Our Benevolent Feudalism

by William J. Ghent

III

The assurance of villein fidelity is a prime need of a feudal order. The fidelity need not be personal, as in the old days; instead, the altered ceremony of “homage” may take in whole regiments by a single rite. Recent acts of the great employers make strongly for creating inducements for this fidelity. In spite of instances of conduct like that of the coal magnates of Pennsylvania, there is a growing tendency to unite for life-long service the careers of the more faithful workers with the corporations by whom they are employed. “Model workshops,” and even “model villages,” are unquestionably increasing in numbers. Their character is almost pure paternalism—“enlightened absolutism,” Professor Ely calls it. Rarely have the workers themselves the slightest word to say as to their construction or conduct. What is thought to be good for them, what is thought will win their devotion, is given them. Whether at Pullman, Ill., at Dayton or Cleveland, Ohio, or at Pelzer, S.C., the general spirit manifested is the same. The perfervid chapter on “American Liberality to Workmen,” which Mr. Nicholas Paine Gilman gives us in his volume, “A Dividend to Labor,” contains dozens of instances wherein employers have indulged their benevolence by the gift of flower-pots, wash-basins, and other cultural paraphernalia to their employees. Mr. Victor H. Olmsted, in the Bulletin of the Department of Labor for November, 1900, gives another, though somewhat duplicated, list; and the Rev. Josiah Strong’s monthly journal, Social Service, furnishes a current record of such benevolences. The providences of the Colorado Fuel and Iron Company alone make a remarkable showing. This corporation has even a “sociological department,” and it is at present building a $10,000 mission at Bessemer, near Pueblo. The plan of the mission, we read, is to have a refuge, with all modern improvements, for “floaters,” or the unemployed. These wayfarers may make a temporary living by working in an attached woodyard. In all its camps in Colorado this company has established kindergartens, libraries, and, in remote places, grade schools for the children of its employees. Its hospital at the Pueblo works is said to be the best equipped in the West. “It is the announced purpose of this corporation,” we read, “to solve the social problem.”

Model workshops and the distribution of relief are but a small part of the tendency. The giving of old-age pensions, particularly by railroad companies, has recently taken on the dimensions of a national movement. The pension system is not a conspicuously expensive one, for the numbers of workmen who live long enough to avail themselves of its benefits are but scant. The sums paid out for pensions by the Baltimore and Ohio Railroad Relief Department in eighteen years average $31,185.85 yearly—about the salary of a first vice-president—and the employees themselves have borne a considerable part of the expense. A total of 697 pensions has been granted during this time, but 365 of the beneficiaries have considerately died, and thus reduced the expenses.

The pension system as it obtains among railroads is more or less an outgrowth of the relief association begun by the Baltimore and Ohio Railroad Company on May 1, 1880. Prototypes can possibly be found, but this instance is the first of any consequence. The State of Maryland revoked the charter of the association in 1888. This was an embarrassing interruption, but by no means a fatal one, for the society was immediately reorganized as a department of the company. The plan was to pay accident, sick, and death benefits and old-age pensions, the company contributing $33,500 yearly, and the employees paying monthly dues based on their wages. Section 100 of the regulations for 1889 declares that “the fund for the payment of pensions will be derived wholly from the contributions of the company,” a change from the earlier method in the direction of pure paternalism. The usual age for pensioning is sixty-five years, and the president and directors determine the roll.

The Pennsylvania Railroad Voluntary Relief Department was begun in 1886. In a number of respects it followed the details of the earlier association. As to pensions, however, it put the matter forward by arranging for the gradual growth of a superannuation fund out of the department’s surplus. There were six companies, according to Mr. William Franklin Willoughby’s “Workingmen’s Insurance,” that before 1898 had created regular insurance departments. These were the Baltimore and Ohio, the Pennsylvania, the Pennsylvania west of Pittsburg, the Chicago, Burlington, and Quincy, the Philadelphia and Reading, and the Plant System. Though in two or three instances the plans have been altered, all these companies founded their pension systems on employees’ contributions.

