Popular Science Monthly/Volume 27/October 1885/The Relations of Railway Managers and Employees II

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Popular Science Monthly Volume 27 October 1885  (1885) 
The Relations of Railway Managers and Employees II
By William Theodore Barnard
End of series



IN the United States it has not been an uncommon practice for rail-road corporations, looking to their own immediate immunity from prosecution, to aid their servants in securing, in various ways, some protection from or indemnity for the effects of injuries received in the performance of duty; but such efforts, being usually spasmodic, and always conditioned upon releasing the company from all liability, have RAILWAY MANAGERS AND EMPLOYES. 769

not generally received the cordial recognition and support of the em- ployes themselves ; have been ephemeral, and at best have only partially afforded the contributing companies protection from legal responsibilities. Objection has frequently been made to the writer that the conditions under which railroads are operated in the United States differ so widely from those of other countries as to render the experience of the latter of little practical value to us for purposes of comparison and guidance, and this belief seems to be wide-spread. The best possible answer to such an objection may be obtained from an inquiry into the results of the efforts of those American railroads (and there are several conspicuous examples) which, following English and Continental precedents, have systematically united with their employes in establishing societies like those which have proved so prosperous abroad. Reference has been made in a previous paragraph to an association of this character inaugurated five years ago by a prominent Eastern trunk line. From the first publication of its pro- spectus the Baltimore and Ohio Employes' Relief Association attracted marked attention, not only among railroad managers of advanced thought, but very generally among students of social and industrial science and prominent educators, and that interest has been well sus- tained by frequent reports in the public press of its growth and work. Having in the five years of its existence a sustained membership ex- ceeding 18,400 ; having, under its various features, distributed over a wide territory more than $929,940.14, in 42,930 separate payments ; and combining within itself, in one harmonious system, provision for the relief of the sick, injured, superannuated, and for their families after death ; a savings-bank, a building association, a circulating library, and other features of less importance ; being a leader in rail- road sanitation ; and, in short, representing, on the largest scale in the United States, the most popular foreign friendly and aid societies this Relief Association will best serve for purposes of restoration.

A general review of its theory and provisions is necessary for a proper understanding of the results it has attained, but any specially interested in the details of its organization and management are re- ferred to the secretary of the association at Baltimore.*

In a circular dated May 1, 1880, the Baltimore and Ohio Railroad Company announced that, on the petition of a number of its em- ployes, after a very thorough examination and study of benevolent railway organizations in Great Britain, France, and Germany, having a full appreciation of the advantages which experience has uniformly shown may be enjoyed by the employers and employes of railroad and other large corporations where benevolent relief societies have

  • The writer was induced, some years ago, to publish in the Chicago " Railway Age "

an account of the features of this association, then in operation, but to which important additions have since been made. Having but a limited circulation, among railroad peo- ple only, that paper has been utilized in the preparation of this article. vol. xxvii. 49


been put into operation, it thereby inaugurated an Employes' Relief Association, which was subsequently incorporated by special act of the Legislature of Maryland, June 3, 1882.

The Baltimore and Ohio board of directors, by a resolution guar- anteeing the absolute fulfillment of all the promises and provisions of the constitution of the association, made the following announcement :

" To give further force and effect to this plan, and as an earnest of its solicitude for their comfort and welfare, the company has con- tributed $100,000 as the nucleus of a fund from which its employes can derive pecuniary relief in the event of becoming incapacitated for earning their livelihood, or by means of which, in the event of death, they may leave some provision for their families, upon condition that they will second its endeavor to promote their welfare by making such contributions to the fund as will secure its permanency and effective- ness.

" The company will also, without expense to the fund, give the services of its staff in conducting the clerical and other business neces- sary to its proper management ; office-room for its records, etc. ; and, whenever it is necessary or desirable to employ females or children for such work as they are qualified to perform, preference will be given to the widows, wives, sisters, and children of its faithful contributing employes over other applicants in the order above named.

" It will also make arrangements by which the children of those contributing to the fund, under sixteen years of age, shall travel free when going to or returning from school, over all its lines for distances under ten miles, and will give half-fare transportation to contributors, their wives and children traveling over its lines.

