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THE SOCIAL INSURANCE MOVEMENT gggff |
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"It would be basically more sound for the solution to be left to the individual,” declared an American businessman in 1924, referring to old age dependency. But that, he admitted poignantly, presumed "thrift, saving, intelligent investment," and a wage adequate for saving--in other words, "the practice of some of my pet theories which do not work out.”1 American businessmen in the first third of the twentieth century faced the question of welfare with self-contradiction. In their more thoughtful moments they recognized that industrialization implied a need for new provisions for welfare. Rationalizers of business, they cast about for patterns to rationalize the welfare sector as well. But when they did so, they instinctively introduced criteria quite foreign to the goal of maximizing economic security. Their alien criteria cut off available options, and made for a confusion of purpose. Although in business they were practical men, in welfare they imposed upon themselves limits to their own abilities either to rationalize welfare institutions or to attain the ideal of economic security for every individual and family. A few were willing to contemplate compulsory social insurance, but even they did not escape the confusion of criteria and the self-imposed ineffectuality. The reforming spirit of the progressive period was contagious, and between 1900 and 1920 the business community gave social insurance some hearing. Every businessman knew, declared Frank Vanderlip, president of New York's National City Bank, in 1905, that workers were becoming “mere automatic wheels in the great industrial organization." As the worker lost his “industrial independence," sickness, accident, or old age reduced him to a condition worse than in a pre-industrial day. Germany with her social insurance had made the most progress yet toward a solution, Vanderlip continued, and American businessmen, because they found their own affairs ever more intertwined with those of the state, were prepared to accept governmental programs for their workers. It was in much the same tone that Howell Cheney, a Hartford, Connecticut silk manufacturer spoke to the 1914 convention of the National Association of Manufacturers. Cheney, who had already helped the NAM draft a workmen's compensation bill, admonished his colleagues to take the lead in promoting the social principles of mutual helpfulness and cooperation, and not fear to "draft them into definite legislation.” It was a misfortune, Cheney thought, that the "fine old word" “social" had been corrupted into an "ism.” A year later the chairman of the NAM's Industrial Betterment Committee, Ferdinand C. Schwedtman, warmly recalled Cheney's address and called for a study of health insurance.2 Enough business leaders, and organizations came to the support of workmen's compensation to be a factor in bringing on the wave of laws that began in 1911. No subsequent social insurance measure ever drew as much support from the business community, largely because none offered business a quid pro quo nearly as attractive as relief from the chaotic employers' liability system. Yet a scattering of businessmen went on to support compulsory insurance against sickness. Cheney emphasized that businessmen's instinctive objections based on belief in voluntary thrift were irrelevant. The workingman desperately needed protection, he argued, and the hard fact was that he did not have it. Albert W. Whitney, an insurance company official who advocated making health insurance compulsory if necessary, defended the institution in language well suited to businessmen's outlook. Insurance, he argued in 1916, accomplished the good of philanthropy, "without sacrifice of self respect." It was "necessarily social," yet had "the directness and self-centeredness of business." It offered "the advantages of socialism without sacrifice of the virtues of individualism.” And it showed "the inherent compatibility of self-interest and altruism."3 Even the National Association of Manufacturers considered health insurance with favor. Consideration of the reform, declared Schwedtman's committee in 1916, was in keeping with the effort "to apply more rational and more enlightened rules of conduct to our complex business systems." Germany's system of social insurance was "remarkably systematic and consistent." To be sure, "a higher and better method” would be for employers to provide insurance for their workers voluntarily, but some employers simply would not do so. Moreover, the committee had polled members of the NAM, and of 564 who replied, only 192 had opposed “the State or Federal Government taking any action with reference to social insurance." And any form of persuasion government used would "involve features far more objectionable than compulsion." "The State should move cautiously and tentatively" with new experiments, the committee believed; "but, as the evolution of the modern State plainly shows, it must move. It must often subordinate the independence of the individual to the general good; it must work out many of its beneficent purposes by collective means; it must sometimes compel the individual to do that which he ought to be willing to do.” 4 The NAM accepted the Schwedtman committee's 1916 report, but not because of its liberal sentiments. Despite its brave words, the report recommended in the end to hold final approval of a full-fledged system of compulsory health insurance in abeyance. That conclusion represented the position of businessmen far better than the pro-health insurance language. The next year the committee, with a new chairman, and with Cheney as well as Schwedtman having resigned, expressed itself decidedly against health insurance (and against old age pensions as well). Health insurance seemed a "costly experiment" that was built on foreign "industrial conditions and social customs” and offered no assurance of results "practicable for American industry." Moreover, it was "palliative, not remedial.” The palliative vs. preventive argument was a favorite of businessmen. Several reports of the National Industrial Conference Board emphasized that preventive efforts would remove the need for all but a limited amount of insurance, would be infinitely cheaper, and generally better. Another line of attack was that of the National Civic Federation, which on matters of social insurance spoke the voice of its employer members, with labor members either concurring of finding themselves ignored. Its method was to raise myriads of questions about structural details and fictions in foreign social insurance and in proposed American systems, and thereby to convey opposition through certain unexamined assumptions which underlay its questions: that social insurance would not yield a return commensurate with the public expenditures involved; that American government was too irresponsible to operate insurance without corruption; that anomalies in the structures were inherent and inevitable and so serious as to be prohibitive; and that deviation from the rules of private insurance was unsound. Such assumptions represented the mainstream of business thought.5 Those mainstream assumptions had no spokesmen more able than two representatives of insurance companies, Frederick L. Hoffman and P. Tecumseh Sherman, whom businessmen and others inclined to oppose social insurance very often consulted and quoted. Hoffman was Statistician and Third Vice-President of the Prudential Insurance Company of America; Sherman a New York lawyer and a sometime insurance company lobbyist. Both defended compulsory workmen's compensation (if insurance companies rather than state run funds got the carrying trade), Hoffman even serving on the executive committee of the American Association for Labor Legislation until 1916. But they became articulate opponents of other forms of compulsory social insurance, Hoffman especially bitterly, in the health insurance campaign of 1915 to 1920, Sherman with a steady stream of anti social insurance polemics lasting well into the early 1930s. The two men were the anti-heroes of the social insurance movement, as well versed in the issues, the technicalities, and the foreign data as any hero. Hoffman especially could argue from genuinely welfare criteria, insisting with a display of statistics that German health insurance had not improved health, or pointing out that compulsory systems tied to wage contributions did not reach the poorest of the poor. Both professed a deep wish to find solutions to the problems of economic security. 6 But like their eager business audience, Hoffman and Sherman freely mixed into their professed concern for welfare a set of criteria that worked against the central goal of maximizing economic security. They protested departure from the rules of private insurance. “Nothing is insurance in the true sense that rests on compulsion and on a state or an employers contribution,'' Hoffman pronounced in 1915, of health insurance. "It is simply a modified form of taxation." They opposed use of state subsidies to shift economic resources to creating security for low-income classes, except perhaps to bolster voluntary effort. Sherman was sure that in compulsory insurance this "socialistic purpose” would eventually “effect such an extensive transfer of wealth as to amount to what may be fairly termed expropriation;" while Hoffman argued that the state should direct its social policy to the frugal and hard working who with proper institutions could support themselves, not to the residuum of very poor. “It is not sympathy with suffering that is needed, but sympathy with hard struggling,” Hoffman paraphrased the Social Darwinist William G. Summer, “but unhappily, most of the kindly thought of the world is wasted upon those who least deserve it.” Both men staunchly championed voluntaristic solutions. It mattered not that voluntary insurance would reach far fewer of the poorest poor than the compulsory systems, which Hoffman criticized on that very point. The two men reinforced their voluntarism, during and after World War I, by emphasizing the autocratic, paternalistic German origins of social insurance as against the spirit of self-reliance in American institutions. Most of the criteria by which they got the ear of businessmen but compromised the goal of maximum economic security were the criteria of a laissez-faire social fundamentalism. 