The Pennsylvania’s fund reached the figure set for it January 1, 1900, and the pension system was proclaimed. On the first day of 1901 the Chicago and Northwestern put in operation a gratuitous pension system, appropriating $200,000 for the purpose. The beneficiaries, all of whom must have been thirty years with the company, were divided into two classes: first, those seventy years old, who were to be retired and pensioned at once; and second, those from sixty-five to sixty-nine years inclusive, who were to be retired and pensioned at the discretion of the pension board. The rate fixed is one per cent per year of service of the average monthly pay for the preceding ten years. An employee whose average wages were $55 per month, and who had been with the company for thirty years, would thus receive $16.50 a month.

The Illinois Central proclaimed its pension system July 1, 1901. On March 1, 1902, the Delaware, Lackawanna, and Western took the same course, appropriating $50,000. The terms are somewhat more liberal, in that only twenty-five years’ service is required, and that some employees may be retired between the ages of sixty and sixty-five. The Metropolitan Street Railway Company followed on March 6th, and the Philadelphia and Reading Company on May 21. The details, while varying somewhat, are in the main alike for all of these companies.

Though the experiment is a comparatively frugal one, there is no doubt that it brings compensatory returns; for it serves to keep quiescent and faithful large bodies of men, and perhaps to loosen the bonds of the labor-union. It holds in servicemen above thirty-five or forty-five years of age, for they know the difficulty of securing work elsewhere; and it feeds them with a more or less illusory hope of an ultimate pension. Indeed, the motive of inducing a closer dependence of the laborer upon the employer is more or less frankly confessed. “Under it” (the pension system), reads the Lackawanna’s advertisement to the public, “the road and its employees are to be more closely knit by substantial ties.” The president of the Metropolitan Street Railway Company, however, sounds a more altruistic and benevolent note. “My object in establishing this department,” he is quoted as saying, “is to preserve the future welfare of aged and infirm employees and to recognize efficient and loyal service.”

Despite such benevolent professions there are grave grounds for scepticism regarding the tangible benefit of the system to the employees. If Hope lingers with them, it must be because, as Mr. William Watson sings, “airiest cheer suffices for her food.” For both the ascertained results of an eighteen years’ operation of the system, and a moment’s glance at conditions surrounding the new applications of it, point to a most rigorous limitation of its benefits. In the first place, there is a growing disinclination to employ in any industry men past forty-five years of age. The new regulations of the Philadelphia and Reading reduce even this limit ten years, prohibiting the taking on of employees past thirty-five years of age, except by the approval of the board of directors of the company, although in special cases where unusual qualifications are desired the age limit may be waived. So general is this attitude of employers that the Chicago Federation of Labor was recently moved to the passing of a resolution proposing that “every unemployed man forty-five years of age who cannot show what the charity authorities call ‘visible means of support’ shall be mercifully shot in a lawful and orderly manner.” Moreover, the chances of a railroad employee reaching the age of sixty-five or seventy years are about equal to the chances of winning a large sum at policy. Discharges are frequent and arbitrary, and usually there is no appeal. Aside from this, the casualties are enormous. Of the 191,198 railroad workers classed as trainmen employed throughout the country in 1900, 1396 (or one in every 138) were killed, and 17,571 (or one in every 10.8) injured. The corrected figures for 1901 (given to the public in August of the present year) show about the same percentages. Of the 209,043 trainmen, 1537 (or one in every 136) were killed, and 16,715 (or one in every 12.5) were injured. Thanks to the new safety appliances, casualties caused by coupling and uncoupling cars declined by 84 killed and 2461 injured; but in other classes of accidents the percentages brought the averages to near the previous figures. At best, the chances of maiming or death constantly increase with every one of the twenty-five or thirty years’ service required for the earning of a pension. In the Metropolitan (now Interurban) Street Railway service, where accidents are few but discharges many, the benevolent instincts of the president will prove difficult of realization. This official admitted that discharges had at one time reached an average of 300 a month. An employee informed the author that he knew of but two or three men in the entire service whom the published terms entitled to pensions, while another employee conceded a possible dozen.