"Also, having learned of the pecuniary necessities of persons for- merly in its service, and being anxious and solicitous that its present and future employes, although escaping accidents and sickness while in the discharge of duty, shall not find themselves without means of sup- port whenever, through approaching old age or the contraction of infirmities, they become unable to perform the services assigned them or to earn a livelihood in other pursuits, it has added to the indemnity features of the plan its superannuation or annuity provision, which it commends to their consideration and adoption."

Subsequently this superannuation feature was elaborated under a further endowment which nets the association $25,000 per annum, and later on its savings, building, and free circulating library features were guaranteed by and received the liberal support of the company, which is also taking measures to establish a sanitarium and home for its dis- abled and aged employes and their families, for which a beautifully located and healthy site has already been purchased.

In the preparation of this scheme the selecting and classification of risks were among the earliest and most embarrassing of the questions to be settled. All legitimate life and accident insurance companies,


and indeed all the most solvent co-operative associations, select their risks, upon which they place a limit, imposing their own standard of physical qualifications. Railroads, however, can make no such invid- ious distinctions against, perhaps, their most deserving servants, and hope to succeed in any insurance scheme they inaugurate. Such a plan must embrace all, if any. In considering percentages of railroad accidents the physical condition of employes is a comparatively small factor entering but little into cause and effect because in active rail- roading, as in army campaigning, the weak and diseased are soon elimi- nated, and the fittest only survive the exposure and physical strain to which they are constantly subjected. In the five years of this associa- tion it has been uniformly found that the standard of health and lon- gevity of railroad operatives is remarkably high, far exceeding that which the insurance tables assign as the average for people of equal age but of unselected occupations. On the other hand, age is a potent factor in determining liability for sickness and death from other causes than violence. Besides the statistics of accidents at its command, the Balti- more and Ohio Company were able to ascertain with approximate ac- curacy the ages of its employes; and it was thereby enabled to estimate with a reasonable degree of certainty the risks to be incurred and pro- vided for. Then, after allowing the employes a reasonable time within which to enter the association without questioning their age or physi- cal condition, it adopted and has since rigidly enforced the policy of employing for its service none over forty-five years of age, and who can not pass a strict medical examination. Among other immediate results of this measure, the average age of many thousands of employes has been reduced to twenty -eight years, and the standard of their physical strength and activity perceptibly advanced, to the company's obvious gain and the lessening of the liabilities of the relief associa- tion, which were predicated upon the average age and health of the company's employes when the average of age was much higher and their standard of health lower than now. This has resulted in largely increased benefits without increasing premiums, and has rendered the company's guarantee, as regards the relief features, practically a nul- lity. The premiums and benefits under the relief feature of the asso- ciation were predicated upon a simple classification of the employes according to hazard of occupation and accustomed compensation. It was recognized that the laboring classes of this country are familiar with larger sums of money than are foreigners, and are therefore apt to regard with indifference the net earnings of premiums that would be deemed considerable abroad ; and because adequate protection against the wants of life affords great security against harassing and costly litigation with the employers, it was thought desirable to fix the standard unit sufficiently high to give substantial relief, while yet not allowing such large benefits as would require oppressive taxation of the employes, or as would offer temptations to practice fraud or deceit


by pretended disablements. The benefit must also be tangible and fixed, to obviate discontent ; for, as a rule, the people engaged in man- ual labor are suspicious of indefinite insurance, and dread being taxed for unknown quantities the employes of the company were there- fore divided into two classes the first class containing those engaged in operating trains and rolling-stock, and the second containing all those not so engaged ; and the unit of premium was fixed at twenty- five cents per month per rate, for each feature, or seventy-five cents for the three features of the lowest rate, increasing in the ratio as given in the table on page 773.

Members may now secure insurance under this feature to the ex- tent of thirty rates, or six thousand for a premium of twenty-five cents a rate for death under benefit 5 only.

It was provided that, while no employe could take the benefits of a lower class than those to which his salary assigned him, he could take as many more rates (up to the limit) as he chose. Also that such of those employes in the service at the time of the inauguration of the as- sociation as did not desire to take the three, could yet, as they elected, enjoy the benefits of one or more features ; which brought within the reach of all, on a uniform and simple scale, protection commensurate with what they could spare to secure it.

