Summary: Committee meeting transcript showing the discussion about the role of the family in providing care, and the ways that old age assistance might be provided.
November 13, 1934
Mr. I.M. Rubinow, Secretary, B'nai B'rith, of Cincinnati is our first speaker.
MR. RUBINOW: I didn't want to go contrary to the wishes of the audience. After all, I have written my paper, handed it to the stenographer, even given a copy to the newspaper boys. So the paper has done its duty and I may go ahead and discuss the problems at issue.
I want first to make this general statement. We mustn't visualize one specific method of meeting the problem of old age pensions. In Cincinnati in a public address, I recently mentioned that the people of the State of Ohio have shown their interest and humane attitude to the old people by passing overwhelmingly the so-called Old Age Pension Law last year, upon which one of my audience made the remark that the people's altruism was over-estimated, that it was not so much the old people they had been thinking if, but of themselves getting old. From that point of view, old age pensions will, I am afraid, be a dismal failure and disappointment. There is no one way of visualizing our own friends or parents at old age.
There are at least ten different ways of adjustments now being made. We don't even know the distribution of half of the people of the United States over 65. The increased number of people which Mr. Hopkins says do not have to work either when they are old or young, who are not particularly worried as they have made safe and secure investments, and perhaps know the secret of security. That is, of course, a very desirable adjustment.
I am sorry to have to disagree somewhat with moving the age of idleness back to 60. I am at present a member of the Wage Adjustment Board, working on cases of the Street Railway of Cincinnati, and I have learned that they have people over 60, 65, and even 70, who are still running cars. While that might be a most desirable adjustment, I don't know how far to increase such an adjustment. Because of the increased mechanism of industry, it is quite a big question. Industry will have to become less intensive before we can find employment for people over 65. Then there is another problem. Certainly we have not yet been able to decrease the large number of people over 65 who are found to be incurable, who are in insane asylums and institutions of that character. We would like to depopulate them of old people, but we don't know how. There is also the undesirable form of adjustment of enforced residence in a poorhouse, almshouse, or even call it county farm, that we may be able to correct.
There are at least three more popular methods of providing for the aged. One is having the old folks stay with their children, another, the so-called old age pension, gratuitous plan, whether from state treasury or any other source, and the third, service pensions.
Now, the leading thought in my mind is that obviously the form of service pension, from which there are now a few hundred thousand people getting advantage, is in my opinion, and I believe it is the opinion of most social workers, the most desirable solution of the old age problem.
Since the present conference is engaged with the question of what to do with the old folks and what to do with ourselves when we get old, the controversy is between two alternatives, the service pension on the one hand and the old age pension on the other hand.
I think that as far as the psychological and economic phases are concerned the advantages are on the side of the service pension. The difficulty of the service pension at the present is the requirement for long continued service for the same employer. Compulsory contributing old age insurance is no more than the extension of the principle of service pension from the individual employer to cover the entire industrial history of the individual. That is all it means. In this way if you have compulsory contributing old age pensions with the vast majority being given the advantage of this method, it is much more desirable socially, economically, and spiritually than the method of old-age pension so-called. That is why I prefer the compulsory contributing system to the old age pension system, even though I am at present chairman of the Board of Old Age Pensions in my own city, and trying to do the best I know how with that particular law. We have no system of compulsory pensions even now.
Unfortunately we have not the choice between the two methods. It is extremely difficult to introduce and apply at once a system of contributing old-age insurance. You can't insure a house that is on fire, and you can't insure if there is any meaning in the word "insurance," an old man over 65 against economic conditions as the result of his old age, but you can insure the young generations. So obviously state old age pensions must be supplied to those who are in need of assistance, those immediately in need. For all others, the method of compulsory contributing old age insurance is much more preferable than any other system.
This conflict between the two methods is not new. The difficulties confronting America to-day are the same difficulties which confronted Europe. There were exactly the same discussions; exactly the same procedure had to be followed in both England and in France in inaugurating old age pension systems. Things that were done in the earlier stages were afterwards considered unnecessary.
If you accept the duality of the problem--the old already old and for the young who will come old soon--then the technical question is to find the best solution of both aspects of the problem.
We have old age pension laws in 29 states already. Let us hope in the near future the rest of the states will enact old age pension laws and thus make this system nationwide.
May I take another two or three minutes to point out one very important consideration in the immediate sizing up of the problem confronting us? That is that at best the so-called old age pension gratuitous grants are after all a modified, camouflaged form of relief, which do not meet the conditions, and might as well be nothing, because they are based upon evidence of need. The one thing 75 investigators in our little town have to struggle with is determining, not whether the people are deserving, but whether they are in need. Of course, when you get into a situation of this kind there is bound to be the temptation to misrepresent or exaggerate. I certainly do not blame the old people. If I were dependent and had to make a sad story of my own life, I probably could succeed in making up a good one. The "means test" is a consideration of old age legislation.
While I am rather hesitant in criticizing this legislation, particularly in the presence of the author of the first bill, it must be recognized that American legislation added another undesirable requirement. I am trying to do my best on every occasion to point that out, as it apparently has not penetrated the public conscience. Not only do we apply the "means test" to the old people, but we apply it to their descendants. No old age pension law outside of the United States asks for that. That emphasizes the charity, philanthropy, and relief aspects of our legislation. We have to go into the economic conditions, not only of the old folks themselves, but of every one of their children, and grandchildren. It seems even the ancestors are involved.
