International Harvester offers pension plan before most in 1908

During most of the 19th-century industrial revolution in this country, the laboring men who made the revolution possible were more or less throw away items — like a file or a piece of sandpaper.

They were used by the factory or mine owner, who grew wealthy from their labor, then when too old, worn out, or crippled to work any longer were terminated from the payroll and left to live as best they could with no income.

The first nongovernment pension plan in the United States was created by the American Express Co. in 1875, and by 1910, 20 or more large corporations had pension plans in operation and others were contemplating introduction.

International Harvester

One of these companies was the mighty International Harvester Corporation (IHC) who had established a pension system Sept. 1, 1908.

Cyrus McCormick Jr. wrote in his memoirs, “Many employers have come to realize that they owe more than wages and that their employees are entitled to compensation when disabled, and to provision for old age.” McCormick referred to this largesse on the part of IHC as “Welfare work, so-called,” and writes that “Good welfare work, like good business, pays.”

In the October 1909 issue of Harvester World, the first year’s results of the new pension plan were discussed. “This company inaugurated a pension system on Sept. 1, 1908, and already 41 employees have retired on pensions.

“At the time the pensions were granted, the average age of the pensioners was 68. The average term of service was 30 years and six months, and the average pension granted was $243 a year. William Whitty, of Springfield, Ohio, has the distinction of being the oldest pensioner at 78 years and four months and with more than 46 years of active service.

“George Reynolds, also of Springfield, has served the company and its predecessors for over 50 years and was 75 years and 10 months at the time his pension was granted.

“The combined length of service of these 41 faithful employees was 1,251 years, and it would require the combined labor of an army of 375,515 men for one full working day to accomplish the work done by the 41 pensioners during their term of service.

“It is the desire of the officials that each employee should feel that after he has worked long and faithfully he will not be forgotten in his old age when physical infirmities make it impossible for him to compete with younger and more energetic men.”

It seems that IHC may have provided compensation under the plan for on-duty accident or death, but not if these occurred off-duty or from illness.

Benefits

Therefore, also in 1908, the company established what was known as an Employees’ Benefit Association. This was a voluntary mutual aid organization in each of the firm’s different factories which an employee could join and contribute a small portion of his pay to the common good.

IHC bore the administrative costs and to each unit where membership exceeded 50 percent, donated $25,000, or $50,000 if more than 75 percent.

Each benefit association unit was overseen by elected representatives of the employees themselves, as well as from management.

The 1909 Harvester World magazine tells us that at that point “nearly 20,000 employees have become members. Approximately 75 percent of the works have joined and 71 percent of the office forces.”

The Weber Wagon Works led in membership with 96.9 percent; Deering Works boasted 93.2 percent while the Milwaukee Works had 81.8 percent.

The article said, “All works lower than this (Milwaukee) should start in and hustle for new members.”

I find it interesting that the former McCormick factories were reluctant to join the association — a lack of trust in management, I wonder?

This was not much more than 20 years after a bitter strike at the McCormick Works during which several workers were killed.

Anyway, the article gives some figures for the benefits paid by the association during September 1909.

A 51-year-old engineer at the Champion Works died in an accident and his heirs were paid two year’s wage. A “heater” at the same works died of illness and got one year’s wages, while a pensioner, 75, died and was awarded $530. (A note after this entry states, “Member contributed for death benefit only.”)

A 29-year-old “trackman” at the mines died in an accident and his wife got two year’s wages, while a foreman, 30, and a shaper, 39, at other factories died of illness and qualified for one year’s wages.

A 31-year-old at McCormick Works lost an eye and was awarded one-half of a year’s wages. It’s not clear whether or not some of the reported accidents may have occurred on the job, as a remark at the end of the report states, “Amounts shown for accident benefits include accidents occurring outside of factories or off duty.”

So although the benefits weren’t much, International Harvester deserves credit for being one of the earliest companies in the United States to provide help for its employees beyond just wages paid for work performed.