7 While the businessmen who applauded Hoffman, Sherman, and others of their persuasion wished to retain fundamental traditions, scarcely any, at least of the articulate, thought that existing institutions of welfare were either rational or sufficient. From within the business community came voices, growing louder in the progressive era and shouting down almost all pro-social insurance sentiment in the 1920s, calling for businessmen aggressively to promote non-governmental welfare institutions. Sometimes they took the COS tack of preaching better coordination and supervision of local private charity, fostering the relational approach and some highly discretionary public relief as its complements. Sometimes they advocated making the business firm the unit of welfare by attaching employee benefit systems to it. Both efforts involved attempts to rationalize the welfare sector. But each method exposed its own inherent limitations. In their local communities businessmen and business organizations were leaders in developing forms of cooperation that gave private charity a new lease on life by the mid-1920s. Community chests and local councils of social agencies had roots, of course, in the charities endorsement committees that city Chambers of Commerce and Boards of Trade began to form well before World War I to relieve individual businessmen of the burden of investigating the many requests for funds. By circulating lists of charitable agencies, which they deemed to be well-governed, sound in their methods of fund-raising and bookkeeping, and not guilty of overlapping other agencies, the committees wielded very effective power in charitable matters. To be sure, with the evolution of the chests and social agency councils the businessmen lost some of their leverage to agency executives, but certainly not all. As St. Louis Community Fund and Council Director Robert Kelso paraphrased their attitude in 1928: “Maybe we don’t own this Chest; but the crowd [who run the agencies] ought to know that we control it.”8 The ancient alliance between business and private charity persisted through all changes in institutional forms. The case of Walter Gifford, president of the American Telephone and Telegraph Company, was illustrative. The New York Charity Organization Society made Gifford its vice-president in 1929, president in 1931 and for a decade thereafter. In 1931 and 1932 he also was Director of President Herbert Hoover's Organization on Unemployment Relief, which relied on local municipal and private relief for meeting the depression crisis. In conjunction with their belief in local, non-governmental methods, businessmen supported the personalized, relational, casework principle. Arguing against public old age pensions early in 1930, Gifford declared that Americans had developed a “science” of welfare suited to its own conditions, and “the essence of this science is that each case shall have personal and individual treatment by people trained to discriminate." Discriminating charity had to depend on private support, Gifford argued, because the state had to dispense its largess under “general rules,” without distinctions. Myron C. Taylor, Chairman of the Board at United States Steel, agreed. Only private relief, he argued in 1934, could offer “individualized help," "neighborly and friendly services,” and “an American quality of social compassion.” Only private family welfare agencies could “tackle the problems of proper human relationships." Similarly the NAM, in a major statement against unemployment insurance in 1933, invoked the names of British COs founder Charles Loch and American case-work apostle Mary Richmond and declared that “the case-work principle . . . is the only sound method of relief.” Indeed, the NAM quoted a Harvard Professor of Christian Morals, it was “a reiteration of the teaching of Jesus." 9 Realistically, however, businessmen could not deny some need to resort to government and its treasury. At that point their attitudes became highly paradoxical. They took for granted that public poor relief was evil, and stigmatized social insurance for allegedly partaking of its essence. "Indiscriminate poor relief, pure and simple, merely disguised in name and in a form peculiarly liable to abuse and fraudulent imposition," an NCF committee declared of British and Danish old age pensions in 1914. In the 1920s businessmen continued such epithets against old age pensions, but shifted their loudest sneers to unemployment insurance, especially Great Britain's "shameless dole." It mattered not that the British system was contributory and highly structured, for when its funds ran low in a decade of heavy unemployment the government had departed from actuarial principles to grant “extended” benefits from public funds. As the National Industrial Conference Board’s Chief Investigator Leslie Vickers declared in 1932, when social insurance systems departed from private insurance principles they “in effect cease to be practical insurance schemes and become rather relief plans.”10 By such words, however, businessmen denounced only the mixing of relief with insurance, and did not totally reject the relief principle. Despise poor relief they might, but they continued to tolerate it, or modifications of it that were closer to traditional relief laws than was social insurance. If there had to be doles from the public treasury, most businessmen believed, they should be in forms that were ad hoc and highly discretionary. Those forms fell within the tiny increment between traditional poor relief and the "public assistance” approach. As late as December, 1934 the NAM retained the tone of the traditional method when, stating its principles of "social security," it called for relief but not “so extravagant that it undermines the morale of those who receive it, becomes the permanent form of income for a substantial part of the population,” and "eventually bankrupts the nation." A bit more reformist, the NCF suggested the "public assistance" approach as early as 1920. Rejecting social insurance, particularly health insurance, it called for a "thoroughly reconsidered and materially improved method of domestic or domiciliary assistance.” The new assistance was to be geared to the poorest of the deserving poor, not to paupers, and be therefore “clearly differentiated from poor relief.” Later the NCF advocated the proliferation of Boards of Public Welfare as an alternative to old age pension systems, preferring that relief be given "as occasion demands and not upon any set formula.” Even when businessmen tolerated the word “pension,” they stuck to quasi-poor-relief concepts. In 1932 the United States Chamber of Commerce defended "old age pension and relief laws” if they "grant no vested right to a pension of a stipulated amount" and if funds were administered “by local authorities on a discretionary basis.” Such aid, the Chamber was confident, would neither remove incentives to thrift "nor constitute a needless or prohibitive expense to the state or local governments.” In 1931 the NICB reported that employers who favored old age pensions and those who opposed scarcely disagreed, for those in favor conceived them as more closely related to poor relief than to social insurance, and those who opposed approved of “carefully restricted poor relief distributed in the form of pension allowance” to certain of the aged. 11 In sum, businessmen had to concede that some public relief was necessary, but most did not want it institutionalized, with fixed rules and legal or vested rights for recipients. They wanted it individualized, discretionary--and economical. In their support of non-governmental, local charity the businessmen walked the maze of the COS movement. From endorsement committees to community chests they tried to make welfare rational by streamlining the administration of private charity. But then they retained the particularistic, relational approach, and reluctantly had to let even private charity's big ugly sister, discretionary poor relief tag along. Consequently they, like the COSs, could make little progress toward the goals either of rationality in welfare or of genuine security for the dependent. So they turned simultaneously to another path. "It is essential that employers because of their superior intelligence and commanding position, should take a leading part in helping to improve the intelligence, thrift, and character of their employees,'' declared the NAM committee that rejected compulsory health insurance and old age pensions in 1917. This could be "done with unquestioned mutual gain to both employer and employee.”12 In the dozen years following 1917 “welfare capitalism” whereby business firms treated employees to everything from baseball clubs to personal counseling, would of course reach the height of its repute. Insurance, pension, and other benefit systems were prominent in welfare capitalism, and businessmen who commented on the problem of the worker’s security gave such systems a place of highest honor. Discretionary public relief was enough for ne’er-do-wells and unemployables, personalized private charity the ideal way to aid some others; but only benefits from the firm in which he produced seemed proper for the self-respecting, productive workman. Occasionally businessmen included trade union and fraternal systems in their high honors, but they favored employer plans. Even those willing to contemplate a governmental role sometimes wanted government to begin by regulating, encouraging, and possibly subsidizing the voluntary efforts, and favored compulsory systems only as a last resort. Welfare capitalists promoted their benefit plans as a peculiarly American method. Actually, like state insurance, the plans had foreign precedents: the railroad benefit programs that spread across Europe after their beginnings in Belgium and Holland in 1845, the pensions the Krupp Steel Company of Germany gave its retired employees, the unemployment compensation that the Carl Zeiss Optical Works and several other German firms provided. In America one of the first harbingers of twentieth century welfare capitalists was piano maker Alfred Dolge of Dolgeville, New York, who established among other programs a mutual sick and accident benefit society for his employees in 1881, plus an old age pension system in 1882; and Dolge had been born and reared in Germany. But the industrial benefit approach took on a native flavor when many major American railroad lines established systems between 1875 and 1910, and after 1900 such famous American manufacturers as Standard