The manner of collecting premiums next demanded consideration. As no initiation fee could, with propriety, be exacted of those newly seeking employment for a livelihood, so none could properly be col- lected from those already in the service ; and as, for obvious reasons, it was undesirable to ground the plan upon a capital stock company, it became necessary to mainly depend for assets upon the payment of premiums. By the simple expedient of requiring premiums to be paid in advance, there would always be on hand the maximum sum required to pay for the casualties of the following month, and this was also thought to be the least onerous and therefore the best form of sub- scription.

The liabilities and benefits of members being well known, premi- ums could be deducted from their wages on the monthly pay-roll, and thus all risk through the handling of funds by irresponsible parties was avoided, and the Baltimore and Ohio Company became responsi- ble for the collection the association being credited on the company's books with the premiums which remain in its custody until withdrawn by legitimate warrant. No large sums are allowed to accumulate, the surplus not needed for immediate wants being invested by the com- mittee of management from time to time in first-class securities. It was believed, and the result has fully proved, that premiums thus col- lected, while subject to the scrutiny of every interested person, would be paid with less reluctance than after the money had passed into the actual possession of members, and in many cases they would not be conscious of having made any contribution at all.


PSM V27 D795 Railroad employee benefits table.png

A much graver matter was that involving the question whether membership should be made compulsory upon employes of the com- pany, and, if at all, to what extent. It is believed to be a fact that neither abroad nor in this country has an accident railway association

although some have carried heavy endowments been successful for

a lone term of years except where membership has been made compul- sory. Many have been organized, and have lived for longer or shorter periods, but their sphere of usefulness is always very limited, and they gradually become inefficient and fall into disrepute or have to be reor- ganized at the sacrifice of good faith to old members.

It was urged upon the management that they should use all proper means to induce membership on the part of those already in the serv- ice, and that the company should adopt such measures as would at least insure a thoughtful consideration of the benefits offered its em- ployes. It was finally determined to adopt a modified compulsory policy, the ultimate effect of which would be to bring within the asso- ciation every employe of the company. It is this compulsory feature which makes the association unique, and which guarantees its per- manency and continuous success. It is undeniably within the strict bounds of propriety for the management of a railway or any other cor- poration to specify the conditions upon which it will employ, and to decline the services of those who show no disposition to protect them- selves and families against the vicissitudes of the service they seek to enter. But to inaugurate such a policy at that particular time was to trespass upon very delicate ground, and required no little determina- tion, for the railroads of the country were just recovering from the prostrating effects of the strike of 1877, and were cautiously re-estab- lishing the status quo. This new departure from preconceived ideas and practices of dealing with labor was watched with great interest by railroad officials and others accustomed to dealing with the grave issues constantly arising from the employment of large bodies of men, and it was amid many predictions of failure that the announcement was made that the company would thereafter require as a condition prece- dent to employment that those seeking service should enter the insur- ance organization. It started a very lively discussion as to the merits of the scheme, and forced those to examine its provisions who would otherwise have passed them by with indifference.

Upon careful examination of the foregoing tabulated statement it will be noted that contributions are, in all cases, deducted monthly from the members' wages, so that payments are required of them only when they have earned wages, and the allowance is, in all cases, pro- portioned to the monthly contributions paid by each person in the sev- eral classes into which the contributors have been divided.

In cases of disablement the allowance is paid not less than once every month ; before each payment, whether for temporary or perma- nent disability, satisfactory evidence of its existence being required.


The notification of disablement, which precedes all applications for temporary or permanent allowance, is made upou and in consonance with forms furnished for that purpose ; when it is the duty of the head of the department, or supervisor of division or section, under whom the member serves, to certify whether the disablement was received in the discharge of duty and in the company's service, and to forward a certificate to that effect to the secretary of the association, accom- panied by a similar certificate covering the clinical facts from the so- ciety's surgeon called to attend the member.

The managers, from time to time, adopt such measures to secure the proper visitation of contributors on the allowance list as they think proper, and no member refusing to submit to an examination by such visitor is entitled to receive any benefits from the fund during the continuance of such refusal.

To constitute a lawful claim for accident indemnity, there must be :

1. Exterior or patent evidence of injury, and satisfactory testimony that it resulted from accident while in the discharge of duties assigned the contributor by the company, and incapacitates him from earning a livelihood.

2. In case of death, that the injuries sustained by such accident were the sole and direct cause of death ; or

3. Not resulting from accidents while performing the company's service, that it was not caused by injuries received while engaged in unlawful enterprises or riots. The managers are the exclusive judges as to whether the injuries have been so caused and received, and their decision shall be final and conclusive.