In addition to the service pension at one end and the free gratuitous pension on the other, there is also a third accepted method of adjustment. That is, for the old people to be a burden upon their children. With the present condition of the county at large, the present leveling of wages, the present difficulty of keeping up the American standards (the American standard about which we talk so much, and which is more of an aspiration than recognized economic fact) I maintain the imposition of the burden of support of the old, if placed upon the children to the extent of depriving the children or the grandchildren of their purchasing capacity is not a desirable adjustment. Whether or not the old folks should live with their children we will not go into.
I believe the federal government has a very strong duty to perform in this respect, not only because it may stimulate adoption of new old age laws in the 17 or 18 states that haven't these laws yet, but because by subsidy there can be an increased rate of pensions, which at present varies in the different states by ten or twenty dollars a month. It has been maintained that $17 is sufficient for the maintenance of old folks on a level of decency and comfort.
Only by national control over state systems achieved through the promise of a federal subsidy can we have at least a decent system of free public old age pensions to work with, until we get service pensions.
(Following is the speech prepared by Mr. I. M. Rubinow.)
Within the inevitable time limitations I can only lay down to-day in a somewhat dogmatic way, a few fundamental principles underlying the problem we are to discuss. Perhaps the first principle is recognition of the fact that the problem has many ramifications, that the aged do not represent one uniform group, and that no plan for the aged can be satisfactory unless it recognizes at least the most important variables.
There is, to begin with, the question of age which may begin at 60 and extend to 80 or 90 or more; second, the factor of health; third, the general economic status; fourth, the occupational status: fifth, the marital and family status. It is further important to recognize the fact that none of these five conditions always remain static, that every one of them is subject to change--age, health, the existence of responsible relatives, and even occupational and general economic status.
Because of the influence of these numerous factors in various combinations we find in a cross section of to-day at least ten groups making various methods of adjustment to secure the necessities of life, as follows:
the old persons remaining at their jobs, or occupations until 70 or perhaps even until 80
the fortunate minority which may rest on its economic laurels, drawing upon inherited wealth or upon saving of a successful economic life,
those who have earned and receive a satisfactory pension from their former private or public employer,
the large, though gradually decreasing number of recipients of war pensions, whose number may perhaps increase if the pension principle is applied to the veterans of the World War,
the very large, perhaps the largest, number of those who are supported by their children or other relatives,
a rather limited number of persons receiving regular relief from private philanthropic agencies,
guests or inmates of private homes for the aged, having a very great variety of standards of comfort,
the aged population of our poorhouses or almshouses or county farms,
the aged in homes for incurable or insane asylums,
and the latest development, the recipients of the so-called state old age pensions.
Unfortunately, there are no figures to indicate the distribution of the 6,500,000 persons over 65 years of age among those ten classes, to say nothing of the possibility of a residuum which continues to shift for itself in various distressing ways.
At least approximate estimates can be made of recipients of public and war pensions, inmates of public almshouses and private old folks homes and hospitals for incurable and mental disease, and even recipients of old age pensions in a number of states. The total number of these classes, however, amounts to considerably less than 1,000,000. Only rough guesses can be made of those still employed, living on savings, or living in children's homes. And the population of cheap lodging houses and the residuum which may be in the gutter is an absolutely unknown quantity. The few local investigations which have been made are not sufficiently trustworthy. No study which dates back to the pre-depression era can serve as a guide because of the tremendous changes which have taken place in the value of savings, the employment of the aged, and the ability of the majority of workingmen's families to support their parents. Perhaps a thorough investigation of the distribution of our aged population among these classes should be the first task in a scientific study of the problem if it were not for the fact that such investigation, besides being costly, might take a good deal of time and delay necessary action.
At any rate the important problem that faces us is not so much the exact distribution among these ten groups which may fluctuate from year to year, particularly under stress of exceptional economic conditions, but some agreement as to the comparative fitness and desirability of these various methods of facing old age. In regard to some of them a general agreement can perhaps be easily reached, but unfortunately, these are the methods which perhaps we can influence but slightly. We should like to see fewer people ending their lives in insane asylums or hospitals for incurables, but this represents a medical problem of which we cannot dispose to-day. Perhaps at the other extreme we would admit the desirability of the aged retaining their health, working capacity, and working opportunity until the end of their days, but again that opens a complex problem of industrial organization that cannot be easily answered. For instance, can private competitive industry be so adjusted as to provide an increasing opportunity for workers who have passed the crest of productivity and endurance? We might all envy the fortunate minority that can live on income from accumulated capital, but how to increase the number of those who can accumulate enough for such a happy old age is a problem perhaps even more complex than all the problems presented by social insurance. One couldn't very well look towards an extension of war pensions as a method of solving the problem of old age without placing one's hope in a continuous series of destructive wars.
Old folks homes present a traditional and popular escape for some, but are altogether unacceptable for sound psychological reasons to many. Institutional care will always be needed for some proportion of the aged. This may be easily admitted in the case of those who are incapacitated either physically or mentally, but may be optional with healthy old men and women, depending upon their comparative sense of gregariousness. On the other hand the public poorhouse will be condemned by most and, in fact, has been one of the most potent factors in popularizing better methods of provision.
Thus by a process of exclusion there remain certain methods of care for aged persons, incapacitated primarily by lack of economic opportunity. These are service pensions, dependence upon relatives, and so-called public old age pensions. Compulsory social old age insurance is obviously but a modification of service pensions extended from one specific employer to the entire industrial history of the individual.
