beneficiary systems in connection with their unions, the real reason for the rapid growth of benefits lies, of course, in the desire of the members to participate in such beneficiary systems. The development of beneficiary systems has, therefore, not been guided chiefly or largely by the consideration as to what benefits would most aid the trade unions in enforcing their trade policies. The unions have chosen rather to develop those benefits for which there was the greatest need. Taking the Report of the American Federation of Labor as a convenient summary of the beneficiary activities of American trade unions, it appears that in 1907 of sixty-seven national unions paying benefits of all kinds, sixty-three paid death benefits, six paid benefits on the death of members' wives, twenty-four paid sick benefits, eight paid travelling benefits and six paid out-of-work benefits. The benefit which is most effective as an aid to the enforcement of collective bargaining is out-of-work relief. This it will be noted has been adopted by very few unions. On the contrary, the death or funeral benefit of small amount is far and away the predominant form of national trade-union benefit. Probably no other benefit offers as little support to the militant side of trade unionism. The reasons for the greater development of this benefit are, first, the great need among many trade unionists for benefits of this kind. Only within recent years has the funeral benefit been widely obtainable from ordinary insurance companies. Secondly, the administration of a small funeral benefit presents few difficulties as compared with the sick or out-of-work benefit.

While the principle that trade-union benefits are an aid in collective bargaining has not led to the development in American trade unions of those varieties which might be supposed to have an advantage in this respect, the form of some of the benefits has been shaped in accordance with this theory. Thus, there is a tendency to grade the amount of the benefit according to the length of membership, the intention being to make it more serviceable in retaining members.

In practically all the unions trade-union benefits originated with the local unions. With the introduction of national systems the unions have pursued different policies with regard to the degree of freedom allowed the local union in paying benefits. The national unions that pay benefits may thus be divided into three classes according to their relations with the local unions. In the first class are those unions that pay insurance against death and disability.^[10] These unions reserve to the national union the exclusive right and authority to issue insurance but permit the local organizations to pay other benefits. In the second group are those unions that pay death, sick or out-of-work benefits from their national treasuries, but prohibit the local unions from paying similar benefits. The unions that have patterned after the Cigar Makers' Union belong to this group. The chief of these are the Deutsch-Amerikanischen Typographia, the Iron Molders' Union, the Journeymen Plumbers' Association, and the Piano and Organ Workers' Union. Finally, the largest group of unions paying benefits permit the local unions also to pay similar benefits. The principal unions of this character are the Typographical Union, the Brotherhood of Carpenters and Joiners, the Brotherhood of Painters, and the Amalgamated Wood Workers' Union. In general, the more highly developed the beneficiary functions of the national unions become, the less freedom the local unions are given in carrying on such functions. The tendency is therefore to replace local with national benefits. The local unions still play, however, a large rôle in the payment of benefits. It is probable that the aggregate sum disbursed by local unions in the United States for such purposes does not fall far short of the amount expended by the national unions.

CHAPTER I.

INSURANCE AGAINST DEATH AND DISABILITY.

The distinction between systems of insurance on the one hand and systems of death benefits on the other is not so much one of quality as of quantity. Legally the distinction lies in the fact that in the case of insurance a signed contract known as a policy is given to the insured, while in the case of a benefit no policy is issued. This difference is not of economic importance. Ordinarily, however, where a trade union issues insurance policies to its members the amount paid is larger than in the case of a death benefit. The establishment of insurance systems has thus been confined to a few organizations. The membership of these unions receive relatively high wages and are regularly employed. The highly important rôle which insurance systems have played in the formation and working of these unions and the general similarity of their experiences make it desirable to treat insurance against death and disability separately from the more common death benefits.

The unions which have been successful in establishing insurance systems are the seven principal unions of railway employees, viz., the Grand Brotherhood of Locomotive Engineers, the Order of Railway Conductors, the Brotherhood of Locomotive Firemen, the Brotherhood of Railroad Trainmen, the Order of Railroad Telegraphers, the Switchmen's Union of North America, and the International Brotherhood of Maintenance-of-Way Employees and the National Association of Letter Carriers.

The oldest of these organizations, the Engineers, was formed at Detroit, August 17, 1863, as the "Brotherhood of the Footboard," and was reorganized at Indianapolis, Indiana, August 17, 1864, under the present name. Under the original constitution, foremen and machinists as well as engineers were admitted; but since February 23, 1864, membership has been restricted to locomotive engineers.^[11] The Brotherhood was prosperous from the outset, and at the twenty-first convention in 1884 Grand Chief Arthur reported 258 subordinate divisions with 16,000 members; at the sixth biennial session in May, 1904, Grand Chief Stone reported 652 divisions with 46,400 members.

The Brotherhood of Locomotive Engineers is not only the oldest of the railway unions, but was the first to institute national beneficiary features. Three years after its organization, in September, 1866, the grand division levied an assessment to raise a fund for "widows and orphans and totally disabled members." The law was unsatisfactory, and few subordinate divisions paid the assessments prior to the Cincinnati convention of October, 1867. This convention ordered all assessments paid at once, and on December 2, 1867, $1212.40 was paid over to the chairman of the board of trustees. This was the nucleus of a fund which reached $10,787.63 on March 1, 1871. On account of charges of mismanagement and the slow growth of the fund repeated efforts were made to repeal the "fund" law, but without success. At the Nashville convention of 1870 a committee appointed to consider the disposition of the fund at the expiration of the five years recommended that the entire sum be paid back to the subordinate divisions. The grand chief opposed this use of the fund, since he regarded it as the Brotherhood's "strongest pillar."^[12]

Before the expiration of the five-year period, however, on December 3, 1867, the Brotherhood founded an insurance association.