All legitimate claims for death-allowance are paid in full, irrespect- ive of any previous payments which may have been made under the head of temporary disability allowance, but the managers have power to require such information and particulars as they deem necessary to establish the validity of the claim of any person applying for allow- ance.

In urgent cases the managers have power to pay part of the death- allowance within a shorter period than sixty days, but the whole is always paid within that time.

In the event of a contributor, who has been injured while in the line of duty and in the company's service, resuming work and after- ward dying from the effects of such injury, the fund is liable for the payment of the accidental death allowance, according to the scale, should death occur within a period of six months from the date of injury ; but, after that interval no further liability attaches to the fund with regard to the payment of the accidental death allowance. Any contributor, who, by reason of continued sickness from natural causes, or resulting from accidents incurred while not on duty, is un- able to work, is entitled to death-allowance according to the scale and provisions relating thereto ; if death occur no later than one month


after the time for -which payments have been made, and if it can be shown to the satisfaction of the committee of management that such person has not worked elsewhere during any part of the intervening


Each contributor is given a certificate setting forth his rate of con- tribution, and the measure of relief to wbich he is entitled ; which is valid during the period the holder remains employed by the Baltimore and Ohio Railroad. Company, or by other companies to whose employes the benefits of the fund may be extended ; which certificate is to be exchanged or modified from time to time, so as always to represent the grade or standing of its holder in the fund.

The death-allowance is paid to the person designated by the con- tributor in his application ; but, if there be no such designation, then to the legal representative of the deceased.

The several subscriptions to the fund are deducted monthly, or whenever salaries are paid by the company's paymasters in advance, and are held subject to investment or disbursement as the managers may decide.

In order to secure to the railroad company that immunity from prosecution which its liberal contributions for the protection of its employes' interests entitle it to enjoy, it was further announced that it was not contemplated to give double benefits in those cases of disa- bility or death resulting from accidents ; the promised benefits would not be paid when the contributor or any person entitled to damages because of the accident to him, whether resulting in death or not, claimed damages against the company ; and requiring the filing with the managers of the association of a release satisfactory to them, signed by all persons in interest, releasing the company from all liability ; but it was left optional with the employe to accept the benefits offered by the association, or to institute other measures to secure indemnity for injury sustained.

Every applicant for membership is required to state in his applica- tion his age and length of service with the road, or its branches, which is held to be conclusive evidence in respect to any subsequent claim presented by him or his representative.

Before any accident allowance can be paid to any member, the surgeon of the association must certify that he is totally unable to labor ; and the supervisor or chief of division or department in which he served before the accident must certify that his injuries were received while in the discharge of duty and in the company's service.

In cases of illness or diability not thus incurred, the allowance is paid only after cei'tificates, satisfactory to the managers, have been received from a duly registered medical practitioner, corroborated by the contributor's superintendent, or the head of department, that sick- ness or injury had caused total disability for labor for the time spe- cified in the certificate.


The moneys belonging to the funds of the association not required for immediate use are invested by the managers in United States bonds, Maryland State and municipal bonds, Baltimore and Ohio Railroad bonds or obligations, or other first-class securities. All securities and the moneys necessary to meet current expenses are intrusted to the official custody of the Treasurer of the Baltimore and Ohio Railroad Company, to be held subject to requisition of the committee of management.

The managers are chosen partly by the Baltimore and Ohio Railroad Company, on account of its interest in the fund, and partly by the con- tributors to it ; the company choosing four and the contributors five the majority of those selected. .

Any differences arising between claimants for the benefits set forth in the constitution and the committee of management are submitted to arbitration.

The condition of the fund is annually investigated and reported on by a proper and competent person, to be selected by the managers for that purpose, and any surplus remaining at the end of each year is de- voted to the reduction of the rates of contributions of members, or in such other manner disposed of as in the judgment of the committee will best subserve the interests of the association.