The history of the movement towards systematic public provision for old age in Europe and the rest of the world during the last 40 years has been, to a very large extent, a more or less friendly conflict between the two methods, compulsory insurance and so called state old age pensions. The discussions around this problem in this country during the last 25 years have, after all, been merely a reflection of similar discussions and arguments in all the other countries. Perhaps the most interesting aspect of this discussion throughout these 40 years has been the tacit but altogether erroneous assumption that both methods are equally applicable to all the elements of population, and that therefore the problems necessarily reduces itself to the choice between the two. The slightest consideration of the problem must show that this is not so, and particularly is not so at any one moment when a system, whichever it be, must be adopted.
It is but a trite observation that social measures are not adopted for eternity. They must present an effort to meet, first, the immediate problem which confronts society, and in addition, plan as far as possible for the immediate future. The immediate problem is to determine the distribution of the aged among the ten classes indicated above, some highly desirable and some highly undesirable. The task is to influence this distribution so that there would be a larger proportion of the aged finding satisfactory adjustment and a reduction in the number of those whose adjustment is obviously unsatisfactory. No counsel of perfection need be aimed at in the beginning. Few counsels of perfection are easily achieved.
The obvious problems that present themselves as soon as the whole question is considered are what to do with the unknown distressing residuum, the people on the bottom, the people who manage to get along, we don't know how. And only slightly above them is the population of our poorhouses and county homes. They present the picturesque though gruesome aspect of the problem of old age. For them private social agencies have advocated private assistance or even public outdoor relief, and more recently old age pensions. The efforts of disguising the poor relief aspect of so-called old age pensions are praiseworthy indeed. They indicate the humanness either of the social worker or reformer or legislator. Yet an analysis of the situation should not find any difficulty in recognizing that disguise. Can one question what the result of an inquiry would be among millions of workers, young or old, and particularly young, if they asked to state what method of provision for themselves they would prefer, an ample and earned service pension or dependence upon a skimpy and gratuitous grant out of public funds? But in the presence of millions who have not earned their pensions and are in need of help, a discussion of this character might appear to be purely academic. The standards of so-called pensions in the United States have already shaped themselves even though the movement is only a few years old. An average grant of between $15.00 and $20.00 a month, a searching inquiry into economic status, the hated so-called "means test" of England aggravated in the United States by an equally searching means test of relatives (which I shall touch upon presently), and numerous qualifying conditions, moral, political, or others, taken together, so forcefully emphasize the relief character of pensions that a mere use of the word pension--and even that is not universal--is not sufficient to disguise it. At the other extreme are pensions earned, partly paid for, free of the means test, coming not as a gratuity but as a matter of right, and not subject to the vagaries of state appropriations.
In a sliding scale of social conditions the choice is never between the uppermost and the lower rung. No human being, except it be in sentimental movies, has his choice between clipping coupons and sleeping in a bowery lodging house. The choice usually lies between adjacent areas. I would want to provide to all those who are not economically independent and who cannot continue at their normal occupation, a decent and reasonable service pension, but it cannot be done--certainly not in a day or a year. There is no social justice in limiting the opportunity for such pension to the lucky few who have worked all their lives for one large and prosperous and generous corporation. Again, any action on behalf of the aged is induced by the problem of the aged to-day. A public grant with or without disguise is obviously the only practical way of meeting that problem. It is a rational way on the part of working society, you and I who are still earning a living, to meet the problem of old age of the other fellow, of the old men and women who are down and out. But how many are there, not only among us but among the millions of wage workers, salaried employees, or even farmers, who would be willing to consider this method a satisfactory answer to the problem of the future, the problem of their own old age? If then, we only are concerned about the problem of distress of the aged of to-day, an old age pension system, perhaps more generous than those already adopted, may be considered sufficient. But if we are to legislate for tomorrow as well, the advantage of a service pension system must be recognized.
As to what should be the best method of procedure is another problem, perhaps merely a technical problem which must receive separate consideration. Whether to establish a comprehensive system of compulsory insurance in which the entire financial responsibility for the years gone by, spent in service by each individual prior to his insurance, will be carried by the public treasury, whether to adopt and continue straight old age pensions, side by side with the compulsory insurance scheme, and allow the insurance scheme gradually to replace the free pension system, is a question of method. Whether both steps should or can be taken at once will depend very much upon the social and political situation of the moment. England and France adopted old age pension systems years before the compulsory scheme was provided. In this country we already have some 30 state old age pension systems not all of equal effectiveness. It is not unreasonable to expect that with some effort the system might become universal except for the inevitable tardiness of the south in social legislation. The skimpiness of even the best of their systems and the tendency to reduce the standards because of pressure of fiscal difficulties points to the desirability of a national subsidy and control. At best the method cannot be expected to come up to the dignity and thoroughness of service pensions through old age insurance.
Perhaps I have said enough about the fundamental distinction between old age pensions and compulsory insurance, but if I may take the liberty of a few more minutes I should like to point out one very significant factor which differentiates the old age pensions in the United States from the systems prevailing in other countries, and that is the introduction of the "means test" not only for the aged themselves but for their so-called responsible relatives. To come back to our original analysis of the ten methods of present provision for old age, American pension legislation evidently assumes without argument that the fifth method, support by children, is at least as desirable as, or perhaps preferable to, public support through old age pensions. It makes the violent assumption that wherever such support is found it represents a socially satisfactory answer to the problem of old age. It says little concerning the social cost that the imposition of this burden of support of the aged upon their children represents; it gives no consideration to the lowering of the standard of living of millions of families and their children. It assumes that the average wages today are sufficient not only for the maintenance of the worker and his wife and children, but even of ancestors. Perhaps it is only through the humaneness in the application of this principle that the cruelty of this system is somewhat mitigated. But it is that very humaneness that emphasizes the charity aspect of American so-called pension legislation. In our haste to get something done we have allowed this point of view to penetrate practically all of our state pension legislation that has been written on our statute books during the last ten years. The implications are too obvious to require any extensive comment, even if there were time. Only national control over state systems achieved through the promise of a federal subsidy or threat of its elimination can correct this tragic situation.
