a policy of progressive social reform, designed to allay the discontent of the working class. A main feature of this policy was the elaborate scheme of workingmen's insurance, initiated by the sickness insurance act of 1883, extended by the accident insurance law of 1884, and tentatively rounded out by the old age and invalidity insurance act of 1889. Thus the German old age insurance is a part of a system of social insurance devised by Bismarck, as one means of combating the spread of Social-Democracy.

The old age insurance, as organized and administered under the act of 1899, is obligatory upon the following classes:

1. Persons employed as laborers, journeymen, assistants, apprentices, or domestic servants earning wages or salary.

2. Managing officials, foremen and technical workers, clerks and apprentices in business houses, other employees whose service or employment forms their principal vocation, such as teachers and tutors, and all persons receiving wages or salary, if their annual earnings do not exceed 2,000 marks ($500).

3. Persons employed for wages or salary as crews of German vessels and ship captains, whose earnings do not exceed 2,000 marks ($500).

The right to insure voluntarily under the act is granted to these classes:

1. Superintendents of works, foremen, men with technical education, business assistants, teachers and tutors, ship captains, and

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