Report of the Industrial Insurance Commission to the Governor of Illinois
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REPORT OF THE INDUSTRIAL INSURANCE COMMISSION.
His Excellency/ Governor C, S. Deneen.
Sir — ^The General Assembly of Illinois, in May, 1905, passed by
unanimous vote of both House and Senate, a resolution which runs
textually as follows :
Whereas, The Umited time at the disposal of the present session of the
General Assembly is insufficient to take up, much less carefully and fully
consider, the important subject of industrial insurance including pensions
for aged workers, protective measures in the interest of workingmen, which
m other countries have proved of great value and benefit; and.
Whereas, Even in the most favored countries the margin between work
and want is an exceedingly narrow one; besides there can be no apprehension
more keen or pitiless than the constant clinging dread shared equally by all
wealth producers that misfortune in the form of sickness/ the liability to
become incapacitated through accident or by time's inevitable advance ac-
companied by waning strength, there will be lacking the means necessary
for ordinary maintenance. This most melancholy fact, of which all are
conscious, poisons the present and fills the future with fears. The so-called
civilized industrialism of our day can be subject to no stronger criticism
than the charge fortified by universal experience, that the men and women
whose productive energy have contributed so much to our wealth, progress
and development, leading simple, unexpensive lives, become in their declin-
ing years powerless, principally because they are penniless; and.
Whereas, It ought to be the duty of the law-making power of the State
to prevent so far as legislative aid and encouragement can modify this de-
plorable state of affairs; therefore, be it
Resolved, By the House of Representatives, the Senate conpurring herein,
That the Governor is hereby authorized and requested to appoint a commis-
sion consisting of five representative men who shall serve without re-
numeration and whose duties shall be to thoroughly investigate and report
to the Governor the draft of a bill providing a plan for industrial insurance
and workingmen's old age pension for consideration and action by the mem-
bers of the Forty-fifth General Assembly.
The appointment of the Industrial Insurance Commission was made
by the Governor in accordance with the law, and the persons chosen
were: Charles H. Hulburd, president; David Kinley, Harrison F,
Jones, Adolph E. Adeloff and Charles Richmond Henderson, secre-
tary. All these persons had previous acquaintance with some aspects
of the problem. The commission was organized on Feb. 3, 1906, im-
mediately after the appointments were made.
The commission recognizes the valuable legal counsel of Mr. C. H.
Hamill, attomey-at-law, whose difficult and delicate task it was to
formulate, as well as possible, the provisions of a law which might \
afford universal protection to workingmen and yet not be inconsistent ^ " J^
with our Constitution. We have incorporated his work in this report
because we believe it will have great value in giving direction to public
thought in the coming development of the subject.
We also desire to recognize in this report the valuable assistance of
a gentleman learned in the law and acquainted with European systems
of industrial insurance, Prof. Ernest Freund, of the Faculty of Law in
the University of Chicago. It was he who formed the shorter law
which is herewith recommended for action of the General Assembly.
He gave earnest and efficient labor without expectation of pecuniary
The duty of the commission is clearly and comprehensively stated
in the resolution of the General Assembly and the necessity for its work
IS indicated in the preamble. Under modern conditions of industry,
as compared with those in the days of our ancestors, the causes of
injury and disease are multiplied by the use of rapid, steam-driven
machinery, by congestion in crowded shops of towns and. cities afid by
the increased strain of life; at the same time the operatives have no
longer ownership and control of the instruments of production, no
voice in the management of the process, no vote in shaping the physical
conditions under which they must toil, and no share in the profits of
the business. The vast majority of industrial laborers live upon wages
and are under the direction of managers on whom they are econom-
Under these conditions some measure of legal control, independent
of both employers and employes, is recognized to be necessary in all
civilized nations. The wage-worker produces for the common benefit,
and when he is rendered incapable of earning by injuries caused by
his employment he ought not to bear alone, and in the hour of his
deepest need, the full burden of the loss. All the great nations have
now accepted the duty of social insurance except our own country;
and it is not to be thought that we shall long remain, morally, in the
The commission was specifically and distinctly required by law, to
study the entire question in all its aspects, and to oflFer the draft of a
bill embodying their conclusions in form for legislation. It should be
noticed that they were required to offer a bill embodying the principle
of insurance in some form : "Whose duties shall be^ to thoroughly in-
vestigate and report to the Governor the draft of a bill providing a
plan for industrial insurance and workingmen's old age pensions for
consideration and action by the members of the Forty-fifth General
In order to show that the demand for insurance of workingmen is
not artificial, local or recent even in America, but has been seriously
considered, though the results of experiments have been only in a
limited degree satisfactory, we give here some of the facts presented in
a report of a committee to the National Conference of Charities and
Corrections in 1906:
Repobt of Special Ck)MMiTTEE.
While it is well known that the United States is the most backword of
modern nations in providing industrial insurance, it should not be admitted
that we have not made progress in the right direction, and some of the ex-
periments promise to have instruction for European peoples. The principle
of insurance as an economic protection to the family in case of the incapacity
or death of the chief breadwinner of the family, has the approval of many
of the most sagacious and successful leaders in business, and this in spite
of their belief that the management of insurance companies has been
in only too many instances extravagant and corrupt. This approval is
shown in the most practical manner by the numbers of policyholders and the
enormous amounts of insurance in force.
In 1904 there were in force in "ordinary insurance" companies ,5,507,759
policies, to the amount of f 10,412,078,338.
Some of the most competent leaders in American enterprise have not
only approved the principle of insurance in the conduct of their private
affairs, but they have already established and successfully conducted plans
of insurance for their employes. In the first rank we mention the relief
departments of several great railroad corporations. Mr. Riebenack, comp-
troller of Uie Pennsylvania Railroad, has made a valuable study of this sub-
ject and summarizes the result by saying: "The nine purely relief depart-
ment roads hereinbefore discussed represent an aggregate of 31,000 miles of
roadway, or about 15 per cent of the total railway mileage of the United
States, with employes numbering 318,000, or about 24 per cent of the total
number of railway employes in the country, and an insurance membership
of 206,000 employes, or practically 65 per cent of the total number of