From Mutual Aid to the Welfare State by David T. Beito

Author:David T. Beito
Language: eng
Format: epub
Publisher: The University of North Carolina Press
Published: 2010-05-15T00:00:00+00:00

Coping with Depression and War

The SBA weathered the economic storms of depression rather well. Throughout the crisis it continued to pay all claims and kept debt to a minimum. Much of the credit lay with the conservative financial management during the 1920s. The SBA had generally avoided the temptation to finance expansion through borrowing. The combined construction costs of the original and expanded hospital, as well as the homes, had come primarily from voluntary contributions. This abhorrence of debt, which was a characteristic of other societies as well, was a natural reaction to years of bad experience with overexpansion and cheap rates. Even so, the leaders of the SBA faced a crisis. Membership plummeted throughout most of the 1930s. In 1928, 224,807 men, women, and children belonged to the SBA, but by 1936 their ranks had thinned to 93,458.49

The SBA may have lost ground nationwide, but it became more popular than ever in Kansas. In 1925 the state membership was 42,127, or 19.8 percent of the nationwide total. By 1949 the number of Kansans who belonged to the SBA reached an all-time high of 70,818, or 53.6 percent of the entire membership. Not surprisingly, nearby Missouri was second with 11.1 percent of the national total. These figures corresponded with hospital use. Between 1925 and 1928, 62.4 percent of the patients were Kansans, while 14.6 percent were Missourians. From July 1948 to June 1949 a whopping 71.3 percent of the 3,478 members who used the hospital were from Kansas; Missouri was second at 14.1 percent.50

The domination of Kansas and Missouri was a double-edged sword. On one hand, it gave convincing evidence that the founders were right in their perception that there was a demand for the hospital. Clearly, Americans wanted far more from a fraternal society than life insurance. On the other hand, the existence of the SBA Hospital impeded the work of organizers in distant states. It dramatically weakened the incentive for individuals who had neither the time nor the money to travel to Topeka. Unfortunately for the SBA, it was impossible to stake all hopes on Kansas and Missouri. The membership in these states was much higher than ever but was still not enough to support a 250-bed hospital.

The larger hospital had not translated into a busier one. If anything, the annual number of patients began to decline. From 1932 to 1940 the patient load stabilized at 1,200 to 1,500 per year. After 1930, however, it was unusual if patients filled more than one-third of the available 250 beds. The figure would have been even lower had not the SBA also made efforts, albeit with limited success, to attract full-pay private patients.51

The hopes for generating revenue from membership fees also fell short. At no time were they sufficient to cover operating costs. The amount of costs covered by fees gradually increased to 29 percent in 1937. After that it never dipped below 25 percent. Transfers from the general fund continued to pay the bulk of the costs throughout the 1940s.

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