Oil, International Harvester, and U. S. Steel followed suit.13 Most plans offered some combination of accident, sickness, invalidity, survivors and./or old age benefits. Their provisions and degree of structuring varied widely: from mutual-aid societies that operated haphazardly on a subscription basis and put the burden of contribution or, the workers; through pensions that employers granted gratuitously and sometimes capriciously to exceptionally faithful employees; to fully structured systems, using actuarial principles and perhaps even insurance companies as carriers. In 1916 the Dennison Manufacturing Company of Framingham, Massachusetts went the further step of establishing unemployment compensation, and a few other firms followed. Most prominent were the General Electric Company, which introduced a plan in 1930, and eighteen Rochester, New York companies with a plan, which the United States Chamber of Commerce endorsed in 1931.14 The unemployment compensation plans also varied, although none ever achieved full actuarial structuring. Labor unionists constantly denounced industrial benefit systems as devices for fighting unions; and employers sometimes lent color to their charges, as when General Manager Edward J. Nally said of workers striking against his Postal Telegraph Company in 1908 that “all of them have discharged themselves" and even those who returned would love their pension rights.15 Nevertheless, welfare capitalist devoted much more discussion to preserving and strengthening their systems than to making them more directly anti-union. The plans challenged unionism, but less as strategy for direct battle than at the higher level of rival concepts of social organization. Like unionism the plans were collectivist, for they represented a solidarity and a kind of socialism within the limits of the firm. Too much "competition often leads to demoralization, ambition to crime, independence and self'-reliance to defiance and rebellion," explained J. C. Bartlett, superintendent of the Burlington railroad's benefit system, in 1897. American labor, already highly independent and self-reliant, now needed "to be induced to see the mutual advantage to itself and its employers of cooperation, interdependence, and mutual reliance."16 Few welfare capitalists espoused intra-firm socialism so explicitly, but their collectivism was implicit. Envisioning themselves as social leaders, and perceiving little conflict of interest between themselves and their workers, they imagined collectivist lines of cooperation running vertically between worker and management in the company, not horizontally among the entire working class. And they conceived welfare institutions that would embody the vertical relationship, preferring them to the more horizontal governmental insurance. Within the framework of their social philosophy the businessmen indulged their propensity to judge welfare institutions by non-welfare criteria. Some used humanitarian arguments that suggested direct concern for employees' economic security, but as, their discussion advanced such sentiments receded into the background. In a typical remark D. R. Kennedy of the B. F. Goodrich Company's Labor Department declared in 1917 that his company had recently established a system of health benefits "from the standpoint of good business” with “no maudlin sympathy or humanitarianism about it at all." (A moment later, however, with an inconsistency that was nearly as typical, Kennedy assured his hearers that employers were “broad-minded” and "philanthropic," “not cold or stony hearted.”) "Industrial pension plans, generally speaking, have for their ultimate purpose the improvement of industrial relations," declared the NICB in 7925. Employers saw in them means of promoting "continuity and constancy in employment," stabilizing the working force," “stimulating loyalty and efficiency,'' and “creating contentment and good-will among employees.” Moreover, a definite as well as Humane method” for retiring the superannuated was “well adapted to raise the level & efficiency in the active force." The ideal of efficiency, of course, had great appeal. As he discussed sick benefit systems in 1928 a man such as H. M. Trimmer, president of the Brooklyn Chamber of Commerce Management Club, might express concern that benefits to the worker be adequate, but his keynote was the efficiency be gained by detecting and preventing sickness and reducing absenteeism.17 Businessmen constantly discussed how to improve the structures of their plans, and in such discussions also they demonstrated their tendency to make genuinely welfare criteria secondary, or at least indirect. Many early plans needed rationalization, primarily on two counts: haphazard financing, the companies neglecting especially to set aside reserve funds against accruing liabilities; and failure to vast contributions for old age benefits immediately in the worker's account, so that he could be really certain of receiving an annuity in the end. So discretionary were industrial pensions, and so tied to the worker’s remaining with one firm until retirement, that in 1912 Boston reformer Louis Brandeis attacked them sharply as a new form of industrial peonage." Especially effective in exposing both indifferent financing and lack of vesting was a 1925 decision of an Illinois court, which ruled that when Amour & Company purchased the competing firm of Morris & Company in 1923 it took on no obligation to honor Martin employees’ claims against Morris’ defunct pension fund. Gradually a few firms adopted the "group annuity” approach of working through an insurance company to provide well-financed, well-vested systems--an approach insurance companies energetically cultivated. Business organizations developed sophisticated discussions of how to structure plans in the interest of solvency, and many employers took a step toward vesting by using "contractual” systems that returned the employee's contribution to him (often, however, without interest) if he quit the firm before retirement.18 Yet the discussions seemed directed more to the companies' than the workers’ solvency, and sentiment for vesting lagged. Employers did not want their pension contributions to benefit workers who resigned before retirement, declared the NCF Industrial Welfare Department in 1926. To have them do so was, from industry's viewpoint, “far from ideal, since it fails to recognize the greater value of continuous service." In 1931 the NICB showed little alarm that "probably every pension plan has a clause absolving the company from legal liability to make pension payments and also providing that the plan may be discontinued at any time or on giving due notice to that effect." Pensions expert Murray Latimer, completing a massive study of industrial plans in 1932, concluded that recent restructuring of many plant had generally put them on a sounder financial basis, but made benefit and contribution patterns less liberal, with lower cost to employers.19 Thus, while businessmen rationalized their systems in the 1920s and early 1930s, they did not necessarily institutionalize them around employees’ economic security as their primary goal. The plans exhibited two other major weaknesses. They simply failed to cover many workers. In 1930 an NAM committee suggested that if plans increased in the next twenty years as fast as in the twenty just past they might avert "passage of socially and financially burdensome social insurance legislation.” What the NAM did not say was that such progress would not nearly solve the economic security problem. In 1934 only about one industrial worker in ten could look forward to retirement benefits from his employer. Fewer than 100,000 had the protection of company unemployment insurance plans. Of them more than half were General Electric employees; about 20,000 others were employees of the Rochester firms. And in the depression General Electric had invoked a series of emergency measures with the general effects of making employees pay a share of the costs and putting benefits on a discretionary needs basis. Several Rochester firms were unable to keep up their unemployment insurance contributions and never paid benefits, and for those who did, there was a built-in arrangement for shifting part of the cost to the employee in depression emergencies. Of twenty-one other company plans ever attempted seven had failed and others undergone drastic alteration just when workers needed them most. The second weakness was the cavalier manner in which businessmen abjured all responsibility for any but their steadiest employees. Rationalizing that weakness, Reinhard Hohaus, Jr., Assistant Actuary of the Metropolitan Life Insurance Company, distinguished between an "industrial group" of workmen who produced steadily and a "social group'' who were not very productive, and argued that industrial systems be tailored to the "industrial group." The "social group" would have to depend on the "funds of the community as a matter of relief." Implicitly such arguments suggested that businessmen should select only the best risks, and consign their casual employees to the inferior status of recipients of public and private charity. In discussions of industrial unemployment benefit systems in the early 1930s, businessmen again insisted that their responsibilities ended with the stable part of their work forces. The public should care for the chronically underemployed and unemployed, treating them a class apart from those fortunate enough to be steadily productive.20 Businessmen promoted non-governmental institutions of welfare because they recognized the need for some aid to the dependent and wanted it given in business-like, more or less rationalized ways. But on the one hand they tied their efforts to the unsuccessful COS approach, and on the other they tied them to their own interests, to the ability of their firms to make profits, and to the worker's being highly productive. Under their non-governmental approach only a few workers could enjoy the protection of dependable, automatic, non-discretionary devices for welfare. The employers mixed too many criterion alien to welfare with the central criterion of maximizing economic security. Most businessmen viewed industrial benefit schemes as alternatives to state insurance, often promoting their adoption explicitly to forestall government action. But, occasionally an industrial leader reasoned that if business firms' limited plans were good, plans promoted by government might be even better. Some hesitated at the edge of