The association utilizes, under judicious contracts, those hospitals located, and those physicians and surgeons residing, along the com- pany's lines, and this service has been economical and agreeable to its members. While it is responsible for surgical expenses only in cases of injury arising from the discharge of duty, its members have the ad- vantage of reduced prices obtained under its contracts when they are otherwise disabled or sick. There are besides, as a part of the staff of the society, a corps of salaried physicians designated as medical in- spectors, to each of whom is assigned territorial limits, which they are constantly traversing, investigating cases of disability, methods of treatment, the sanitary condition of the lines, etc. It is also their duty to afford prompt relief to sufferers from casualties of travel, whether they be members of the association or other employes, or passengers ; to examine applicants for admission to the company's service as to physical qualifications, and to exercise a rigid censorship over the sani- tary conditions of grounds, buildings, coaches, baggage, etc.

The rigid sanitary supervision exercised by the association through its medical inspectors over every portion of the line enables it to check and control many disorders before they have assumed grave propor- tions. Thus, some years ago, when small-pox was prevalent at many points tapped by the Baltimore and Ohio system, over twelve thousand employes (and in dangerous localities their immediate families) were vaccinated by the medical inspectors at association expense, and, though many employes were greatly exposed to contagion, less than a dozen were affected, and but two died from the disease. It is somewhat re- markable that nearly eighty-five per cent were successful vaccinations


or revaccinations. When diarrhceal, dysenteric, and typhoid disorders become prevalent at any point, they are immediately checked by ap- propriate remedies placed at the disposal of the medical inspectors, master-mechanics, and supervisors, with explicit directions for use. Malarial disorders, especially, have been kept well under control by the distribution of large quantities of approved anti-periodic remedies, which are at the command of every member, and thereby much em- barrassment and inconvenience to the service has been prevented.

Another and popular feature recently inaugurated is the free cir- culating library, which already has nearly five thousand volumes, se- lected with special reference to the wants and tastes of the employes and their families, and purchased from private subscription of officers of the company.

Many of the employes reside at points remote from towns, and have no opportunities for procuring literature adapted to their tastes, and when thrown out of their accustomed occupation by sickness or accident, without resources for entertainment, the minds of many men brood over their misfortunes to an extent that seriously retards re- covery. To such, anything that diverts the mind from care or trouble is unquestionably of therapeutical value. Other employes also are fur- nished with educational and technical works, especially adapted to the requirements of engineers, mechanics, firemen, road, and all other classes of workmen, and those who wish to improve their leisure hours, by studying such works as will increase their professional business knowl- edge, are supplied under conditions which do not necessitate their leaving the society and comforts of their homes, and many employes, therefore, avail themselves of this chance for qualifying themselves for promotion and advancement in life, while at the same time their children, wherever located, have at command facilities for study, and instruct- ive reading matter seldom obtainable outside large cities. The library also undertakes to purchase for members stationery, school, text, and other books at cost price, giving them the benefit of discounts on large orders and free transportation. The plan under which this library is operated is very simple, inexpensive, and effective, and could be put into operation on all our roads at nominal expense. Inexpensive but carefully prepared catalogues are printed ; also cards on which to make requisitions for books, so distributed that every employe can se- lect, order, receive, and return literature without delay through the company's train-service. Library committees, composed of employes, are organized at divisional and all other large stations, and through them, direct or by the aid of officials of the company, any workman, or any member of his family, however isolated, is readily supplied.

In pursuance of the policy of the company to improve the secular, moral, and intellectual welfare of its forces by every means in its power, well lighted and heated reading-rooms have been provided at several principal stations where employes may assemble for social in-


tercourse, or for reading and writing, and these rooms are well fur- nished with the principal daily and monthly periodicals, as well as with weightier matter. It is in contemplation to provide them at other divisional stations.

Like the relief features the savings-fund and building features are operated under fixed laws by a board, the majority of whom are con- tributing members, and are equally fostered and guaranteed by the railroad company.

Among the inducements offered by the savings feature are :

Facilities to members and their wives, no matter how isolated their location, to invest savings or to make temporary deposits in the fund ; and they may make deposits in larger sums and with more frequency than allowed by other savings-banks.

Avoidance of loss of time and of trouble in reaching places for de- positing and withdrawing money, depositories being located at inter- vals along tbe line, averaging less than twenty miles.

Allowance of interest, generally greater than, and always equaling, that given by other savings-banks.

Ability to draw checks against balances, as in other banks, wherever on the line a depositor may be ; to obtain, in place of deposits, checks of the Baltimore and Ohio Company negotiable anywhere, and to with- draw deposits, wholly or in part, with accrued interest, with prompt- ness and certainty, under the legally binding promise of the Baltimore and Ohio Company.