CHAIRMAN DEWSON: At any rate, my three questions were answered. The next speaker on our program is Mr. Lester H. Loble of Helena, Montana.
MR. LOBLE: It is a distinct honor and a source of satisfaction that permits me to come this great distance from the heart of the Rocky Mountains in Montana to our nation's capitol and be privileged to exchange ideas with you national leaders interested in old age security.
In view of the fact that it was my good fortune to be legislative author of the first old age pension bill passed in the United States, introduced during the time I was a Democrat floor leader of the Montana Legislature in 1923, I may perhaps be permitted unusual contentment and satisfaction at this notable gathering and be allowed to tell you of the operation of years of old age pensions.
I know little of the theory of old age security but much, I believe, of the practical operation, the tremendous advantages and the pitfalls. To those who are opposed on the grounds of paternalism, let us remind them that government is not a dividend-paying institution, except in the happiness and contentment of its people.
In 1923 there was no awakened consciousness of the desire for old age pensions. It was introduced in our legislature during times that were most difficult and following a year of drought and distress.
The only organized effort made in behalf of the passage of this law was by the Fraternal Order of Eagles. Much credit is due to this organization which gave of its memberships, its money, and its time in assisting in the final adoption of the bill introduced. The leaders of this organization, Mr. Frank Hering of South Bend, Indiana and Mr. Conrad H. Mann of Kansas City, Missouri, were very important in the establishment of the first old age pension law in the United States.
The bill that finally passed was not mandatory but optional with the boards of county commissioners of the several counties. It is not the best old age pension law that could be drawn, but it was the best that could be secured in the pioneering of this movement.
At the same time that I was preparing the old age pension bill for Montana, one was being drawn in Pennsylvania. I collaborated with some of the eminent legal minds of that state. I was fearful that under the constitution of the state of Montana the act would be held unconstitutional if the pensions were paid from the state treasury, but if they were paid from the county poor fund it would withstand attack. I therefore proceeded along that line. Pennsylvania adopted a law along different lines that was held unconstitutional. Our law has never been attacked nor has any attempt been made to repeal it or amend it. By its provisions any person over the age of 70, who has been a citizen of the United States for 15 years, and who has an income of less than $300 per year, may receive an old age pension, the maximum of which may be $25 per month. The cost administrating of this law has been nothing. Without additional compensation, the boards of county commissioners of the respective 56 counties in Montana constitute the old age pension commissions.
Often a pensioner has some real estate, but an income of less than $300 per year. It may consist of a home. Before granting the pension the commission may require that this property be deeded to the county, effective upon the death of the pensioner, and from the proceeds of the sale of this property at the time of the death of the pensioner, the amount of pension paid during his lifetime, plus 5 per cent interest, is repaid to the county, and the balance from the sale of property goes to the pensioner's heirs. Thus the counties are often reimbursed the entire amount of the pension paid, with interest. Heirs, who in the lifetime of the pensioner have not been interested in his welfare, do not succeed to the pensioner's property until the county has been repaid.
Pensioners received during these 11 years approximately $14.00 per month. The official figures of the United States Bureau of Labor Statistics issued by the United States Government disclosed after a national survey, that the average cost for the care in a poorhouse of an aged person is $334.64 per year, or $28.42 per month. Thus 11 years of actual experience in the administrations of this law discloses beyond contradiction that it is twice as costly to confine an aged person in a poorhouse as it is to grant him an old age pension. As has been demonstrated beyond question, it is an economic saving. The pension system has closed some of the poorhouses of Montana. Poorhouses cannot compete against pensions.
We had but little difficulty in putting the law into operation. There was some resistance from the boards of county commissioners who preferred to give supplies to the aged poor instead of money. We had to eliminate early political pressure in granting of pensions and in various counties had volunteer committees, usually recruited from the Fraternal Order of Eagles, that assisted the boards of county commissioners in investigating the condition of the pensioners so that the law would not be imposed upon.
A few years after the law was in effect, a vice president of a large Pittsburgh steel corporation called at my office and advised me that he was making a survey as one of a committee of the Manufacturers' Association, that he personally was opposed to the old age pension system, but that he wanted full information about it.
Instead of telling him anything about it, I took him by automobile to a little village 20 miles from Helena. We stopped in front of a little vine covered loghouse, walked up a rustic path to the door and were admitted by a little old white haired lady. He observed a tidy home, on the floor was a hand-made rug, on the table a family Bible; on the wall hung a picture of her husband in one of the heavy gilt frames of yore. Her name was Mary Galliger. She and her husband had been trail blazers and pioneers of Montana. On her eightieth birthday she stood in front of a banking institution and read these chilling, type-written words, "Closed by order of the Banking Department. In the hands of a receiver." Within the vaults of that institution rested every dollar that she and her husband had accumulated---ample to care for her--carefully saved for old age. She found herself, an old lady of culture, education, and refinement in the twilight of life, without relatives, without money, without earning capacity. Had it not been for the old age pension law she would have ridden in the black wagon to the poorhouse, there among the derelicts of the world to sit in her tiny, plastered room, wondering why her life should thus be ended. Instead, she lived out her life in her own little home, surrounded by her friends, puttering in her garden, happy and contented, and there finally passed away.