the social insurance movement. In 1931 Gerard Swope, president of the General Electric Company, stimulated wide discussion with a "Swope Plan" whereby-in order to stabilize the economy--government would allow businessmen to regulate competition through federally-supervised trade associations. One responsibility of the associations would be to establish, in cooperation with employee representatives, systems of life, disability, old age, and unemployment insurance. Marion B. Folsom, Assistant Treasurer of the Eastman Kodak Company, was a prominent propagandist for soundly financed industrial pensions systems and a chief architect of the Rochester unemployment reserves plan, and much preferred private to public action. But by early 1934 he was ready to concede that unemployment insurance legislation was imminent and to offer advice as to its formulation, and in 1935 he gave congressional committees effective testimony in favor of the old age insurance sections of the social security program.21 Others moved more quickly from private to public proposals, and supported social insurance less equivocally. In 1917 Edmund Huyck, an Albany woolen manufacturer, elaborated on the benefits his company's health insurance plan had brought employees and suggested that the benefits be made universal through compulsory health insurance. To bring in the state was merely to add another interested partner to the enterprise, he argued, "and you are extending its benefits to great numbers who could never get them from individual employers." Throughout the 1920s successive versions of Wisconsin's pioneering Huber employment compensation bill drew outspoken opposition from the Wisconsin Manufacturers' Association, but Herbert Johnson, president of the S. C. Johnson Company of Racine, propagandized in the bill's favor. He argued from the precedent of his own company's unemployment reserves system. So also did Henry S. Dennison of Massachusetts, president of the first company in the nation to establish an unemployment compensation plan.22 Johnson, Dennison, and other business leaders who spoke out for unemployment insurance in the 1920s and early 1930s--most prominently Ernest G. Draper, vice-president of Hills Brothers Company; Edward A. Filene, Boston merchant and philanthropist; and Samuel A. Lewisohn, vice-president of Miami Copper Company--drew sustenance for their ideas from welfare capitalism's most liberal wing, the cult of scientific management. In 1920 Dennison served as president of the Taylor Society, named for scientific management's founding prophet, Frederick W. Taylor. Others were prominent members of the Taylor Society or of the American Management Association, Filene especially enjoying an international reputation for advanced ideas on management. More than most businessmen the scientific management cultists were in touch with ideas from outside the business world. Their discussions frequently drew upon economists such as John R. Commons, Paul Douglas, J. Douglas Brown, or Herman Feldman; on social workers such as Paul Kellogg or Mary Van Kleeck; or on pension and unemployment compensation experts such as Murray Latimer and Bryce Stewart. The discussions by no means exposed unanimous belief in governmental social insurance. Industrial benefit plans enjoyed much surer approval, and occasionally a voice spoke up for leaving the individual pretty much to his own security devices. But among the adherents of scientific management the atmosphere remained open to the compulsory insurance solution, and there rang some voices firm in its support. By 1931 Harlow S. Person, long-time Managing Director of the Taylor Society, was ready to declare flatly that “unemployment compensation should be obligatory on all industry." 23 The scientific management school emphasized that business existed to serve people. Its disciples, in their rhetoric, frequently reversed the usual relation of business to welfare, and spoke as if human welfare were the direct goal and profits the incidental one. To be sure, many times their thinking got little beyond the facile assumption that maximum welfare would follow automatically from efficiency, increased productivity, and high wages and profits; but some-times it went further. By the late 1920s scientific managers increasingly assumed that the wealth that increased productivity created was social wealth, to be allocated not by individual businessmen or workers but by collective decisions, perhaps by some social mechanisms. In 1928 Persons raised a vigorous discussion in the Taylor Society by suggesting that instead of shortening workdays and workweeks, society use its increased wealth to lessen the number of working years per life span. Although he did not specify public old age annuities, Person declared that "each generation as a group should so organize the distribution of the social income that individuals collectively may enjoy similar benefits." In the ensuing discussion Elliot Smith, Professor of Industrial Engineering at Yale, struck a note of consensus by declaring that management had no right to dictate all of the worker's economic affairs, and that therefore it should foster insurance either through workingmen's organizations or through "community or social action." "I think Dr. Persont's ideas will pass through the same channels as workmen's compensation insurance," declared F. L. Sweetser, General Manager of the Dutchess Manufacturing Company, a firm very progressive in providing industrial benefit plans. 24 Most importantly, scientific managers habitually thought in terms of rationalizing procedures and methods. Rationalization of business was, of course, their central interest. To be sure, a large part of their effort was personnel management, more reminiscent of the caseworkers' attempt to manipulate and rationalize personal behavior than of the approach of social insurance advocates, to manipulate and rationalize economic structures. Gradually, however, scientific managers turned some of their attention from personnel management to coordination of managerial decisions and the smoothing of the flow of goods and services. They addressed themselves to ever-wider units. First they worked for efficient operation of the production line in the shop, and then for cooperation among various departments within the firm. Finally they began to visualize forms of planning that would coordinate all firms in an industry, or even all industries in the nation. By the early 1930s scientific managers looked longingly to the trade association as an instrument for economic stabilization. Person even admitted reluctantly that his own thought pointed in the direction of Russian-style economic planning, although he refused to follow the logic to its extreme.25 Planning was again rationalization of a different sort from social insurance: planners aimed to organize all aspects of business into rational relationship; social insurance advocates concerned themselves first with a rationalization of the welfare sector, to correct the failure of an irrational business system to distribute rewards according to an acceptable standard of welfare. Yet the two approaches could be complementary. Scientific management cultists who supported social insurance gave most attention to the hazard of unemployment, and tried to structure unemployment insurance to promote their larger goal of business stabilization. Had not promotion of safety been the chief benefit of workmen's compensation? Welfare capitalism and its liberal wing, scientific management, by no means pointed their adherents automatically to social insurance. But persons inclined to look could find in them strains of thought that were sympathetic, especially in the Taylorist cult. Scientific management theorists even more than most welfare capitalists’ emphasized that human well-being was the direct purpose of business. They began to consider the allocation of the fruits of increased industrial production as a large, social problem. And they thought in terms of rationalized procedures. * * * * * Business spokesmen, who supported social insurance, whether from a pre- World War I progressive orientation, a scientific management outlook, or other attitudes, were more liberal than the vast majority of their colleagues in accepting an active role for government. Nevertheless, they were still a part of the business community and adhered to its values. When they contemplated the details of social insurance structures, those values were operative. In common with their colleagues who opposed social insurance, businessmen-advocates mixed criteria in a way that almost obscured the central purpose of welfare institutions, that of maximizing economic security. Virtually all businessmen placed the ideal of preventing hazards before they occurred above the more direct goal of adequate compensation to those in need. Among opponents, when the NICB published a pamphlet in 1918 entitled “Sickness Insurance or Sickness Prevention?” it posed a dichotomy that, however false, was a cornerstone of most businessmen’s welfare thought. Preventionism was a bit more difficult to apply to the old age hazard, but in 1917 the Boston Chamber of Commerce opined that old age pensions, being “remedial, not preventive,” were of “less value socially” than workmen’s compensation. When unemployment insurance became an issue in the 1920s and 1930s, opponents revoked the prevention argument with new vigor. Given American traditions, recited American Bankers’ Association president Rome C. Stephenson in 1931, “industry’s real contribution can and should be along an entirely different line….It’s plan should be one of prevention of general unemployment rather than attempt to patch up with doles a situation created largely by lack of industrial foresight.”26 Opponents generally assumed further that under businessmen’s management insurance would retain a preventive character, but governmental programs would inevitably degenerate to relief. Hohaus in 1926 promoted group annuities for his “industrial group” as preventive—not of old age but of old age poverty—in contrast to the relief the “social group” would receive. Although businessmen had often spoken as if governmental health insurance could do nothing to prevent sickness, a writer in the conservative business journal Law and Labor declared of a national conference on industrial sick benefit systems in 1928 that “the key to this work is to help men keep well rather than serve as a substitute for charity.” On unemployment insurance, when the United States Chamber