Participation in all profits earned by the operations of the fund every permanent depositor being substantially a stockholder, without liability or any of the legal responsibilities usually attaching thereto and under the most favorable conditions for the economical, faithful, and w r ise administration of the fund through the offer of the Baltimore and Ohio Company of the services of its bonded and other officials, and the designation of experienced, able, and conservative directors to in- vest its moneys, and generally to manage its affairs.

Under the building feature : Opportunity for every member of the association, not only those who can provide collateral for loans, but also those who have no real estate or other security to provide or to improve homes for their families, by borrowing from the savings fund at the uniform rate of six per cent interest, and upon the easiest terms as regards repayment of principal, viz. : in monthly installments of one dollar upon every hundred dollars borrowed, with the option to bor- rowers of making larger repayments.

Payment of interest, not upon the whole sum borrowed until all the loan is repaid, but only the payment of six per cent per annum upon so much thereof as, at the commencement of each year, remains unpaid an advantage over most building societies.

Certainty of securing valid titles and conveyancing, searching records, recording deeds, etc., at minimum cost, through the employ-


ment of tbe company's numerous counsel resident in various lo- calities.

Free and complete possession of property purchased with loans from the savings fund during the repayment of the loan ; thus substi- tuting the repayment of loans for the payment of rents, and acquiring ownership of homes at little or no additional monthly payments.

Ability to purchase materials at large reductions upon current rates, through contracts made by the association with wholesale dealers for building and otber material in large quantities.

Opportunity to utilize, free of cost, the officers of the association as agents in negotiating real estate and other transactions, such as securing fire and life insurance at reduced rates, prompt payment of taxes, water-rates, etc., etc.

Reduced transportation for all materials entering into the construc- tion or improvement of homesteads.

For those who have nothing to offer as security for loans, a plan for enabling them to secure homes by simply insuring their lives for the ultimate benefit of their families is provided.

Those leaving the company's service can continue their payments as before, or can dispose of their interests to the best advantage, as can also those unable to meet their payments.

Many other minor provisions, all looking to the comfort and wel- fare of its members, have been added to this association from time to time, but their enumeration is unnecessary here. To summarize briefly the beneBts conferred by this institution under its relief features :

It enables employes to avoid selecting insurance organizations un- worthy of confidence, and to avoid forfeiture of their moneyed inter- ests, as premiums are only deducted from month to month, and are monthly expended in giving immunity to the well and indemnity to the disabled. The plan of periodical deductions enables them to make payments of premiums with definiteness, certainty, and regularity, in such small installments as not to be felt, and on a scale which the com- pany has obligated itself shall not be increased. They have the com- pany's guarantee that all benefits promised shall be faithfully paid. The premiums are so graduated that the poorest can enjoy member- ship and advantages proportioned to their contributions. It relieves employes from all necessity of soliciting contributions, prevents rest- lessness, discontent, and hardship resulting from inability to earn wages under bodily infirmity ; and the knowledge that when in distress they get their dues promptly, and not through charity, and that their fami- lies are adequately provided for against immediate want in case of their death or disablement, makes the men more cheerful, efficient, and contented. On the other hand, it does away with all appeals to the personal or official charity of the management, and with claims for indemnity for accident, and relieves the company from nearly all the costs and embarrassments of suits instituted by employes.


The library exerts an elevating and educating influence on the em- ployes of the service, and particularly upon their children, the value of which can only be estimated by those acquainted with the dearth of school facilities, and the ignorance prevailing in the mountain-regions of Maryland and Virginia, and generally throughout West Virginia.

The effect of the savings and building features in inculcating and encouraging prudence and thrift will be readily recognized by us all, who know by experience that there is more need to learn the art of saving money than of earning it. By their means the humblest laborer can provide against seasons of adversity, or if he pleases may provide a home for himself and family and take that rank and independ- ence among his fellows that attach everywhere to freehold and free- dom from debt ; and all this, under circumstances of convenience, cheapness, and absolute security that none but and not many of our metropolitan cities can offer. As illustrating the avidity with which the employes of the Baltimore and Ohio Company are utilizing these new features, it is reported that the savings fund had received in de- posits $273,132.59, of which $159,440.88 have been loaned under its building feature, and only 26 T 3 5 ir per cent of deposits have been with- drawn since the bank was opened.

