The South and Service Pension Laws

BY WILLIAM H. GLASSON, PH. D.,

Professor of Economics and Social Science in Trinity College.

The pension laws of the United States may be conveniently divided into two classes, invalid pension laws and service pension laws. Invalid pension laws are those passed on behalf of persons who have received injuries or contracted disease in the line of duty in military service. Provisions for the benefit of the widows and children of soldiers who have died as the result of such disease or injuries may properly be included under this classification. Down to the year 1818, we had none but invalid laws. Service pension laws grant allowances to those who have performed a stated period of military service without regard to whether any injury or disability was received in that service. Similarly, enactments for the benefit of the widows and children of such persons may be placed in this class. Service pension laws are often limited by requirements that the applicants for the bounty of government shall be either aged or indigent or suffering from some physical or mental disability. Such disability, however, need have no connection with the military service performed by the claimant. When so limited, service pension measures are often called by other names, but the fact of military service is the determining reason for the granting of government aid.

It is the purpose of this paper to offer evidence that there has been a marked degeneration of our pension system since the introduction in 1818 of the principle of service pension legislation, that the danger of such degeneration was brought forcibly to the attention of congress at the time the first service law was passed, and that service pension laws in the past and present have effected a distribution of the public money especially inequitable to the South as compared with other sections of the country.

That this is a matter of much importance does not admit of doubt when one remembers that the national pension system has cost since the close of the Civil War nearly three billions of dollars.* This sum is being increased by about $140,000,000 each

The latest figures obtainable give the cost of the United States pension system since June 30, 1865, as $2,896,063,575. The number of pensioners on the roll on July 1, 1902, was 999,446.

year. One million beneficiaries of the system are receiving from the nation annually sums ranging from seventy-two to twelve hundred dollars. Such payments have in some years amounted to two-fifths of the expenditures of the government. During a considerable period prior to the War with Spain, practically the whole of the receipts from internal revenue taxes were required to meet the pension payments. There is grave reason for believing that the pension system, though in its origin eminently just and proper, has through continued abuse degenerated into a means distributing surplus revenue.

The service pension law of 1818 was passed for the benefit of the indigent survivors of the Revolutionary army. Advocates of the proposed measure pointed with complacency to the surplus in the national treasury and taxed the resources of rhetoric in eulogy of the Revolutionary soldiers, in descriptions of the hardships they had suffered, and in appeals to the gratitude of the country. Senator William Smith, of South Carolina, was one of a small but earnest minority opposed to the general principle of service pension legislation. He warned his colleagues that a dangerous precedent was being established and used words which seem almost prophetic in the light of later experience:

"As an argument, it would appear, to avoid an inquiry into the propriety of this measure, we are told such a case can never happen againthat you can never have another Revolutionary war. Will not those brave men who fought your battles and triumphed so gallantly over the enemy at Chippewa, Plattsburg, Erie, Champlain, Orleans and on the seas, have the same claims upon their country some thirty-five years hence, when time shall have thrown a veil over all the minute circumstances, and it shall be forgotten that they retired from the army with reluctance, after being abundantly paid and abundantly honored?

"Their claim will be as great, and the precedent you are about to make will be followed. One army, you say, gained your independence, and the other has given it a new character, and made it worth maintaining. They have released your country from its degraded state of impressments, paper blockades, royal orders in council, and imperial decrees, and given it as high a grade in the scale of nations as your independence. This will be the beginning of a military pension system which posterity may regret."*

*The italics are introduced by the writer. For Senator Smith's speech see Annals of Congress, 1st Sess., 15th Cong., I, 140-150.

Posterity has begun to regret the system. Appeals have been made by the soldiers of every war to the precedent established in 1818. Service pension laws, more or less limited, have been passed on account of the War of 1812, the Mexican War, and the Indian Wars. The soldiers of the Civil War have secured the passage of the Dependent Pension Law of 1890, which is in reality a limited service law, and has cost the country in the twelve years since its enactment nearly $700,000,000. And yet not a session of congress passes without demands for further extravagant legislation in behalf of men who, as President Cleveland has said, "in their pay and bounty, received such compensation for military service as has never been received by soldiers before, since mankind first went to war."

There was an eager rush of claimants to avail themselves of the provisions of the act of 1818. Ten times as many pensioners were enrolled as had been expected. Many frauds came to light in various sections of the country. The situation was quite analogous to that following the passage of some of our more recent pension laws. As a result of the popular indignation voiced in public meetings and in the newspaper press of the day, remedial legislation was enacted which struck the names of many of the most unworthy pensioners from the rolls. In the distribution of pension money, the South fared much as at the present time. Calhoun, the Secretary of War, who was charged with the execution of the act, reported that, in number of pensioners, the leading States were as follows: New York, Massachusetts, District of Maine, Connecticut, Vermont, New Hampshire and Pennsylvania. The absence of Southern States from this list is noticeable.