I introduced her to my friend and told her that he was interested in old age pensions and she, from the infirmities of old age, not understanding, and looking at him through eyes dimmed with cataracts gave him her blessing for having assisted in the passage of old age pensions. As we left her home he inquired as to what she was receiving and was informed that she received $15.00 a month, that she owned her home. Had it been necessary to send her to the poor farm the cost would have been $30.00 a month.
We drove on a few miles up into the hills of the Rockies. There we stopped at a prospector's gold mining claim. We sat down on the edge of an old broken-down wagon box and waited for the owner. I pointed out to my friend the tunnel, hundreds of feet in depth that had been dug out by hand, the crude hoists and even more obsolete hand mining machinery. It was a typical prospector's layout. From across the hill came Jones Callahan, almost with the step of youth, carrying his pick and shovel and a sack of ore across his back, a long, flowing white beard, a rugged man of the outdoors, aged 92. He had prospected this claim for 45 years, had found but little, yet was as enthusiastic as if he had just started. Before he operated this mine he had discovered one of the richest gold mines in Montana. Like many of his kind he received little for his effort; in fact he sold his interest in this mine years before for $4.00. That mine was produced millions of dollars in dividends and has paid thousands of dollars in taxes. At this very moment it is one of the best paying mines in the state of Montana, hiring scores of men. But this man was a miner, a dreamer, always just going to strike again. Living high up in the Rocky Mountains in his little miner's cabin, he spent his last day on earth with his pick and shovel, still pursuing the elusive gold.
Jones Callaway received a pension of $20.00 a month. It was ample for his needs. He refused to take it until he was told that it was not charity, but in recognition of a life well spent. He talked a long time to my friend from Pittsburgh and this old miner's enthusiasm fired the imagination of my friend from the east. Jones Callaway is long since dead and I cannot remember the name of my friend from Pittsburgh, but he has not forgotten Jones Callaway I know, for when he left and started back down the road he said to me, "I came out here convinced that old age pensions were purely paternalistic, socialistic, unworkable, but I have changed my mind." What report made to his committee, I do not know, except that a few years later I observed in one of the annual reports of the Manufacturer's Association, at least a tacit approval of old age security.
The following figures are the official figures of the State Auditor of the state of Montana, issued under the seal of the state of Montana, and are recorded in his office and kept by him under the requirements of the law.
The first nine months of the year 1923, the first year of the law's existence, disclosed that pensioners received $65.24 per year per person, only $5.43 per month per person.
For the first year, 1924 $151.74 per person per year $12.64 per person per month
" 1925 $174.14 " $14.36 "
" 1926 $179.59 " $14.96 "
" 1927 $167.97 " $13.91 "
" 1928 $188.35 " $15.69 "
" 1929 $168.77 " $14.15 "
" 1930 $154.30 " $12.85 "
" 1931 $158.34 " $13.18 "
" 1932 $145.37 " $12.12 "
" 1933 $ 87.32 " $ 7.27 "
Let us for a moment analyze the figures. Eleven years is a fair test in the trial of this law, as in 11 years are represented good and bad years, prosperity and adversity. The man now 70 years of age receiving a pension was 59 years of age at the time the law became effective. The increase in the number of pensions granted has not been in accord with the claims of its opponents at the time of its adoption. As a matter of fact the increase has been quite gradual. Death and changing conditions are, of course, important factors in the number of people who apply for pensions.
In 1923 349 pensions were granted
" 1924 521 "
" 1925 583 "
" 1926 584 "
" 1927 693 "
" 1928 884 "
" 1929 875 "
" 1930 1032 "
" 1931 1130 "
" 1932 1254 "
" 1933 1781 "
You must bear in mind that while Montana does not have the characteristics of many of the eastern states, the state is a combination of industrial and farm life; located there are the largest copper mines in the world, and throughout western Montana there is much mining and some industrial activity. The eastern part of the state is largely made up of farming communities where large ranches are located, engaged in the production of wheat, cattle and sheep.
In 1933 there was quite a large increase in pensions over 1932, but there was a decrease in the amount paid to each pensioner. This was due to two factors. There was a greater demand for pensions, but there was less money with which to pay them. As a consequence the amount each person received was materially reduced. The pensions are paid from the country poor fund and many of these funds are depleted due to delinquent taxes.
Why is it that an old person can live on a pension of $14.00 a month when it cost $28.00 a month to maintain him in a poorhouse? The answer is found in the fact that the person is not lost to the community and is still partially self-supporting. For illustration, Jack Ferguson, a pensioner, now dead, received his first pension when he was 72 years of age. Hale and hearty, he still continued his business of driving an express wagon for the delivery of small parcels. Though the wagon was dilapidated, and the horse looked as old as himself, he could and did make from fifty cents to a dollar a day during good weather. In the winter he was unable to work. During those months he was on the old age pension list, and religiously, during the summer months when he could work, he had himself removed from the rolls. These old timers earn something. They do some mining, take care of public parks, act as watchmen, and engage in various kinds of activities that permit them to earn a part of their living. They remain among their friends who help them. Remove them to a poor farm and they are lost to society forever. Their self-respect is gone as is their meager earning capacity, and they become dead weight, with nothing to hope for but the call of the Almighty.