The benefits accruing to the Baltimore and Ohio Company through the formation of this association were early demonstrated to be mate- rial and important. Though at first there was opposition from some employes caused by a misapprehension of its provision, and unjust, harsh, and ignorant criticism from newspapers inimical to the Balti- more and Ohio management, the end of its first year showed a mem- bership excelled by few if any benevolent societies in the United States, and at the end of its fourth fiscal year ninety-five per cent of all the company's employes other than clerks, telegraphers, and agents, non-hazardously employed were enrolled.

While before its establishment the Baltimore and Ohio, like all other railroads similarly situated, directly or indirectly, yearly dis- bursed large sums for damages to its employes, and was subjected to much annoyance and loss by the angry feelings engendered by litiga- tions with its people and their friends, since 1880 it has not had a dozen such suits, and this almost total immunity from vexatious litiga- tion with its employes has of itself been a saving of several times the entire expenditure on the association's behalf.

Through the system of medical examination of applicants, through the improved sanitary condition of its shops, through the considera- tion and care and compensation paid employes when disablement ne- cessitates cessation from labor, and through the prompt payment of sufficiently large death insurance, the standard of the service has been perceptibly raised, and it is securing a much more efficient and desira- ble class of labor, skilled and unskilled, and has, in some places, drawn the best material from competitive works, and holds its force with


less difficulty and loss. It is the bond of closer friendly relationship between employer and employe, and has fostered a feeling that the interests of both are identical. It has done away with all pretext for joining organizations inimical to labor, as well as with all justification for seeking charitable assistance from the company or from fellow- employes.

It is the almost unanimous testimony of the railroad company's officials that it would now be most difficult, if not impossible, to in- augurate a general strike among the members of this association.

Personal appeals to the managers of the company for pecuniary assistance on behalf of unfortunate employes are now unknown in this service, and this relief from solicitation has reacted favorably upon the morale of the force by inducing independence and contentment. Besides the many patent advantages accruing to the company from the savings fund and building features, is the important one of con- verting a proverbially migratory force into a permanent one, which is gradually locating itself at points where the company's interests will best be subserved and protected.

Under the pension feature the provision made for the support during life of its aged and permanently disabled employes enables the company to dispense at will with many old servants, who. though incapacitated by mental or bodily infirmity, often the effect of inju- ries received in the service, must, under ordinary conditions, through sheer humanity, be borne on the rolls, though, as all administrative officers know, to the disadvantage and frequently to the endangering of the company's interests.

In brief, the best possible testimony of the good results attained lies in the fact that, as the result of two years' trial of the plan, such a conservative corporation as the Baltimore and Ohio Railroad Com- pany undertook further obligations on its behalf which, if capitalized, would amount to over a half a million dollars, and is contemplating still further donations to the same cause.

Railroading is rapidly advancing beyond the boundaries of a mere business, and into the dignity of a profession requiring extensive knowledge of many branches of science, technical training of a high order, and already requires a devotion to corporate interests from its staff-officers and many subordinates that necessitates the sacrifice of their independence, and all opportunity of securing competence in other channels, while it has not branches or departments in which intelli- gence, energy, and scrupulous honesty are not required. And, as of the great armies of railroad operatives only a few, comparatively, can gain wealth or competence, the great majority who give to their work equal devotion and their full measure of ability yearn for recognition m their sphere, and in no more effective or acceptable way can they be rewarded than that in which the Baltimore and Ohio Railroad has recognized the self-abnegation and faithfulness of its servants.


