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

reward.

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-

ically dependent.

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

rear.

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

Assembly."

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


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