of Commerce recommended the Rochester plan in 1931 it presented it as a device aiding long-term stabilization of business. But it simultaneously declared that compulsory unemployment insurance in Europe had always degenerated into “outright government payments, as in the English dole,” and that therefore “unemployment is not…a practical field for governmental intervention.”27 No cliché of the social insurance discussion was more durable than that prevention was better than relief, and scarcely anyone invoked it with deeper reverence than did businessmen. Nor was it only opponents who intoned the liturgy of preventionism. When businessmen supported social insurance they zealously preached the preventionist creed. Supporting workmen’s compensation in 1911 the NAM's Schwedtman and its General Counsel James Emery declared that "prevention of accidents is of even greater importance than equitable compensation to injured workers," and in so saying spoke typically of all businessmen. While it rejected old age pensions in 1917 as non-preventionist, the Boston Chamber of commerce was willing to consider health insurance partly because it accepted the argument that the reform would reduce the incidence of sickness.28 And the power of unemployment insurance to stabilize business was the message that attracted scientific management apostles to that reform in the 1920s and 1930s. "Insofar as unemployment insurance can be worked out so that it is chargeable directly to industry and to an organization in proportion to its percentage of regularization, it can be considered a preventive measure,'' declared Richard A. Feiss, General Manager of the Joseph and Feiss Clothcraft Shops and vice-president of the Taylor Society, in 1921. Businessmen advocated the technical structures that they thought embodied the preventionist goal. They supported the idea embodied in the original Huber bill in Wisconsin of "merit rating," the adjustment of an industry's or a firms premium to its record of maintaining steady employment. Or they rejected broad pooling of reserve funds and supported bills such as the American Association for Labor Legislation's 1930 "American Plan" which called for separate pools in each industry, or the more radical idea in the Wisconsin law of 1932 which provided a separate fund for each individual firm, on the theory that separate funds would make each employer feel the costs of his own unemployment. Or they supported another feature of the successive Wisconsin bills, that of putting the premium burden on the employer, on grounds that he, not the worker, could reduce unemployment. In 1931 Draper suggested a "state dismissal wage act'' that would have put the cost of unemployment on the employer even more directly: he would have to pay any worker he discharged for a cause other than misconduct one month's wages, either in one lump or in nine weekly installments. In the same year Filene, assuming that state insurance would pool the contributions of efficient firms with the inefficient, urged businessmen to support a law that would exempt firms with private unemployment benefit systems. Astute employers would establish their own plans, and reduce their insurance costs by regularizing their employment.29 The suggestions varied, but in each the faith in preventionism would determine the structure of the system. Faced with the spectacle of unemployment insurance supporters appropriating the preventionist doctrine, businessmen who opposed social insurance began to doubt the preventionist faith. Against the stabilization rationale of the Huber bill, Fred H. Clausen, ex-president of the Wisconsin Manufacturers Association, protested in 1924 that businessmen could not "conceive of an earthly state" in which government would give them the control of the economic system they would need to stabilize business. In the depression years of the early 1930s the NAM suddenly pleaded impotence, despite its earlier faith in employers superior wisdom and consequent responsibility for workers security. Emery, the chief NAM propagandist, declared that unlike in workmen's compensation there was only the slightest connection between managerial policies and the hazard, “Broadly speaking," he argued, neither individual or corporate employers can control the circumstances that make for the rise and fall of . . . demand." The Chamber of Commerce and the NICB echoed similar abjurations. The dissents, of course, contained much truth. Scientific managers were utopian. "The appointed mission of the Industrial Engineer," effused The Society of Industrial Engineer Bulletin in 1922, was “to guide humanity out of the shadow of darkness into a light where Utopianism and Realization be no more terms mutually exclusive." 30 Especially naive was scientific managers’ assumption that unemployment was primarily a problem of the firm, of smoothing out the fluctuations of seasons and style changes, and that if individual firms quit triggering depressions the entire economy would stabilize.31 In the 1920s the school began to outgrow the limits of such microeconomic analysis, to be sure. But those who supported unemployment compensation had formed their thought in the earlier days, and also represented firms that had made reputations with their stabilization plans. In the trauma of the early 1910s several businessmen accepted the truth of the dissent and suggested unemployment insurance plans that scarcely emphasized stabilization. The belief that employers could do much to prevent depression unemployment was "fantastic," declared Lewisohn in 1933. He suggested making the unemployed worker wait as much as sixty days before receiving benefits, to gear the system not to prevention or even to short-term unemployment, but to depression relief. On the premise that unemployment was a permanent problem, Ralph Flanders, president of Jones and Lamson Machine Company and a self-styled philosopher of business’ changing social role, in 1934 suggested coordinating unemployment insurance with permanent systems of public works and youth camps. Robert Elbert, Board Chairman at the International Holding Corporation, believed that "the primary object of unemployment insurance is to afford a guaranteed income to workers when they are unable to find jobs,'' and in 1934 joined with retired financier William E. Woodward to propagandize for a plan with benefits running as long as a half-year.32 But such men made their suggestions very late, and did not represent the majority consensus among the businessman who spoke out for unemployment insurance in the long period of discussion. The dominant theme of that consensus was preventionism, making stabilization of business the primary object of the reform. It was a theme that demonstrated how willing were even the businessmen who supported social insurance to make direct guarantee of income only an indirect goal. Businessmen friendly to social insurance, near-supporters, and others who commented on the principles upon which the institution should be built espoused not only preventionism, but other criteria less relevant to welfare institutions. Preventionism may have been a chimera, but at least its apostles preached it as an indirect method for maximizing economic security. Other criteria diluted or even worked at cross-purposes with that central goal of welfare. Often business spokesman tried to work the ideal of private initiative into public social insurance measures. In the case of workmen's compensation, the NAM at first was willing to tolerate state-administered funds if established insurance companies or employers’ mutuals could compete alongside, but by 1920 it advised states to limit their role to supervision. By then virtually all business groups were unanimous against the state funds. Insurance company official Albert Whitney wanted to use private carriers also in health insurance, professing to have only the well-being of workers, employers, and the insurance system at heart, he argued in 1916 that there was no warrant for excluding insurance companies, and that the currently proposed non-profit, locally-organized mutual funds would unwisely put insurance in inexperienced hands, In the later period the faith in private initiative reappeared in proposals such as Filene’s 1931 plan to exempt firms with private systems from public unemployment compensation, or Draper’s dismissal wage plan which did not include state machinery for insuring the liability it would put upon the employer. Draper defended his plan as steering "clear of too much government interference."33 Fidelity to private initiative kept some reform minded employers, potential supporters of social insurance, hovering timidly at the movement's edge. In 1917 John Crowell, Executive Officer of the New York State Chamber of Commerce, recognized that a proper American solution to the social insurance question would have to incorporate “the view-point of socialized institutions" and the collective welfare," Yet Crowell adhered zealously to belief in the Franklinian virtues, including private, especially individual, initiative. In terms of his dilemma, Crowell’s solution was ingenious. He suggested that to avoid transferring responsibility from the individual the state simply require each worker to insure his own sickness and accident risk, through any carrier he chose, as a prerequisite for getting a job or a marriage license, or even for retaining citizenship. If the person forfeited his individualism to the point of entering "certain kinds of social and industrial relations Crowell argued, he should accept a social means of assuring his welfare as a "concomitant.” A somewhat different attempt to reconcile private initiative with the recognized fact of social interdependence appeared most prominently in the later period in the Swope plan. Although Swope envisioned a permissive and supervisory role for government, he argued that "organized industry should take the lead,” recognizing its public responsibilities, rather than that democratic society should act through its government." 