CHAPTER II.

DEATH BENEFITS.

The most needed trade-union benefits are those against death and these were the first to be established.  At the present time about one half of American national trade unions maintain death benefit systems.  In 1904, out of a total of one hundred and seventeen national unions affiliated with the American Federation of Labor, fifty-three were paying death benefits.[87] Of those unions not affiliated with the American Federation of Labor, ten were also paying such benefits.

[Footnote 87:  Proceedings of the Twenty-fourth Annual Convention of the American Federation of Labor, 1904, p. 46.]

The development of death benefits in American trade unions resembles closely the growth of the insurance systems described in the preceding chapter.  The first unions to adopt death benefits, for example, paid for a time a sum fluctuating in amount.  The benefit was in each case the sum raised by per capita assessments, and the yield varied according to the membership.  Thus, the Iron Molders paid a fluctuating benefit from 1870 to 1879.[88] Upon the death of a member, an assessment of forty cents and later of forty-five per capita was levied.  At Detroit in 1873 the Cigar Makers inaugurated an endowment plan which provided for the payment of a death benefit, the amount of which was to be the sum raised by an assessment of ten cents on each member.  Similarly, the Glass Bottle Blowers, introducing the benefit as late as 1891, made provision for paying the amount secured by an assessment of twenty-five cents per capita.[89]

[Footnote 88:  Iron Molders’ Journal, Vol. 25, June, 1889; Constitution, 1878 (Cincinnati, 1878), Art. 17.]

[Footnote 89:  Proceedings of the Twenty-fifth Annual Convention, Milwaukee, 1901; Report of Secretary Launer (Milwaukee, 1901).]

When the fluctuating benefits were inaugurated the unions were without experience in the exercise of beneficiary functions.  They could not calculate with any exactness the amount of the assessment necessary to provide benefits in fixed sum.  They preferred, therefore, not to guarantee the payment of any amount.  The character of the first death benefit in the Granite Cutters’ Union illustrates the reluctance of the Union in assuming the responsibility of guaranteeing fixed benefits.  In 1877 they adopted a benefit of fifty dollars, but also provided for an additional voluntary benefit to be raised by an assessment of fifty cents.  After a few years the entire system was replaced by provision for the payment of a fixed funeral benefit.

The fluctuating benefit was very unsatisfactory, inasmuch as the insured member could not be certain as to what amount he would receive, and this uncertainty was aggravated by the voluntary character of the association.  Even where participation was compulsory the fluctuations in the number of members were much greater than at present.