About 1830 the rapid extinction of the public debt promised soon to leave the United States with a considerable annual surplus in the treasury. Proposals of a reduction in existing tariff rates. met with great opposition, and, under the circumstances, there were many advocates of increased pension expenditures. The scandals and fraud connected with the law of 1818 had largely passed out of the public mind. In his message of December, 1829, President Jackson suggested the extension of the benefits of the pension laws to all Revolutionary soldiers who were unable to maintain themselves in comfort. Bills were forthwith introduced into congress to carry out this suggestion.

Again a senator from South Carolina lead in the opposition. On April 29, 1830, Senator Hayne made a notable speech* in which he reviewed the course of persion legislation to that time. Down to the year 1818, as he pointed out, the national pension system had been based upon the principle that the claimant must have received some disability directly resulting from his military service. The law of that year had abandoned this principle and made service and poverty the basis of pensions. Having in mind the flagrant abuses under that act, it was folly to open a wide door to similar and greater evils.

Hayne's opposition to new pension laws was connected with his opposition to the maintenance of a protective tariff policy. On this subject, he said:

"I consider this bill as a branch of a great system, calculated and intended to create a permanent charge upon the treasury, with a view to delay the payment of the public debt, and to postpone, indefinitely, the claims of the people for a reduction of taxes, when the debt shall be finally extinguished. It is an important link in the chain by which the American system party hope to bind the people, now and forever, to the payment of the enormous duties deemed necessary for the protection of domestic manufactures."

Under the tariff arrangements then existing, Hayne claimed that the South was paying the greater portion of the duties which supplied the treasury, and that the public money was expended chiefly in the North. He quoted official reports to the effect that the whole amount of appropriations for pensions under the act of 1818 had been about $14,175,000, and that there had been paid to all other pensioners from the beginning of the government, $6,360,000, making a total of $20,535,000. Of the sixteen thousand pensioners then on the roll, about twelve thousand resided in the ten States north of Maryland, and four thousand in the Southern and Western States. From this rough basis, Hayne drew the conclusion that about fifteen of the twenty millions paid to pensioners had gone North, and about five millions to the South and West. He thought that an extension of the pension system would be likely to operate in the same way,

In

*Senator Hayne's speech may be found in Benton's Debates, X, 547-555. discussing the attitude of Southern statesmen toward pension legislation, the writer has drawn upon material afforded by his previously published monograph on "The History of Military Pension Legislation in the United States."

and that when this system degenerated into a mere scheme for the distribution of the public money, the South had a right to complain of its gross inequality.

Although the opposition temporarily prevailed, the service pension act of 1832 was passed by the next congress. The scandal of the act of 1818 was repeated. There was such a rush of applicants that it was thought incredible that there should be so many Revolutionary soldiers alive. The annual charge on the treasury was four or five times what had been estimated. Thoughtful men began to question the moral and political effect of the whole pension system of the United States. Mr. Bouldin, of Virginia, said in the House of Representatives that "the practical effects of the system had been to discourage private industry, and lead a large portion of the people of the United States to look to the treasury as the unfailing spring from which they were to receive every good. The poor, instead of being relieved in their own neighborhoods, were pensioned on the United States." Startling frauds came to light. Claims were made on behalf of persons who never had any but an imaginary existence, and in some cases such claims were admitted and money paid. The people were so indignant at the frauds that the Senate ordered the publication of the list of pensioners, classified by States and counties, and the transmission of each State's list to its courts of record. This action brought panic to the perjurers and forgers who had been conspiring to loot the treasury. In Vermont, Robert Temple and others had swindled the government out of an amount estimated at from forty, to two or three hundred thousand dollars, through payments to fictitious pensioners. Temple had great wealth and was one of the most prominent men in the State. Alarmed at the prospective publication of the pension list, he hurried to Washington and attempted to bribe a clerk to alter the list in order to conceal his crimes. The clerk disclosed the affair to his superiors and Temple, learning that he was about to be arrested, soon after committed suicide. Other frauds were discovered in Virginia, Kentucky and New York. Some of the criminals became fugitives from justice and others were finally lodged in State prisons.

As under other pension laws, but a small part of the disbursements went South. The expenditures of the United States for