Old age security is but payment of a debt that this generation owes to those trail blazers of yesteryear who have made our present existence possible. The law is very little abused and is a haven of refuge to many people who never believed they would need assistance. This law will never be repealed because 11 years of trial have shown it to be a far cheaper method of caring for the aged poor and because it is more humane.
I speak by command of silent lips on behalf of the old age pensioners of the west who have gone on to their reward, on behalf of the contented aged people of Montana who are able to live out their lives with some security, though small. I speak for a state that has tried the experiment and knows that old age security is possible, economical, and humane.
I submit with these remarks the complete record from the State Auditor's office of the state of Montana, which, under the seal of the state shows the process of old age pensions in Montana over a period of 11 years.
We are great in area, small in population, approximately 600,000, but nearly 2,000 old men and old women in the state of Montana are to-day receiving old age pension security.
It is gratifying to know that we have a Committee on Economic Security whose record of past achievements on behalf of the masses of the people lends sincere encouragement to the progress of old age security, that under the leadership of our President and the illustrious Secretary of Labor, the old people have renewed hope.
I trust that legislation will soon be enacted so that instead of 28 states of the Union now in the old age security column, the entire population of this glorious country will know that the haunting fear of poverty in old age has been forever removed from the hearts of our people.
CHAIRMAN DEWSON : I think that Mr. Loble paints a very modest picture of the part he has played in this work.
Our next speaker is Mr. Royal Meeker, former United States Commissioner of Labor Statistics, New Haven.
MR. MEEKER : Madam Chairman, ladies and gentlemen: I have no written document. If I am permitted to speak just a few minutes, I have just a few notes which I may or may not be able to read.
First of all, I would like to direct your attention to the fact that relief or pensions are the last ditches against insecurity, social and economic. You can't insure anything that doesn't exist; you can't give a pension unless you have funds out of which to pay pensions.
The first and most important measure for social security is the revival of industry, constituting employment for the unemployed, constituting income for the lack of income, to take care of the necessities from whatever cause they may arise.
The first and most important step then as a relief measure which this Committee on Economic Security can offer to the President, is a complete revamping and reconstruction of our banking credit and monetary system. I repeat, our banking credit and monetary system--it is one united, indivisible, system--will do more for reestablishment of industry, and reestablishment of income, than all the pension relief measures that could be devised in a hundred years.
The second step is the organizing of industry, conducting it, providing for the conducting of industry so far as possible in an orderly systematic way, so that the balance between consumption and production may be immeasurably improved.
The third and last measure is insurance and relief.
In spite of all we do, men do become unemployed and must be maintained. Men become invalidated and must be maintained. Otherwise we must adopt that philosophy, or rather that policy which obtains among primitive peoples. I am told among certain tribes of Eskimos it devolves upon the eldest son of the ancient patriarch of the family, when the old man cannot pull his weight in the boat anymore, to take the ancient out and knock him in the head. We haven't been reduced to that condition in this country, but if we keep on in the direction we have been going in the last five years, we will arrive there, because we are returning with disconcerting rapidity to that difficult stage of civilization where we will have to use the hand loom, the shoemakers' tools, etc., to furnish our clothing. We are not there yet; it is not necessary for us to discard the ancient invalid in society. We are not yet dragging these ancient, dependent old people out to the city dumps, as they do in China.
May I just briefly survey the whole field which does properly come under the jurisdiction of social insurance against the hazards, the physical hazards of existence? All of the major hazards of existence may be classed properly under six heads: birth, unemployment, illness, accident, invalidity, death. I don't include old age, because old age is not primarily a major classification. Old age falls under two heads, invalidity due to advancing years, and unemployment due to depreciation or advancing years or both.
I greatly honor the Fraternal Order of Eagles for their work in calling attention to the need to provide against dependency and misery attendant upon the advancing years. But I think a word of general admonition, if not criticism, may well be uttered here. It is, I think unfortunate that attention has been centered so wholly upon old age as a cause of dependency, leading to the subordination, if not the actual ignoring of other causes of dependency, which on the whole are much more important than old age. Does that answer your question, Madam Chairman?
With regard to the question, "Why not resort to insurance instead of pensions?" I would say, supplementing what Dr. Rubinow has said, that it is wholly impossible to substitute insurance for pensions because of the present problem which confronts us. People are now suffering from lack of employment, from invalidity, and they must be taken care of. We cannot wait for 30 years to build up a reserve fund in order to take care of these dependent people. That is, it seems to me, a sufficient answer, but we are in the process of the shaping of all state legislation and we should keep in mind what Dr. Rubinow so ably outlined, that is, the necessity of providing for all kinds of invalidity, whether from old age or from other cause, and the building up of a reserve fund, the establishment of what he calls "service insurance." Call it what you will, I don't care, but I think the principle of insurance should be instilled into every old age pension measure that is introduced anywhere.
I have heard during this conference, and I hear it everywhere, whether I stay at home or go abroad, the idea of technological unemployment--just as if something new had come into the world. That is a mistaken idea. It is just as old as the division of labor, and that is pretty old. There has been technological unemployment from the beginning. I suppose that when some men devised the first instrument for scraping up the surface of the ground, so that corn or whatever they had to plant might be planted, I suppose that led to technological unemployment. For instance, these extremely primitive instruments, which consisted of cross sticks, were invented as it did to hunt around in the brush and gather berries, overtake the rabbit, etc., in order to obtain the food supply for the tribe.