34 Swope and others made such statements axiomatically, not after a technical examination of whether reliance on private effort would provide the strongest guarantee to the workers income. Another criterion to which businessman gave high priority was observance of private insurance rules for relating risks, contributions, and benefits. Discussing health insurance in 1919, Howell Cheney specified that, except for adjustment for different levels of risk, benefits should be directly proportional to contributions, which in turn should be directly proportional to incomes. Thus he rejected any adjustment to assure that the benefits to low income workers would be truly adequate. In the same spirit he wanted employers and the state to pay only such contributions as reflected their shares of responsibility for maintaining workers’ health, and argued that an individual known to be susceptible to disease would have to pay a larger part of his premium, his employer and the state a smaller. Whitney meantime insisted that assignment of benefits strictly according to contributions and risks was necessary to reflect a proper social theory. “Nothing will go further toward the establishment of a proper basis for social and economic adjustment than a pitiless cost accounting. . . , “ he declared, “any system that conceals and wrongly distributes the cost of production or that hides with the cloak of philanthropy the cost of decent living to that degree serves to prevent social equilibrium,'' As the discussion shifted primarily to unemployment insurance, private insurance criteria persisted. Businessmen, insisting that unemployment could not be predicted actuarially, usually spoke of unemployment "reserves" rather than "insurance," partly to emphasize that a worker should have no claim to benefits once a given reserve fund was depleted. Not only outright opponents, but a near-supporter such as Marion Folsom, or an outright advocate such as Lewisohn, assumed that public unemployment insurance had to operate within the limits of the reserve fund accumulated in advance and therefore was not a solution that could relieve existing unemployment in the early 1930s. 35 They overlooked or rejected the idea that social insurance could depart from the rules of private insurance and use the taxing power of government rather than systems of reserves for its financial guarantees. "Unless the emergency, relief is granted frankly as such and not grafted upon the insurance system," explained the NICB in 1931, "the result is to destroy the insurance basis of the system and transform it into a state supported agency of unemployment relief."36 At bottom the businessmen's sensitivities rested less on reverence for private insurance principles, no doubt, than on another criterion: continued antipathy for allowing relief to become non-discretionary. Virtually no businessmen wanted to build into any permanently structured machinery the power of redistributing wealth. Anti-relief in matters of social insurance, the businessmen de-emphasized the ideal of financial aid to people in time of need, in the form of truly adequate direct compensation. In 1911 J. Walter Lord, an NCF official, indicated that he would accept workmen's compensation as a piece of industrial regulation, but not as a "communistic" device to eliminate pauperism. In line with the NAM statement of the same year that prevention of accidents was more important than compensation of the injured, the NAM, the National Metal Trades Association, the National Electric Light Association, and the National Founders Association evolved a proposal by which the injured employee could normally expect to bear well over half his wage loss. Before injury he would pay one-fourth of the insurance premium; after injury he would have to wait a full two weeks, then receive compensation at half the wage rate, with a minimum of $5 and a maximum of $12 per week. Adequacy of benefits scarcely grew more important to businessmen in further discussions of social insurance, as their unemployment insurance proposals showed. The Elbert-Woodward plan, with benefits as high as 65% of the wage and lasting as long as 26 weeks, was highly exceptional. Draper's proposal of a month's salary spread over nine weeks was much more typical.37 In principle, businessmen generally preferred contributory systems of social insurance to those that gave their benefits purely from the public treasury. While it firmly rejected gratuitous old age pensions in 1917, the Boston Chamber of Commerce seemed willing to contemplate old age insurance on a contributory basis (perhaps because it was not an imminent threat). The NAM in 1930 was no social insurance supporter but, concerned for those "most valuable assets of American character,' thrift and self-reliance, it held a clear opinion on the gratuitous v. contributory issue; "unsoundness is piled upon unsoundness," it declared, "when such laws provide pure doles from the public treasury." The issue was most relevant in the problem of old age security. In practice, paradoxically, businessmen supported gratuitous old age pensions more often than they called for contributory old age insurance. But they did so thinking of little more than upgrading discretionary poor relief. Those who viewed the issue as a question of social insurance tended to think contributory old age insurance as intrinsically better. Actually businessmen did not develop a very extensive discussion of the structural features of public old age security systems. Perhaps their reticence was partly due to the fact that old age security presented them a revealing dilemma. On the one hand they did not want to make gratuitous aid automatic by building it into non-discretionary mechanisms; but on the other they cringed at the thought of a vast system of compulsory old age annuities, which implied extensive governmental machinery, and perhaps national rather than state administration with concomitant systems of health, invalidity, and survivors, insurance.38 Once again extraneous criteria held them back from the pursuit of maximum economic security for workers. But their utterances suggested that they thought contributory systems superior to gratuitous pensions, in principle. Businessmen almost always believed that the workers should pay part of the contributions to various social insurance programs, at the least enough to give them a sense of participation, at the most a substantial portion. NAM spokesmen argued for workers' paying one-fourth of the cost of workmen's compensation on grounds that it would prevent fraud and “contamination of those qualities of thrift and self-reliance," make them more safety-conscious, and reflect roughly their share of responsibility for accidents. Men such as Whitney and Cheney insisted that in order to make the health insurance system preventive contributions should be levied on employers and employees and perhaps the state in proportion to the responsibility of each for sickness; and Chaney was sure that "the greater amount of our disabilities is fairly traceable to the person suffering them." Scarcely any businessman discussed public old age security programs in enough detail to specify contribution structures, but in his semi-public proposal Swope called on workers at least to match the employer's contribution, and in some cases to pay the larger share. Proponents of unemployment insurance also favored worker contributions. Even Person while accepting the doctrine of the Wisconsin bills that making the employer pay the heaviest burden would promote preventionism, allowed for some token employee contribution; and virtually all others who commented on the issue favored as much or more. As usual, supporters of social insurance shared the assumptions of the larger business community on the point. The tendency in unemployment compensation, declared the NICB in 1933, with obvious reference to Wisconsin's lone law, seemed to be to take the easy way and put the whole burden on the employer. But it would have been more in the American spirit, the Board thought, to have workers make some contribution.39 “He who thinks that the bearing of each other's burdens through insurance is a system whereby the strong carry the weak has not mastered the true spirit of insurance," insisted Whitney in 1916. Businessmen-supporters and near-supporters of social insurance kept high faith that their reform could provide security without deliberate redistribution of wealth through heavy subsidies. Crowell of the New York Chamber of Commerce decided that minor subsidies were acceptable as a quid pro quo for removing from the public treasury some burden of relief, but he thought it best if "the beneficiary bears the big end of the log" and learned the art of self-help. "From the fiscal standpoint," he declared, “it is far more equitable to the propertied portion of the community" if subsidies were small. Cheney tolerated public contributions only as reflections of public responsibility for promoting health, not as a means of carrying some of the poor burdens. He suggested that health insurance would displace much charity and poor relief, but he did not explain how persons who frequented charity and relief rolls, and who stood good chance of being among the highest risks, could afford security without a system that assumed part of their share of risk and redistributed wealth in their favor. In the later period, businessmen who supported unemployment insurance accepted what seemed self-evident to the larger business community that government should not share in contributing to unemployment insurance. Even Elbert and Woodward and Lewisohn, who predicated their plans on the need for compensation rather than on preventionism, specified that employers and employees should pay the entire premium. Elbert and Woodward, to be sure, argued against government contributions not in principle but on grounds that with coverage limited to industrial workers benefits would go to so small a part of the public that to ask the entire public to pay was unfair. But Lewisohn spoke the conventional wisdom, explaining that state contributions "would involve the danger of having the insurance scheme turned into a relief scheme as has been the case in England." 