The new national unions were not strong enough to establish beneficiary systems. Moreover, at many points the establishment of local benefits conflicted with the success of the national organizations. A local union was usually forced to impose certain restrictions upon claimants of benefits, either an initiation fee or a requisite term of membership, in order to protect its funds. Such limitations on the full participation of all members in the benefits of membership militated severely against the carrying out of the prime function of the national unions—the nationalization of membership. The leaders in the trade-union movement of this period were interested chiefly in strengthening the relations of the local unions. They saw, therefore, in the local benefits a hindrance to the accomplishment of their aims. By 1860 it had become a fairly well accepted doctrine that a trade union should not attempt to develop beneficiary functions. It was argued that since the expense of maintaining benefits made the dues of members higher, persons who might otherwise join the unions were prevented from doing so. The leaders of the Iron Molders for years opposed the introduction of beneficiary features on the ground that the development of such activities was likely to interfere with the trade functions of the organization. In 1866 President Sylvis for this reason vigorously opposed the introduction of a national sick benefit.[[2]] As late as 1895 the veteran president of the Iron Molders—Mr. Martin Fox—counselled the Union against developing an extensive beneficiary system.[[3]] The same views were entertained by the leaders of the other more important unions of the period.

Shortly after the close of the Civil War the rapid growth of mutual insurance companies attracted the attention of many trade unionists. The formation of insurance associations under the auspices of the national unions with a membership limited to the members of the unions was discussed in the most important organizations of the day. In many of them voluntary associations of one kind and another were inaugurated. The Granite Cutters, the Iron Molders and the Printers all experimented after this fashion. Only in the railway brotherhoods did these insurance systems develop into a permanent feature.

The development of beneficiary functions by the leading national unions began about 1880. The benefits administered by these organizations do not interfere with the nationalization of membership. A new theory as to the relation between the beneficiary and the trade functions began about 1880 to gain wide acceptance. It was argued and with much force that the benefits were a direct aid in the accomplishment of trade purposes. While some leaders of the older school have seen in the rapid development of beneficiary functions a danger to the unions, the greater number who have come into positions of authority since 1880 have steadily advocated the establishment of benefits.

The following table gives the year in which the principal national unions were organized, together with the date and order of introduction of their national benefit systems.

Name of Organization.Date of National Organization.Date of Introduction of Benefit System[[4]]Order of Introduction of Benefit System
Typographical Union1850 1891 11
Hatters' Association 1853 1887 6
Stone Cutters' Association 1853 1892 13
Glass Bottle Blowers 1857 1891 12
Iron Molders' Union 1859 1870 2
Cigar Makers' Union 1864 1867 1
Typographia, Deutsch-Amerikanischen. 1873 1884 5
Iron, Steel and Tin Workers 1876 1903 22
Granite Cutters 1877 1877 3
Carpenters and Joiners, Brotherhood. 1881 1882 4
Tailors' Union 1884 1890 8
Painters' Brotherhood 1887 1887 7
Pattern Makers' League 1887 1898 16
Barbers' Union 1887 1895 15
Plumbers' Association 1889 1903 23
Machinists' Association 1889 1893 14
Metal Polishers' Union 1890 1890 9
Wood Workers 1890 1890 10
Garment Workers' Union 1891 1902 21
Boot and Shoe Workers' Union 1895 1898 18
Tobacco Workers' Union 1895 1896 17
Leather Workers on Horse Goods 1896 1898 19
Piano and Organ Workers 1898 1898 20
United Metal Workers 1900 1900 24

This change in the attitude of American trade unions toward beneficiary activities is illustrated by the fact that while in the older American trade unions, such as the Typographical Union, the Cigar Makers' Union and the Iron Molders' Union, many years elapsed between the founding of national organizations and the institution of national benefit systems, of the national unions organized since about 1880, some, as for example, the Granite Cutters' Union, the Brotherhood of Painters, the Metal Polishers' Union, and the Wood Workers' Union, incorporated provisions for the payment of benefits in their first constitutions, and many others adopted benefit systems within a few years after organization.

It is maintained that the establishment of beneficiary features is a direct aid to a union in carrying through its trade policies. In the first place, successful systems of benefits, whether they attract members or not, undoubtedly retain them. Sharp and sudden declinations in membership during industrial disturbances are thus prevented. The effect of the panic of 1893-1897 was peculiarly instructive in this respect. Many labor unions suffered a considerable decline in members. The Typographical Union lost about ten per cent. of its membership, the Brotherhood of Carpenters about fifty per cent., while the Cigar Makers with a highly developed system of benefits lost only one and one half per cent. The trade unionists naturally regard it as peculiarly desirable that the members should not abandon the organization when the difficulty of maintaining wages and conditions is greatest. To hold in hard times what has been gained in good times is a vital point in trade-union policy. The trade unionists realize that the chief work of the unions is not so much in advancing wages in good times as in preventing recessions when employment is scarce. President Strasser of the Cigar Makers has pointed out that the Cigar Makers came through the depression of 1893-1897 with very slight reductions in wages. This result he attributed to the beneficiary system which held the membership in good standing.[[5]]

It is, of course, impossible to estimate with any degree of precision the effect of trade-union benefits in retaining members. Certain unions, such as the Cigar Makers and the Typographia, having compact organizations with highly developed systems of benefits lose almost none of their membership in periods of depression. The experience of the Cigar Makers is peculiarly instructive since we are here able to note the effect due to the introduction of a system of benefits. In 1869 the membership of the union was 5800. No benefits were paid except the strike benefit. In 1873 the membership had fallen to 3771, in 1874 to 2167, in 1875 to 1604, and in 1877 to 1016. A noticeable increase set in about 1879 and by 1883 the number of members was 13,214.[[6]] In the depression extending from 1893 to 1897 the membership of the Cigar Makers remained almost stationary. The following table shows the number of members for each year from 1890 to 1900:

189024,624
189124,221
189226,678
189326,788
198427,828
189527,760
189627,318
189726,347
189826,460
189928,994
190033,955