Therefore, technological unemployment has always existed. I doubt very much, you may dispute what I am going to say, whether there is any more technological unemployment to-day in New York than there was in the beginning of the nineteenth century when the industrial revolution so-called was in full swing. I doubt very much if the proposition of technological unemployment to-day is as great as then. However, it is of no matter, purely an academic question.
I don't think we should accept the doctrine that technological improvements increase unemployment, and that therefore from now on we must look forward to an increasing volume of unemployed persons, whether they are unemployed because they have reached the age of 65, 40, or 45, whatever the age limit may be. I see no reason why we should accept that doctrine. It is the most utter arrant nonsense. Technological improvements tend to wash themselves out, to create more employment.
We are in a terrible state of unbalance now, but we have been just as unbalanced before, and I think we have the ability to get back into balance. It is some job, I grant you, but it is the same job that has been done time and time again. And don't forget this old world is a pretty aged institution. I suppose all of you studied ancient history when you went to high school. I didn't go to high school. I didn't go to college. I supposed you studied the history of Egypt. You had perhaps 20 or 30 pages on Egypt and it seemed a very compact piece of history. But there were at least a dozen different Egypts, and dozens and dozens of crises occurred in the history of Egypt. Every one of these crises were as serious to the people of Egypt as this world crisis is serious to us now. There have been industrial revolutions time and again, but the world is not yet bankrupt.
I think we are going to pull out of this. We are in conference for the first time and have some hope of getting through an old age pension system. The only reason it is advocated is because it is the only thing possible. An insurance system is utterly impossible now. The pioneer work done by the Fraternal Order of Eagles and the Federation of Labor has made possible old age pensions.
I have great hopes that we can succeed by driving deeper, in order to provide and care for these hazards of life by an insurance system. It can be done and the time to do it is now. Don't put off unemployment insurance and the building up of unemployment reserve funds until it is too late. I contend that industry cannot afford to delay. The only thing that can save industry from bankruptcy is to adopt unemployment insurance and build up a reserve fund.
Just one more remark. I see the Chairman is getting nervous, and anxious to get to the President's reception. I want to go myself as I have not seen him for some years. I strongly favor the system of federal grants in aid. I think that the federal government has the means of tapping sources of income which cannot be reached successfully by the states, because of state boundaries, etc.
I would strongly suggest that the Committee on Economic Security consider very carefully and recommend very powerfully to the President, the use of grants in aid by the federal government to every state which will enact old age pension laws that measure up to the standards laid down by the federal government. It is the only way to get through some states, and I think the Wagner-Lewis Bill does give us the means of helping old age security from the end of unemployment insurance, as the last measure in the revival of industry.
CHAIRMAN DEWSON: The next speaker on the program is Mr. Abraham Epstein, Executive Secretary, American Association for Social Security, New York City.
MR. EPSTEIN: Madam Chairman, ladies and gentlemen: I am sorry as I am just recovering from a serious illness that I cannot liven up this discussion a little bit. I think this discussion needs a little life, but I am afraid I am not up to the test to-day.
There is one thing that strikes me in both the discussions to-day, this morning and this afternoon; it has struck me too during all my years of interest in this subject, and that is, that the chief difficulty, probably, that prevails in the United States, is the idea of perfection.
We can never discuss one problem by itself. We want to solve all the problems of the universe. And not only do we want to solve all the problems of the universe, but we want to solve the problem in a perfect way. If you had a suggestion that would solve a problem 90 per cent, there would be a demand for a remedy that would solve all the problems 100 per cent. If we in this country get to that stage which our forefathers reached, that is, to stick to one thing at a time and discuss one thing at a time, feeling even a 60 or 70 per cent solution of a problem is worth doing, better than doing nothing, we could make some progress.
While I am not disagreeing with Mr. Hopkins, I do know from my many years of experience that it is dangerous to emphasize that no program of social security is complete unless it has this or that.
We all know, of course, that any program of social security will be complete if complete security is provided and the best kind of security. But I believe that since we are just imperfect human beings, and most of us are imperfect, we should confine ourselves for the present to one problem, at least try to solve one problem at a time, not 100 per cent, or even 90 per cent. If you can only get over that philosophy to the legislatures, I think that all of our problems on social security in this country will be solved.
The reason that there is no perfect remedy for making old age absolutely secure, no matter what principle is adopted, no matter what legislation we enact, is that there will always be certain flaws to make it at least just below 100 per cent perfect, if for no other reason than the fact that the members of the Senate and House of Representatives are fallible people. Some may not believe that, but at least most of us agree on it. Therefore, we cannot expect infallible laws.
We are not going to have perfect old age security legislation, but I do believe that kind of old age security legislation that will meet present conditions, is the best kind of legislation.
This is the subject on which most people become confused. In my 18 to 20 years of hard work, I don't think I can point to a single person whom I have been able to make understand. They all get confused. Even congressman who have been sponsoring bills have gotten mixed up and gone in the other direction. People do not understand, but it is as simple as a, b, c's.
You have a problem to-day of millions of people who have no jobs, and their children cannot support them. That is simple.
All we can do is to get a scheme--not a perfect scheme--but a scheme that will best provide with some decency. I think that everybody in this country and in Europe realizes that the old age pension system, as it is known in this country, whether called this or that, or whether it is a perfect thing or not, can be improved. At least, the idea of keeping all the people in homes on a small pension from the government is a better system, both from the point of view of economy, social and spiritual, than any previous system we have had in this country.