40 Because of their attitude toward subsidies, businessmen inadvertently used social insurance to perpetuate the same concept of class distinctions in welfare that was implicit in industrial benefit plans. In the early 1930s they conceded that government had a responsibility to subsidize the unemployed in extended depressions, but they were as opposed as ever to entrenchment of the principles of relief and redistribution of wealth into permanent, automatically-functioning systems. So they wanted the subsidization undertaken through discretionary cash and work-relief systems, not the insurance mechanism. Relief was better than extending unemployment benefits, as Great Britain had done in the 1920s. In the words of the NICB in 1934, extended benefits made it "impossible to avoid political raids on the unemployment fund until the state of national finances becomes do critical as to threaten the solvency of the nation." The price of such fiscal caution and distrust of legislators, however, was that workers who were not among the readily re-employable elite would very quickly lose the right to aid given automatically and be reduced to the status of depending on the discretion of public officials for relief. Even the liberal Elbert-Woodward plan did not escape the concept of welfare classes. Unfortunately when employers considered public social insurance they retained the assumption that insurance applied only to those workers fortunate enough to be quite steadily productive. Public unemployment insurance like private plans had, in the words of Lewisohn, to be "limited to the stable and permanent working force. Otherwise, the danger is run of having the fit take care of the unfit. 41 Lewisohn’s words symbolized how traditional were the concepts that business-men who supported social insurance tried to build into the institution, and how foreign to the goal of maximizing economic security were some of the criteria by which they tried to design it. In the first third of the twentieth century the American business community was not oblivious to the insecurities that its own industrial odder had created for workers, and many of its spokesmen sought rationalized solutions. But when they did they confounded both the process of rationalization and the attainment of the goal of economic security by clinging to values that confused or even contradicted the purposes of welfare institutions; rigid belief in self-help and individual initiative; slavish adherence to the principles governing private insurance; and most prominently the sacrosanct value of preventionism and the other side of its coin, antipathy for mixing insurance and relief. All but a few businessmen also rejected government as the vehicle for welfare, though none could deny the need for some discretionary public relief at the very least. A few, carried on the tides of pre-World War I progressivism, accepting certain strains in the thought of the scientific management school, appalled by the dependency of the early 1930s, or moved by other stimuli, abandoned that antipathy for governmental action. Combining their rejection of laissez-fairyism with the businessmen's natural attraction to efficient, rationalized procedures, these few supported social insurance programs. But when they did they remained attuned to the business community, and retained virtually all of the other criteria by which businessmen confused and confounded the search for workers' economic security.
Notes, Ch. 5 1 Perry A. Fellows, "Superannuation in Industry," The Social Science Review, 4 (June, 1930), 187. 2 Frank A. Vanderlip, "Insurance for Workingmen," The North American Review, 181 (Dec., 1905), 921-323 Proceedings of the . . . Annual Convention of the National Association of Manufacturers of the united States of America (hereafter cited as NAM Proceedings) (1914). 71-73; "Industrial Betterment," NAM Proceedings (1915), 98. 3 ”Statements of Prominent Persons in Favor of Health Insurance," The American Labor Legislation Review, 8 (Dec., 1918) 321-22; Howell Cheney, "Compulsory Health Insurance," North American Review, 209 (Apr., 1919), 493; Albert Whitney., "Health Insurance an Imminent Problem," The Weekly Underwriter, 95 (Oct. 28, 1916), 507. 4 NAM Proceedings (1916), 33-36 5 Ibid., 37-38; NAM Proceedings (1917), 18-22, 48-64; National Industrial Conference Board, Sickness Insurance or Sickness Prevention? (Boston, 1918), 6; National Industrial Conference Board, National Health and Efficiency (Boston, 1918); National Industrial Conference Board, Is Compulsory Health Insurance Desirable? (Boston, 1919); see especially the National Civic Federation, Report _of _the Committee on Preliminary Foreign Inquiry (New York, 1914); and The National Civic Federation, Compulsory Health Insurance (New York, 1917). 6 For an example of Hoffman's and Sherman's influence with other groups see the National Civic Federation, Second Report of the Committee on Foreign Inquiry (New York, 1920). For examples of Hoffman's writings see Frederick L. Hoffman, "The Problems of Poverty and Pensions in Old Age," Annals of the American Academy of Political and Social Science (hereafter cited as The Annals 14 Sept., 1908), 182-96; Hoffman, "American Problems in Social Insurance," Proceedings of the National Conference of Charities and Corrections (hereafter cited as NCCC Proceedings (1914, 346-55; Hoffman, Failure of German Compulsory Health Insurance --A War Revelation (Insurance Economics Society of America Bulletin No. 11; New York; Hoffman, Facts and Fallacies of Compulsory Health Insurance (Newark, 1917; and Hoffman, More Facts and Fallacies, of Compulsory Health Insurance (Newark, 1920). For examples of Sherman's writings see P. Tecumseh Sherman, "A Compensation Law and Private Justice," The Annals, 38 (July, 1911), 151-589 Sherman, Memorandum in Opposition to the Proposed Workmen's Compensation Act’ of the Pennsylvania Manufacturers' Association (Nov. 30, 1912); Sherman, "Invasion of the Insurance Field by the State,' a revision and reprint of an address of February, 1913; Sherman, Dangerous Tendencies in the American Social Insurance Movement (pamphlet, 1916); Sherman, Old Age Pensions. Experience in Denmark, New Zealand, Australia, France, and Great Britain: Criticism of Similar Plan Advocated for Enactment by State Legislature (New York. 1923); and Sherman, "Should America Adopt a System of Compulsory Unemployment Insurance?" Congressional Digest., 10 (Aug., 1931), 217, 219. 7 Quotations taken from Frederick L. Hoffman, remarks in "Discussion," Journal of the American_ Medical Association, 65 (Dec. 11, 1915), 2060; Sherman, Dangerous Tendencies, 9; Hoffman, 'The Problems of Poverty and Pensions in Old Age," 185-86. 8 See Chapter 3; Robert W. Kelso, "Banker Control of Community Chests," The Survey, 68 (May 1, 1932), 117-19, 158-59. 9 Walter S. Gifford, "Pensions, Charities, and Old Age," The Atlantic Monthly, 145 (Feb., 1930), 295; "M. C. Taylor Warns of Relief Perils," The New York Times, Oct. 28, 1934, I, p. 29; National Association of Manufacturers, Unemployment Insurance Handbook (New York, 1933), 153. 10 The National Civic Federation, Report of the Committee on Preliminary Foreign Inquiry, 87; James A. Emery, “Should America Adopt a System of Compulsory Unemployment Insurance? Con," Congressional Digest,10 (Aug., 1931), 211; National Civic Federation, Unemployment Insurance Conference: At Annual Meeting, The National Civic Federation, Jan. 31, 1922), 10-11. 11 Congress of American Industry and National Association of Manufacturers, "Platform and Resolutions Adopted December 5 and 6," NAM Proceedings (1934), 11; The National Civic Federation, Second Report, 6; National Civic Federation, State Old Age Pensions: Constructive Proposals for Prevention and Relief of Destitution in Old Age. (New York, 1929), 16; Chamber of Commerce of the United States of America, Employees' Retirement Annuities (Washington, D.C., 1932), 35-38; National Industrial Conference Board, The Support of the Aged: A Review of Conditions and Proposals (New York, 1931), 51-53, 61-65. 12 NAM Proceedings (1917), 22. 13 Max Riebenack, "The Pension Features of Foreign Railways," United States Industrial Commission Reports, 17 (1901), 932-69; "Standard Oil Pensions," The New York Times, Dec. 30, 1902) p. 1; Richard and Florence Kitchelt, "'A Factory That Owns Itself," The World's Work, 23 (Apr., 1912), 658-60; Mollie Carroll, Unemployment Insurance in Germany Washington, 1930); Paul Monroe, "An American System of Labor Pensions and Insurance," The American Journal of Sociology., 2 (Jan., 1899), 506-08; Domenico Gagliardo, American Social Insurance New York, 1949), 131-32; "Those Who Can Afford Welfare Work," World's Work, 36 (June, 1918), 131-32; "Employees' Benefit Association of the International Harvester Company," The Annals, 33 (Mar., 1909), 246-57; International Harvester Company, International Harvester Company and Its Employees (Chicago, 1910); Charles A. Gulick, Labor Policy of the United States Steel Corporation (New York, 1925), 11}0-41. 14 Beulah Amidon, "Out of the House of Magic," The Survey, 65 (Dec. 1, 1930), 245-52, 295, 299, 301. For details of the General Electric and Rochester plans, and the Chamber's endorsement, see Marion Folsom, The Rochester Unemployment Benefit Plan (New York, 1932); Folsom, "Future Protection of the Jobless," Nation's Business (Mar., 1934); Chamber of Commerce of the United States of America, Unemployment Insurance and Unemployment Benefit Plans (Washington D.C., 1932); Anice Whitney, "Operation of Unemployment-Benefit Plans in the United States up to 1934: Part 1," Monthly Labor Review, 38 (June, 1934), 1305. 15 Edward J. Nally, "We Want an Old-Age Pension System That Will Not Enslave." Locomotive Firemen and Enginemen's Magazine, 118 (Apr., 1910), 548-49. 16 J. C. Bartlett, Railway Relief Departments: A Paper Read Before the St. Louis Railway Club (Feb. 12, 1897), 17 D. R. Kennedy, "General Discussion," American Labor Legislation Review, 7 (Mar., 1917), 62; National Industrial Conference Board, Industrial Pensions in the United States (New York, 1925)„ 11; H. M. Trimmer, "Mutual Benefit Associations as an Aid in Production and Savings," Law and Labor, 10 (Sept., 1928), 200-02. 18 Louis D. Brandeis, "Our New Peonage: Discretionary Pensions," The In-dependent, 73 (July 25, 1912), 187-91. On the Morris case see National Fetal Trades des Association, Committee on Industrial Relations, A Study of Employee Pension Plans (Ch cago, 1927), 1-16; and Robert W. Dunn, The Americanization of Labor: The Employers' Offensive Against the Trade Unions New York, 1927), 184. For insurance company officials' remarks see, Wm. J. Graham, "Pension Plans and Thrift," Personnel Administration (bound as Management Review), 11 (Mar., 1923), 9-11; E. G. McDonald, "'When a Man Wears Out--", Factory and Industrial Management, 85 (Mar., 1928), 536-38. On types of plans and their financing see "Pension Systems in Industry," Law and Labor, 3 (July, 1921), 180; National Personnel Association, Pensions for Industrial and Commercial Employees (New York, 1922); National Industrial Conference Board, Experience with Mutual Benefit Associations in the United States (New York, 1923); National Industrial Conference Board, Industrial Pensions in the United States (New York, 1925); National Civic Federation, Industrial Welfare Department, Old Age Annuities (New York 1925); National Metal Trades Association, A Study of Employee Pension Plans, 1-16. and Bryce M. Stewart, Financial Aspects of Industrial Pensions (New York, 1928). 