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 role 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.

[Footnote 11:  Locomotive Engineers’ Journal, February, 1867.]

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]