Now, I think that all of us can agree also that in the case of a man 65 or 70 years of age with no job and no children to support him, there is only one thing to do and that is to get him a straight pension. Can't we settle that matter for once and stop this talk about contribution? These contributions mean or presuppose the earning of wages.
Remember most of the people of that age have no wages and no money. Let's not talk about it any more and for once come to the agreement which we already ought to know, because for seven years we have had a bill--seven years is supposed to be the ripening age for a bill to mature--and it should have matured last year. Now then we have a bill in which we said to accomplish this thing we will need the federal government to subsidize some of the states making provisions for the aged, because some of the states cannot do it themselves. There should be universal agreement on that.
It seems to me before devising the most perfect scheme, we should at least do this. We are not going to have 100 per cent perfection, but I for one will be darned happy to see 60 per cent of the problem solved.
I come in contact with dozens of old men and women in New York drawing $30 or $35 a month from the city. I can see the change in these people, and I confess even in my sickness, I get cheer out of it. It makes me quite happy over this accomplishment, although we do know that there are other people in New York who are entitled to it and not getting it. But there are 52,000 more getting it now than before.
Let us first of all understand that there is no other way, no better way of meeting the present problem than improving the existing pension legislation through federal subsidy. That was provided on the O'Connor Bill maturing in Congress, and there is absolutely no reason for a bill of that sort having to go through again this year. It should have gone through last year.
There is another problem. That is in relation to the taxpayer. Do we wish to continue this kind of system? Let me suggest as Dr. Rubinow suggests, that you can't relieve yourself of this problem in the future by establishing a contributing pension system, which will not mature for a good number of years. Until that system matures, give the people straight pensions and ultimately establish a fund which will be able to improve a great deal of the present handicaps. Eliminate the "means test," and all sorts of things will be automatically eliminated. Take the burden from the government and put it on the people themselves.
This seems to me very simple and yet here are 20 years of educational work on this thing, and I challenge you to find six people in this country who understand the matter. We have not been able to get Congress to understand it in spite of its simplicity.
I only hope the Committee on Economic Security will be able to reach the nation with this very simple proposition--not with the aim of getting a perfect scheme. Even the Committee is fallible. I at least think so. I don't expect the perfect thing, not even from the White House. But let us be contented with half-perfection for even half is better than none at all. Thank you.
CHAIRMAN DEWSON: Before I throw the meeting open for discussion, I want to read this note.
"The President desires to meet the members of the advisory Council in advance of the general reception. This will make it necessary for the members to be at the White House at four-forty-five p.m."
It will therefore be necessary to close this meeting at 4:20 so that those belonging to the Council can leave.
We have 20 minutes left during which we can discuss the question of old age insurance and pensions.
MR. FRANK MORRISON (Secretary of American Federation of Labor): I desire to say that the American Federation of Labor is wholeheartedly in support of old age pensions. We feel that men who have devoted their time to industry and the government should be take care of in their old-age.
We believe that it is cheaper for the country itself to have old age pensions with a uniform age for the receipt of pensions, than for individual industrial organizations and governmental units to have varying systems.
Only a few years ago this Federation declared in favor of old age pensions, because many of the international unions set up old age pensions for their own members. The organization of which I am a member, International Typographical Union, gives an old age pension of $8 a week for all men over 65 years of age who are unable to secure sustained employment because they have infirmities.
Formerly, when a man died his pension died with him. His wife did not have the protection of the pension. Now the pension that would come from the states or from the federal government including the District of Columbia and Alaska, would cover both the man and his wife separately and distinctly, so that they would have protection in their old age.
We feel that until a man or woman is protected in old age, until we have laws that protect the workers by insurance against unemployment, conditions are not satisfactory. I want to ask you gathered here to-day, what more splendid thing could happen, if we should on the basis of these meetings enact an unemployment insurance law and give impetus to the various states to secure the enactment of old age laws? We would thus be covering our citizens from the cradle to the grave.
MR. F. S. KELLOGG (Manufacturers' Association, New Jersey): As I have listened to the discussion here to-day, I have become increasingly convinced that we will not find a solution of these problems until we consider the individual worker. I feel that a reserve should be accumulated, not as a means of relief at the present moment. I recognize what other experts have said, that you cannot accumulate to meet the present situation, is correct. Accumulations to meet the present situation should have been started years ago.
CHAIRMAN DEWSON: Would you begin it now?
DR. KELLOGG: The state has got to take care of that end of the thing.
CHAIRMAN DEWSON: For the future?
DR. KELLOGG: For the future and we should begin now to accumulate that fund. To my mind that should be accumulated for each individual worker and should be available for that worker's needs, if that worker's needs happen to come first by unemployment. And if he isn't unemployed it should be for old age, and if he doesn't reach old age and get out of employment previous to death, then that fund should be available to his family and his people at his death.
I don't believe we will get any solution of this problem until we do two things, get down to the individual worker, and make the fund, if I may say it in this way, limber and flexible enough to satisfy the conditions that may arise, the catastrophe which meet the worker, so much for non-employment, so much for life, so much for old age pension, these reserve funds must have enough mobility and flexibility to meet these different problems.
The Manufacturers' Association of New Jersey has been studying this problem. I want to say here, there seems to be a popular idea that each and every Manufacturers' Association is opposed to the proper solution of these problems. I can say our association is not. It is willing to cooperate toward the proper solution, and any information which it has gathered together or has on hand, or any ideas which it may have, or any assistance it can give, are at the disposal of the Committee. Thank you.