19 National civic Federation, Industrial Welfare Department, Old Age Annuities (New York, Dec., 1926); National Industrial Conference Board, Elements of Industrial Pension Plans (New York, 1931), 18; Murray Latimer, Industrial Pension Systems in the United States and Canada (New York, 1932), 886-87, 20 NAM Proceedings (1930) (American Industries, 31 Oct., 1930), 38; Abraham Epstein, Insecurity, A Challenge to America (New York, 1939), 148. On private unemployment compensation plans see An Historical Basis for Unemployment Insurance: A Report Prepared for the Employment Research Institute, University of Minnesota (Minneapolis, 1934), 67-75; J. Douglas Brown, "Company Plans for Unemployment Compensation," The American Labor Legislation Review, 23 (Dec., 1933, 176-81; Charles Fowler, "Private Unemployment Benefit Schemes in the United States," American Federationist, 41 (Mar., 1934), 258-60; Whitney, "Operation of Unemployment-Benefit Plans" (cited note 14), 1288-1318; Reinhard Hohaus, Jr., "The Function and Future of Industrial Retirement Plans," Proceedings of the Casualty Actuarial Society, 12 (May 21, 1926), 307-08. On businessmen's attitudes toward casual workers see a National Industrial Conference Board report, "Unemployment Benefits," Law and Labor, 14 (Mar., 1932,) 25. 21 J. George Frederick, ed., The Swope Plan: Details, Criticisms, Analysis (New York, 1931), 19-45; Folsom, "Future Protection of the Jobless" (cited note 14); Folsom's 1935 testimony in Economic Security Act (Senate Finance Committee Hearings on S. 1130, 74th, Cong., 1st Sess., 553), 89, and in Economic Security Act (House Ways and Means Committee Hearings on H. R. 4120, 74th Cong., 1st Sess., 1935), 989-1008. 22 Edmund N. Huyck, "Establishment Funds and Universal Health Insurance," The American Labor Legislation Review, 7 (Mar., 1917), 85-90; Herbert Johnson, "Unemploymerrt Prevention Insurance an Aid to Stabilizing Business," The American Labor Legislation Review, 13 (Dec., 1923), 241-43; Henry Dennison, “An Incentive to Better Management," in Allen Forsberg, compiler, Selected Articles on Unemployment Insurance (New York, 1926), 202-06. 23 Bulletin of the Taylor Society, Management Review, The Society of Industrial Engineer’s Bulletin, 1914-1935, passim. See especially Morris Cooke, "Industrial Employment Code," The Bulletin of the Taylor Society, 16 (Oct., 1931), 178-85; H. S. Person, "Unemployment Compensation--A Positive Force for Regulation," 21 (June, 1931), 216. 24 "Comment," Bulletin of the Taylor Society, 13 (Dec., 1928), 222-48; for another source questioning the right of businessmen to control welfare allocations see R. W. Stone, Personnel Management: An Appraisal (New York, 1932), 7-9. 25 See especially H.S. Person, "On the Contribution of Scientific Management to Industrial Problems," The Bulletin of the Taylor Society, 8 (June, 1923), 116-19; "Comment," The Bulletin of the Taylor Society, 13 Feb., 1928), 1; Person, "Scientific Management and Economic Planning: A Philosophy and Technique of Progressive Industrial Stabilization," Bulletin of the Taylor Society, 16 (Dec., 1932,) 201-27; Ordway Tead, "The Regulation of Business," The Bulletin of the Taylor Society, 12 (Feb., 1927), 326-27; "Discussion," The Bulletin of the Taylor Society and the Society of Industrial Engineers, 1 (Nov., 1934), 15-17. 26 National Industrial Conference Board, Sickness Insurance or Sickness Prevention?; Boston Chamber of Commerce, Special Committee on Social Insurance, Non-Contributory Old Age Pensions and Health Insurance (Boston, 1917), 3; Rome Stephenson, "Should America Adopt a System of Compulsory Unemployment Insurance? Con," Congressional Digest, 10 (Aug., 1931), 211. 27 Reinhard Hohaus, Jr., "Function of Retirement Plans" (cited note 20), 303-19; Meyer Bloomfield, "The National Conference on Mutual Benefit Associations," Law and Labor, 10 (Sept., 1928), 196; Chamber of Commerce of the United States of America, Referendum No. 58 on the Report of the Special Committee on Continuity of Business and Employment (n.d., but internal evidence places it after May, 1931), 14-16. 28 Ferdinand Schwedtman and James Emery, Accident Prevention and Relief: An Investigation of the Subject in Europe with Special Attention to England and German, Together with Recommendations for Action in the United States of America (New York, 1911), xiv; Boston Chamber of Commerce, Non-Contributory Old Age Pensions, 3. 29 Richard Feiss, "The Engineering Approach to the Problem of Continuous Employment," The Bulletin of the Taylor Society, 6 (Oct., 1921), 194; N. T. Stone, "Can the Worker Be Guaranteed Continuous Employment?" Proceedings of the National Council of Social Work (hereafter cited as NCSW Proceedings) (1922), 315; John B. Andrews, "Stabilization of Employment in the United States," NCSW Proceedings (1924), 356-63; Bernard Rothwell, "A Sound Basis for Corrective Legislation," The American Labor Legislation Review, 21 (Mar., 1931), 27; Ernest Draper, "Why Unemployment Reserve Funds?" The American Labor Legislation Review, 21 (Mar., 1931), "Industry Needs Unemployment Reserves," The American Labor Legislation Review, 22 (Mar., 1932), 29-32; Paul Raushenbush, “ Unemployment Compensation Act," The American Labor Legislation Review, 22 (Mar., 1932), 12; Draper, "A State Dismissal Wage Act," _The Survey, 6 Jan. 15, 1931), 426-27; Edward Filene, Successful Living in the Machine Age New York, 1931), 67-70. 30 F. H. Clausen, "Answering Dr. John R. Commons," in Compulsory Unemployment Insurance, a pamphlet prepared by the Wisconsin Manufacturers' Association (Madison, 1924, 10; Emery, "Compulsory Unemployment Insurance? Con" (cited note 10), 209. For the NAM's complete statement against unemployment insurance see National Association of Manufacturers Unemployment Insurance Handbook: A Reference Book for the Use of Legislators, Business, Executives; Teachers, and Students New York, -1-933T.-Chamber of Commerce of the U ted States, Unemployment Insurance (cited note 14), 5; National Industrial Conference Board, "Unemployment Reserves," The Conference Board Bulletin, 7 (Mar. 20, 1933)$ 22; "The Realization of Utopia," The Society of Industrial Engineers Bulletin, 4 (Nov., 1922). 31 See especially Morris Cooke, "Scientific Management as a Solution of the Unemployment Problem," The Annals 61 (Sept., 1915), 146-64; Richard Feiss, "Scientific Management Applied to the-Steadying of Employment, and Its Effect in an Industrial Establishment," The Annals, 61 (Sept., 1915), 103-11; Morris Cooke, "Unemployment Scores," The Bulletin of the Taylor Society, 6 (Aug., 1921), 163-70; Richard Feiss, "The Engineering Approach to the Problem of Continuous Employment," 192. 32 Sam A. Lewisohn, "Principles of Unemployment Insurance," Review of Reviews and World's Work, 87 (Mar., 1933) 29-31, 50; Ralph E. Flanders, An End to Unemployment, address before Industrial Advisory Board (June 17, 1934), 1-11; Industrial Advisory Board, Report of Unemployment Insurance _Committee to the Industrial Advisory Board (June 18, 1934), 1-30; see also Robert G. Elbert, Unemployment and Relief (New York, 1934), especially 68-97. 33 Schwedtman and Emery, Accident Prevention and Relief (cited note 28), 65-67; "Industrial Betterment, Health and Safety," NAM Proceedings (May 17-19, 1920), 72-79; Whitney, "Health Insurance" (cited note 307-09; Filene, Successful Living in the Machine Age (cited note 29), 59-70, 269-74; Draper, "Dismissal Wage Act," 42-27. 34 John F. Crowell, Social Insurance; with Special Reference to Compulsory Health Insurance (New York, 1917), 65,23,79; Frederick, The Swope Plan (cited note 21), 26, 22. 35 Cheney, "Compulsory Health Insurance" (cited note 3), 494-98; Whitney, "Health Insurance" (cited note 3), 508; Folsom, "Future Protection of the Jobless" (cited note 14); Lewisohn, "Principles of Unemployment Insurance," 29-31, 50. 36 National Industrial Conference Board, Unemployment Benefits and Insurance (New York, 1931), 78. 37 National Civic Federation, Department on Compensation for Industrial Accidents and their Prevention, Proceedings of Winter Meeting (Dec. 8, 1911), 26-27; Magnus W. Alexander, What Should be the Principal Provisions of _a Workmen's Compensation Act? (prepared for and. issued by the National Founder's Association, the National Association of Manufacturers, the National Metal Trades Association, and the National Electric Light Association, Feb., 1915), 1-24; Industrial Advisory Board, Report of Unemployment Insurance Committee (cited note 32), 10, 6; Draper, "Dismissal Wage Act” cited note 29). 426. 38 Boston Chamber of Commerce, Non-Contributory Old _Age Pensions and Health Insurance (cited note 26), 3-5; NAM Proceedings 1930 (American Industries, 31 /Oct., 1930), 36. For sources revealing the businessmen's dilemma on old age security see National Civic Federation, Industrial Welfare Department, Old Age Pensions Conference (New York, 1927), 4-9; and National Civic Federation, State Old Age Pensions: Constructive Proposals (cited note 11) 4, 13. 39 Schwedtman and Emery, Accident Prevention and Relief (cited note 28), 263-64; "Address of Mr. M. W. Alexander," NAM Proceedings May 15-17, 1911),150; Fred C. Schwedtman, "Cooperation or--What?" Address to 2nd annual convention, International Association of Casualty and Surety Underwriters (Aug., 1912); Whitney, "Health Insurance" (cited note 3), 5018; Cheney, "Compulsory Health Insurance" (cited note 3), 496-97; Frederick, The Swope Plan (cited note 21), 31-33; Person, "Unemployment. Compensation" (cited note 21), 216; Draper, "Dismissal Wage Acts' (cited note 29), 427; Lewisohn, "Principles of Unemployment Insurance" (cited note 32), 31; National Industrial Conference Board, "Unemployment Reserves" (cited note 30), 24. 40 Whitney "Health Insurance" (cited note 3), 508; Crowell, Social Insurance (cited note 30, 23; Cheney, "Compulsory Health Insurance" (cited note 3),497, 494; Industrial Advisory Board, Report of Unemployment Insurance Committee (cited note 32), 4; Lewisohn, "Principles of Unemployment Insurance" cited note 32), 31, 41 National Industrial Conference Board, Unemployment Insurance: Lessons from British Experience (New York, 1934), 26; Industrial Advisory Board, Report of Unemployment Insurance Committee (cited note 32), 6; Lewisohn, "Principles of Unemployment Insurance's cited note 32), 50. |