REVOLUTIONARY WAR FIGURE THOMAS PAINE PROPOSED PLAN FOR 'MODERN' SOCIAL INSURANCE IN 1795

Reprinted with Permission from Dallas Bogan. This article was published in the LaFollette Press.

Aging is inevitable for all regardless of economic security, society classes, or stature in one's community. Saving for retirement is virtually meaningless to the young and energetic. Retirement after a long life of labor is a feature of life we now take for granted. This lifestyle was not always viable. In the days of the early pioneer retirement was practically unheard of. During these times of old it was a struggle to develop a system for retirement.

One of the first people to propose a plan for retirement security was Revolutionary War figure Thomas Paine. His strategy for a "modern" social insurance plan was written in his pamphlet, published in the winter of 1795. He called for the "establishment of a public system of economic security for the new nation." Entitled, "Agrarian Justice," it called for the creation of a system whereby those inheriting property would pay a 10 percent inheritance tax which would create a special fund out of which a one-time earnings of 15 pounds sterling would paid to each citizen upon attaining age 21. This initiative would give them a start in life. Annual benefits of 10 pounds sterling were to be paid to every person age 50 and older, to guard against poverty in old age.

Civil War pensions were America's first "Social Security" program. The actual Social Security program arrived in America in 1935. This was one forerunner that offered something that could be recognized as a social security program to a special portion of the American population. Following the Civil War, there were hundreds of thousands of widows and orphans, along with hundreds of thousands of disabled veterans. The fact remains that immediately following the Civil War a much higher proportion of the population was disabled or survivors of deceased breadwinners than at any time in America's history. This calamity led to the development of a liberal pension program, which paralleled later developments in Social Security.

(The first national pension program for soldiers was actually passed in early 1776, prior to the signing of the Declaration of Independence. Throughout America's ante-bellum period pensions of limited types were paid to veterans of America's various wars. However, it was the creation of Civil War pensions that a somewhat completed pension system developed in America for the first time.)

The Civil War Pension program began shortly after the start of the War, which began in 1861 and ended in 1865. The first legislation was initiated in 1862 providing for benefits coupled to disabilities "incurred as a direct consequence of military duty." Widows and orphans could receive pensions equal in amount to that which could have been payable to their deceased soldier if he had been disabled. The link with service-connected disability was broken in 1890, whereby any disabled Civil War veteran qualified for benefits.

Old age was made an ample qualification for benefits in 1906. And-so, by 1910, Civil War veterans and their survivors enjoyed a program of disability, survivors and old-age benefits similar in some ways to the later Social Security programs. Also by 1910, over ninety percent of the remaining Civil War veterans were receiving benefits under this program. However, they comprised barely .6 percent of the total U.S. population of that era. This pension system attracted young ladies to elderly veterans whose pensions they could inherit as the widow of a war veteran. It is hard to believe but surviving widows of Civil War veterans were receiving pensions as late as 1999.

Military pensions were an important foundation of economic security in the early years of the nation. For example, in 1893, the $165 million spent on military pensions was the largest expenditure ever made by the federal government to that time. Military pensions accounted for 37 percent of the total federal budget in 1894.

Features were installed into the federal pension program, which read that former Confederate soldiers and their families were barred from receiving Civil War pensions. And-so, in 1910, the per capita average military pension for residents of Ohio was $3.36 and for Indiana it was $3.90. By comparison, the per capita average for the Southern states was 50 cents, and in South Carolina, 17 cents.

The fact lies that in America a social security program in the form of Civil War pensions since 1862 did not extend itself to the general population until the official act of "Social Security" in 1935.