Let other railroads follow their example. Let them do away with nepotism in employment and promotion ; accept the services only of those found to be expert workmen, physically as well as mentally qualified to fill responsible positions ; then surround those selected with such material protection and attractions as will annul migratory instincts and anchor them by chains of self-interest, and they will have made safe provision against such disasters as that which overtook some of our Eastern lines in 1877. The motive of a railroad in thus meeting its employes more than half-way need not be concealed. It is far better to have it at once understood that self-interest is to be the governing consideration on both sides ; that as the employe ex- pects to profit by his participation in such a scheme, so does the rail- road, from its participation therein, not at the expense but through the promotion of its workmen's interests. The latter, by yielding a small percentage of their pay, can secure to themselves all the benefits derivable from the most judiciously prepared scheme of insurance and mutual benefit that the light of the present age can afford ; the former, through the annual investment of a reasonable sum, probably to the saving of larger expenditures in other directions, will profitably secure itself against the annoyance of lawsuits and other ill results, while also reaping other advantages and forwarding the philanthropical work of the age. The student of railway benevolent institutions abroad will be struck by the disparity of growth between those in which in- surance against accident, old age, and death is by the employer made compulsory upon the employe, and others where such action is optional in favor of the former. In old settled countries, where the labor market is overstocked and competition for place most active, lit- tle difficulty is experienced in enforcing such a prerequisite to employ- ment ; but in this country, where the rapid development of railroad interests usually creates a constant demand for labor, and where the dissatisfied employe of one road has only to step across the field, as it were, to be welcomed with perhaps increased pay by rival interests, it takes nerve to enforce such a provision. There are few intelligent railroad managements that will not fully admit that, as the result of proverbial improvidence, their employes are, as a class, discontented, migratory, and exceptionally difficult to reach with moral and eco- nomical teachings ; and they must clearly perceive, in the words of a recent writer, that " there is marked tendency to trust to luck in the future for themselves and their families, instead of making provision ahead, which exercises a demoralizing effect upon the whole character, and directly affects the interests of their employers." Yet, though they are prepared to admit that this fact makes it both right and a duty of the employer to interfere to correct the evil, as far as it is possible to do so, and that " if men need to be made provident, and to guard against adversity in sickness and old age by compulsion, then compul- sion should be used," they are naturally slow to force an issue not


absolutely vital, and which they fear may deprive them of help at time of need. The danger is, however, more imaginary than real, for no one will deny the right of a corporation, or any employer contracting for labor, to impose such conditions as a precedent to employment as its interests and judgment dictate, and to select preferably those will- ing to help protect themselves and dependents from the effects of a hazardous service. The great success of the Baltimore and Ohio Em- ployes' Relief Association lies in the fact that the managers of that company " had the courage of their convictions," and made it a con- dition precedent to employment in its service that the men should sign an agreement to protect themselves and families against the vicissi- tudes of a hazardous service.

The proverbial conservatism and timidity of capital make it slow to realize the logical sequence of experiments which have a vital bear- ing on its invested interests. The uniform success and increased pros- perity which have attended industrial partnerships between capitalists and their workmen practiced more extensively on the Continent of Europe than in England, and little or not at all with us show to the disinterested, thoughtful mind that herein, more than in efforts in all other directions combined, excellent though their effect may be, lies the true solution of the gravest and most important question pending before the world i. e., how to equitably adjust the relations between capital and labor. Probably the serious contemplation of a division, no matter how minute, of their profits with those whose labor made them, would incite in the minds of our railway share and bond holders such alarm and opposition as would displace any management advanc- ing such a proposition ; yet on one or more of the most important rail- ways in France judicious action in this direction has resulted in the employes becoming the majority owners of the securities of the prop- erties they operate, and those corporations and firms in whose profits their workmen are allowed to participate have experienced increased prosperity and decreased migration and irregularity in attendance of the workmen, whose general standard of efficiency has been raised by the competition to share such benefits, and this unity of interests has entirely isolated them from the effects of labor agitations and tur- moils. That the managers of such great interests as those of our rail- roads and mammoth manufacturing establishments who pioneer a re- form of this character must possess great nerve and resolution as well as influence, goes without saying ; but the constant strife and compe- tition now prevailing, necessitating most rigid economies, which almost always result in curtailment of wages and in strikes, must of themselves gradually force corporations to concert measures for securing perma- nent control of their forces, and none can be so effective as those that look to a community of financial interests. The manager who first succeeds in applying to his service the principle of industrial part- nership will prove a Napoleon in the railroad world and a dictator to

�� � all competitors. That some one competent, and of influence sufficient to direct such a movement, may shortly arise, is not altogether improbable, for already the president of one of the great Eastern trunk lines, when recently recapitulating what his board of management had done to cultivate such attachment in its employés, said:

"I hope to see the day when this society will be extended into a great cooperative association; when the men in this service will individually have pecuniary interests in this vast property; when the men who run the trains and operate the machinery, and all others having steady employment, will be part owners in this great corporation; when they will in every sense be identified with and form a part of this company."

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