American Legion of Honor

The American Legion of Honor was a fraternal benefit order that was active in the late 19th century and early 20th century. In its heyday, it was one of the best known benefit societies.

The organization was founded on December 18, 1878 in Boston, Massachusetts by Dr. Darius Wilson and nine others. Some of the founders had participated in the founding of the Royal Arcanum and Dr. Wilson was also connected with the Knights of Honor and was reportedly a members of the Ancient Order of United Workmen.

Membership was open to white men and women eighteen to fifty years of age. Originally the upper age limit was sixty four, but this was reduced in 1885. There were initiation ceremonies but, if the candidate objected, these could be dispensed with and a formal obligation could be taken at any time and place. The order had a three tier structure: local units were called "Subordinate Councils"; above them were the "Grand" or "State Councils"; representatives of the latter and all living Past Supreme Commanders made up the "Supreme Council".

The order issued certificates of $1000, $2000 or $3000 each, at their option, and those certificates carried a "graduate weekly benefit."

The Legion reached its membership high point at the end of 1889 with 62,457. Like many fraternal organizations, the Legion ran into financial difficulties in 1895 and 1896. These were caused by a number of factors, including the Panic of 1896, an increased death rate, increased expenses and debts, "unusually high" assessments in 1896 and a lack of new members. The total membership on December 31, 1895 was 53,210 and for December 31, 1896 36,028.

Like many fraternal orders of its time the American Legion of Honor was based on inadequate rates that eventually led to bankruptcy. While the organization was successful in the early years, as the mortality of its membership increased, the order could no longer pay promised benefits as fewer people joined and others withdrew. (This phenomenon is known in insurance jargon as "adverse selection", as sicker persons retain their memberships and younger, healthier persons fail to join in adequate numbers to offset the claims paid out.) In 1903, for instance, only 51 members joined, bringing in $755,000, however 2,004 members either died or withdrew taking over $3 million dollars with them. The order went into receivership in August 1904.

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